As Filed with
the Securities and Exchange Commission
on April 27, 1995
File Nos. 33-7592
811-4768
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X_/
Pre-Effective Amendment No. ___ /___/
Post-Effective Amendment No. 11 /_X_/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940 / X /
Amendment No. 11 /_X_/
(Check appropriate box or boxes)
PIONEER INTERMEDIATE TAX-FREE FUND
(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 ap- propriate box)
_ _ immediately upon filing pursuant to paragraph (b)
_X_ on April 28, 1995 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. The Registrant has filed the Notice required by Rule 24f-2 for its most
recent fiscal year on or about February 28, 1995.
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
CLASS A AND CLASS B SHARES
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
Objective and Policies;
The Fund
5. Management of the Fund................ Prospectus - Management of the
Fund
6. Capital Stock and Other Securities.... Prospectus -Investment Objective
and Policies; The Fund
7. Purchase of Securities Being Offered.. Prospectus - Fund Share
Alternatives; How to Buy
Fund Shares; Shareholder
Services; Distribution Plans
8. Redemption or Repurchase.............. Prospectus - Fund Share
Alternatives; How to Sell 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>
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
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; Underwriting Agreement
and Distribution Plans;
Custodian; Independent
Accountants
17. Brokerage Allocation and Other
Practices........................... Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities.... Statement of Additional
Information - Description of
Shares; 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
20. Tax Status............................ Statement of Additional
Information - Tax Status
<PAGE>
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
21. Underwriters.......................... Statement of Additional
Information - Principal
Underwriter; Underwriting
Agreement and Distribution Plans
22. Calculation of Performance Data....... Statement of Additional
Information - Investment Results
23. Financial Statements.................. Balance Sheet; Report of
Independent Public Accountants
<PAGE>
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A and Class B Shares
April 28, 1995
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus dated April 28, 1995, of Pioneer Intermediate Tax-Free Fund (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
incorporated into this Statement of Additional Information by reference. Prior
to January 3, 1994, the Fund was known as "Pioneer Municipal Bond Fund."
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions.............................2
2. Management of the Fund...........................................5
3. Investment Adviser...............................................10
4 Underwriting Agreement and Distribution Plans....................10
5. Shareholder Servicing/Transfer Agent.............................13
6. Custodian........................................................13
7. Principal Underwriter............................................14
8. Independent Public Accountants...................................14
9. Portfolio Transactions...........................................14
10. Tax Status.......................................................16
11. Description of Shares............................................19
12. Certain Liabilities..............................................20
13. Determination of Net Asset Value.................................20
14. Systematic Withdrawal Plan.......................................21
15. Letter of Intention..............................................22
16. Investment Results...............................................22
Appendix A.......................................................A-1
Appendix B.......................................................B-1
Appendix C.......................................................C-1
Appendix D.......................................................D-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 Prospectus (the "Prospectus") of Pioneer Intermediate Tax-Free Fund
(the "Fund") identifies the investment objective and the principal investment
policies of the Fund. Other investment policies are set forth below.
Portfolio Management
The Fund intends to manage its portfolio fully by buying and selling
securities, as well as holding securities to maturity. In managing its portfolio
the Fund seeks to take advantage of market developments and yield disparities,
which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in anticipation
of a rise in interest rates so as to minimize depreciation of principal;
(2) lengthening the average maturity of its portfolio in anticipation
of a decline in interest rates so as to maximize tax-exempt yield;
(3) selling one type of debt security (e.g., revenue bonds) and buying
another (e.g., general obligation bonds) when disparities arise in the
relative values of each; and
(4) changing from one debt security to an essentially similar debt
security when their respective yields appear distorted due to market
factors.
The Fund engages in portfolio trading if it believes a transaction net
of costs (including custodian charges) will help in achieving its investment
objective.
Investment Restrictions
Fundamental Investment Restrictions. The Fund has adopted certain
fundamental investment restrictions which may not be changed without the
affirmative vote of the holders of a majority of the Fund's outstanding shares.
As used in the Prospectus and this Statement of Additional Information, such
approval means the approval of the lesser of (i) the holders of 67% or more of
the shares represented at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (ii) the holders of
more than 50% of the outstanding shares.
The Fund may not:
(1) Borrow money, except as a temporary measure for
extraordinary or emergency purposes, and then only in an amount not
exceeding 10% of its gross assets, or pledge, mortgage or hypothecate
<PAGE>
an amount of its assets taken at market value which would exceed 15% of
its gross assets, in each case taken at the lower of cost or market
value and subject to a 300% asset coverage requirement;
(2) Underwrite securities issued by other persons except
insofar as the Fund may technically be deemed an underwriter under the
Securities Act of 1933 in selling a portfolio security;
(3) Purchase or sell real estate (including limited
partnership interests, but excluding Municipal Bonds secured by real
estate or interests therein), interests in oil, gas or mineral leases
or exploration or development programs, commodities or commodity
contracts (except contracts for the future acquisition or delivery of
fixed-income securities) in the ordinary course of its business;
(4) Make loans to other persons except through the use of
repurchase agreements. The purchase of debt securities by the Fund
pursuant to its investment objectives and other investment policies
shall not be considered loans for purposes of this restriction. Not
more than 10% of its total assets will be invested in repurchase
agreements maturing in more than seven days;
(5) Purchase the securities of any issuer if such purchase, at
the time thereof, would cause more than 5% of its total assets taken at
market value to be invested in the securities of such issuer, other
than securities issued or guaranteed by the U.S. Government or its
agencies or instrumentalities; or
(6) Purchase any securities or evidences of interest therein
on margin, except that the Fund may obtain such short-term credit as
may be necessary for the clearance of purchases and sales of
securities;
The Fund will not purchase securities while any borrowings are
outstanding.
Although the Fund may invest more than 25% of its assets in
industrial development revenue bonds, the Fund will not purchase a
security if, as a result, more than 25% of the Fund's assets would be
in industrial revenue bonds where payment of principal and interest is
the ultimate responsibility of issuers in the same industry.
Non-fundamental Investment Restrictions. The following
restrictions have been designated as non-fundamental and may be changed
by a vote of the Fund's Board of Trustees without approval of
shareholders.
<PAGE>
The Fund may not:
(a) Purchase or retain the securities of any issuer,
if those individual officers, directors or trustees of the Fund, its
adviser or principal underwriter, each owning beneficially 0.50% of the
securities of such issuer, together own more than 5.0% of the
securities of such issuer;
(b) Sell any security which the Fund does not own
unless by virtue of its ownership of other securities it has at the
time of sale a right to obtain securities without payment of further
consideration equivalent in kind and amount to the securities sold and
provided that if such right is conditional the sale is made upon the
same conditions;
(c) Purchase or sell any put or call option or any
combination thereof, provided that this shall not prevent the purchase,
ownership, holding or sale of contracts for the future delivery of
fixed income securities; or
(d) Invest in any security, including any repurchase
agreement maturing in more than seven days, which is illiquid, if more
than 15% of the total assets of the Fund, taken at market value, would
be invested in such securities.
In addition, in connection with the offering of its shares in certain
jurisdictions, the Fund has agreed to adopt certain additional investment
restrictions which are not fundamental and may be changed by a vote of the
Fund's Board of Trustees. The Fund has agreed (1) to invest no more than 5% of
its total assets in warrants, valued at the lower of cost or market, and no more
than 2% of its total assets in warrants, so valued, which are not listed on
either the New York or American Stock Exchanges; (2) that (i) short sales at any
one time shall not exceed 25% of the net equity of the Fund and (ii) the value
of any one issuer in which the Fund is short may not exceed the lesser of 2.0%
of the value of the Fund's net assets or 2.0% of the securities of any class of
any issuer; and (3) not to pledge, mortgage or hypothecate its portfolio
securities if the percentage of securities so pledged, mortgaged or hypothecated
plus the percentage of the sales charge on its shares would exceed 10%. In
addition, short sales may only be made in securities fully listed on a national
stock exchange.
Percentage Restrictions
If a percentage restriction on investment or utilization of assets set
forth above or in the Prospectus is adhered to at the time an investment is made
or assets are so utilized, a later change in percentage resulting from changes
in the value of the Fund's portfolio securities will not be considered a
violation of a policy.
<PAGE>
The Fund has adopted the following operating policies which are not
fundamental and which may be changed without shareholder approval. The Fund may
enter into repurchase agreements (a purchase of and a simultaneous commitment to
resell a security at an agreed upon price on an agreed upon date) with
broker-dealers and member banks of the Federal Reserve System and only if
collateralized by U.S. Government securities. If the vendor of a repurchase
agreement fails to pay the sum agreed to on the agreed upon delivery date, the
Fund would have the right to sell the U.S. Government securities, but might
incur a loss in so doing and in certain cases may not be permitted to sell the
U.S. Government securities. As noted in Non-fundamental Investment Restriction
(d), the Fund may not invest more than 15% of its assets in repurchase
agreements maturing in more than seven days. The Fund does not anticipate
investing more than 5% of its total assets in repurchase agreements maturing in
more than 7 days in the foreseeable future.
For the purposes of the Fund's investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of, and interest on, the security.
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.*, President and Director of The
Chairman of the Board, Pioneer Group, Inc. ("PGI");
President and Trustee Chairman and Director of Pioneering
Management Corporation ("PMC"); Chairman of
the Board and Chief Executive Officer of
Pioneer Winthrop Advisers ("PWA"); Chairman
of the Board of Pioneer Funds Distributor,
Inc. ("PFD"); Director of Pioneering Services
Corporation ("PSC") and Pioneer Capital
Corporation ("PCC"); President and Director
of Pioneer Plans Corporation ("PPC");
Chairman of the Board and Director of
Teberebie Goldfields Limited; and Chairman
and Partner, Hale and Dorr (counsel to the
Fund).
<PAGE>
RICHARD H. EGDAHL, M.D., Professor of Management, Boston
Trustee University School of Management,
Boston University since 1988; Professor of Public
Health Policy Health, Boston University School of
Institute Public Health; Professor of Surgery,
53 Bay State Road Boston University School of Medicine
Boston, Massachusetts and Boston University Health Policy
Institute; Trustee, Boston University Medical
Center; Executive Vice President and Vice
Chairman of the Board, University Hospital;
Academic Vice President for Health Affairs,
Boston University; Trustee, 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
utilization management firm) and
Springer-Verlag New York, Inc. (publisher);
Honorary Trustee, Franciscan Children's
Hospital.
MARGARET B.W. GRAHAM, Manager of Research Operations,
Trustee Xerox Palo Alto Research Center,
The Keep since September 1991; Professor of
Post Office Box 110 Operations Management and Management
Little Deer Isle, Maine of Technology, Boston University
School of Management ("BUSM"), since 1989;
Associate Dean, BUSM, 1988 to 1990 and
previously, Associate Professor, Department
of Operations Management, BUSM.
JOHN W. KENDRICK, Professor Emeritus of Economics,
Trustee George Washington University and
6363 Waterway Drive Adjunct Scholar, American Enterprise
Falls Church, Virginia Institute.
<PAGE>
MARGUERITE A. PIRET, President, Newbury, Piret & Company,
Trustee Inc. (a merchant banking firm).
One Boston Place,
Suite 2363
Boston, Massachusetts
DAVID D. TRIPPLE*, Executive Vice President and
Trustee and Executive Director of PGI; Director of PFD,
Vice President Pioneer Investment Corp. ("PIC"),
Pioneer International Corp. ("PIntl"), PCC
and Pioneer SBIC Corporation; President,
Chief Investment Officer and a Director of
PMC.
STEPHEN K. WEST, Partner, Sullivan & Cromwell (a law
Trustee firm).
125 Broad Street
New York, New York
JOHN WINTHROP, President, John Winthrop & Co., Inc.
Trustee (a private investment firm); and
One North Adgers Wharf Trustee of NUI Corp. of Alliance
Charleston, South Carolina Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves.
KATHLEEN McCLASKEY Assistant Vice President, PMC.
Vice President
WILLIAM H. KEOUGH, Senior Vice President, Chief
Treasurer Financial Officer and Treasurer of
PGI; Treasurer of PFD, PMC, PSC, PCC, PPC,
and Pioneer SBIC Corporation; and Treasurer
and Director of PPC.
JOSEPH P. BARRI, Secretary of PGI, PMC, PPC,
Secretary PIC and PCC; Clerk of PFD and PSC and
Partner, Hale and Dorr (counsel to the Fund).
ROBERT NAULT, General Counsel of PGI since 1995;
Assistant Secretary formerly of Hale and Dorr (counsel to the
Trust) where he most recently served as a
junior partner.
<PAGE>
ERIC W. RECKARD, Manager of Fund Accounting and Compliance of
Assistant Treasurer PMC since 1994; Manager of Auditing and
Business Analysis of PGI (until 1994).
Each of the above (except for Ms. McClaskey) is also an officer and/or
Trustee of the other Pioneer mutual funds. 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. 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 PMC and PSC is owned by PGI, a
publicly-owned Delaware corporation. All of the outstanding capital stock of PFD
is indirectly owned by PGI.
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 Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Winthrop Real Estate Note 1 PFD
Investment Fund
Pioneer Europe Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double PMC PFD
Tax-Free Fund
Pioneer Cash Reserves Fund PMC PFD
<PAGE>
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 2
Pioneer Variable Contracts Trust PMC Note 3
-------------
Note 1 Pioneer Winthrop Advisers is the investment adviser for this fund.
Note 2 This is a closed-end fund.
Note 3 This is a series of seven separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
PMC, the Fund's investment adviser, also manages the investments of
certain institutional private accounts.
To the knowledge of the Fund, no officer or Trustee of the Fund owned
5.0% or more of the issued and outstanding shares of PGI as of March 31, 1995,
except Mr. Cogan who then owned approximately 15% of such shares. To the
knowledge of the Fund, the following accounts owned more than 5% of the
outstanding Class B shares of the Fund: Donaldson Lufkin Jenrette Securities
Corporation, Jersey City, New Jersey (12,026 shares, 6%); Geraldine Crawford,
Huntington Station, New York (11,076 shares, 5%); and Dorothy M. Wilson Trustee
for Darlene Stadler U/A DTD 2-7-95, Pueblo, Colorado (10,558 shares, 5%). To the
knowledge of the management of the Fund, no entity owned more than 5% of the
outstanding shares of the Class A shares of the Fund as of March 31, 1995.
Compensation of Officers and Trustees
The Fund pays no salaries or compensation to any of its officers. The
Fund pays an annual trustees' fee of $1,000, and a payment of $100 plus expenses
per meeting attended, to each Trustee who is not affiliated with PMC, PFD or PSC
and pays an annual trustees' 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 are reimbursed to the Fund under its
management contract.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund:
<TABLE>
<CAPTION>
Pension or Total
Retirement Compensation
Benefits from Fund and
Aggregate Accrued as Pioneer
Compensation Part of Family
Name of Trustee From the Fund* Fund's Expense of Funds**
<S> <C> <C> <C>
John F. Cogan, Jr. $ 500 $0 $11,750
David D. Tripple 500 0 11,750
<PAGE>
Richard H. Egdahl, M.D. 1,500 0 55,650
Margaret B.W. Graham 1,500 0 55,650
John W. Kendrick 1,500 0 55,650
Marguerite A. Piret 2,250 0 66,650
Stephen K. West 2,000 0 63,650
John Winthrop 2,000 0 63,650
<FN>
* As of Fund's fiscal year end.
** As of December 31, 1994 (calendar year end for all Pioneer Funds).
</FN>
</TABLE>
At March 31, 1995, the Trustees and officers of the Fund owned in the
aggregate, less than 1% of the outstanding securities of the Fund.
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 and is renewable annually by the vote of a majority of the Board of
Trustees of the Fund (including a majority of the Board of Trustees who are not
parties to the contract or interested persons of any such parties) 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.
Pursuant to the management contract, PMC will not be liable for any error of
judgment or mistake of law or for any loss sustained by reason of the adoption
of any investment policy or the purchase, sale or retention of any securities on
the recommendation of PMC. PMC, however, is not protected against liability by
reason of wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under the respective management contract.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 0.50% per annum of the Fund's
average daily net assets. The fee is normally computed daily and paid monthly.
On an interim basis, PMC has agreed not to impose management fees for the Fund
and if necessary to limit or otherwise reduce other operating expenses to the
extent needed to limit the expenses of the Fund as described in the Prospectus
in Note 3 to the table set forth under "Expense Information." PMC's agreement is
voluntary and temporary and may be revised or terminated at any time. The
purpose of this policy is to enhance the Fund's dividend yield during the period
when, because of the Fund's size, fixed expenses have a more significant impact
on yield.
Pursuant to the expense limitation discussed above, during the fiscal
years ended December 31, 1994, 1993 and 1992, the management fees were reduced
<PAGE>
by $183,384, $188,711 and $215,325, respectively, resulting in actual management
fees paid during those periods to PMC of $412,999, $171,943 and $37,930. See the
Notes to the Financial Statements in the December 31, 1994 Annual Report
(incorporated herein by reference) for more information.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund has entered into an Underwriting Agreement with PFD. The
Underwriting Agreement will continue from year to year if annually approved by
the Trustees. The Underwriting Agreement provides that PFD will bear any
distribution expenses not born by the Fund.
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 has adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act with respect to Class A shares (the "Class A Plan") and a
plan of distribution with respect to Class B shares (the "Class B Plan")
(together, the "Plans).
Class A Plan
Pursuant to the Class A Plan, the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus. See "Distribution
Plans" in the Prospectus. The expenses of the Fund pursuant to the Class A Plan
are accrued on a fiscal year basis and may not exceed, with respect to Class A
shares, the annual rate of 0.25% of the Fund's average annual net assets
attributable to Class A.
Class B Plan
The Class B Plan provides that the Fund shall pay PFD, as the Fund's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Fund's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Fund's average daily
<PAGE>
net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Fund's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be in consideration of personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services to the Fund. PFD pays
commissions to dealers as well as expenses of printing prospectuses and reports
used for sales purposes, expenses with respect to the preparation and printing
of sales literature and other distribution related expenses, including without
limitation, the cost necessary to provide distribution-related services, or
personnel, travel office expenses and equipment. The Class B Plan also provides
that PFD will receive all CDSCs attributable to Class B shares. (See
"Distributions Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund,
for review by the Trustees, a quarterly written report of the amounts expended
under the respective Plan and the purpose for which such expenditures were made.
In the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is
not an interested person of the Fund, has any direct or indirect financial
interest in the operation of the Plans except to the extent that PFD and certain
of its employees may be deemed to have such an interest as a result of receiving
a portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
<PAGE>
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plan, the Trustees identified and considered a number of potential
benefits which the Plans may provide. The Board of Trustees believes that there
is a reasonable likelihood that the Plans will benefit the Fund and its current
and future shareholders. Under their terms, the Plans remain in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The Plans may not be amended to increase
materially the annual percentage limitation of average net assets which may be
spent for the services described therein without approval of the shareholders of
the Fund affected thereby, and material amendments of the Plans must also be
approved by the Trustees in the manner described above. A Plan may be terminated
at any time, without payment of any penalty, by vote of the majority of the
Trustees who are not interested persons of the Fund and have no direct or
indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the Fund (as defined in the
1940 Act). A Plan will automatically terminate in the event of its assignment
(as defined in the 1940 Act).
During the fiscal year ended December 31, 1994, the Fund incurred total
distribution fees of $204,976 and $6,089 pursuant to the Class A and Class B
Plan, respectively. 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.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston,
Massachusetts, to act as shareholder servicing agent and transfer agent for the
Fund. This contract terminates if assigned and may be terminated without penalty
by either party by vote of the Board of Directors or Trustees or a majority of
its outstanding voting securities and the giving of sixty 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 shareholder inquiries.
PSC receives an annual fee of $28.00 per Class A and Class B
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
<PAGE>
Fund's Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the
Fund's assets. The Custodian's responsibilities include safekeeping and
controlling the Fund's cash and securities, handling the receipt and delivery of
securities, and collecting interest and dividends on the Fund's investments. The
Custodian does not determine the investment policies of the Fund or decide which
securities the Fund will buy or sell. The Fund may, however, invest in
securities, including repurchase agreements, issued by the Custodian and may
deal with the Custodian as principal in securities transactions. Portfolio
securities may be deposited into the federal Reserve-Treasury Department Book
Entry System or the Depository Trust company.
7. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts, serves as the principal
underwriter for the Fund in connection with the continuous offering of its
shares. During the Fund's 1994, 1993 and 1992 fiscal years, net underwriting
commissions retained by PFD in connection with its offering of Fund shares were
approximately $26,044, $93,000 and $45,000, respectively. Commissions reallowed
to dealers by PFD in those periods were approximately $299,506, $644,000 and
$401,000, respectively. See "Underwriting Agreement and Distribution Plans"
above for a description of the terms of the Underwriting Agreement with PFD.
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) 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. An exchange of
securities for Fund shares will generally be a taxable transaction to the
shareholder.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP 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 SEC.
<PAGE>
9. PORTFOLIO TRANSACTIONS
Decisions relating to the purchase and sale of securities for the Fund,
the allocation of portfolio transactions and, where applicable, the negotiation
of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in and broker-dealers through which it seeks this result. Municipal
Bonds and other debt securities are traded principally in the over-the-counter
market on a net basis through dealers acting for their own account and not as
brokers. The cost of securities purchased from underwriters includes an
underwriter's commission or concession, and the prices at which securities are
purchased and sold from and to dealers include a dealer's mark-up or mark-down.
PMC attempts to negotiate with underwriters to decrease the commission or
concession for the benefit of the Fund. PMC normally seeks to deal directly with
the primary market makers unless, in its opinion, better prices are available
elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management agreement, be bought
from or sold to dealers who furnish research services to the Fund and/or other
investment companies managed by PMC, or who sell shares of the Fund. Brokerage
and research 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; and furnishing
analyses, manuals and reports concerning issuers, securities, economic factors
and trends, portfolio strategy, performance of accounts, comparative fund
statistics and credit rating service information. PMC maintains a listing of
dealers who provide such services on a regular basis. Management believes that
no exact dollar value can be calculated for such services.
The Fund is managed by PMC which also serves as investment adviser to
other mutual funds in the Pioneer group and certain private accounts with
investment objectives similar to those of the Fund. Securities frequently meet
the investment objectives of the Fund, such other mutual 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
<PAGE>
factors considered in the investment recommendations include other investments
which each client or account presently has in a particular industry and the
availability of investment funds in each client or account.
It is possible that at times identical securities will be held by more
than one fund and/or account. However, positions in the same issue may vary and
the length of time that any fund or account may choose to hold its investment in
the same issue may likewise vary. To the extent that the Fund, another mutual
fund in the Pioneer group or a private account managed by PMC may not be able to
acquire as large a position in such security as it desires, it may have to pay a
higher price for the security. Similarly, the Fund may not be able to obtain as
large an execution of an order to sell or as high a price for any particular
portfolio security if PMC decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one account, the resulting
participation in volume transactions could produce better executions for the
Fund or the account. In the event that 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.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Fund.
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, diversification of its assets and distribution of its income to
shareholders. 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. The Fund is not
subject to Massachusetts corporate excise or franchise taxes, and, provided that
the Fund qualifies as a regulated investment company for federal income tax
purposes, the Fund will also not be required to pay any Massachusetts income
tax.
In accordance with its investment objectives, the Fund invests its
assets in a manner which will provide as large a portion of tax-exempt income as
is consistent with the protection of shareholders' capital. Since the protection
of capital is an important aspect of the Fund's investment objectives, the Fund
may from time to time invest a portion of its portfolio in short-term
obligations and may engage in transactions generating income which is not
tax-exempt, e.g., purchase non-municipal securities, sell or lend portfolio
<PAGE>
securities, enter into repurchase agreements, dispose of rights to when-issued
securities prior to issuance, acquire any security at a market discount, or
acquire certain stripped tax-exempt obligations or their coupons at a discount.
The Code permits tax-exempt interest received by the Fund to flow
through as tax-exempt "exempt-interest dividends" to the Fund's shareholders,
provided that the Fund qualifies as a regulated investment company and at least
50% of the value of the Fund's total assets at the close of each quarter of its
taxable year consists of tax-exempt obligations. That part of the Fund's net
investment income which is attributable to interest from tax-exempt securities
and which is distributed to shareholders will be designated by the Fund as an
"exempt-interest dividend" under the Code. Exempt-interest dividends are
excluded from a shareholder's gross income under the Code. Exempt-interest
dividends are excluded from a shareholder's gross income under the Code. The
percentage of income designated as tax-exempt is applied uniformly to all
distributions made during each taxable year and may differ from the actual
tax-exempt percentage for any particular month. That portion of net investment
income distributions not designated as tax-exempt and any distributions of the
excess of net short-term capital gain over net long-term capital loss are
taxable to shareholders as ordinary income, and any distributions of the excess
of net long-term capital gain over net short-term capital loss (after taking
into account any capital loss carryovers) are taxable to shareholders as
long-term capital gains, regardless of the shareholder's holding period for the
shares. Dividends declared by the Fund in October, November or December as of a
record date in such a month and paid the following January will be treated for
federal income tax purposes as received by shareholders on December 31 of the
calendar year in which they are declared.
For Federal income tax purposes, the Fund is permitted to carry forward
a net capital loss in any year to offset its 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, as noted above, would not be distributed as such to
shareholders.
Because none of the Fund's income will arise from dividends, no part of
its distributions to its corporate shareholders will qualify for the
dividends-received deduction for corporations.
Redemptions, including exchanges, are taxable transactions. If Class A
shares redeemed (or surrendered in an exchange) have been held for less than 91
days, the sales charge paid on the acquisition of such shares is not included in
their federal tax basis for the purposes of determining gain or loss if a
<PAGE>
reinvestment in the Fund or exchange into a different Fund occurs, in either
case to the extent a sales charge that would otherwise apply to acquisition of
the newly-acquired shares is reduced or eliminated pursuant to the reinvestment
or exchange privilege. Instead, the portion of the sales charge so disregarded
is carried over and included in the federal tax basis of the newly-acquired
shares. In addition, if a redemption results in a loss and an investment is made
in the Fund within a period of 61 days beginning 30 days before and ending 30
days after the redemption, the loss may be disallowed for federal income tax
purposes under the "wash sale" rules. In such a case, the disallowed amount
would be included in the federal tax basis of the newly- acquired shares.
Any loss realized by a shareholder on the redemption, exchange or other
disposition of shares with a tax holding period of six months or less will be
disallowed to the extent of any distributions of exempt-interest dividends with
respect to such shares and, to the extent not thus disallowed, will be treated
as a long-term capital loss to the extent of any distributions of long- term
capital gains with respect to such shares.
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. Consequently, subsequent distributions from this appreciation
may be taxable to the 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.
Interest on indebtedness incurred (directly or indirectly) by
shareholders to purchase or carry shares of the Fund will not be deductible for
federal income tax purposes to the extent it is deemed to relate to exempt-
interest dividends received from the Fund.
Federal law generally requires that the Fund withhold as "backup
withholding" 31% of reportable payments, including taxable income dividends (but
not including exempt-interest dividends), capital gain dividends, and the
proceeds of redemptions (including exchanges) 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 dividends income. Backup
withholding may be inapplicable for any year in which the Fund reasonably
<PAGE>
estimates that at least 95% of its dividends paid with respect to such year are
exempt-interest dividends.
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. The description does not address special tax
rules applicable to certain classes of investors such as insurance companies and
financial institutions. Investors other than the U.S. persons may be subject to
different U.S. tax treatment including a possible 30% U.S. withholding tax (or
U.S. withholding tax at a lower treaty rate) on amounts treated as ordinary
dividends from the Fund and, unless an effective IRS Form W-8 or authorized
substitute is on file, to 31% backup withholding on certain other payments from
the Fund.
The exemption of exempt-interest dividends for Federal income tax
purposes does not necessarily result in exemption under the tax laws of any
state or local taxing authority, which vary with respect to the taxation of such
dividend income. Many states will exempt from tax that portion of an
exempt-interest dividend which represents interest received by the Fund on that
state's securities, subject in some cases to compliance with concentration
and/or reporting requirements, which the Fund makes no commitment to seek to
satisfy. However, the Fund will report annually to its shareholders the
percentage of interest income received by the Fund during the preceding year on
Municipal Bonds indicating, on a state-by-state basis only, the source of such
income. Each shareholder is advised to consult his own tax adviser regarding the
exemption of exempt-interest dividends under applicable state and local law.
<PAGE>
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 (without par value) which may be divided into such separate
series as the Trustees may establish. The Trustees may establish additional
series of shares, and may divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Fund. The Declaration of Trust further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of two classes of
shares of the Fund, Class A shares and Class B shares. Each share of a class of
the Fund represents an equal proportionate interest in the assets of the Fund
allocable to that class. Upon liquidation of the Fund, shareholders of each
class are entitled to share pro rata in the Fund's net assets allocable to such
class available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of shares, in which case the
<PAGE>
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
The shares of the Fund are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of the Fund vote together as a class on matters
that affect the Fund in substantially the same manner. As to matters affecting a
single class, shares of such class will vote separately.
Although Trustees are not 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 its shares. Shares have no
pre-emptive 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 July 24, 1986, a copy of which is on file with
the office of the Secretary 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 and provides 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. 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 will 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
<PAGE>
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 each class of the Fund is determined
as of the close of regular trading on the New York Stock Exchange (the
"Exchange") (currently 4:00 p.m., Eastern Time) on each day on which the
Exchange is open for trading. As of the date of this Statement of Additional
Information, the Exchange is open for trading every weekday except for the
following holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of each class of the Fund is also determined on any other day in
which the level of trading in its portfolio 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 purchased 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 each class of the Fund is computed by
taking the amount of the value of all of the Fund's assets, less the Fund's
liabilities attributable to the class, and dividing it by the number of
outstanding shares of the class. The Board of Trustees has directed that the
fair market value of the Fund's assets should be determined as follows.
Ordinarily, investments in debt securities are valued on the basis of
information furnished by a pricing service which utilizes primarily a matrix
system (which reflects such factors as security prices, yields, maturities and
ratings), supplemented by dealer and exchange quotations, to recommend
valuations for normal institutional-sized trading units of debt securities. In
addition, the Board has instructed advisory personnel not to rely exclusively on
this pricing service if the fair market value of certain securities may be more
accurately determined on the basis of information available from other sources.
Temporary cash investments are valued at amortized cost, which approximates
market value.
The Fund's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per Class A share. Class
B shares are offered at net asset value without the imposition of an initial
sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP"), which is available for Class A
shares only, is designed to provide a convenient method of receiving fixed
<PAGE>
payments at regular intervals from Class A shares of the Fund deposited by the
applicant under this SWP. The applicant must deposit or purchase for deposit
with PSC shares of the Fund having a total value of not less than $10,000.
Periodic checks of $50 or more will be sent to the applicant, or any person
designated by him, monthly or quarterly. Class B share accounts must meet the
minimum initial investment requirement prior to establishing a SWP. Withdrawals
from Class B share accounts are limited to 10% of the value at the time the SWP
is established. See "How to Sell Fund Shares" in the Prospectus.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. Redemptions are potentially taxable
transactions to shareholders. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. 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 SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed. The fees of PSC for maintaining SWPs are paid by the Fund.
15. LETTER OF INTENTION
Purchases of $100,000 or more of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided to PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Class
A shares of $100,000 over a 13-month period would be charged at the 3.50% 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
<PAGE>
obtain the reduced sales charge by including the value (at current offering
price) of all Class A shares of record held in the Fund and other Pioneer mutual
funds, except directly purchased Class A shares of Pioneer Money Market Trust,
as of the date of the Letter of Intention as a credit toward determining the
applicable scale of sales charge for the Class A shares to be purchased under
the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment 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 set forth in detail in the Account
Application carefully before signing.
16. INVESTMENT RESULTS
The Fund's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this Statement of Additional Information
or in advertising are calculated by standard methods prescribed by the SEC.
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 other relevant indices. For example, the Fund may compare a
class's yield and/or total return to the Shearson Lehman Hutton Municipal Bond
Index, or other comparable indices or investment vehicles.
In addition, the performance of the classes of the Fund may be compared
to alternative investment or savings vehicles (such as individual securities,
bank deposits, or certificates of deposit) and/or indices or indicators of
economic activity, e.g., inflation, interest rates, or the Consumer Price Index.
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, Personal
Investor, 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 CDA/Weisenberger Investment
Companies Service, Donoghue's Mutual Fund Almanac, Investment Company Data,
Inc., Ibbotson Associates, Johnson's Charts, Kanon Bloch Carre and Co., Lipper
Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
<PAGE>
One of the primary methods used to measure the performance of a class
of the Fund is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in the
class, over any period up to the lifetime of the class. 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.
Other data that may be advertised or published about a class of the
Fund include the average portfolio quality, the average portfolio maturity, and
the average portfolio duration.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts are
taken into consideration. For any account fees that vary with the size of the
account, the account fee used for purposes of the above computation is assumed
to be the fee that would be charged to the Fund's mean account size.
Standardized Yield Quotations
The yield of a class is computed by dividing the class's net investment
income per share during a base period of 30 days, or one month, by the maximum
offering price per share of the class on the last day of such base period in
accordance with the following formula:
YIELD = 2[ (a-b +1 ) 6 -1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares
outstanding during the period that were
entitled to receive dividends
d = the maximum offering price per share on the
last day of the period
<PAGE>
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i) The yield to maturity of each obligation held by the Fund is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates;
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period;
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled;
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date;
(v) Obligations with sinking fund call provisions may be regarded as
maturing as to that portion to be retired on each sinking fund call date or
during a twelve-month period; and
(vi) In the case of a tax exempt obligation issued without original
issue discount and having a current market discount, the coupon rate of interest
of the obligation is used in lieu of yield to maturity to determine interest
income earned on the obligation. In the case of a tax exempt obligation with
original issue discount where the discount based on the current market value of
the obligation exceeds the then remaining portion of original issue discount
(i.e. market discount), the yield to maturity used to determine interest income
earned on the obligation is the imputed rate based on the original issue
discount calculation. In the case of a tax exempt obligation with original issue
discount where the discount based on the current market value of the obligation
is less than the then remaining portion of the original issue discount (market
premium), the yield to maturity used to determine interest income earned on the
obligation is based on the market value of the obligation.
The yields of the Fund for the one-month period ended December 31, 1994
determined in accordance with the formula above were 5.01% for Class A shares
and 4.39% for Class B shares, except that absent expense limitations, the yields
<PAGE>
on Class A shares and Class B shares of the Fund would have been 4.86% and
4.26%, respectively.
Taxable Equivalent Yield
The Fund may also from time to time advertise the taxable equivalent
yield of a class which is determined by dividing that portion of the class's
yield (calculated as described above) that is tax exempt by one minus the stated
federal income tax rate and adding the product to that portion, if any, of the
class's yield that is not tax exempt. For a description of how to compare yields
on municipal bonds and taxable securities, see the Taxable Equivalent Formula
set forth in Appendix A to the Prospectus. The taxable equivalent yield for a
Class A shareholder and a Class B shareholder in the 39.6% federal income tax
bracket for the one-month period ended December 31, 1994 determined in
accordance with such formula was 8.29% and 7.27%, respectively, except that
absent expense limitations, the yield on Class A shares and Class B shares of
the Fund would have been 8.05% and 7.05%, respectively.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A and Class B shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment made on the first day of a designated period to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T) n = ERV
Where: P = a hypothetical initial payment of $1,000,
less the maximum sales load of $35 for
Class A shares or the deduction of the CDSC
on Class B shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1,000 initial payment made at the beginning
of the designated period (or fractional portion thereof)
The computation above assumes that all dividends and distributions made by the
Fund are reinvested at net asset value during the designated period. The average
annual total return quotation is determined to the nearest 1/100 of 1%. The
average annual total return on a Class A share of the Fund for the one-year and
five-year periods ended December 31, 1994 were -9.31% and 5.31%, respectively,
<PAGE>
and for the period since inception (October 22, 1986) was 5.43%. The total
return on a Class B share of the Fund as of December 31, 1994 was -4.37%. Absent
expense limitations in effect during these periods, the average annual total
return on a Class A share or a Class B share of the Fund would have been lower
than the returns quoted above.
Automated Information Line (FactFone)
FactFone, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer bond funds;
o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer money market funds; and
o dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with SEC mandated standard
formulas.
In addition, by using a personal identification number (PIN),
shareholders may access their account balance and last three transactions and
may order a duplicate statement.
All performance numbers communicated through FactFone represent past
performance, and figures for all quoted bond funds include the applicable
maximum sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A and Class B shares (except
for Pioneer money market funds, which seek a stable $1.00 share price) will also
vary and may be worth more or less at redemption than their original cost.
<PAGE>
APPENDIX A
Description of Municipal Bonds
Municipal Bonds include debt obligations issued to obtain funds for
various public purposes, including the construction of a wide range of public
facilities such as bridges, highways, housing, mass transportation, schools,
streets and water and sewer works. Other public purposes for which Municipal
Bonds may be issued include refunding outstanding obligations, obtaining funds
for general operating expenses, and obtaining funds to loan to other public
institutions.
The two principal classifications of Municipal Bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment for
principal and interest. The payment of such bonds may be dependent upon an
appropriation by the issuer's legislative body. The characteristics and
enforcement of general obligation bonds vary according to the law applicable to
the particular issuer. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. There are, of
course, variations in the security of Municipal Bonds, both within a particular
classification and between classifications, depending on numerous factors.
The yields on Municipal Bonds are dependent on a variety of factors,
including general money market conditions, supply and demand and general
conditions of the Municipal Bond market, size of a particular offering, the
maturity of the obligation and rating of the issue. The ratings of Moody's
Investor Service, Inc. and Standard & Poor's corporation represent their
opinions as to the quality of various Municipal Bonds. It should be emphasized,
however, that ratings are not absolute standards of quality. Consequently,
Municipal Bonds with the same maturity, coupon and rating may have different
yields while Bonds of the same maturity and coupon with different ratings may
have the same yield.
A-1
<PAGE>
APPENDIX B
Description of Municipal Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are produced by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such change as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- --------
1 The ratings indicated herein are believed to be the most recent rating
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
B-1
<PAGE>
Standards & Poor's Corporation3
AAA: Bonds rated AAA are highest grade obligations. This rating
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
3 Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
<PAGE>
APPENDIX C
Description of Certain Other Investments
U.S. Government Obligations - are issued by the Treasury and include
bills, certificates of indebtedness, notes, and bonds. Agencies and
instrumentalities of the U.S. Government are established under the authority of
an act of Congress and include, but are not limited to, the Government National
Mortgage Association, the Tennessee Valley Authority, the Bank for cooperatives,
the Farmers Home Administration, Federal Home Loan Banks, Federal Intermediate
Credit Banks, Federal Land Banks, and the Federal National Mortgage Association.
Certificates of Deposit - are certificates issued against funds
deposited in a commercial bank, are for a definite period of time, earn a
specified rate of return, and are normally negotiable.
Bankers' Acceptances - are short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.
Repurchase Agreements - are agreements by which a person purchases a
security and simultaneously commits to resell that security to the seller (a
member bank of the Federal Reserve System or recognized securities dealer) at an
agreed upon price on an agreed upon date within a number of days (usually not
more than seven) form the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security, usually
U.S. Government or Government agency issues. Under the 1940 Act, repurchase
agreements are considered to be loans by the Fund. The Fund's risk is limited to
the ability of the seller to pay the agreed upon amount on the delivery date. In
the opinion of the Fund's adviser this risk is not material; if the seller
defaults, the underlying security constitutes collateral for the seller's
obligation to pay although the Fund may incur certain costs in liquidating this
collateral and in certain cases may not be permitted to liquidate this
collateral.
C-1
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements of the Registrant are incorporated
by reference from the 1994 Annual Report to Shareholders
which is incorporated by reference into Part B, the Statement
of Additional Information. The 1994 Annual Report to
Shareholders is attached hereto as Exhibit 12.
(b) Exhibits:
1. Amended and Restated Declaration of Trust+
1.1 Establishment and Designation of Classes+
2. By-Laws+
3. None
4. None
5. Management Contract+
6.1. Underwriting Agreement+
6.2. None
7. None
8.1 Form of Custodian Agreement with Brown Brothers
Harriman & Co.+
9. None
10. None
11. Consent of Arthur Andersen LLP++
<PAGE>
12. 1994 Annual Report to Shareholders++
13. Form of Stock Purchase Agreement+
14. None
15. Distribution Plan+
15.1 Form of Class B Rule 12b-1 Distribution Plan+
16. Description of Average Annual Total Return and Yield
Calculation+
17. Financial Data Schedule ++
18. Power of Attorney+
------------------------
+ Refiled electronically herewith in accordance with EDGAR
requirements. Also previously filed and incorporated by
reference from the exhibits filed with the Registration
Statement, as amended, of the Registrant (File No. 33-7592).
++ Filed electronically herewith in accordance with
EDGAR requirements.
Item 25. Persons Controlled By or Under
Common Control With Registrant
The Pioneer Group, Inc., a Delaware corporation ("PGI"), owns 100% of
the outstanding capital stock of Pioneering Management Corporation, a Delaware
corporation ("PMC"), Pioneering Services Corporation ("PSC"), Pioneer Capital
Corporation ("PCC"), Pioneer Fonds Marketing GmbH ("GmbH"), Pioneer SBIC Corp.
("SBIC"), Pioneer Associates, Inc., Pioneer International Corporation, Pioneer
Plans Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and Pioneer
Investments Corporation ("PIC"), all Massachusetts corporations. PGI also owns
100% of the outstanding capital stock of Pioneer Metals and Technology, Inc.
("PMT"), a Delaware corporation, and Pioneer First Polish Trust Fund Joint Stock
Company ("First Polish"), a Polish corporation. PGI owns 90% of the outstanding
shares of Teberebie Goldfields Limited ("TGL"). PMC owns 100% of the outstanding
capital stock of Pioneer Funds Distributor, Inc. ("PFD"), a Massachusetts
corporation. Pioneer Winthrop Advisers ("PWA"), a Massachusetts general
partnership, is a joint venture between PGI and Winthrop Financial Associates, a
Limited Partnership, a Delaware limited partnership. Pioneer Fund, Pioneer II,
<PAGE>
Pioneer Three, Pioneer Bond Fund, Pioneer Intermediate Tax-Free Fund, Pioneer
Growth Trust, Pioneer Europe Fund, Pioneer International Growth Fund, Pioneer
Short-Term Income Trust, Pioneer Tax-Free State Series Trust, Pioneer Money
Market Trust, Pioneer America Income Trust and the Registrant (each of the
foregoing, a Massachusetts business trust), and Pioneer Interest Shares, Inc. (a
Nebraska corporation) and Pioneer Growth Shares, Pioneer Income Fund, Pioneer
India Fund, Pioneer Tax-Free Income Fund and Pioneer Emerging Markets Fund (each
of the foregoing, a Delaware business trust) are all parties to management
contracts with PMC. Pioneer Winthrop Real Estate Investment Fund is a party to a
sub-investment management contract with PMC. PCC owns 100% of the outstanding
capital stock of SBIC. SBIC is the sole general partner of Pioneer Ventures
Limited Partnership, a Massachusetts limited partnership. John F. Cogan, Jr.
owns approximately 15% of the outstanding shares of PGI. Mr. Cogan is Chairman
of the Board, President and Trustee of the Registrant and of each of the Pioneer
investment companies; Director and President of PGI; President and Director of
PPC, PIC, Pioneer International Corporation and PMT; Director of PCC and PSC;
Chairman of the Board and Director of PMC, PFD and TGL; Chairman, President and
Director of PGL; Chairman of the Supervisory Board of GmbH; Chairman and Chief
Executive Officer of PWA; Chairman and Member of Supervisory Board of First
Polish; and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities
The following table sets forth the approximate number of recordholders
of each class of securities of the Registrant as of March 31, 1995:
Class A Class B
Number of Record Holders: 2,548 79
Item 27. Indemnification
Except for the Amended and Restated Declaration of Trust dated
December 7, 1993, 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 of 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.
<PAGE>
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) Schedule D, Section 6, Business Background of
each individual.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
<S> <C> <C>
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
James L. Spencer Director and Executive None
Vice President
David D. Tripple Director Executive Vice
President and Trustee
Stephen W. Long Senior Vice President None
Alicja Malecka Vice President None
Richard C. Dolan,
Jr. Vice President None
John W. Drachman Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant Vice None
President
<PAGE>
Gail A. Smyth Assistant Vice None
President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
</TABLE>
(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.
Item 31. Management Services
The Registrant is a party to only one contract, described in
the Prospectus, under which it receives services from Pioneering Management
Corporation.
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 annual 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's prior undertaking seeking to limit
indemnification of its officers and Trustees has been deleted. All
indemnification provisions are contained in the Registrant's Amended and
Restated Declaration of Trust, as approved by shareholders on December 6, 1993.
<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. 11 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 Commonwealth
of Massachusetts, on the 25th day of April, 1995.
PIONEER INTERMEDIATE TAX-FREE FUND
By: /s/Joseph P. Barri
Joseph P. Barri,
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 11 to the Registration Statement (File No. 33-7592)
has been signed below by the following persons in the capacities and on the date
indicated:
Signature Date
Principal Executive Officer: )
)
)
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. ) April 25, 1995
)
)
Principal Financial and )
Accounting Officer: )
)
)
/s/William H. Keough* )
William H. Keough )
<PAGE>
A MAJORITY OF THE BOARD OF TRUSTEES:
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
/s/Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
/s/John W. Kendrick* )
John W. Kendrick )
)
/s/Marguerite A. Piret* )
Marguerite A. Piret )
)
/s/David D. Tripple* )
David D. Tripple )
)
/s/John Winthrop* )
John Winthrop )
)
/s/Margaret B.W. Graham* )
Margaret B.W. Graham )
)
/s/Stephen K. West* )
Stephen K. West
*By: /s/Joseph P. Barri
Joseph P. Barri, April 25, 1995
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1 Amended and Restated Declaration of Trust
1.1 Establishment and Designation of
Classes
2. By-Laws
5. Management Contract
8.1 Form of Custodian Agreement
with Brown Brothers Harriman & Co.
11. Consent of Arthur Andersen LLP
12. 1994 Annual Report to Shareholders
13. Form of Stock Purchase Agreement
15. Distribution Plan
15.1 Form of Class B Rule 12b-1
Distribution Plan
16. Description of Average Annual Total
Return and Yield Calculation
17. Financial Data Schedule
18. Power of Attorney
AMENDED AND RESTATED DECLARATION OF TRUST
OF
PIONEER MUNICIPAL BOND FUND
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
December 7, 1993
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I. NAME AND DEFINITIONS
1.1 Name............................................................1
1.2 Definitions.....................................................1
ARTICLE II. TRUSTEES
2.1 General Powers..................................................4
2.2 Investments.....................................................4
2.3 Legal Title.....................................................6
2.4 Issuance and Repurchase of Shares...............................7
2.5 Delegation; Committees..........................................7
2.6 Collection and Payments.........................................7
2.7 Expenses........................................................7
2.8 Manner of Acting; By-laws.......................................7
2.9 Miscellaneous Powers............................................8
2.10 Principal Transactions..........................................9
2.11 Litigation......................................................9
2.12 Number of Trustees..............................................9
2.13 Election and Term...............................................9
2.14 Resignation and Removal.........................................10
2.15 Vacancies.......................................................10
2.16 Delegation of Power to Other Trustees...........................11
ARTICLE III. CONTRACTS
3.1 Underwriting Contract...........................................11
3.2 Advisory or Management Contract.................................11
3.3 Administration Agreement........................................12
3.4 Service Agreement...............................................12
3.5 Transfer Agent..................................................12
3.6 Custodian.......................................................12
3.7 Affiliations of Trustees or Officers, Etc.......................13
3.8 Compliance with 1940 Act........................................13
ARTICLE IV. LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES
AND OTHERS
4.1 No Personal Liability of Shareholders, Trustees, Etc............14
4.2 Non-Liability of Trustees, Etc..................................14
4.3 Mandatory Indemnification.......................................15
4.4 No Bond Required of Trustees....................................17
4.5 No Duty of Investigation; Notice in Trust
Instruments, Etc................................................17
4.6 Reliance on Experts, Etc........................................17
ARTICLE V. SHARES OF BENEFICIAL INTEREST
5.1 Beneficial Interest.............................................18
5.2 Rights of Shareholders..........................................18
5.3 Trust Only......................................................18
5.4 Issuance of Shares..............................................19
5.5 Register of Shares..............................................19
5.6 Transfer of Shares..............................................19
5.7 Notices.........................................................20
5.8 Treasury Shares.................................................20
5.9 Voting Powers...................................................20
5.10 Meetings of Shareholders........................................21
5.11 Series or Class Designation.....................................21
5.12 Assent to Declaration of Trust..................................25
ARTICLE VI. REDEMPTION AND REPURCHASE OF SHARES
6.1 Redemption of Shares............................................25
6.2 Price...........................................................26
6.3 Payment.........................................................26
6.4 Effect of Suspension of Determination of Net Asset Value........26
6.5 Repurchase by Agreement.........................................27
6.6 Redemption of Shareholder's Interest............................27
6.7 Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding......................27
6.8 Reductions in Number of Outstanding Shares Pursuant to
Net Asset Value Formula........................................27
6.9 Suspension of Right of Redemption...............................28
ARTICLE VII. DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS
7.1 Net Asset Value.................................................28
7.2 Distributions to Shareholders...................................29
7.3 Determination of Net Income; Reduction of Outstanding
Shares......................................................30
7.4 Power to Modify Foregoing Procedures............................31
ARTICLE VIII. DURATION; TERMINATION OF TRUST OR A SERIES OR
CLASS; AMENDMENT; MERGERS, ETC.
8.1 Duration........................................................31
8.2 Termination of the Trust or a Series or a Class.................31
8.3 Amendment Procedure.............................................33
8.4 Merger, Consolidation and Sale of Assets........................34
8.5 Incorporation...................................................35
ARTICLE IX. REPORTS TO SHAREHOLDERS...................................35
-ii-
<PAGE>
ARTICLE X. MISCELLANEOUS
10.1 Execution and Filing............................................35
10.2 Governing Law...................................................36
10.3 Counterparts....................................................36
10.4 Reliance by Third Parties.......................................36
10.5 Provisions in Conflict with Law or Regulations..................36
-iii-
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
PIONEER MUNICIPAL BOND FUND
AMENDED AND RESTATED DECLARATION OF TRUST made this 7th day of December,
1993 by John F. Cogan, Jr., Richard H. Egdahl, Margaret B. W. Graham, John W.
Kendrick, Marguerite A. Piret, David D. Tripple, Stephen K. West and John
Winthrop (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees").
WHEREAS, pursuant to a Declaration of Trust dated July 24, 1986, the
Trustees established a trust for the investment and reinvestment of funds
contributed thereto;
WHEREAS, in accordance with said Declaration, on July 24, 1986, the
Trustees, pursuant to a resolution duly adopted, established "Pioneer Municipal
Bond Fund" as the sole Series of the Trust;
WHEREAS, said Declaration of Trust provides that the beneficial interest
in the trust assets be divided into transferable shares of beneficial trust;
WHEREAS, said Declaration of Trust provides that all money and property
contributed to the Trust thereunder shall be held and managed in trust for the
benefit of the holders subject to the provisions thereof; and
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety, as hereinafter provided;
NOW THEREFORE, the undersigned, being a majority of the Trustees of the
Trust, hereby amend and restate the Declaration in its entirety, as follows:
<PAGE>
ARTICLE I
Name and Definitions
Section 1.1. Name. The name of the trust created hereby is "Pioneer
Municipal Bond Fund" (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to the
contract described in Section 3.3 hereof.
(b) "By-laws" means the By-laws referred to in Section 2.8 hereof, as
amended from time to time.
(c) "Class" means any division of shares within a Series, which Class is
or has been established within such Series in accordance with the provisions of
Article V.
(d) The terms "Commission" and "Interested Person" have the meanings
given them in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series of Shares, the term
"vote of a majority of the Shares outstanding and entitled to vote" shall have
the same meaning as is assigned to the term "vote of a majority of the
outstanding voting securities" in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time to
time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which such words appear.
(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.
<PAGE>
(h) "Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities assigned
thereto.
(i) "Fundamental Restrictions" means the investment restrictions set
forth in the Prospectus and Statement of Additional Information and designated
as fundamental restrictions therein.
(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(l) The "194O Act" means the Investment Company Act of 1940, as amended
from time to time.
(m) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o) "Series" individually or collectively means the separately managed
component(s) of the Trust as may be established and designated from time to time
by the Trustees pursuant to Section 5.11 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares.
(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any Series (as
the context may require) which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares. "Outstanding" Shares means those
Shares shown from time to time on the books of the Trust or its Transfer Agent
<PAGE>
as then issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in the
treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(s) "Trust" means Pioneer Municipal Bond Fund.
(t) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, and reference herein to a Trustee or the Trustees shall refer to such
person or persons in this capacity or their capacities as trustees hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including any and all assets of or allocated to any
Series or Class, as the context may require.
ARTICLE II
Trustees
Section 2.1. General Powers. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
<PAGE>
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid powers. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 2.2. Investments. The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts for
or evidence of equity interests; bonds, debentures, bills, time notes and all
other evidences of indebtedness; negotiable or non-negotiable instruments;
government securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or quasi-governmental agency
or instrumentality; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all kinds of
repurchase agreements, of any corporation, company, trust, association, firm or
other business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; and the Trustees shall be deemed
to have the foregoing powers with respect to any additional securities in which
the Trust may invest should the Fundamental Restrictions be amended.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements and forward foreign currency exchange contracts, to purchase and sell
options on securities, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
<PAGE>
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; and to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
ad other obligations of any such corporation, company, trust, association or
firm.
(h) To enter into a plan of distribution and any related agreements
whereby the Trust may finance directly or indirectly any activity which is
primarily intended to result in sales of Shares.
(i) To adopt on behalf of the Trust or any Series thereof an alternative
purchase plan providing for the issuance of multiple Classes of Shares (as
authorized herein at Section 5.11), such Shares being differentiated on the
basis of purchase method and allocation of distribution expenses.
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
<PAGE>
appurtenant to or arising out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust or any Series of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the Property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VI and VII and Section 5.11 hereof, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of The Commonwealth of Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have the power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
<PAGE>
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or any
Series of the Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient, to the same extent as such delegation is permitted by the
1940 Act.
Section 2.6. Collection and Payment. Subject to Section 5.11 hereof, the
Trustees shall have the power to collect all property due to the Trust; to pay
all claims, including taxes, against the Trust Property; to prosecute, defend,
compromise or abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligations, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 2.7. Expenses. Subject to Section 5.11 hereof, the Trustees shall
have the power to incur and pay any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes of this
Declaration, and to pay reasonable compensation from the funds of the Trust to
themselves as Trustees. The Trustees shall fix the compensation of all officers,
employees and Trustees of the Trust.
Section 2.8. Manner of Acting; By-laws. Except as otherwise provided
herein or in the By-laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of a majority of the
entire number of Trustees then in office. The Trustees may adopt By-laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-laws to the extent such power is not
reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
<PAGE>
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the
Trustees shall have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the business of the Trust
or any Series thereof; (b) enter into joint ventures, partnerships and any other
combinations or associations; (c) remove Trustees or fill vacancies in or add to
their number, elect and remove such officers and appoint and terminate such
agents or employees as they consider appropriate, and appoint from their own
number, and terminate, any one or more committees which may exercise some or all
of the power and authority of the Trustees as the Trustees may determine; (d)
purchase, and pay for out of Trust Property or Trust Property of the appropriate
Series of the Trust, insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, administrators, distributors,
selected dealers or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust or any Series thereof has dealings,
including the Investment Adviser, Administrator, Distributor, Transfer Agent and
selected dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust or any Series thereof and the method by which its or
their accounts shall be kept; (i) adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument executed on behalf of
the Trust; and (j) establish record dates relating to meetings of shareholders,
payments of dividends or other distributions, exchanges or conversions of shares
or any other matter deemed appropriate by the Trustees.
Section 2.10. Principal Transactions. Except in transactions not
permitted by the 1940 Act or rules and regulations adopted by the Commission,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust or any Series thereof to any
Trustee or officer of the Trust or any firm of which any such Trustee or officer
is a member acting as principal, or have any such dealings with the Investment
<PAGE>
Adviser, Distributor or Transfer Agent or with any Interested Person of such
Person; and the Trust or a Series thereof may employ any such Person, or firm or
company in which such Person is an Interested Person, as broker, legal counsel,
registrar, transfer agent, dividend disbursing agent or custodian upon customary
terms.
Section 2.11. Litigation. The Trustees shall have the power to engage in
and to prosecute, defend, compromise, abandon, or adjust by arbitration, or
otherwise, any actions, suits, proceedings, disputes, claims and demands
relating to the Trust, and out of the assets of the Trust or any Series thereof
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, to dismiss any
action, suit, proceeding, dispute, claim or demand, derivative or otherwise,
brought by any person, including a Shareholder in its own name or the name of
the Trust, whether or not the Trust or any of the Trustees may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Trust.
Section 2.12. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15).
Section 2.13. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.15 hereof, the Trustees may
succeed themselves and shall be elected by the Shareholders owning of record a
plurality of the Shares voting at a meeting of Shareholders on a date fixed by
the Trustees. Except in the event of resignations or removals pursuant to
Section 2.14 hereof, each Trustee shall hold office until such time as less than
a majority of the Trustees holding office have been elected by Shareholders. In
such event the Trustees then in office shall call a Shareholders' meeting for
the election of Trustees. Except for the foregoing circumstances, the Trustees
shall continue to hold office and may appoint successor Trustees.
Section 2.14. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
<PAGE>
shall be effective upon such delivery, or at a later date according to the terms
of the instrument. Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than three) for cause,
by the action of two-thirds of the remaining Trustees or by action of the
holders of two-thirds of the outstanding Shares of the Trust (for purposes of
determining the circumstances and procedures under which any such removal by the
Shareholders may take place, the provisions of Section 16(c) of the 1940 Act (or
any successor provisions) shall be applicable to the same extent as if the Trust
were subject to the provisions of that Section). Upon the resignation or removal
of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of memorializing the conveyance to the Trust or the remaining Trustees of any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
Section 2.15. Vacancies. The term of office of a Trustee shall terminate
and a vacancy shall occur in the event of his death, retirement, resignation,
removal, bankruptcy, adjudicated incompetence or other incapacity to perform the
duties of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit, made by a written instrument signed by a majority of the Trustees
then in office. Any such appointment shall not become effective, however, until
the person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in anticipation of a
vacancy to occur at a later date by reason of retirement, resignation or
increase in the number of Trustees, provided that such appointment shall not
become effective prior to such retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the such retirement, resignation or increase
on the number of Trustees. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in this Section 2.15, the
Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
<PAGE>
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees in office shall be conclusive
evidence of the existencwe of such vacancy.
Section 2.16. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
fewer than three (3) Trustees personally exercise the powers granted to the
Trustees under this Declaration except as herein otherwise expressly provided.
ARTICLE III
CONTRACTS
Section 3.1 Underwriting Contract. The Trustees may in their discretion
from time to time enter into an exclusive or non-exclusive distribution contract
or contracts providing for the sale of the Shares to net the Trust or the
applicable Series of the Trust not less than the amount provided for in Section
7.1 of Article VII hereof, whereby the Trustees may either agree to sell the
Shares to the other party to the contract or appoint such other party as their
sales agent for the Shares, and in either case on such terms and conditions, if
any, as may be prescribed in the By-laws, and such further terms and conditons
as the Trustees may in their discretion determine not inconsistent with the
provisions of this Article III or of the By-laws; and such contract may also
provide for the repurchase of the Shares by such other party as agent of the
Trustees.
Section 3.2. Advisory or Management Contract. Subject to approval by a
vote of a majority of Shares outstanding and entitled to vote, the Trustees may
in their discretion from time to time enter into one or more investment advisory
or management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contract with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trustor such Series management, investment advisory, administration,
accounting, legal statistical and research facilities and services, promotional
or marketing activities, and such other facilities and services, if any, as the
Trustees shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of the Declaration, the Trustees may authorize the Investment
<PAGE>
Advisers, or any of them, under any such contracts (subject to such general or
specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities and other
investments of the Trust on behalf of the Trustees or may authorize any officer,
employee or Trustee to effect such purchases, sales, loans or exchanges pursuant
to recommendations of such Investment Advisers, or any of them (and all without
further action by the Trustees). Any such purchases, sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees. The Trustees
may, in their sole discretion, call a meeting of Shareholders in order to submit
to a vote of Shareholders at such meeting the approval or continuance of any
such investment advisory or management contract. If the Shareholders of any one
or more of the Series of the Trust should fail to approve any such investment
advisory or management contract, the Investment Adviser may nonetheless serve as
Investment Adviser with respect to any Series whose Shareholders approve such
contract.
Section 3.3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof furnish the Trust or a Series or a Class thereof with
office facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms ad conditions as the
Trustees may in their discretion determine.
Section 3.4. Service Agreement. The Trustees may in their discretion from
time to time enter into Service Agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to Administration Plans
and Service Plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 3.5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion deem not inconsistent
with the Declaration. Such services may be provided by one or more Persons.
<PAGE>
Section 3.6. Custodian. The Trustees may appoint or otherwise engage one
or more banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-Laws of the Trust. The Trustees may also authorize
the Custodian to employ one or more sub-custodians, inc1uding such foreign banks
and securities depositories as meet the requirements of applicable provisions of
the 1940 Act, and upon such terms and conditions as may be agreed upon between
the Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 3.7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust or any
Series thereof is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of any
organization, with which a contract of the character described in Sections 3.1,
3.2, 3.3 or 3.4 above or for services as Custodian, Transfer Agent or disbursing
agent or for related services may have been or may hereafter be made, or that
any such organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
3.1,3.2,3.3 or 3.4 above or for services as Custodian, Transfer Agent or
disbursing agent or for related services may have been or may hereafter be made
also has any one or more of such contracts with one or more other partnerships,
corporations, trusts, associations or other organizations, or has other business
or interests, shall not affect the validity of any such contract or disqualify
any Shareholder, Trustee or officer of the Trust from voting upon or executing
the same or create any liability or accountability to the Trust or its
Shareholders.
Section 3.8. Compliance with 1940 Act. Any contract entered into pursuant
to Sections 3.1 or 3.2 shall be consistent with and subject to the requirements
of Section 15 of the 1940 Act (including any amendment thereof or other
<PAGE>
applicable Act of Congress hereafter enacted), as modified by any applicable
order or orders of the Commission, with respect to its continuance in effect,
its termination and the method of authorization and approval of such contract or
renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, except to the extent arising from
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties with respect to such Person; and all such Persons shall look solely to
the Trust Property, or to the Property of one or more specific Series of the
Trust if the claim arises from the conduct of such Trustee, officer, employee or
agent with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee, or agent, as such, of the Trust or any Series
thereof, is made a party to any suit or proceeding to enforce any such liability
of the Trust or any Series thereof, he shall not, on account thereof, be held to
any personal liability. The Trust shall indemnify and hold each Shareholder
harmless from and against all claims and liabilities, to which such Shareholder
may become subject by reason of his being or having been a Shareholder, and
shall reimburse such Shareholder or former Shareholder (or his or her heirs,
executors, administrators or other legal representatives or in the case of a
corporation or other entity, its corporate or other general successor) out of
the Trust Property for all legal and other expenses reasonably incurred by him
in connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of
assets of the one or more Series whose Shares were held by said Shareholder at
the time the act or event occurred which gave rise to the claim against or
liability of said Shareholder. The rights accruing to a Shareholder under this
Section 4.1 shall not impair any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust or any Series thereof to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
<PAGE>
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer,
employee or agent of the Trust or any Series thereof shall be liable to the
Trust, its Shareholders, or to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee, officer, employee or
agent of the Trust (including any individual who serves at its request as
director, officer, partner, trustee or the like of another organization in which
it has any interest as a shareholder, creditor or otherwise) shall be
indemnified by the Trust, or by one or more Series thereof if the claim arises
from his or her conduct with respect to only such Series, to the fullest extent
permitted by law against all 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 Trustee or officer 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; and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or
officer:
(i) against any liability to the Trust, a Series thereof or the
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust or a Series thereof;
<PAGE>
(iii) in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b)(ii) resulting in a payment by a
Trustee or officer, 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 or other
disposition;
(B) based upon a review of readily available facts (as opposed to a full
trial-type inquiry) by (x) vote of a majority of the Noninterested Trustees
acting on the matter (provided that a majority of the Non-interested Trustees
then in office act on the matter) or (y) written opinion of independent legal
counsel; or
(C) by a vote of a majority of the Shares outstanding and entitled to
vote (excluding Shares owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee or officer 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, administration and assigns
of such a person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the Trust or any Series thereof other than
Trustees and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust or a Series thereof prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 4.3, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust or Series thereof
shall be insured against losses arising out of any such advances; or
<PAGE>
(ii) a majority of the Non-interested Trustees acting on the matter
(provided that a majority of the Non-interested Trustees act on the matter) or a
independent legal counsel in a written opinion shall determine, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will be found
entitled to indemnification.
As used in this Section 4.3, a "Non-interested Trustee" is one who (i) is
not an "Interested Person" of the Trust (including anyone who has been exempted
from being an "Interested Person" by any rule, regulation or order of the
Commission), and (ii) is not involved in the claim, action, suit or proceeding,
Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated
to give any bond or other security for the performance of any of his duties
hereunder.
Section 4.5. No Jury of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
<PAGE>
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, be
fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Trust or a Series thereof, upon an opinion of counsel,
or upon reports made to the Trust or a Series thereof by any of its officers or
employees or by the Investment Adviser, the Administrator, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE V
SHARES 0F BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited. The Trustees shall have the exclusive authority without
the requirement of Shareholder approval to establish and designate one or more
Series of shares and one or more Classes thereof as the Trustees deem necessary
or desirable. Each share of any Series shall represent an equal proportionate
Share in the assets of that Series with each other Share in that Series. Subject
to the provisions of Section 5.11 hereof, the Trustees may also authorize the
creation of additional Series of Shares (the proceeds of which may be invested
in separate, independently managed portfolios) and additional Classes of Shares
within any Series. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split in Shares,
shall be fully paid and nonassessable by the Trust.
Section 5.2. Rights of Shareholders. The ownership of the Trust Property
of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
<PAGE>
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration. The
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may determine with respect
to any Series or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, except that only Shares previously contracted to be sold may be issued
during any period when the right of redemption is suspended pursuant to Section
6.9 hereof, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares of the Trust or, if
the Shares be divided into Series or Classes, of any Series or any Class thereof
of the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or 1/1,000ths of a Share or integral multiples thereof.
Section 5.5. Register of Shares. A register shall be kept at the
principal office of the Trust or an office of the Transfer Agent which shall
<PAGE>
contain the names and addresses of the Shareholders and the number of Shares
held by them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or distributions or otherwise to exercise or enjoy
the rights of Shareholders. No Shareholder shall be entitled to receive payment
of any dividend or distribution, nor to have notice given to him as provided
herein or in the By-laws, until he has given his address to the Transfer Agent
or such other officer or agent of the Trustees as shall keep the said register
for entry thereon. It is not contemplated that certificates will be issued for
the Shares; however, the Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate rules and regulations
as to their use.
Section 5.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any transfer agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy or incompetence of any Shareholder, or otherwise by operation of law,
shall be recorded on the register of Shares as the holder of such Shares upon
production of the proper evidence thereof to the Trustees or the Transfer Agent,
but until such record is made, the Shareholder of record shall be deemed to be
the holder of such Shares for all purposes hereunder and neither the Trustees
nor any Transfer Agent or registrar nor any officer or agent of the Trust shall
be affected by any notice of such death, bankruptcy or incompetence, or other
operation of law.
Section 5.7. Notices. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
<PAGE>
Section 5.8. Treasury Shares. Shares held in the treasury shall, until
resold pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Section 2.13; (ii) with
respect to any investment advisory contract entered into pursuant to Section
3.2; (iii) with respect to termination of the Trust or a Series or Class thereof
as provided in Section 8.2; (iv) with respect to any amendment of this
Declaration to the extent and as provided in Section 8.3; (v) with respect to
any merger, consolidation or sale of assets as provided in Section 8.4; (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 8.5; (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or a Series thereof or the Shareholders of either; (viii)
with respect to any plan adopted pursuant to Rule 12b-1 (or any successor rule)
under the 1940 Act, and related matters, to the extent required under the 1940
Act; and (ix) with respect to such additional matters relating to the Trust as
may be required by this Declaration, the Bylaws or any registration of the Trust
as an investment company under the 1940 Act with the Commission (or any
successor agency) or as the Trustees may consider necessary or desirable. 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. On any matter submitted to a vote of Shareholders, all Shares
shall be voted by individual Series except (1) when permitted by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series; and (2)
when the Trustees have determined that the matter affects only the interests of
one or more Series or Class thereof, then only the Shareholders of such Series:
or Class thereof shall be entitled to vote thereon. The Trustees may, in
conjunction with the establishment of any further Series or any Classes of
Shares, establish conditions under which the several Series or Classes of Shares
shall have separate voting rights or no voting rights. There shall be no
cumulative voting in the election of Trustees. Until Shares are issued, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, this Declaration or the By-laws to be taken by Shareholders.
The By-laws may include further provisions for Shareholders' votes and meetings
and related matters.
<PAGE>
Section 5.10. Meetings of Shareholders. No annual or regular meetings of
Shareholders are required. Special meetings of the Shareholders, including
meetings involving only the holders of Shares of one or more but less than all
Series or Classes thereof, may be called at any time by the Chairman of the
Board, President, or any Vice-President of the Trust, and shall be called by the
President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the holder or holders of
ten percent (10%) or more of the total number of Shares then issued and
outstanding of the Trust entitled to vote at such meeting. Meetings of the
Shareholders of any Series of the Trust shall be called by the President or the
Secretary at the written request of the holder or holders of ten percent (10%)
or more of the total number of Shares then issued and outstanding of such Series
of the Trust entitled to vote at such meeting. Any such request shall state the
purpose of the proposed meeting.
Section 5.11. Series or Class Designation. (a) Without limiting the
authority of the Trustees set forth in Section 5.1 to establish and designate
any further Series, it is hereby confirmed that the Trust consists of the
presently Outstanding Shares of one Series: Pioneer Municipal Bond Fund (the
"Existing Series").
(b) Without limiting the authority of the Trustees set forth in Section
5.1 to establish and designate any further Classes, it is hereby confirmed that
each Series of the Trust's Shares consists of a single Class.
(c) The Shares of the Existing Series and each Class thereof herein
established and designated and any Shares of any further Series ad Classes that
may from time to time be established and designated by the Trustees shall be
established and designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and determined, by
the Trustees (unless the Trustees otherwise determine with respect to further
Series or Classes at the time of establishing and designating the same);
provided, that all Shares shall be identical except that there may be variations
so fixed and determined between different Series or Classes thereof as to
investment objective, policies and restrictions, purchase price, payment
obligations, distribution expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, exchange rights,
and conditions under which the several Series shall have separate voting rights,
all of which are subject to the limitations set forth below. All references to
<PAGE>
Shares in this Declaration shall be deemed to be Shares of any or all Series or
Classes as the context may require.
(d) As to any existing Series and Classes, both heretofore and herein
established and designated, and any further division of Shares of the Trust into
additional Series or Classes, the following provisions shall be applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or one or more Classes
that may be established and designated from time to time. The Trustees may hold
as treasury shares (of the same or some other Series or Class), reissue for such
consideration and on such terms as they may determine, or cancel any Shares of
any Series or Class reacquired by the Trust at their discretion from time to
time.
(ii) All consideration received by the Trust for the issue or sale of
Shares of a particular Series or Class, 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
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits and
proceeds thereof, funds or payments which are not readily identifiable as
belonging to any particular Series, the Trustees shall allocate them among any
one or more of the Series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series for all purposes. No holder of Shares of any
Series shall have any claim on or right to any assets allocated or belonging to
any other Series.
(iii) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series or the appropriate
Class or Classes thereof and all expenses, costs, charges and reserves
<PAGE>
attributable to that Series or Class or Classes thereof, and 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 to and among any one or more of the Series
established and designated from time to time in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items are capital; and each
such determination and allocation shall be conclusive and binding upon the
Shareholders. The assets of a particular Series of the Trust shall, under no
circumstances, be charged with liabilities attributable to any other Series or
Class thereof of the Trust. All persons extending credit to, or contracting with
or having any claim against a particular Series or Class of the Trust shall look
only to the assets of that particular Series for payment of such credit,
contract or claim.
(iv) The power of the Trustees to pay dividends and make distributions
shall be governed by Section 7.2 of this Declaration with respect to any Series
or Classes which represent the interests in the assets of the Trust immediately
prior to the establishment of two or more Series or Classes. With respect to any
other Series or Class, dividends and distributions on Shares of a particular
Series or Class may be paid with such frequency as the Trustees may determine,
which may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, to the holders of Shares of that Series or Class, from such of the
income and capital gains, accrued or realized, from the assets belonging to that
Series, as the Trustees may determine, after providing for actual and accrued
liabilities belonging to that Series or Class. All dividends and distributions
on Shares of a particular Series or Class shall be distributed pro rata to the
Shareholders of that Series or Class in proportion to the number of Shares of
that Series or Class held by such Shareholders at the time of record established
for the payment of such dividends or distribution.
(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of distributions
of income and capital gains made with respect to such Series or Class net of
<PAGE>
expenses. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series or
Class, such Shareholder shall be paid solely out of the funds and property of
such Series of the Trust. Upon liquidation or termination of a Series or Class
thereof of the Trust, Shareholders of such Series or Class thereof shall be
entitled to receive a pro rata share of the net assets of such Series. A
Shareholder of a particular Series of the Trust shall not be entitled to
participate in a derivative or class action on behalf of any other Series or the
Shareholders of any other Series of the Trust.
(vi) On each matter submitted to a vote of Shareholders, all Shares of
all Series and Classes shall vote as a single class; provided, however, that (1)
as to any matter with respect to which a separate vote of any Series or Class is
required by the 1940 Act or is required by attributes applicable to any Series
or Class or is required by any Rule 12b-1 plan, such requirements as to a
separate vote by that Series or Class shall apply; (2) to the extent that a
matter referred to in clause (1) above affects more than one Class or Series and
the interests of each such Class or Series in the matter are identical, then,
subject to clause (3) below, the Shares of all such affected Classes or Series
shall vote as a single Class; (3) as to any matter which does not affect the
interests of a particular Series or Class, only the holders of Shares of the one
or more affected Series or Classes shall be entitled to vote; and (4) the
provisions of the following sentence shall apply. On any matter that pertains to
any particular Class of a particular Series or to any Class expenses with
respect to any Series which matter may be submitted to a vote of Shareholder,
only Shares of the affected Class or that Series, as the case may be, shall be
entitled to vote except that: (x) to the extent said matter affects Shares of
another Class or Series, such other Shares shall also be entitled to vote, and
in such cases Shares of the affected Class, as the case may be, of such Series
shall be voted in the aggregate together with such other Shares; and (y) to the
extent that said matter does not affect Shares of a particular Class of such
Series, said Shares shall not be entitled to vote (except where otherwise
required by law or permitted by the Trustees acting in their sole discretion)
even though the matter is submitted to a vote of the Shareholders of any other
Class or Series.
(vii) Except as otherwise provided in this Article V, the Trustees shall
have the power to determine the designations, preferences, privileges, payment
obligations, limitations and rights, including voting and dividend rights, of
<PAGE>
each Class and Series of Shares. Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide that the holder
of Shares of any Series or Class shall have the right to convert or exchange
said Shares into Shares of one or more Series or Classes of Shares in accordance
with such requirements, conditions and procedures as may be established by the
Trustees.
(viii) The establishment and designation of any Series or Classes of
Shares shall be effective upon the execution by a majority of the then Trustees
of an instrument setting forth such establishment and designation and the
relative rights and preferences of such Series or Classes, or as otherwise
provided in such instrument. At any time that there are no Shares outstanding of
any particular Series or Class previously established and designated, the
Trustees may by an instrument executed by a majority of their number abolish
that Series or Class and the establishment and designation thereof. Each
instrument referred to in this section shall have the status of an amendment to
this Declaration.
Section. 5.12. Assent to Declaration of Trust. 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 hereto.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust. The
Trust may require any Shareholder to pay a sales charge to the Trust, the
underwriter, or any other person designated by the Trustees upon redemption or
repurchase of Shares in such amount and upon such conditions as shall be
determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or Class
thereof at the price determined as hereinafter set forth, upon the appropriately
verified written application of the record holder thereof (or upon such other
form of request as the Trustees may determine) at such office or agency as may
be designated from time to time for that purpose by the Trustees. The Trustees
<PAGE>
may from time to time specify additional conditions, not inconsistent with the
1940 Act, regarding the redemption of Shares in the Trust's then effective
Prospectus.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall have theretofore prescribed by resolution. In the absence of
such resolution, the redemption price of Shares deposited shall be based on the
net asset value of such Shares next determined as set forth in Section 7.1
hereof after receipt of such application. The amount of any contingent deferred
sales cue or redemption fee payable upon redemption of Shares may be deducted
from the proceeds of such redemption.
Section 6.3. Payment. Payment of the redemption price of Shares of the
Trust or any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940 Act
or other applicable laws, as may be specified from time to time in the Trust's
then effective Prospectus, subject to the provisions of Section 6.4 hereof.
Notwithstanding the foregoing, the Trustees may withhold from such redemption
proceeds any amount arising (i) from a liability of the redeeming Shareholder to
the Trust or (ii) in connection with any Federal or state tax withholding
requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of
the determination of net asset value with respect to Shares of the Trust or of
any Series or Class thereof, the rights of Shareholders (including those who
shall have applied for redemption pursuant to Section 6.1 hereof but who shall
not yet have received payment) to have Shares redeemed and paid for by the Trust
or a Series or Class thereof shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any Share certificates
on deposit. The redemption price of Shares for which redemption applications
have not been revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such suspension,
and payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
<PAGE>
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in their
sole discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Class thereof held by any Shareholder if the value of such Shares held
by such Shareholder is less than the minimum amount established from time to
time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a) If the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify the Trust or any Series of the Trust
as a regulated investment company under the Internal Revenue Code of 1986, then
the Trustees shall have the power by lot or other means deemed equitable by them
(i) to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in Section 6.1.
(b) The holders of Shares or other securities of the Trust or any Series
of the Trust shall upon demand disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares or other
securities of the Trust or any Series of the Trust as the Trustees deem
necessary to comply with the provisions of the Internal Revenue Code of 1986, as
amended, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or any Series of the Trust pursuant to the provisions of Section
7.3.
<PAGE>
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Series
thereof of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust or a Series thereof fairly to determine the
value of its net assets, or (iv) during any other period when the Commission may
for the protection of Shareholders of the Trust by order permit suspension of
the right of redemption or postponement of the date of payment or redemption;
provided that applicable rules and regulations of the Commission shall govern as
to whether the conditions prescribed in clauses (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust 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 on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which such stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or Class thereof shall be determined on
such days and at such time or times as the Trustees may determine. The value of
the assets of the Trust or any Series thereof may be determined (i) by a pricing
service which utilizes electronic pricing techniques based on general
institutional trading, (ii) by appraisal of the securities owned by the Trust or
any Series of the Trust, (iii) in certain cases, at amortized cost, or (iv) by
such other method as shall be deemed to reflect the fair value thereof,
<PAGE>
determined in good faith by or under the direction of the Trustees. From the
total value of said assets, there shall be deducted all indebtedness, interest,
taxes, payable or accrued, including estimated taxes on unrealized book profits,
expenses and management charges accrued to the appraisal date, net income
determined and declared as a distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any Series or Class of the Trust. The resulting amount which shall
represent the total net assets of the Trust or Series or Class thereof shall be
divided by the number of Shares of the Trust or Series or Class thereof
outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The net
asset value of the Shares shall be determined at least once on each business
day, as of the close of regular trading on the New York Stock Exchange or as of
such other time or times as the Trustees shall determine. The power and duty to
make the daily calculations may be delegated by the Trustees to the Investment
Adviser, the Administrator, the Custodian, the Transfer Agent or such other
Person as the Trustees by resolution may determine. The Trustees may suspend the
daily determination of net asset value to the extent permitted by the 1940 Act.
It shall not be a violation of any provision of this Declaration of Trust if
Shares are sold, redeemed or repurchased by the Trust at a price other than one
based on net asset value if the net asset value is affected by one or more
errors inadvertently made in the pricing of portfolio securities or in accruing
income, expenses or liabilities.
Section 7.2. Distributions to Shareholders. (a) The Trustees shall from
time to time distribute ratably among the Shareholders of the Trust or of a
Series or Class thereof such proportion of the net profits, surplus (including
paid-in surplus), capital, or assets of the Trust or such Series held by the
Trustees as they may deem proper. Such distributions may be made in cash or
property (including without limitation any type of obligations of the Trust or
Series or Class or any assets thereof), and the Trustees may distribute ratably
among the Shareholders of the Trust or Series or Class thereof additional Shares
of the Trust or Series or Class thereof issuable hereunder in such manner, at
such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
<PAGE>
exclude Shares for which orders have been placed subsequent to a specified time
on the date the distribution is declared or on the next preceding by if the
distribution is declared as of a day on which Boston banks are not open for
business, all as described in the then effective Prospectus. The Trustees may
always retain from the net profits such amount as they may deem necessary to pay
the debts or expenses of the Trust or a Series or Class thereof or to meet
obligations of the Trust or a Series or Class thereof, or as they may deem
desirable to use in the conduct of the affairs or to retain for future
requirements or extensions of the business. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate. The Trustees may in their
discretion determine that an account administration fee or other similar charge
may be deducted directly from the income and other distributions paid on Shares
to a Shareholder's account in each Series or Class of the Trust.
(b) Inasmuch as the computation of net income and gains for Federal
income tax purposes may vary from the computation thereof on the books, the
above provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or a Series or Class thereof to avoid or reduce liability for
taxes.
Section 7.3. Determination of Net Income; Reduction of Outstanding
Shares. Subject to Section 5.11 hereof, the net income of the Series and Classes
thereof of the Trust shall be determined in such manner as the Trustees shall
provide by resolution. Expenses of the Trust or of a Series or Claims thereof,
including the advisory or management fee, shall be accrued each day. Each Class
shall bear only expenses relating to its Shares and an allocable share of Series
expenses in accordance with such policies as may be established by the Trustees
from time to time and as are not inconsistent with the provisions of this
Declaration of Trust or of any applicable document filed by the Trust with the
Commission or of the Internal Revenue Code of 1986, as amended. Such net income
may be determined by or under the direction of the Trustees as of the close of
trading on the New York Stock Exchange on each day on which such market is open
or as of such other time or times as the Trustees shall determine, and, except
as provided herein, all the net income of any Series or Class of the Trust, as
so determined, may be declared as a dividend on the Outstanding Shares of such
Series or Class. The Trustees shall have the authority at any time and for any
<PAGE>
reason to reduce the number of Shares of any Series or Class by reducing the
number of Shares of such Series or Class by reducing the number of full and
fractional shares outstanding in any such Series or Class. Without limiting the
generality of the foregoing, if, for any reason, the net income of any Series or
Class of the Trust determined at any time is a negative amount or for any other
reason, the Trustees shall have the power with respect to such Series or Class
(i) to offset each Shareholder's pro rata share of such negative amount from the
accrued dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of such Series or Class by reducing the number of Shares in
the account of such Shareholder by that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of the Trust an asset account in the amount of
such negative net income, which account may be reduced by such amount; provided,
that the same shall thereupon become the property of the Trust with respect to
such Series or Class shall not be paid to any Shareholder, and provided,
further, that dividends shall not be declared upon the Outstanding Shares of
such Series or Class on or after the day such negative net income is
experienced, until such asset account is reduced to zero. The Trustees shall
have full discretion to determine whether any cash or property received shall be
treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any of
the foregoing provisions of this Article VII, but subject to Section 5.11
hereof, the Trustees may prescribe, in their absolute discretion, such other
bases and times for determining the per Share net asset value of the Shares of
the Trust or a Series or Class thereof or net income of the Trust or a Series or
Class thereof, or the declaration and payment of dividends and distributions as
they may deem necessary or desirable. Without limiting the generality of the
foregoing, the Trustees may establish several Series or Classes of Shares in
accordance with Section 5.11, and declare dividends thereon in accordance with
Section 5.11(d)(iv).
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII.
<PAGE>
Section 8.2. Termination of the Trust or a Series or a Class. The Trust
or any Series or Class thereof may be terminated by (i) the affirmative vote of
the holders of not less than two-thirds of the Shares outstanding and entitled
to vote at any meeting of Shareholders of the Trust or the appropriate Series or
Class thereof, (ii) by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
the appropriate Series or Class thereof; provided, however, that if such
termination is recommended by the Trustees, the vote or written consent of the
holders of a majority of the Shares of the Trust or the appropriate Series or
Class thereof outstanding and entitled to vote shall be sufficient authorization
for such termination, or (iii) notice to Shareholders by means of an instrument
in writing signed by a majority of the Trustees, stating that a majority of the
Trustees has determined that the continuation of the Trust or a Series or Class
thereof is not in the best interest of such Series or Class, the Trust or their
respective shareholders as a result of factors or events adversely affecting the
ability of such Series or a Class or the Trust to conduct its business and
operations in an economically viable manner. Such factors and events may include
(but are not limited to) the inability of a Series or Class or the Trust to
maintain its assets at a appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such lines or Class or the Trust invests or economic developments or
trends having a significant adverse impact on the business or operations of such
Series or Class or the Trust. Upon the termination of the Trust or the Series or
Class:
(i) The Trust, Series or Class shall carry on no business except for the
purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust, Series or Class shall have been
wound up, including the power to fulfill or discharge the contracts of the
Trust, Series or Class, collect its assets, sell, convey, assign, exchange,
transfer or otherwise dispose of all or any part of the remaining Trust Property
or Trust Property allocated or belonging to such Series or Class to one or more
persons at public or private sale for consideration which may consist in whole
or in part of cash, securities or other property of any kind, discharge or pay
its liabilities, and do all other acts appropriate to liquidate its business;
provided that any sale, conveyance, assignment, exchange, transfer or other
<PAGE>
disposition of all or substantially all the Trust Property or Trust Property
allocated or belonging to such Series or Class that requires Shareholder
approval in accordance with Section 8.4 hereof shall receive the approval so
required; and
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or the remaining property of the
terminated Series or Class, in cash or in kind or partly each, among the
Shareholders of the Trust or the Series or Class according to their respective
rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Office of the
Secretary of the Commonwealth of Massachusetts an instrument in writing setting
forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties with respect to the Trust or
the terminated Series or Class, and the rights and interests of all Shareholders
of the Trust or the terminated Series or Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended by
a vote of the holders of a majority of the Shares outstanding and entitled to
vote or by any instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of a majority of the Shares
outstanding and entitled to vote.
(b) The Trustees may amend this Declaration without the vote or consent
of Shareholders if they deem it necessary to conform this Declaration to the
requirements of applicable Federal or state law or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code of 1986, as amended, or if requires or required to do so by any
Federal agency or by a state Blue Sky commissioner or similar official, but the
Trustees shall not be liable for failing so to do. The Trustees may also amend
this Declaration without the vote or consent of Shareholders if they deem it
necessary or desirable to change the name of the Trust or Series or to make any
other changes in the Declaration which do not adversely affect the rights of
Shareholders hereunder. Finally, the Trustees may amend this Declaration without
<PAGE>
the vote or consent of Shareholders (i) to add to their duties or obligations or
surrender any rights or powers granted to them herein; (ii) to cure any
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Declaration which will
not be inconsistent with the provisions of this Declaration; and (iii) to
eliminate or modify any provision of this Declaration which memorializes or sets
forth an existing requirement imposed by or under (a) any Federal or state
statute or any rule, regulation or interpretation thereof or thereunder or (b)
any rule, regulation, interpretation or guideline of any federal or state
agency, now or hereafter in effect, including without limitation, requirements
set forth in the 1940 Act and the rules and regulations thereunder (and
interpretations thereof), to the extent any change in applicable law
liberalizes, eliminates or modifies any such requirements, but the Trustees
shall not be liable for failure to do so.
(c) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series or Class thereof by
reducing the amount payable thereon upon liquidation of the Trust or Series or
Class thereof or by diminishing or eliminating any voting rights pertaining
thereto, except with the vote or consent of the holders of two-thirds of the
Shares of the Trust or such Series or Class outstanding and entitled to vote.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees ad agents of the Trust or to permit assessments
upon Shareholders.
(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or Trust Property allocated or belonging to such
Series, including its good will, upon such terms ad conditions and for such
consideration when and as authorized at any meeting of Shareholders called for
<PAGE>
the purpose by the affirmative vote of the holders of two-thirds of the Shares
of the Trust or such Series outstanding and entitled to vote, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of the Shares of the Trust or such Series; provided,
however, that, if such merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares of the Trust or such Series owing and entitled to vote
shall be sufficient authorization; and any such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been accomplished
under and pursuant to Massachusetts law.
Section 8.5. Incorporation. The Trustees may cause to be organized or
assist in organizing a corporation or corporations under the laws of any
jurisdiction or any other trust, partnership, association or other organization
to take over all of the Trust Property or the Trust Property allocated or
belonging to such Series or to carry on any business in which the Trust shall
directly or indirectly have any interest, and to sell, convey and transfer the
Trust Property or the Trust Property allocated or belonging to such Series to
any such corporation, trust, association or organization in exchange for the
shares or securities thereof or otherwise, and to lend money to, subscribe for
the shares or securities of, and enter into any contracts with any such
corporation, trust, partnership, association or organization, or any
corporation, partnership, trust, association or organization in which the Trust
or such Series holds or is about to acquire shares or any other interest. The
Trustees may also cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership, association or
other organization if and to the extent permitted by law, as provided under the
law then in effect. Nothing contained herein shall be construed as requiring
approval of Shareholders for the Trustees to organize or assist in organizing
one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring all or a portion of the
Trust Property to such organization or entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series a written financial report of the transactions of the Trust and
Series thereof, including financial statements which shall be certified at least
annually by independent public accountants.
<PAGE>
ARTICLE X
MISCELLANEOUS
Section 10.1. Execution and Filing. This Declaration and any amendment
hereto shall be filed in the office of the Secretary of The Commonwealth of
Massachusetts and in such other places as may be reqired under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective upon its execution. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and filed with the Secretary of The Commonwealth of
Massachusetts. A restated Declaration shall, upon execution, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto.
Section 10.2. Governing Law. This Declaration is executed by the Trustees
and delivered in The Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of all parties hereto and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying as to (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements of
<PAGE>
this Declaration, (e) the form of any By-laws adopted by or the identity of any
officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any Person dealing with the
Trustees ad their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of legal counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986, as amended, or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
7th day of December, 1993.
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.,
as Trustee and not individually
975 Memorial Drive, #802
Cambridge, Massachusetts 02138
/s/ Margaret B.W. Graham
Margaret B. W. Graham,
as Trustee and not individually
776 Garland Drive
Palo Alto, California 94303
<PAGE>
/s/ Richard H. Egdahl
Richard H. Egdahl,
as Trustee and not in individually
53 Bay State Road
Boston, Massachusetts 02215
/s/ John W. Kendrick
John W. Kendrick,
as Trustee and not individually
Hyatt Residence, Apt. 1521
8100 Connecticut Avenue
Chevy Chase, Maryland 20815
/s/ Marguerite A. Piret
Marguerite A. Piret,
as Trustee and not individually
162 Washington Street
Belmont, Massachusetts 02178
/s/ David D. Tripple
David D. Tripple,
Trustee and not individually
6 Woodbine Road
Belmont, Massachusetts 02178
/s/ Stephen K. West
Stephen K. West,
as Trustee and not individually
125 Broad Street
New York, New York 10004
/s/ John Winthrop
John Winthrop,
as Trustee and not individually
One North Adgels Wharf
Charleston, South Carolina 29401
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared John F.
Cogan, Jr., to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared Margaret
B.W. Graham, to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that she executed the same as her free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared Richard H.
Egdahl, to me known to be the person described in and who executed the foregoing
Amended and Restated Declaration of Trust of the Pioneer Municipal Bond Fund,
and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared John W.
Kendrick, to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared Marguerite
A. Piret, to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that she executed the same as her free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared David D.
Tripple, to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared Stephen K.
West, to me known to be the person described in and who executed the foregoing
Amended and Restated Declaration of Trust of the Pioneer Municipal Bond Fund,
and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREIF, I have hereunto set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
County of Suffolk, ss.
On this 7th day of December, 1993, before me personally appeared John
winthrop, to me known to be the person described in and who executed the
foregoing Amended and Restated Declaration of Trust of the Pioneer Municipal
Bond Fund, and acknowledged that he executed the same as his free act and deed.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my official
seal this 7th day of December, 1993.
/s/ Gratia Milliken
Notary Public
My Commission Expires: 11/29/96
PIONEER MUNICIPAL BOND FUND
Establishment and Designation
of
Class A Shares and Class B Shares
of Beneficial Interest of
Pioneer Municipal Bond Fund
The undersigned, being a majority of the Trustees of Pioneer Municipal Bond
Fund, a Massachusetts business trust (the "Fund"), acting pursuant to Sections
5.1 and 5.11 of the Amended and Restated Declaration of Trust dated December ,
1993 of the Fund, as amended from time to time (the "Declaration"), do hereby
divide the shares of beneficial interest of the Fund (the "Shares"), to create
two classes of Shares of the Fund as follows:
1. The two classes of Shares established and designated hereby are "Class
A Shares" and "Class B Shares," respectively.
2. Class A Shares and Class B Shares shall each be entitled to all of the
rights and preferences accorded to Shares under the Declaration.
3. The purchase price of Class A Shares and of Class B Shares, the method
of determining the net asset value of Class A Shares and of Class B
Shares, and the relative dividend rights of holders of Class A Shares
and of holders of Class B Shares shall be established by the Trustees
of the Fund in accordance with the provisions of the Declaration and
shall be set forth in the Fund's Registration Statement on Form N-1A
under the Securities Act of 1933 and/or the Investment Company Act of
1940, as amended and as in effect at the time of issuing such Shares.
4. All Shares of the Fund issued prior to the filing of this instrument
with the Secretary of State of The Commonwealth of Massachusetts shall
be deemed Class A Shares and the Trustees, acting in their sole
discretion, may determine that any Shares of the Fund issued after
such time are Class A Shares, Class B Shares or Shares of any other
class of the Fund hereafter established and designated by the
Trustees.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument this
_____ day of December, 1993.
John F. Cogan, Jr. Marguerite A. Piret
as Trustee and not individually as Trustee and not individually
975 Memorial Drive, #802 162 Washington Street
Cambridge, MA 02138 Belmont, MA 02178
Richard H. Egdahl, M.D. David D. Tripple
as Trustee and not individually as Trustee and not individually
Health Policy Institute 6 Woodbine Road
53 Bay State Road Belmont, MA 02178
Boston, MA 02215
Margaret B.W. Graham Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
776 Garland Drive Sullivan & Cromwell
Palo Alto, CA 94303 125 Broad Street
New York, NY 10004
John W. Kendrick John Winthrop
as Trustee and not individually as Trustee and not individually
Hyatt Residence, Apt. 1521 52 King Street
8100 Connecticat Ave. Charleston, SC 29401
Chevy Chase, MD 20815
BY-LAWS
of
PIONEER MUNICIPAL BOND FUND
ARTICLE I
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 l. Trustees. The business and affairs of the Trust shall be managed by
<PAGE>
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.
<PAGE>
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 1. Voting Power and Meetings. 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,
<PAGE>
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 Trust 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.
<PAGE>
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 ne 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
<PAGE>
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
<PAGE>
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);
<PAGE>
(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
<PAGE>
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
<PAGE>
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 MUNICIPAL BOND FUND"
"A MASSACHUSETTS BUSINESS TRUST 1986"
SECTION 2. Fiscal Year. The fiscal year of the Trust shall be the period of
twelve months ending on the 31st day of December 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 July 24, 1986, and known as "Pioneer Municipal Bond Fund," as
amended and in effect from time to time.
<PAGE>
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.
FORM OF NEW MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of January, 1994 between Pioneer
Municipal Bond Fund, a Massachusetts business trust (the "Fund"), and Pioneering
Management Corporation, a Delaware corporation (the "Manager").
WITNESSETH
WHEREAS, the Fund is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act")
and has filed with the Securities and Exchange Commission (the "Commission") a
registration statement (the "Registration Statement") for the purpose of
registering its shares for public offering under the Securities Act of 1933, as
amended,
WHEREAS, the Fund currently issues one series of shares (the "Portfolio"),
WHEREAS, the parties hereto deem it mutually advantageous that the Manager
should be engaged, subject to the supervision of the Fund's Board of Trustees
and officers, to manage the Fund,
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Fund and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide investment research, advice and
supervision and will furnish continuously an investment program for the
Portfolio consistent with the investment objectives and policies of the
Portfolio. The Manager will determine from time to time what securities shall be
purchased for the Portfolio, what securities shall be held or sold for the
Portfolio's account and what portion of the Portfolio's assets shall be held
uninvested as cash, subject always to the provisions of the Fund's Declaration
of Trust, By-Laws and its registration statements under the 1940 Act and under
the Securities Act of 1933 covering the Fund's shares, as filed with the
Securities and Exchange Commission, and to the investment objectives, policies
and restrictions of the Portfolio, as each of the same shall be from time to
time in effect, and subject, further, to such policies and instructions as the
Board of Trustees of the Fund may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act with respect
to the Portfolio in the same manner and with the same force and effect as the
Fund itself might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales or other
transactions.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Portfolio and upon the Fund's request, furnish research,
statistical and advisory reports upon the industries, businesses, corporations
or securities as to which such requests shall be made, whether or not the
Portfolio shall at the time have any investment in such industries, businesses,
corporations or securities. The Manager will use its best efforts in the
preparation of such reports and will endeavor to consult the persons and sources
believed by it to have information available with respect to such industries,
businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Portfolio's securities transactions required by sub-paragraphs (b)(5),(6),(9)
and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Fund with respect to the Portfolio) and preserve such records for the periods
prescribed therefor by Rule 31a-2 of the 1940 Act. The Manager will also provide
to the Board of Trustees such periodic and special reports as the Board may
reasonably request.
2. The Manager recognizes that the Fund may from time to time create
additional investment portfolios, that this agreement relates only to the
management of the assets of the Portfolio, and that the management of the assets
of any additional portfolio of the Fund are subject, or will be subject, to one
or more separate investment management agreements.
3. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Fund 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 with respect to the Portfolio, and shall arrange, if desired by the
Fund, for members of the Manager's organization to serve as officers or agents
of the Fund.
(b) The Manager shall pay directly or reimburse the Fund for: (i) the
compensation (if any) of the Trustees who are affiliated with, or interested
persons of, the Manager and all officers of the Fund as such; and (ii) all
expenses not hereinafter specifically assumed by the Fund or the Portfolio where
such expenses are incurred by the Manager or by the Fund or the Portfolio in
connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Portfolio.
(c) The Fund shall assume and shall pay: (i) charges and expenses for
fund accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by personnel of the Manager or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Fund with respect to the Portfolio; (iv) issue
and transfer taxes, chargeable to the Fund in connection with securities
transactions to which the Fund is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Fund to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Fund and/or its shares with the Commission, state or blue
sky securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Fund and to the Trustees; (ix) distribution
fees paid by the Fund in accordance with Rule 12b-1 promulgated by the
Commission pursuant to the 1940 Act; (x) compensation of those Trustees of the
Fund who are not affiliated with or interested persons of the Manager, the Fund
(other than as Trustees), The Pioneer Group, Inc. or Pioneer Funds Distributor,
Inc.; (xi) the cost of preparing and printing share certificates; and (xii)
interest on borrowed money, if any.
(d) In addition to the expenses described in Section 3(c) above, the
Fund shall pay all brokers' and underwriting commissions chargeable to the Fund
in connection with securities transactions to which the Fund is a party.
4. (a) The Fund shall pay to the Manager, as compensation for the Manager's
services hereunder, a fee at the rate of 0.50% per annum of the Portfolio's
average daily net assets. The management fee payable hereunder shall be computed
daily and paid monthly in arrears. In the event of termination of this
Agreement, the fee provided in this Section shall be computed on the basis of
the period ending on the last business day on which this Agreement is in effect
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month.
(b) If the operating expenses of the Portfolio in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Portfolio are sold, the amount payable to the Manager under subsection (a)
above will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulation. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Fund for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
5. The Manager will not be liable for any error of judgment or mistake of
law or for any loss sustained by reason of the adoption of any investment policy
or the purchase, sale, or retention of any security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Fund or Portfolio or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, directors, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Fund or deemed to violate or give rise to any duty or
obligation of the Manager to the Fund except as otherwise imposed by law. The
Fund recognizes that Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of portfolio securities for
the account of the Portfolio, neither the Manager nor any of its Directors,
officers or employees will act as a principal or agent or receive any commission
except as permitted by the 1940 Act. The Manager shall arrange for the placing
of all orders for the purchase and sale of portfolio securities for the
Portfolio's account with brokers or dealers selected by the Manager. In the
selection of such brokers or dealers and the placing of such orders, the Manager
is directed at all times to seek for the Portfolio the most favorable execution
and net price available except as described herein. It is also understood that
it is desirable for the Portfolio that the Manager have access to supplemental
investment and market research and security and economic analyses provided by
brokers who may execute brokerage transactions at a higher cost to the Portfolio
than may result when allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient execution. Therefore, the Manager
is authorized to place orders for the purchase and sale of securities for the
Portfolio's account with such brokers, subject to review by the Fund's Trustees
from time to time with respect to the extent and continuation of this practice.
It is understood that the services provided by such brokers may be useful to the
Manager in connection with its or its affiliates services to other clients. In
addition, subject to the Manager's obligation to seek the most favorable
execution and net price available, the Manager may consider the sale of
Portfolio shares in selecting brokers and dealers.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other clients,
the Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Portfolio
and to such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until May 31, 1995 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Fund voting in person, including a majority of its Trustees who are not parties
to this Agreement or interested persons (as the term "interested persons" is
defined in the 1940 Act) of any such parties, at a meeting of Trustees called
for the purpose of voting on such approval or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio,
subject to the right of the Fund and the Manager to terminate this contract as
provided in Section 8 hereof.
8. Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Directors or its Board of Trustees, as the case may be, or
by vote of a "majority of its outstanding voting securities" (as defined in the
1940 Act) of the Portfolio and the giving of 60 days' written notice to the
other party.
9. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Manager is an independent contractor and not an employee of the
Fund or Portfolio for any purpose. If any occasion should arise in which the
Manager gives any advice to its clients concerning the shares of the Portfolio,
the Manager will act solely as investment counsel for such clients and not in
any way on behalf of the Fund or Portfolio.
11. This Agreement states the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
12. This Agreement and all performance hereunder shall be governed by the
laws of The Commonwealth of Massachusetts, which apply to contracts made and to
be performed in The Commonwealth of Massachusetts.
13. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
14. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, and of any and every
nature whatsoever shall be satisfied solely out of the assets of the portfolio
affected thereby and that no Trustee, officer or holder of shares of beneficial
interest of the Fund shall be personally liable for any of the foregoing
liabilities. The Fund'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.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER MUNICIPAL BOND FUND
/s/ Joseph P. Barri By: /s/ John F. Cogan, Jr.
Joseph P. Barri John F. Cogan
Secretary President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/ Joseph P. Barri By: /s/ John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary President
EXHIBIT 6.1
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 10th day of July, 1990 by and
between Pioneer Municipal Bond Fund ("Pioneer") and Pioneer Funds Distributor,
Inc. (the "Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer, a Massachusetts business trust, is registered as an open
end, diversified, management investment company under the Investment Company Act
of 1940, as amended (the "1940 Act"), and has filed a registration statement
(the "Registration Statement") with the Securities and Exchange Commission (the
"Commission") for the purpose of registering shares of beneficial interest for
public offering under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter, 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 and is registered as a broker-dealer with
the Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of Pioneer which the Trustees may establish from time
to time (individually, a "Portfolio and collectively, the Portfolios"); and
WHEREAS, the parties hereto have executed an Underwriting Agreement dated
January 30, 1990, and wish by this Agreement to amend and supersede in its
entirety such prior Agreement.
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 a Portfolio of Pioneer (the "Shares")
for sale to investors either directly or indirectly through other
broker-dealers. The Underwriter is not required to purchase any specified number
of Shares, but will purchase from Pioneer only a sufficient number of Shares as
may be necessary to fill unconditional orders received from time to time by the
Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering price
based upon the net asset value of the Shares, to be calculated as described in
the Registration Statement, including the Prospectus, filed with the Commission
and in effect at the time of the offering, plus sales charges as approved by the
Underwriter and the Trustees of Pioneer and as further outlined in Pioneer's
Prospectus. The offering price shall be subject to any provisions set forth in
the Prospectus from time to time with respect thereto, including, without
limitation, rights of accumulation, letters of intention, exchangeability of
shares, reinstatement privileges, net asset value purchases by certain persons
and reinvestments of dividends and capital gain distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement may be terminated by either party upon sixty days'
written notice.
5. This Agreement shall terminate on any anniversary hereof if its terms
and renewal have not been approved by a majority vote of the Trustees of Pioneer
voting in person, including a majority of its Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Underwriting Agreement (the "Qualified Trustees"), at a
meeting of Trustees called for the purpose of voting on such approval. This
Agreement may also be terminated at any time, without payment of any penalty, by
Pioneer on 60 days' written notice to the Underwriter, or by the Underwriter
upon similar notice to Pioneer. This Agreement may also be terminated by a party
upon five (5) days written notice to the other party in the event that the
Commission has issued an order or obtained an injunction or other court order
suspending effectiveness of the Registration Statement covering these shares of
Pioneer. Finally, this Agreement may also be terminated by Pioneer upon five (5)
days written notice to the Underwriter provided either of the following events
has occurred: (i) the NASD has expelled the Underwriter or suspended its
membership in that organization; or (ii) the qualification, registration,
license or right of the Underwriter to sell shares in a particular state has
been suspended or cancelled in a state in which sales of the shares of Pioneer
during the most recent 12 month period exceeded 10% of all shares of Pioneer
sold by the Underwriter during such period.
6. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii)
those amounts payable to the Underwriter as reimbursement of expenses pursuant
to any distribution plan for Pioneer which may be in effect. Nothing contained
herein shall relieve Pioneer of any obligation under its management contract or
any other contract with any affiliate of the Underwriter.
7. The parties to this Agreement acknowledge and agree that all liabilities
arising hereunder, whether direct or indirect, of any nature whatsoever,
including without limitation, liabilities arising in connection with any
agreement of Pioneer of its Trustees as set forth herein to indemnify any party
to this Agreement or any other person, if any, shall be satisfied out of the
assets of Pioneer and that no Trustee, officer or holder of shares of beneficial
interest of Pioneer shall be personally liable for any of the foregoing
liabilities. Pioneer's Declaration of Trust, as amended from time to time, is on
file in the Office of Secretary of State of The Commonwealth of Massachusetts.
The Declaration of Trust describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest.
8. This Agreement 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 Agreement shall be
construed according to the laws of The Commonwealth of Massachusetts.
10. This Agreement is intended to amend and supersede in its entirety the
existing Underwriting Agreement between the parties dated January 30, 1990.
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 day and year first above written.
ATTEST: PIONEER MUNICIPAL BOND FUND
/s/ Joseph P. Barri By: /s/ John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
/s/ Joseph P. Barri By: /s/ John F. Cogan, Jr.
Clerk President
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER MUNICIPAL BOND FUND,
(now Pioneer Intermediate Tax Free Bond Fund)
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CUSTODIAN AGREEMENT
AGREEMENT made this 23rd day of December, 1991 between PIONEER MUNICIPAL BOND
FUND (the "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the Custodian
as a custodian for the term and subject to the provisions of this Agreement. The
Custodian shall not be under any duty or obligation to require the Fund to
deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Declaration of
Trust or Certificate of Incorporation and By-Laws (or comparable documents) of
the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund held
by the Custodian: Except for securities and funds held by any Subcustodians or
held by the Custodian through a non-U.S. securities depository appointed
pursuant to the provisions of Section 3 hereof, the Custodian shall have and
perform the following powers and duties:
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
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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
<PAGE>
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
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<PAGE>
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are available for the purpose, bills, statements, or other
obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either directly or
through one or more Agents appointed by the Custodian (provided that any such
agent shall be qualified to act as a custodian of the Fund pursuant to the
Investment Company Act of 1940 and the rules and regulations thereunder), in a
Securities System provided that such securities are represented in an account
("Account") of the Custodian or such Agent in the Securities System which shall
not 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
<PAGE>
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.
<PAGE>
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
<PAGE>
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 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.
<PAGE>
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 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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
<PAGE>
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
<PAGE>
(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
<PAGE>
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.
<PAGE>
12. Binding Effect: This Agreement shall be binding on and shall inure to the
benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original. This Agreement shall become effective
when one or more counterparts have been signed and delivered by each of the
parties.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
in its name and behalf on the day and year first above written.
PIONEER INTEREST SHARES, INC. BROWN BROTHERS HARRIMAN
& CO.
By _________________________ PER PRO
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our firm) included in or made a part of the Pioneer
Intermediate Tax-Free Fund Post-Effective Amendment No. 11 to Registration
Statement File No. 33-7592 and Amendment No. 11 to Registration Statement File
No. 811-4768.
Arthur Andersen LLP
Boston, Massachusetts
April 20, 1995
Pioneer Intermediate Tax-Free Fund
Fellow Shareowners,
This annual report to shareowners of Pioneer Intermediate Tax-Free Fund de-
tails the Fund's performance in 1994. During the year, your Fund continued to
pursue its goal of providing an attractive level of income free from federal
taxation, consistent with preservation of capital. The Fund did so by invest-
ing primarily in bonds awarded one of the top three investment-grade ratings:
A or higher, as rated by Moody's Investor Service or Standard & Poor's Corp.
HOW YOUR FUND PERFORMED
. Class A Shares -- In 1994, shareowners received $0.50 per share in dividends
and $0.0023 in capital gains distributions. On December 31, the Fund pro-
vided a 5.01% 30-day yield, which measures net investment income using a
standard formula prescribed by the Securities and Exchange Commission.
At the end of the year net asset value stood at $9.62 per share, compared to
$10.76 one year earlier. For 1994, the Fund's Class A shares had a total re-
turn of-6.02%, based on net asset value. Total return measures the change in
share price and assumes reinvestment of all distributions. In comparison, the
Lehman Brothers Municipal Bond Index returned -5.17% for the year.
. Class B Shares -- The Fund began offering Class B shares on April 29, 1994.
Since inception date, shareowners received $0.271 per share in income divi-
dends and $0.0023 per share in capital gains distributions. On December 31,
the Fund's Class B shares provided a 4.39% 30-day yield, which measures net
investment income by annualizing the most recent dividend, using a formula
prescribed by the Securities and Exchange Commission.
At the end of the year, net asset value stood at $9.65 per share, compared to
$10.07 on the inception date. The Fund's B shares posted a total return of -
1.49%, based on net asset value, assuming shares were held throughout the pe-
riod. Total return measures the change in share price and assumes reinvest-
ment of all dividends. In comparison, the Lehman Brothers Municipal Bond In-
dex generated a total return of -0.51% from the end of April through the end
of the year.
Because your Fund's income is free from federal taxation, its yield compares
favorably with taxable bonds on an after-tax basis. The Fund's 5.01% SEC yield
on A shares, and 4.39% yield on B shares, would be equal to these taxable
yields:
<TABLE>
<CAPTION>
FEDERAL TAXABLE EQUIVALENT YIELD
TAX BRACKET A SHARES B SHARES
<S> <C> <C>
39.6% 8.29% 7.27%
36.0 7.83 6.86
31.0 7.26 6.36
</TABLE>
Despite the Fund's negative total return for 1994, we believe it is important
to maintain your focus on the long term. Over the past five years, your Fund's
A shares provided an average annual total return of 6.06%; since the Fund's
inception on October 22, 1986, its average annual total return was 5.89%,
based on net asset value.
MARKET OVERVIEW
In 1994, the dominant factor in the financial markets was the repeated moves
by the Federal Reserve Board to cool the economy. The Fed believed the pace of
economic growth was too rapid to be sustained without prompting inflation.
Thus, starting in February, the Fed acted six times to "tighten" monetary con-
ditions; in other words, it repeatedly raised key short-term interest rates.
The series of rate increases provided some assurance to bond investors that
the Fed was committed to holding inflation in check. Overall, however, the
Fed's tightening caused interest rates to rise on bonds of all maturities.
For example, intermediate U.S. Treasury notes, as measured by Ibbotson Associ-
ates, posted a total return of
<PAGE>
- -5.14%. To put that in perspective, this was the largest one year decline in
prices of intermediate notes since record keeping began in 1925, and more than
twice the decline experienced in 1931, the previous worst year. The municipal
bond market fared even worse, with Lehman Brothers Municipal Bond Index re-
turning -5.17%, and the Lehman Brothers Long-Term Municipal Index returning -
9.10%.
Your management believes that much of last year's decline in the municipal
bond market stemmed from an overreaction on the part of some investors. In-
deed, in the first weeks of 1995 the municipal bond market has bounced back to
be one of the strongest-performing sectors. Over the long term, we continue to
be bullish about the value present in the municipal arena, especially when we
look at the advantage tax-free compounding of dividends can offer shareowners.
HOW PIONEER MANAGED YOUR INVESTMENT
During 1994, your management sought to reduce the average effective life of
the portfolio. We believe that such a strategy positions the Fund to earn
strong income, while reducing potential price fluctuation. We reduced the av-
erage weighted life of the Fund to 9.29 years from 10.22 years; as of year-
end, 65% of the bonds had remaining maturities of 10 years or less.
MATURITY DISTRIBUTION
(Average Life)
[PIE CHART APPEARS HERE]
0-2 Years 6%
2-5 Years 18%
5-7 Years 21%
7-10 Years 20%
10-15 Years 17%
15+ Years 18%
We also sought opportunities to insulate the Fund from bonds subject to calls.
When rates fall, many issuers legally may redeem their issues prior to maturi-
ty-- a move that deprives the bond investors of further potential gains on
those securities and lowers their income stream. By removing bonds with call
provisions from the portfolio, your management believes the Fund is better po-
sitioned to gain ground when rates eventually shift course and begin to fall.
The strengthening economy, which prompted the Fed to raise interest rates,
also provided us with opportunities to improve the quality of bonds in the
portfolio, of which 98% are rated A, AA or AAA (the three highest investment
grades). A good example of this is the Fund's increased position in general
obligation bonds, which stood at 18% of the portfolio at year end, compared to
10% a year earlier. General obligation bonds are backed by the taxing power of
states and local governments, whose economies, overall, have been strengthened
by the economic recovery.
PORTFOLIO QUALITY
[PIE CHART APPEARS HERE]
AAA 28%
AA 52%
A 18%
Short-Term Investments 2%
During 1994, the problems of Orange County, California, attracted much public-
ity. The County declared bankruptcy after a series of speculative investments
by its treasurer lost significant sums of the county's money. Your Fund owns
Orange County Local Transportation Authority Sales Tax Revenue Bonds, but Or-
ange
2
<PAGE>
County's problems have had minimal impact on the Fund. Because your Fund is
highly diversified, as of December 31, the bonds represented just 2.6% of the
Fund's portfolio. And because these bonds are backed by the sales tax revenues
of Orange County -- one of the wealthiest counties in the country -- as of Jan-
uary 31 the securities were still rated AA (the second-highest rating category)
by Standard & Poors Corp. and Moody's Investors Service. Your management antic-
ipates that the Authority will meet its scheduled February 15, 1995, interest
payment.
MANAGEMENT OUTLOOK
The Fed's target is to steer the economy between paths of inflationary over-
heating and a recession -- a goal known as a "soft landing." Your management
believes that the rise in interest rates that began in the early part of 1994
is substantially over. However, economic indicators, such as last years strong
4% increase in Gross Domestic Product and the relatively low unemployment rate,
lead us to believe that the Fed still may wish to further dampen the growth of
the economy. Indeed, the Fed raised rates on February 1 and has indicated that
it may do so again. The tightening by the Fed is a normal activity at this
stage of the business cycle -- it has occurred 10 times in the last 41 years.
Conditions in the municipal bond market are generally favorable. Supply is rel-
atively tight, while there is a high level of demand from individuals seeking
to minimize the impact of the higher federal tax brackets that went into effect
last year. Your management will continue to look for opportunities that present
themselves in this environment, while emphasizing current income and invest-
ment-grade issues.
Please refer to the following pages for audited financial statements and the
complete list of portfolio holdings as of December 31, 1994. If you have any
questions about your investment in Pioneer Intermediate Tax-Free Fund, contact
your investment representative, or call Pioneer at 1-800-225-6292.
Respectfully submitted,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President, Pioneer Intermediate Tax-Free Fund
February 10, 1995
3
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer
Intermediate Tax-Free Fund (Class A) at public offering price, compared to the
growth of the Lehman Brothers Municipal Bond Index.+
[GRAPH APPEARS HERE]
PIONEER INTERMEDIATE TAX-FREE FUND (CLASS A)
AVERAGE ANNUAL TOTAL RETURNS
(AS OF DECEMBER 31, 1994)
LIFE OF
FUND
(10/22/86) 5 YEARS 1 YEAR
---------- ------- ------
NET ASSET VALUE 5.89% 6.06% -6.02%
PUBLIC OFFERING PRICE* 5.43% 5.31% -9.31%
PIONEER INTERMEDIATE LEHMAN BROTHERS
TAX-FREE FUND (CLASS A) MUNICIPAL BOND INDEX
----------------------- --------------------
10/86+ $10,000.00 $ 9,650
12/86 10,169.80 9,662
12/87 10,323.10 9,284
12/88 11,372.39 10,472
12/89 12,599.22 11,494
12/90 13,517.41 12,232
12/91 15,158.70 13,598
12/92 16,494.97 14,775
12/93 18,521.30 16,412
12/94 17,563.88 15,424
*Reflects deduction of the 3.50% maximum sales charge at the beginning of the
period and assumes reinvestment of distributions at net asset value.
+Index comparisons begin October 31, 1986.
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the
past five years and have a maturity of at least two years. Index returns assume
monthly reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. Investors cannot directly invest in the Index.
Past performance does not guarantee future results. Return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
4
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer
Intermediate Tax-Free Fund (Class B) at public offering price, compared to the
growth of the Lehman Brothers Municipal Bond Index.+
[GRAPH APPEARS HERE]
PIONEER INTERMEDIATE TAX-FREE FUND (CLASS B)
AVERAGE ANNUAL TOTAL RETURNS
(AS OF DECEMBER 31, 1994)
LIFE OF
FUND
(4/29/94)
---------
RETURN IF NOT REDEEMED -1.49%
RETURN IF REDEEMED* -4.37%
PIONEER INTERMEDIATE LEHMAN BROTHERS
TAX-FREE FUND (CLASS B) MUNICIPAL BOND INDEX
----------------------- --------------------
4/94 $10,000.00 $10,000
5/94 10,086.54 10,082
6/94 10,024.85 10,038
7/94 10,208.75 10,171
8/94 10,244.13 10,204
9/94 10,093.85 10,046
10/94 9,941.63 9,868
11/94 9,735.11 9,700
12/94 9,949.42 9,556
*Reflects deduction of the 3.00% Contingent Deferred Sales Charge at the end of
the period and assumes reinvestment of distributions.
+Index comparisons begin April 30, 1994.
The Lehman Brothers Municipal Bond Index is an unmanaged measure of
approximately 15,000 municipal bonds. Bonds in the Index have a minimum credit
rating of BBB, were part of at least a $50 million issuance made within the
past five years and have a maturity of at least two years. Index returns assume
monthly reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. Investors cannot directly invest in the Index.
Past performance does not guarantee future results. Return and principal value
will fluctuate so that an investor's shares, when redeemed, may be worth more
or less than their original cost.
5
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S
RATING INVESTMENT IN TAX-EXEMPT SECURITIES--
PRINCIPAL (UNAUDITED) 98.2%+ VALUE
- ----------------------------------------------------------------------------
<C> <C> <S> <C>
ARIZONA--3.5%
$1,000,000 AA Arizona State Transportation Board
Highway Revenue, 6.5%, Prerefunded,
2001*................................. $1,050,010
1,000,000 AA Arizona Transportation Board Highway
Revenue, 4.7%, 2005................... 866,610
1,000,000 AA Salt River Project Agricultural
Improvement and Power District
Revenue, 4.9%, 2008................... 853,940
CALIFORNIA--2.6%
400,000 AA Southern California Public Power
Authority Revenue, 7.375%, 2021....... 421,696
2,000,000 AA Orange County Local Transportation
Authority Sales Tax Revenue, 6.0%,
2008.................................. 1,636,140
COLORADO--0.3%
200,000 AA- Regional Transportation District of
Colorado Sales Tax Revenue, 8.0%,
Prerefunded, 1996*.................... 216,756
CONNECTICUT--1.8%
1,500,000 AA- Connecticut Special Tax Transportation
Revenue, 5.2%, 2005................... 1,386,225
DISTRICT OF COLUMBIA--1.0%
250,000 A+ District of Columbia University
Revenue, Georgetown University Issue,
7.0%, 2005............................ 257,205
500,000 AA- Georgetown University General
Obligation, 8.125%, 2008.............. 538,820
FLORIDA--2.1%
750,000 AAA Broward County, School General
Obligation, 7.125%, Prerefunded,
1999*................................. 805,463
265,000 AA Florida State Board of Education
Capital Outlay, 7.25%, Prerefunded,
1996*................................. 277,126
35,000 AA Florida State Board of Education
Capital Outlay, Escrowed to Maturity
in Government Securities, 7.25%,
Prerefunded, 2009*.................... 36,014
500,000 AA Jacksonville Electric Authority St.
Johns River Power Park System Revenue,
8.875%, 2010.......................... 523,370
GEORGIA--3.0%
500,000 AA- Metropolitan Atlanta Rapid Transit
Authority Sales Tax Revenue, 7.25%,
2010.................................. 522,255
250,000 AAA Municipal Electric Authority of Georgia
Revenue, 7.75%, Prerefunded, 1997*.... 265,785
1,000,000 AA- Municipal Electric Authority of Georgia
Revenue, 5.5%, 2020................... 820,030
400,000 AA- Municipal Electric Authority of Georgia
Special Obligation Revenue, 7.65%,
2003.................................. 434,804
220,000 AAA Savannah Water & Sewer Revenue
Refunding & Improvement, 7.5%,
Prerefunded, 1997*.................... 235,941
30,000 AA- Savannah Water & Sewer Revenue
Refunding & Improvement, 7.5%, 2010... 31,847
HAWAII--2.5%
2,000,000 AA State of Hawaii General Obligation,
5.25%, 2000........................... 1,950,480
ILLINOIS--4.4%
1,000,000 AAA Chicago Wastewater Transmission
Revenue, 6.3%, Prerefunded, 2003*..... 1,043,630
600,000 AAA Illinois Sales Tax Revenue, 7.25%,
Prerefunded, 1999*.................... 647,922
1,000,000 AAA Illinois Sales Tax Revenue, 5.5%, 2018. 840,420
1,000,000 AA- Illinois Education Facilities Authority
Revenue Northwestern University, 5.5%,
2013.................................. 863,670
INDIANA--3.5%
750,000 A Indiana Municipal Power Agency, Power
Supply System Revenue, 7.1%,
Prerefunded, 2000*.................... 807,802
1,500,000 Aaa(1) Indiana State Educational Facilities
Authority Revenue for Notre Dame,
6.0%, 2023............................ 1,358,835
500,000 A+ Indiana Transportation Finance
Authority Highway Revenue, 8.0%,
Prerefunded, 1998*.................... 546,070
KANSAS--0.7%
500,000 AA Kansas Department of Transportation
Highway Revenue, 6.5%, Prerefunded,
2002*................................. 528,075
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31,
1994--continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S
RATING INVESTMENT IN TAX-EXEMPT SECURITIES--
PRINCIPAL (UNAUDITED) 98.2%+ VALUE
- ----------------------------------------------------------------------------
<C> <C> <S> <C>
KENTUCKY--1.4%
$ 215,000 AAA Kentucky Turnpike Authority Economic
Development Road Revenue, 7.25%,
Prerefunded, 2000*...................... $ 232,910
35,000 AAA Kentucky Turnpike Authority Economic
Development Road Revenue, 7.25%,
Prerefunded, 2000*...................... 37,915
750,000 A+ Lexington-Fayette Urban County Government
Revenue, 7.0%, 2006..................... 785,828
LOUISIANA--0.7%
500,000 A- Louisiana Recovery District Sales Tax
Revenue, 7.625%, 1996................... 515,935
MAINE--1.3%
250,000 A+ Maine Municipal Bond Bank, Sewer and
Water Revenue, 6.6%, 2015............... 243,897
250,000 A+ Maine Municipal Bond Bank, Revenue,
7.15%, Prerefunded, 2001*............... 272,173
245,000 A+ Maine Municipal Bond Bank, Revenue,
7.65%, Prerefunded, 1998*............... 267,574
245,000 AAA Maine Municipal Bond Bank, Revenue, 8.6%,
Prerefunded, 1997*...................... 271,171
MARYLAND--4.1%
1,500,000 Aa(1) Maryland Community Development
Administration Single Family Mortgage
Revenue, 5.95%, 2006.................... 1,449,765
2,000,000 AA Maryland Department of Transportation,
4.2%, 2001.............................. 1,742,740
MASSACHUSETTS--1.3%
1,000,000 AAA Massachusetts Housing Finance Agency,
FNMA Collateralized, 6.875%, 2021....... 986,020
MICHIGAN--4.6%
250,000 AA Detroit School District General
Obligation, 7.15%, Prerefunded, 2001*... 271,682
1,500,000 AAA Detroit Sewer Disposal Revenue, FGIC
Insured, 4.85%, 2001.................... 1,396,035
1,000,000 AA- Michigan State Trunk Line Fuel Sales Tax
Revenue--Series A, 5.625%, 2003......... 971,340
1,000,000 AA- Michigan State Trunk Line Fuel Sales Tax
Revenue--Series B, 5.625%, 2003......... 971,340
MINNESOTA--1.0%
750,000 AA+ Minnesota Public Facilities Authority
Water Pollution Control Revenue, 7.0%,
2009.................................... 781,440
MISSOURI--1.3%
1,000,000 Aa(1) Missouri State Environmental Improvement
& Energy Resources Authority Revenue,
6.55%, 2014............................. 988,070
NEBRASKA--1.3%
1,000,000 AA Omaha Public Power District Electric
System Revenue, 6.5%, Prerefunded,
2002*................................... 1,052,510
NEVADA--0.5%
145,000 AA Nevada Housing Division Single Family
Program Revenue, 8.0%, 2009............. 150,226
250,000 AAA State of Nevada General Obligation, 8.0%,
Prerefunded, 1997*...................... 270,755
NEW HAMPSHIRE--2.2%
1,000,000 AA+ New Hampshire Higher Educational
Facilities Authority Dartmouth College,
5.5%, 2013.............................. 876,900
500,000 AAA New Hampshire Turnpike System Revenue,
7.375%, Prerefunded, 2000*.............. 545,630
250,000 A New Hampshire Turnpike System Revenue,
8.25%, Prerefunded, 1997*............... 272,825
NEW JERSEY--6.5%
750,000 AA- New Jersey Highway Authority Garden State
Parkway Senior Revenue, 7.25%,
Prerefunded, 1999*...................... 807,788
2,000,000 AA+ State of New Jersey Sales Tax General
Obligation, 5.8%, 2007.................. 1,933,980
1,000,000 A New Jersey State Turnpike Authority
Revenue, 5.9%, 2003..................... 998,110
1,500,000 A+ New Jersey Transportation Trust Fund
Authority Transportation System Revenue,
4.6%, 2001.............................. 1,368,630
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31,
1994--continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S
RATING INVESTMENT IN TAX-EXEMPT SECURITIES--
PRINCIPAL (UNAUDITED) 98.2%+ VALUE
- ------------------------------------------------------------------------------
<C> <C> <S> <C>
NEW MEXICO--2.0%
$1,500,000 AA Albuquerque Joint Water & Sewer System
Revenue, 5.5%, 2017..................... $1,303,260
250,000 AA Albuquerque Joint Water & Sewer System
Revenue, 7.65%, Prerefunded, 1997*...... 267,425
NEW YORK--3.4%
750,000 AA- Municipal Assistance Corporation for the
City of New York Revenue, 7.25%, 2008... 780,262
500,000 A- New York City Municipal Water Finance
Authority Revenue, 7.75%, Prerefunded,
1998*................................... 541,985
750,000 AA- New York State Power Authority General
Purpose Revenue, 7.0%, Prerefunded,
1996*................................... 777,983
500,000 A+ Triborough Bridge and Tunnel Authority
General Purpose Revenue, 7.375%,
Prerefunded, 1998*...................... 534,810
NORTH CAROLINA--1.9%
1,500,000 AAA Charlotte General Obligation, 5.7%, 2007. 1,452,855
OHIO--1.6%
1,500,000 AA Ohio Higher Educational Facilities
Commission Revenue Oberlin College
Project, 5.375%, 2015................... 1,283,220
OKLAHOMA--1.8%
1,500,000 A- Grand River Dam Authority Electric
Revenue, 5.75%, 2006.................... 1,436,970
OREGON--1.0%
500,000 AA- State of Oregon Veterans Welfare General
Obligation, 7.0%, 2011.................. 516,275
250,000 AA- State of Oregon Veterans Welfare General
Obligation, 7.75%, 2003................. 268,465
PENNSYLVANIA--2.6%
1,000,000 A- Pennsylvania Industrial Development
Authority Revenue, 7.0%, Prerefunded,
2001*................................... 1,080,260
1,000,000 A Pennsylvania State Turnpike Commission
Highway Revenue, 5.45%, 2002............ 960,210
PUERTO RICO--4.7%
85,000 A Commonwealth of Puerto Rico General
Obligation, 7.125%, Prerefunded, 1997*.. 90,306
415,000 A Commonwealth of Puerto Rico General
Obligation, 7.125%, 2002................ 437,800
500,000 AAA Puerto Rico Highway Authority Revenue
Refunding, 8.0%, Prerefunded, 1998*..... 548,410
1,500,000 A Puerto Rico Highway and Transportation
Authority Revenue, 5.5%, 2019........... 1,248,795
1,500,000 A Commonwealth of Puerto Rico General
Obligation, 5.375%, 2006................ 1,336,845
SOUTH CAROLINA--1.0%
750,000 A+ South Carolina Public Service Authority
Revenue, 7.0%, Prerefunded, 2001*....... 810,615
TEXAS--6.5%
500,000 AA+ Harris County, Toll Road Revenue and
General Obligation, 6.75%, 2014......... 504,810
1,000,000 A Houston Water & Sewer System Revenue,
5.4%, 2000.............................. 967,050
750,000 A+ San Antonio Prior Lien Water Revenue,
7.125%, Prerefunded, 1999*.............. 802,837
1,000,000 AA Tarrant County Water Control Revenue,
6.0%, Prerefunded, 2001................. 1,015,310
1,500,000 AA State of Texas General Obligation, 5.8%,
2004.................................... 1,483,365
250,000 AAA University of Texas Permanent University
Fund Escrowed to Maturity in Government
Securities, 8.0%, 2004.................. 283,868
UTAH--2.4%
750,000 AA Intermountain Power Agency Special
Obligation Second Crossover Revenue,
7.5%, 2016.............................. 768,915
1,000,000 AA Intermountain Power Agency Power Supply
Revenue, 5.5%, 2020..................... 837,250
260,000 AA Utah Housing Finance Agency Single Family
Mortgage Purchase Revenue, 7.3%, 2003... 268,584
30,000 AA Utah Housing Finance Agency Single Family
Mortgage Purchase Revenue, 7.3%, 1995... 30,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31,
1994--continued
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STANDARD
& POOR'S
RATING INVESTMENT IN TAX-EXEMPT SECURITIES--
PRINCIPAL (UNAUDITED) 98.2%+ VALUE
- ----------------------------------------------------------------------------
<C> <C> <S> <C>
VERMONT--0.7%
$ 500,000 AAA Vermont Municipal Bond Bank, 7.9%,
Prerefunded, 1998*.................... $ 549,075
VIRGINIA--8.0%
750,000 AA Richmond General Obligation, 7.0%,
Prerefunded, 2000*.................... 805,507
500,000 AA+ Virginia State Housing Development
Authority, Single Family Mortgage
Revenue, 7.8%, 2008................... 517,500
1,500,000 AA Virginia State Transportation Board
Revenue, 5.5%, 2018................... 1,273,170
1,000,000 AAA Fairfax County General Obligation,
4.8%, 2003............................ 917,190
1,000,000 AA Virginia Public School Authority
Revenue, 4.9%, 2003................... 926,710
2,000,000 AA Norfolk General Obligation, 4.7%, 2002. 1,832,600
WASHINGTON--6.8%
1,000,000 AA Lewis County Public Utility District #1
Revenue, 5.0%, 2004................... 901,520
800,000 A+ Metropolitan Seattle Limited Sales Tax
General Obligation, 7.2%, Prerefunded,
1997*................................. 843,352
1,000,000 AA Seattle Municipal Light and Power
Electric Revenue, 5.75%, 2012......... 899,770
750,000 AA State of Washington Motor Vehicle Fuel
Tax General Obligation, 7.25%,
Prerefunded, 1999*.................... 796,763
1,000,000 AA State of Washington General Obligation,
6.0%, 2002............................ 1,015,290
1,000,000 AA+ King County General Obligation, 4.5%,
2003.................................. 874,210
WYOMING--2.2%
750,000 A- Sweetwater County Pollution Control
Revenue, 7.625%, 2013................. 774,735
1,015,000 AA- Wyoming Farm Loan Board Capital
Facilities Revenue, 6.25%, 2008....... 973,365
-----------
TOTAL INVESTMENT IN TAX-EXEMPT
SECURITIES--98.2% (Total Cost
$79,422,703).......................... $76,769,627
-----------
TEMPORARY CASH INVESTMENT--0.2%
Tax-Exempt Variable Rate Securities (2)
100,000 Arkansas Development Finance Authority,
FGIC Guarantee, 5.45%, 2015........... $ 100,384
100,000 City of Fountain Inn, South Carolina
Industrial Development Revenue for
Cincinnati Milacron, Bankers Trust
Guarantee, 5.50%, 2008................ 100,389
-----------
TOTAL INVESTMENT IN TEMPORARY TAX-
EXEMPT VARIABLE RATE
SECURITIES--0.2%...................... $ 200,773
-----------
ALL OTHER ASSETS, LESS LIABILITIES--
1.6%.................................. $ 1,232,476
-----------
NET ASSETS--100%....................... $78,202,876
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
SCHEDULE OF INVESTMENTS--PIONEER INTERMEDIATE TAX-FREE FUND--DECEMBER 31,
1994--continued
- --------------------------------------------------------------------------------
+ The concentration of investments in securities by type of obligation/market
sector is:
<TABLE>
<S> <C>
General Obligation................................................. 18.2%
Escrowed in U.S. Government Securities............................. 26.6%
Revenue Bonds:
Education Revenue................................................. 7.9%
Water & Sewer Revenue............................................. 3.3%
Housing Revenue................................................... 4.4%
Insured........................................................... 1.8%
Pollution Control Revenue......................................... 3.3%
Power Revenue..................................................... 10.3%
Sales Tax Revenue................................................. 5.6%
Transportation Revenue............................................ 16.0%
Various Revenues.................................................. 2.3%
Reserves........................................................... 0.3%
</TABLE>
*Prerefunded bonds have been collateralized by U.S. Treasury securities which
are held in escrow and used to pay principal and interest on the tax exempt
issue and to retire the bonds in full at the earliest refunding date.
(1)Rating by Moody's.
(2)Rates for variable rate securities are as of December 31, 1994.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
BALANCE SHEET--DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost and cost
for federal income tax purposes $79,422,703; see Schedule of
Investments and Notes 1, 2 and 3).............................. $76,769,627
Temporary cash investments, at approximate value (see Schedule
of Investments and Note 1)..................................... 200,773
Cash............................................................ 17,781
Receivables--
Interest........................................................ 1,564,335
Trust shares sold............................................... 32,270
Other........................................................... 4,491
-----------
Total assets................................................... $78,589,277
-----------
LIABILITIES:
Payables--
Trust Shares repurchased........................................ $ 55,912
Dividends....................................................... 134,383
Other........................................................... 15,000
Accrued expenses--
Management fees (Note 4)........................................ 20,254
Other (Notes 4, 5 and 6)........................................ 160,852
-----------
Total liabilities.............................................. $ 386,401
-----------
NET ASSETS:
Paid-in capital (Note 8)........................................ $81,171,407
Accumulated distributions in excess of net investment income.... (16,448)
Accumulated net realized loss on investments (Note 2)........... (299,007)
Net unrealized loss on investments (Note 2)..................... (2,653,076)
-----------
Total net assets............................................... $78,202,876
===========
NET ASSET VALUE PER SHARE:
Class A--(based on $76,673,804/7,966,299 shares of beneficial
interest outstanding--unlimited number of shares authorized $9.62
with no par value)............................................. =====
Class B--(based on $1,529,072/158,485 shares of beneficial
interest outstanding--unlimited number of shares authorized $9.65
with no par value)............................................. =====
MAXIMUM OFFERING PRICE:
Class A......................................................... $9.97
=====
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
STATEMENT OF OPERATIONS--FOR THE YEAR ENDED DECEMBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest....................................................... $ 4,865,497
EXPENSES:
Management fees (Note 4)........................... $ 412,999
Transfer fees (Note 5)
Class A............................................ 78,833
Class B............................................ 1,006
Distribution fees (Note 7)
Class A............................................ 204,976
Class B............................................ 6,089
Professional fees.................................. 99,325
Accounting......................................... 78,815
Printing........................................... 47,190
Registration fees (Note 1)......................... 33,801
Custodian fees..................................... 17,790
Fees and expenses of nonaffiliated trustees........ 15,648
Miscellaneous...................................... 17,577
----------
Total expenses.................................... $1,014,049
Less management fees waived by Pioneering
Management Corporation (Note 4).................. 183,384
----------
Net expenses.................................................. $ 830,665
-----------
Net investment income....................................... $ 4,034,832
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments............................... $ (299,222)
Decrease in net unrealized gain on investments................. (8,771,933)
-----------
Net loss on investments....................................... $(9,071,155)
-----------
Net decrease in net assets resulting from operations.......... $(5,036,323)
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1994 AND 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1994 1993
------------ -----------
<S> <C> <C>
FROM OPERATIONS:
Net investment income.............................. $ 4,034,832 $ 3,754,680
Net realized gain (loss) on investments............ (299,222) 921,869
Net increase (decrease) in net unrealized
gain on investments............................... (8,771,933) 2,626,759
------------ -----------
Net increase (decrease) in net
assets resulting from operations................. $ (5,036,323) $ 7,303,308
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income
Class A--net ($0.494 and $0.558 per share,
respectively).................................... $ (4,031,997) $(3,737,484)
Class B--net ($0.268 and $0.000 per share,
respectively).................................... (24,385) --
In excess of net investment income
Class A--net ($0.002 and $0.000 per share,
respectively).................................... (16,135) --
Class B--net ($0.003 and $0.000 per share,
respectively).................................... (313) --
Realized gain on investments
Class A--net ($0.004 and $0.120 per share,
respectively).................................... (32,059) (901,913)
Class B--net ($0.002 and $0.000 per share,
respectively).................................... (97) --
------------ -----------
Decrease in net assets resulting from
distributions to shareholders..................... $ (4,104,986) $(4,639,397)
------------ -----------
FROM TRUST SHARE TRANSACTIONS:
Net Proceeds from sale of shares................... $ 18,171,021 $26,881,366
Net asset value of shares issued to shareholders
in reinvestment of dividends...................... 2,597,115 3,124,687
Cost of shares repurchased......................... (15,520,911) (7,925,755)
------------ -----------
Increase in net assets resulting from trust
share transactions................................ $ 5,247,225 $22,080,298
------------ -----------
Net (decrease) increase in net assets............. $ (3,894,084) $24,744,209
NET ASSETS:
Beginning of year.................................. 82,096,960 57,352,751
------------ -----------
End of year (including undistributed
(distributions in excess of) net investment
income of $(16,448) and $21,550, respectively).... $ 78,202,876 $82,096,960
============ ===========
</TABLE>
<TABLE>
<CAPTION>
1994 1993
------------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................ 1,602,661 $ 16,366,775 2,527,330 $26,881,366
Shares issued to
shareholders in
reinvestment of
distributions............. 257,363 2,584,951 292,535 3,124,687
Less shares repurchased.... (1,526,764) (15,286,865) (743,489) (7,925,755)
---------- ------------ --------- -----------
Net increase.............. 333,260 $ 3,664,861 2,076,376 $22,080,298
========== ============ ========= ===========
CLASS B*
Shares sold................ 180,473 $ 1,804,246
Shares issued to
shareholders in
reinvestment of
distributions............. 1,240 12,164
Less shares repurchased.... (23,228) (234,046)
---------- ------------
Net increase.............. 158,485 $ 1,582,364
========== ============
</TABLE>
- --------
* Class B shares were first publicly offered on April 29, 1994.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31, OCTOBER 27 TO
--------------------------------------------------------------------------- DECEMBER 31,
1994+ 1993 1992 1991 1990 1989 1988 1987 1986
CLASS A ------------ ------- ------- ------- ------- ------- ------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $10.76 $10.32 $10.06 $ 9.63 $ 9.66 $9.40 $8.95 $10.01 $10.00
-------- ------- ------- ------- ------- ------- ------- -------- -------
Income from investment
operations:
Net investment income.. $ 0.494 $ 0.560 $ 0.587 $ 0.610 $ 0.627 $0.634 $0.628 $ 0.624 $ 0.050
Net realized and
unrealized gain (loss)
on investments........ (1.134) 0.558 0.257 0.430 (0.033) 0.257 0.476 (1.024) (0.040)
-------- ------- ------- ------- ------- ------- ------- -------- -------
Total income (loss)
from investment
operations........... $(0.640) $ 1.118 $ 0.844 $ 1.040 $ 0.594 $0.891 $1.104 $(0.400) $ 0.010
Distribution to
shareholders:
From net investment
income................ (0.494) (0.558) (0.584) (0.610) (0.624) (0.631) (0.654) (0.660) --
In excess of net
investment income..... (0.002)
From net realized
capital gains......... (0.004) (0.120) -- -- -- -- -- -- --
-------- ------- ------- ------- ------- ------- ------- -------- -------
Net increase (decrease)
in net asset value.... $(1.14) $ 0.44 $ 0.26 $ 0.43 $(0.03) $0.26 $0.45 $(1.06) $ 0.01
-------- ------- ------- ------- ------- ------- ------- -------- -------
Net asset value, end of
period................ $ 9.62 $10.76 $10.32 $10.06 $ 9.63 $9.66 $9.40 $ 8.95 $10.01
======== ======= ======= ======= ======= ======= ======= ======== =======
Total return*.......... (6.02)% 11.08% 8.65% 11.17% 6.42% 9.77% 12.79% (3.91)% 0.10%
Ratio of net operating
expenses to average
net assets............ 1.00% 0.85% 0.85% 0.75% 0.66% 0.60% 0.50% 0.35% 0.61%**
Ratio of net investment
income to average net
assets................ 4.89% 5.23% 5.78% 6.21% 6.56% 6.60% 6.89% 7.08% 9.73%**
Porfolio turnover rate. 39.24% 13.93% 3.52% 4.61% 7.99% 4.09% 10.03% 0.06% --
Net assets, end of
period (in thousands). $ 76,674 $82,097 $57,353 $44,631 $34,118 $28,754 $20,121 $ 13,107 $ 3,066
Ratios assuming no
waiver of fees or
assumption of
expenses--
Net operating expenses. 1.22% 1.12% 1.27% 1.33% 1.17% 1.10% 1.28% 1.53% --
Net investment income.. 4.67% 4.97% 5.36% 5.63% 6.05% 6.10% 6.11% 5.90% --
<CAPTION>
APRIL 29,
1994 TO
DECEMBER 31,
1994+
CLASS B*** ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period... $10.07
--------
Income from investment operations:
Net investment income.. $ 0.268
Net realized and
unrealized gain (loss)
on investments........ (0.415)
--------
Total income from
investment operations. $(0.147)
Distribution to
shareholders:
From net investment
income................ (0.268)
In excess of net
investment income..... (0.003)
From net realized
capital gains......... (0.002)
--------
Net increase (decrease)
in net asset value.... $(0.42)
--------
Net asset value, end of
period................ $ 9.65
========
Total return*.......... (1.49)%
Ratio of net operating
expenses to average
net assets............ 1.84%**
Ratio of net investment
income to average net
assets................ 4.17%**
Porfolio turnover rate. 39.24%
Net assets, end of
period (in thousands). $ 1,529
Ratios assuming no
waiver of fees or
assumption of
expenses--
Net operating expenses. 2.14%**
Net investment income.. 3.87%**
</TABLE>
- -------
+ Based upon average shares outstanding and average net assets for the period
presented.
* Assumes initial investment at net asset value at the beginning of each peri-
od, reinvestment of all distributions, the complete redemption of the in-
vestment at net asset value at the end of each period and no sales charges.
Total return would be reduced if sales charges were taken into account.
** Annualized.
*** Class B shares were first publicly offered on April 29, 1994.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994
- -------------------------------------------------------------------------------
1. Pioneer Intermediate Tax-Free Fund, (the Fund) is a Massachusetts business
trust registered under the Investment Company Act of 1940 as a diversified,
open-end management company. Effective January 1, 1994, the Fund changed its
name from the Pioneer Municipal Bond Fund to the Pioneer Intermediate Tax-Free
Fund.
The Board of Trustees authorized the issuance of two classes of the Fund,
designated as Class A and Class B shares. Class B shares were first publicly
offered on April 29, 1994. Shares issued and outstanding prior to April 29,
1994 were designated as Class A shares. The shares of each class represent an
interest in the same portfolio of investments of the Fund and have equal vot-
ing, redemption, dividend and liquidation, except that each class of shares
can bear different transfer agent and distribution fees and have exclusive
voting rights with respect to the distribution plans that have been adopted by
holders of Class A and Class B shares, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund, which are in conformity with those generally accepted in
the investment company industry.
A. Investment Securities--Security transactions are recorded on the date the
securities are purchased or sold. Debt securities (other than short-term obli-
gations), including listed issues, are valued on the basis of valuations fur-
nished by a pricing service which utilizes both dealer-supplied valuations and
electronic data processing techniques which take into account appropriate fac-
tors such as institution-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics and
other market data. Temporary cash investments are stated at cost plus accrued
interest, which approximates market value. Interest income is recorded on the
accrual basis. Original issue discount is accreted daily on a yield to matu-
rity basis.
Gains and losses from sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Fund's practice first to select for sale those securities which have
the highest cost and also qualify for long-term capital gain or loss treatment
for tax purposes.
B. Federal taxes--It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net investment income and net realized capital gains, if
any, to its shareholders. Therefore, no federal tax provisions are required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with income tax rules. Therefore, the
source of a portfolio's distributions may be shown in the accompanying finan-
cial statements as either from or in excess of net investment income or net
realized gain on investment transactions, or from capital, depending on the
type of book/tax differences that may exist.
C. Fund Shares--The Fund records sales and repurchases of its trust shares on
the trade date. Net losses, if any, as a result of cancellations, are absorbed
by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the
Fund and wholly-owned subsidiary of The Pioneer Group, Inc. (PGI). PFD earned
$26,045 in underwriting commissions during the year ended December 31, 1994 on
the sale of shares of the fund. Shareholders begin earning dividends on the
first business day following receipt of payment for purchased shares. Shares
continue to earn dividends up to and including the date of redemption. Divi-
dends are declared daily and are normally paid on the last day of each month.
Monthly distributions may also include a portion of any net short-term capital
gains realized by the Fund. Long-term capital gains, if any, will be distrib-
uted annually in December.
D. Class Allocations--Distribution expenses are calculated based on the aver-
age daily net asset value attributable to Class A and Class B shares of the
Fund, respectively. Shareholders of Class A and Class B share all expenses and
fees paid to the service organization, Pioneering Services Corporation (PSC),
for their services, which are allocated based on the number of accounts in
each class and the ratable allocation of related out of pocket expenses (See
Note 5). Income, common expenses and realized and unrealized gains (losses)
are calculated at the Fund level and allocated daily to each class of shares
based on the respective percentage of adjusted net assets at the beginning of
the day.
2. At December 31, 1994, total cost of securities, net realized gain, accumu-
lated net realized gain, accumulated undistributed net investment income, and
the increase in net unrealized gain for federal income tax purposes were iden-
tical to those on a financial reporting basis. Aggregate gross unrealized gain
on securities in which there was an excess of market value over tax cost was
$1,799,103. Aggregate gross unrealized loss
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS--DECEMBER 31, 1994--continued
- -------------------------------------------------------------------------------
on securities in which there was an excess of tax cost over market value was
$4,452,179. Net unrealized loss for tax purposes was $2,653,076.
At December 31, 1994, the Fund had a net capital loss carryforward of
$299,007 which will expire in the year 2002 if not utilized.
3. During the year ended December 31, 1994, the cost of purchases and the pro-
ceeds from sales of securities, other than temporary cash investments, were
$38,094,892 and $31,500,888 respectively.
4. Pioneering Management Corporation (PMC) is the Fund's investment adviser
and a wholly-owned subsidiary of PGI. Management fees are calculated at the
annual rate of 0.50% of the average daily net assets.
PMC has agreed to waive its management fees and to assume other operating ex-
penses of the Fund to the extent necessary to limit Class A expenses to 1.00%
of the Fund's average daily net assets attributable to the Class A shares; the
portion of the Trustwide expenses attributable to Class B shares will be re-
duced only to the extent such expenses are reduced for the Class A shares.
PMC's agreement to assume expenses for the Fund is voluntary and temporary and
may be revised or terminated at any time.
PMC furnishes investment advice, provides facilities and office equipment,
and pays executive salaries and certain other operating expenses under the
management agreement. No officer of the Fund receives any compensation di-
rectly from the Fund. All officers of the Fund are directors and/or officers
of the investment adviser and/or principal underwriter. In addition, certain
other services and costs, including accounting, regulatory reporting and in-
surance premiums, are paid by the Fund under the management agreement. In-
cluded in Accrued expenses--Other is $6,940 in accounting fees payable to PMC
at December 31, 1994.
5. PSC, a wholly-owned subsidiary of PGI, provides substantially all transfer
agent and shareholder services to the Fund, at negotiated rates. Included in
Accrued expenses--Other are $10,707 in transfer fees payable to PSC at Decem-
ber 31, 1994.
6. The Fund has adopted a Plan of Distribution for both Class A shares ("Class
A Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1 un-
der the Investment Company Act of 1940 pursuant to which certain distribution
and service fees are paid to PFD.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual expendi-
tures to finance any activity primarily intended to result in the sale of
Class A shares or to provide services to holders of Class A shares. Plan ex-
penses are accrued daily and may not exceed 0.25% of the Fund's average annual
net assets attributable to Class A shares. The Class B Plan provides that the
Fund will pay a distribution fee at an annual rate of 0.75% of the Fund's av-
erage daily net assets attributable to Class B shares and will pay PFD a serv-
ice fee at the annual rate of 0.25% of the Fund's average daily net assets at-
tributable to Class B shares. Included in Accrued expenses--Other are $54,533
in distribution fees payable by the Fund to PFD at December 31, 1994.
Class B shares which are redeemed within four years of purchase are subject
to a contingent deferred sales charge ("CDSC") at declining rates beginning at
3.0% of the lesser of the current market value at the time of redemption or
the original purchase cost of the shares being redeemed. Proceeds from the
CDSC are paid to PFD. For the year ended December 31, 1994, CDSC in the amount
of $965 was paid to PFD.
7. The Fund adopted the provisions of Statement of Position 93-2 (SOP 93-2)
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies." SOP
93-2 requires the Fund to report the accumulated net investment income (loss)
and accumulated net capital gain (loss) accounts to approximate amounts avail-
able for future distributions on a tax basis (or to offset future realized
capital gains). As a result, the Fund has reclassified $12,572 from accumu-
lated net realized loss on investments to paid-in capital. Net investment in-
come and net assets were not affected by this change.
16
<PAGE>
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF TRUSTEES AND
OFFICERS
- --------------------------------------------------------------------------------
The aggregate direct remuneration paid by the Fund to nonaffiliated trustees
and officers during the year ended December 31, 1994 was approximately $12,242,
plus expenses incurred in attending trustees meetings of approximately $2,652.
Fees of trustees who are affiliated with or "interested persons" of Pioneering
Management Corporation and Pioneer Funds Distributor, Inc., investment adviser
and principal underwriter, respectively, of the Fund ($1000 in 1994), are reim-
bursed to the Fund by Pioneering Management Corporation in accordance with the
management contract with the Fund. At December 31, 1994, the trustees and offi-
cers of the Fund owned beneficially 23,091 shares of the Fund (approximately
0.28% of the outstanding shares). The Pioneer Group, Inc., is a publicly-held
corporation of which Mr. Cogan owned approximately 15% of the outstanding
shares of capital stock at December 31, 1994.
17
<PAGE>
TAX TREATMENT OF DISTRIBUTIONS--MADE DURING THE YEAR ENDED DECEMBER 31, 1993
- --------------------------------------------------------------------------------
During the year ended December 31, 1994, Pioneer Intermediate Tax-Free Fund
paid the following distributions.
<TABLE>
<CAPTION>
DISTRIBUTIONS PER SHARE
-------------------------------
FROM NET FROM NET
PAYMENT DATE INVESTMENT INCOME REALIZED GAIN
------------ ----------------- -------------
<S> <C> <C>
CLASS A SHARES
1/31/94 $.044 $ --
2/28/94 .043 --
3/31/94 .043 --
4/29/94 .042 --
5/31/94 .040 --
6/30/94 .040 .0023
7/29/94 .040 --
8/31/94 .040 --
9/30/94 .040 --
10/31/94 .041 --
11/30/94 .041 --
12/30/94 .045 --
----- ------
TOTAL Class A Shares $.499 $.0023
===== ======
CLASS B SHARES
5/31/94 .033 --
6/30/94 .033 .0023
7/29/94 .033 --
8/31/94 .033 --
9/30/94 .033 --
10/31/94 .034 --
11/30/94 .034 --
12/30/94 .038 --
----- ------
TOTAL Class B Shares $.271 $.0023
===== ======
</TABLE>
Of the $.499 and $.271 net investment income per share distributed to Class A
shareholders and Class B shareholders, respectively, during 1994, 100% is tax-
exempt.
Of the $.0023 net realized gain per share distributed to Class A and Class B
shareholders during 1994, 100% is long-term.
Shareholders who elected to take the Capital Gain Distribution in additional
shares of the Fund should report the distribution as explained above. The tax
cost of the shares received is $10.19 and $10.21 per share for Class A and
Class B shareholders, respectively.
18
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER INTERMEDIATE TAX-FREE
FUND:
We have audited the accompanying balance sheet of Pioneer Intermediate Tax-
Free Fund, (a Massachusetts business trust), including the schedule of invest-
ments, as of December 31, 1994, and the related statement of operations for
the year then ended, statement of changes in net assets for the years ended
December 31, 1994 and 1993 and financial highlights for the periods presented.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of De-
cember 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presenta-
tion. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Pio-
neer Intermediate Tax-Free Fund as of December 31, 1994, the results of its
operations, the changes in its net assets and financial highlights for the pe-
riods presented, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 3, 1995
<PAGE>
PIONEER INTERMEDIATE
TAX-FREE FUND
60 State Street Boston, MA 02109
OFFICERS
John F. Cogan, Jr., Chairman and President
David D. Tripple, Executive Vice President
Kathleen D. McClaskey, Vice President
William H. Keough, Treasurer
Joseph P. Barri, Secretary
TRUSTEES
John F. Cogan, Jr. Marguerite A. Piret
Richard H. Egdahl, M.D. David D. Tripple
Margaret B.W. Graham Stephen K. West
John W. Kendrick John Winthrop
INVESTMENT ADVISER LEGAL COUNSEL
Pioneering Management Hale and Dorr
Corporation
CUSTODIAN PRINCIPAL UNDERWRITER
Brown Brothers Pioneer Funds
Harriman & Co. Distributor, Inc.
SHAREHOLDER SERVICE INDEPENDENT
AND TRANSFER AGENT PUBLIC ACCOUNTANTS
Pioneering Services Arthur Andersen LLP
Corporation
60 State Street
Boston, Massachusetts 02109
Please call Pioneer for information on:
Existing accounts, new accounts,
prospectuses, applications and
service forms.....................1-800-225-6292
Fund yields and prices............1-800-225-4321
Telecommunication Device for
the Deaf (TDD)....................1-800-225-1997
Toll-free fax ....................1-800-225-4240
Retirement Plans..................1-800-622-0176
When distributed to persons who are not shareholders of the Fund, this report
must be accompanied by an official prospectus, which discusses the objectives,
policies and other information concerning the Fund.
0295-2261
(C)Pioneer Funds Distributor, Inc.
[PIONEER LOGO APPEARS HERE]
Pioneer
Intermediate
Tax-Free Fund
Annual Report
December 31, 1994
STOCK PURCHASE AGREEMENT
This Agreement is made this 2nd day of October, 1986 between Pioneering
Management Corporation, a Delaware corporation ("PMC") and Pioneer Municipal
Bond Fund, a Massachusetts business trust ("Pioneer").
WHEREAS, Pioneer wishes to sell and PMC wishes to purchase 12,500 shares of
beneficial interest in Pioneer for a purchase price of $10.00 per share (the
"Shares"); and
WHEREAS, PMC is purchasing the Shares for the purpose of providing the
initial capitalization of Pioneer;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PMC is delivering
to Pioneer a check in the amount of $125,000 and Pioneer is delivering to PMC a
stock certificate for the Shares.
2. PMC agrees that it is purchasing the Shares for investment and has no
present intention of redeeming or reselling the Shares.
Executed as of the date first set forth above.
PIONEERING MANAGEMENT CORPORATION
By: /s/ John F. Cogan, Jr.
PIONEER MUNICIPAL BOND FUND
By: /s/ John F. Cogan, Jr.
EXHIBIT 15
DISTRIBUTION PLAN
PIONEER MUNICIPAL BOND FUND
DISTRIBUTION PLAN, dated as of September __, 1990 of PIONEER MUNICIPAL BOND
FUND, 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 12b-1 promulgated by the Securities and
Exchange Commission under the 1940 Act ("Rule 12b-1"), 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
<PAGE>
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 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 12b-1, on the
following terms and conditions:
1. The Fund may expend pursuant to this Plan amounts not to exceed .25% of
l% of the average daily net assets of the Fund per annum.
2. Subject to the limit in paragraph 1, 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 such reimbursement shall be paid ten (10) days after the
end of the month or quarter, as the case may be, in which such expenses are
incurred. The 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 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
<PAGE>
"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.
If such annual approval is not obtained, this Plan shall expire on September __,
1991.
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. 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.
10. 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.
11. The Fund shall preserve copies of this Plan, and each agreement related
hereto and each report referred to in paragraph 10 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.
12. This Plan shall be construed in accordance with the laws of the
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
<PAGE>
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.
FORM OF
CLASS B DISTRIBUTION PLAN
PIONEER INTERMEDIATE TAX-FREE FUND
CLASS B DISTRIBUTION PLAN, dated as of _____________, 1994 of PIONEER
INTERMEDIATE TAX-FREE FUND, a Massachusetts business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest (the
"Class B Shares") of the Trust in accordance with Rule 12b-1 promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B distribution plan (the "Class B Plan") as a plan
of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class B Shares in connection with the Class B Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class B Shares in connection with the offering of Class B
Shares, (b) PFD may compensate any Dealer that sells Class B Shares in the
<PAGE>
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class B shares, its profits
or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class B shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Trust and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class
B Plan for the Trust as a plan of distribution of Class B Shares in accordance
with Rule 12b-1, on the following terms and conditions:
1. (a) The Trust is authorized to compensate PFD for (1) distribution
services and (2) personal and account maintenance services performed
and expenses incurred by PFD in connection with the Trust's Class B
shares. Such compensation shall be calculated and accrued daily and
paid quarterly or at such other intervals as the Board of Trustees may
determine.
(b) The amount of compensation paid during any one year for
distribution services shall be .75% of the average daily net assets of
the Trust attributable to such year.
(c) Distribution services and expenses for which PFD may be compensated
pursuant to this Plan include, without limitation: compensation to and
expenses (including allocable overhead, travel and telephone expenses),
of (i) brokers and dealers who are members of the National Association
<PAGE>
of Securities Dealers, Inc. ("NASD") or their officers, sales
representatives and employees; (ii) compensation to and expenses of PFD
and any of its affiliates and any of their respective officers, sales
representatives and employees; (iii) banks and their officers, sales
representatives and employees, who engage in or support distribution of
the Trust's Class B shares; printing of reports and prospectuses for
other than existing shareholders; and preparation, printing and
distribution of sales literature and advertising materials.
(d) The amount of compensation paid for personal and account
maintenance services and expenses shall be .25% of the average daily
net assets of the Trust attributable to such year. As partial
consideration for personal services and/or account maintenance services
provided by PFD to the Class B shares, PFD shall be entitled to be paid
any fees payable under this clause (d) with respect to Class B shares
for which no dealer of record exists, where less than all consideration
has been paid to a dealer of record or where qualification standards
have not been met.
(e) Personal and account maintenance services for which PFD or any of
its affiliates, banks or Dealers may be compensated pursuant to this
Plan include, without limitation: payments made to or on account of PFD
or any of its affiliates, banks, or other brokers and dealers who are
members of the NASD or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance to,
shareholders regarding their ownership of Class B shares or their
accounts or who provide similar services not otherwise provided by or
on behalf of the Trust.
(f) PFD may impose certain deferred sales charges in connection with
the repurchase of Class B shares by the Trust and PFD may retain (or
receive from the Trust as the case may be) all such deferred sales
charges.
(g) Appropriate adjustments to payments made pursuant to clauses (b)
and (d) of this paragraph 1 shall be made whenever necessary to ensure
that no payment is made by the Trust in excess of the applicable
maximum cap imposed on asset based, front-end and deferred sales
charges by subsection (d) of Section 26 of Article III of the Rules of
Fair Practice of the NASD.
<PAGE>
2. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
3. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4. This Class B Plan shall become effective upon approval by a vote of the
Board of Trustees and a vote of a majority of the Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Class B Plan or in any agreements related to
the Class B Plan (the "Qualified Trustees"), such votes to be cast in person at
a meeting called for the purpose of voting on this Class B Plan.
5. This Class B Plan will remain in effect indefinitely, provided that such
continuance is "specifically approved at least annually" by a vote of both a
majority of the Trustees of the Trust and a majority of the Qualified Trustees.
If such annual approval is not obtained, this Class B Plan shall expire on
____________, 1995.
6. This Class B Plan may be amended at any time by the Board of Trustees,
provided that this Class B Plan may not be amended to increase materially the
limitations on the annual percentage of average net assets which may be expended
hereunder without the approval of holders of a "majority of the outstanding
Class B voting securities" of the Trust and may not be materially amended in any
case without a vote of a majority of both the Trustees and the Qualified
Trustees. This Class B Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees or by a vote of the holders of a "majority of
the outstanding voting securities" of Class B of the Trust.
<PAGE>
7. The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class B Plan and the purposes for which such
expenditures were made.
8. While this Class B Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
9. For the purposes of this Class B 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.
10. The Trust shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11. This Class B Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12. If any provision of this Class B Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Class B Plan
shall not be affected thereby.
Exhibit 16
Pioneer Municipal Bond Fund
Description of Average Annual Total Return
l/n
T = (ERV/P) -l, where:
T = average annual total return
n = number of years
ERV = ending redeemable value of a
hypothetical $1,000 payment made
at the beginning of n years
p = hypothetical $1,000 initial payment
------------------------------------------------------------------
Pioneer Municipal Bond Fund Average Annual Total Returns
for Periods Ending 12/31/89:
One Year
1/1
T = ($l,048.60/$l,000.00) -l
T = 4.86%
Inception
(10/22/86) 1/3.1671
T = ($l,137.36/$l,000.00) -l
T = 4.11%
<PAGE>
PIONEER MUNICIPAL BOND FUND
CURRENT YIELD CALCULATION FOR THE 30 DAY PERIOD ENDING 12/31/89
6
Standardized yield formula: 2(((((a-b)/(cd))+1) -1)
a-b 6
Yield calculation 2[(----- +1) -1]
cd
a-b = net income during period $156,851.38
c = average daily number of shares
during period 2,974.506,52
c = offering price per share on last day
of period $10.12
Standardized Yield as of 12/31/89 = 6.33%
156,851,38
Yield = 2 x [( --------------- +1)6 -1]
30,102,006.380
= 2 x [( 1.005211 )6 -1]
= 2 x (1.0316742-1)
= 6.33%
[ARTICLE] 6
[CIK] 0000798172
[NAME] Pioneer Intermediate Tax-Free Fund
[SERIES]
[NUMBER] 0
[NAME] none
[MULTIPLIER] 1
[CURRENCY] U. S .Dollars
[PERIOD-TYPE] Year
[FISCAL-YEAR-END] DEC-31-1994
[PERIOD-START] JAN-01-1994
[PERIOD-END] DEC-31-1994
[EXCHANGE-RATE] 1
[INVESTMENTS-AT-COST] 79,422,703
[INVESTMENTS-AT-VALUE] 76,769,627
[RECEIVABLES] 1,596,605
[ASSETS-OTHER] 4,491
[OTHER-ITEMS-ASSETS] 218,554
[TOTAL-ASSETS] 78,589,277
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 386,401
[TOTAL-LIABILITIES] 386,401
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 81,171,407
[SHARES-COMMON-STOCK] 8,124,784
[SHARES-COMMON-PRIOR] 7,633,039
[ACCUMULATED-NII-CURRENT] (16,448)
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (299,007)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (2,653,076)
[NET-ASSETS] 78,202,876
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 4,865,497
[OTHER-INCOME] 0
[EXPENSES-NET] (830,665)
[NET-INVESTMENT-INCOME] 4,034,832
[REALIZED-GAINS-CURRENT] (299,222)
[APPREC-INCREASE-CURRENT] (8,771,933)
[NET-CHANGE-FROM-OPS] (5,036,323)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (4,056,382)
[DISTRIBUTIONS-OF-GAINS] (32,156)
[DISTRIBUTIONS-OTHER] (16,448)
[NUMBER-OF-SHARES-SOLD] 1,783,134
[NUMBER-OF-SHARES-REDEEMED] (1,549,992)
[SHARES-REINVESTED] 258,603
[NET-CHANGE-IN-ASSETS] (3,894,084)
[ACCUMULATED-NII-PRIOR] 21,550
[ACCUMULATED-GAINS-PRIOR] 6,138,656
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] (412,999)
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] (1,014,049)
[AVERAGE-NET-ASSETS] 82,511,902
[PER-SHARE-NAV-BEGIN] 10.760
[PER-SHARE-NII] 0.494
[PER-SHARE-GAIN-APPREC] (1.134)
[PER-SHARE-DIVIDEND] (0.494)
[PER-SHARE-DISTRIBUTIONS] (0.006)
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 9.620
[EXPENSE-RATIO] 1
[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: 09/27/93 /s/ Stephen K. West
Stephen K. West
Trustee
