File Nos. 33-7592; 811-4768
As filed with the Securities and Exchange Commission on April 25, 1996,
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X_/
Pre-Effective Amendment No. ___ /___/
Post-Effective Amendment No. 14 /_X_/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 / X /
Amendment No. 14 /_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:
_X__ on April 29, 1996 pursuant to paragraph (b)
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 27, 1996.
CALCULATION OF REGISTRATION FEE
Title of Amount of Proposed Proposed
Securities Shares Maximum Maximum Amount of
Being Being Offering Aggregate Registration
Registered Registered Price Per Unit Offering Price Fee
Shares of
Beneficial 299,563 $10.36 $2,964,018.58 $100*
Interest
*This calculation has been made pursuant to Rule 24e-2 under the Investment
Company Act of 1940. During its fiscal year ended December 31, 1995, the
Registrant redeemed or repurchased 1,212,169 shares of beneficial interest, of
which 940,598 were utilized by the Registrant on its Rule 24f-2 Notice filed on
February 27, 1996 and 271,571 are being used herein for purposes of reducing the
filing fee payable herewith under Rule 24e-2. No fee is required for the
registration of such 271,571 shares. An additional 27,992 shares being
registered hereby are valued at the public offering price of $10.36 as of April
18, 1996.
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
CLASS A, CLASS B AND CLASS C 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
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 Public
Accountants
17. Brokerage Allocation and Other
Practices........................... Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities.... Statement of Additional
Information - Description of
Shares; 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
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>
[Pioneer logo]
Pioneer
Intermediate
Tax-Free
Fund
Class A, Class B and Class C Shares
Prospectus
April 29, 1996
The investment objective of Pioneer Intermediate Tax-Free Fund (the "Fund")
is to provide as high a level of current income exempt from Federal income
taxes from a high-quality portfolio of municipal bonds as is consistent with
prudent investment risk.
Fund returns and share prices fluctuate and the value of your account upon
redemption maybe more or less than your purchase price. Shares in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank or
other depository institution, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board or any other
government agency.
This Prospectus provides the information about the Fund that you should know
before investing. Please read and keep it for your future reference. More
information about the Fund is included in the Statement of Additional
Information, also dated April 29, 1996, which is incorporated into this
Prospectus by reference. A copy of the Statement of Additional Information
may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109. Other information about the Fund has been filed with the
Securities and Exchange Commission (the "SEC") and is available upon request
and without charge.
TABLE OF CONTENTS PAGE
- -------- ------------------------------------------------- -------
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
"When Issued" Securities 5
Portfolio Transactions and Turnover 5
IV. MANAGEMENT OF THE FUND 6
V. FUND SHARE ALTERNATIVES 7
VI. SHARE PRICE 7
VII. HOW TO BUY FUND SHARES 7
VIII. HOW TO SELL FUND SHARES 10
IX. HOW TO EXCHANGE FUND SHARES 11
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS AND TAX STATUS 13
XII. SHAREHOLDER SERVICES 14
Account and Confirmation Statements 14
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Telephone Transactions and Related Liabilities 14
FactFone(SM) 15
Telecommunications Device for the Deaf (TDD) 15
Systematic Withdrawal Plans 15
Reinstatement Privilege (Class A Shares Only) 15
XIII. THE FUND 15
XIV. INVESTMENT RESULTS 16
XV. APPENDIX 17
Taxable Equivalent Yields 17
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects actual expenses for the fiscal year ended
December 31, 1995. For Class C shares, operating expenses are based on
estimated expenses that would have been incurred if Class C shares had been
outstanding for the fiscal year ended December 31, 1995.
Shareholder Transaction Class Class Class
Expenses: A B C+
Maximum Initial Sales
Charge on Purchases (as
a percentage of the
offering price) 3.50% None None
Maximum Sales Charge on
Reinvestment of
Dividends None None None
Maximum Deferred Sales
Charge
(as a percentage of
original purchase price
or redemption price, as
applicable) None(1) 3.00% 1.00%
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses
(as a percentage of
average net assets):
Management Fee (after fee
reduction)(3) 0.39% 0.39% 0.39%
12b-1 Fees 0.23% 1.00% 1.00%
Other Expenses (including
transfer agent fee,
custodian fees and
accounting and printing
expenses) (after
expense reduction)(3) 0.38% 0.43% 0.43%
---- ------ -------
Total Operating Expenses
(after fee and expense
reductions)(3) 1.00% 1.82% 1.82%
==== ====== =======
+ Class C shares were first offered on January 31, 1996.
(1)Purchases of $1,000,000 or more and purchases by participants in a group
plan (as described under "How to Buy Fund Shares") are not subject to an
initial sales charge but may be subject to a contingent deferred sales
charge ("CDSC") as further described under "How to Buy Fund Shares."
(2)Separate fees (currently $10 and $20, respectively) apply to domestic or
international bank wire transfers of redemption proceeds.
(3)Effective January 3, 1994, Pioneering Management Corporation ("PMC"),
agreed not to impose a portion of its management fee and to make other
arrangements, if necessary, to the extent necessary to limit the Class A
operating expenses of the Fund to 1.00% of the average daily net assets
attributable to the Class A shares. The portion of fund-wide expenses
attributable to Class B and Class C shares will be only reduced to the
extent such expenses were reduced for the Class A shares of the Fund. This
agreement is voluntary and temporary and may be revised or terminated at
any time.
Expenses Absent Fee
and Expense
Reductions Class A Class B Class C
------- ------- ---------
Management Fee 0.50% 0.50% 0.50%
Other Expenses 0.39% 0.46% 0.46%
Total Operating
Expenses 1.12% 1.96% 1.96%
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return and redemption at the end of each of the time periods:
1 3 5
Year Years Years 10 Years
----- ------ ------ ---------
Class A Shares $45 $66 $ 88 $153
Class B Shares*
-Assuming complete
redemption at end
of period $50 $77 $109 $192
-Assuming no
redemption $18 $57 $ 99 $192
Class C shares**
-Assuming complete
redemption at end
of period $28 $57 $ 99 $214
-Assuming no
redemption $18 $57 $ 99 $214
* Class B shares convert to Class A shares six years after purchase;
therefore, Class A expenses are used after year six.
** Class C shares redeemed during the first year after purchase are subject
to a 1% CDSC.
The example is designed for informational purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and return will vary from year to year and may be higher or lower
than those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
fees and expenses are paid, see "Management of the Fund," "Distribution
Plans" and "How To Buy Fund Shares" in this Prospectus and "Management of the
Fund" and "Underwriting Agreement and Distribution Plans" in the Statement of
Additional Information. The Fund's payment of a Rule 12b-1 fee may result in
long-term shareholders indirectly paying more than the economic equivalent of
the maximum sales charge permitted under the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified amounts
of Class A shares and the value of Class A shares owned in other Pioneer
mutual funds is taken into account in determining the applicable initial
charge. See "How to Buy Fund Shares." No sales charge is applied to exchanges
of shares of the Fund for shares of other publicly available Pioneer mutual
funds. See "How to Exchange Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen LLP, independent public accountants.
Arthur Andersen LLP's report on the Fund's financial statements as of
December 31, 1995, appears in the Fund's Annual Report which is incorporated
by reference in the Statement of Additional Information. Class C shares is a
new class of shares; no financial highlights exist for Class C shares. The
Annual Report includes more information about the Fund's performance and is
available free of charge by calling Shareholder Services at 1-800-225-6292.
Pioneer Intermediate Tax-Free Fund
For Each Class A Share Outstanding Throughout Each Period:
For the Year Ended December 31,
-----------------------------------------------------
1995 1994+ 1993 1992 1991
------- ------- ------- ------- ---------
Net asset value,
beginning
of period $ 9.62 $10.76 $10.32 $10.06 $ 9.63
------ ------ ------ ------ -------
Increase (decrease)
from investment
operations:
Net investment
income $ 0.49 $ 0.49 $ 0.56 $ 0.59 $ 0.61
Net realized and
unrealized gain
(loss) on
investments 0.82 (1.13) 0.56 0.25 0.43
------ ------ ------ ------ -------
Total increase
(decrease) from
investment
operations $ 1.31 $(0.64) $ 1.12 $ 0.84 $ 1.04
Distribution to
shareholders from:
Net Investment
Income (0.49) (0.49) (0.56) (0.58) (0.61)
Net realized
capital gains -- (0.01) (0.12) -- --
------ ------ ------ ------ -------
Net increase
(decrease) in net
asset value $ 0.82 $(1.14) $ 0.44 $ 0.26 $ 0.43
------ ------ ------ ------ -------
Net asset value, end
of period $10.44 $ 9.62 $10.76 $10.32 $10.06
====== ====== ====== ====== =======
Total return* 13.80% (6.02)% 11.08% 8.65% 11.17%
Ratio of net
operating expenses
to average net
assets 1.02%++ 1.00% 0.85% 0.85% 0.75%
Ratio of net
investment income
to average net
assets 4.77%++ 4.89% 5.23% 5.78% 6.21%
Portfolio turnover
rate 28.75% 39.24% 13.93% 3.52% 4.61%
Net assets, end of
period
(in thousands) $79,432 $76,674 $82,097 $57,353 $44,631
Ratios assuming no
reduction of fees
or expenses
Net operating
expenses 1.12% 1.22% 1.12% 1.27% 1.33%
Net investment
income 4.67% 4.67% 4.97% 5.36% 5.63%
Ratios assuming a
reduction of fees
and expenses by
PMC and a
reduction for fees
paid indirectly:
Net operating
expenses 1.00%
Net investment
income 4.79%
October
27,
1986 to
December
31,
---------
1990 1989 1988 1987 1986
------- ------- ------- ------- ---------
Net asset value,
beginning
of period $ 9.66 $ 9.40 $ 8.95 $10.01 $10.00
------ ------ ------ ------ -------
Increase (decrease)
from investment
operations:
Net investment
income $ 0.63 $ 0.63 $ 0.63 $ 0.62 $ 0.05
Net realized and
unrealized gain
(loss)
on investments (0.04) 0.26 0.47 (1.02) (0.04)
------ ------ ------ ------ -------
Total increase
(decrease) from
investment
operations $ 0.59 $ 0.89 $ 1.10 $(0.40) $ 0.01
Distribution to
shareholders from:
Net Investment
Income (0.62) (0.63) (0.65) (0.66) --
Net realized
capital gains -- -- -- -- --
------ ------ ------ ------ -------
Net increase
(decrease) in net
asset value $(0.03) $ 0.26 $ 0.45 $(1.06) $ 0.01
------ ------ ------ ------ -------
Net asset value, end
of period $ 9.63 $ 9.66 $ 9.40 $ 8.95 $10.01
====== ====== ====== ====== =======
Total return* 6.42% 9.77% 12.79% (3.91)% 0.10%
Ratio of net
operating expenses
to average net
assets 0.66% 0.60% 0.50% 0.35% 0.61%**
Ratio of net
investment income
to average net
assets 6.56% 6.60% 6.89% 7.08% 9.73%**
Portfolio turnover
rate 7.99% 4.09% 10.03% 0.06% --
Net assets, end of
period
(in thousands) $34,118 $28,754 $20,121 $13,107 $3,066
Ratios assuming no
reduction of fees
or expenses
Net operating
expenses 1.17% 1.10% 1.28% 1.53% --
Net investment
income 6.05% 6.10% 6.11% 5.90% --
Ratios assuming a
reduction of fees
and expenses by
PMC and a
reduction for fees
paid indirectly:
Net operating
expenses
Net investment
income
+ Based upon average shares outstanding and average net assets for the
period presented.
++ Ratios include fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment 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.
3
<PAGE>
II. FINANCIAL HIGHLIGHTS (continued)
Pioneer Intermediate Tax-Free Fund
For Each Class B Share Outstanding
Throughout Each Period*** For the April 29,
Year Ended 1994 to
December 31, December 31,
1995 1994+
---------- ------------
Net asset value, beginning of period $ 9.65 $10.07
-------- ----------
Increase (decrease) from investment operations:
Net investment income $ 0.41 $ 0.27
Net realized and unrealized gain (loss)
on investments 0.80 (0.42)
-------- ----------
Total increase (decrease) from investment
operations $ 1.21 $(0.15)
Distribution to shareholders:
From net investment income (0.40) (0.27)
From net realized (unrealized) capital gains -- --
-------- ----------
Net increase (decrease) in net asset value $ 0.81 $(0.42)
-------- ----------
Net asset value, end of period $10.46 $ 9.65
======== ==========
Total return* 12.71% (1.49)%
Ratio of net operating expenses to average
net assets 1.86%++ 1.84%**
Ratio of net investment income to average
net assets 3.90%++ 4.17%**
Portfolio turnover rate 28.75% 39.24%
Net assets, end of period (in thousands) $2,553 $1,529
Ratios assuming no reduction of fees or expenses
Net operating expenses 1.96% 2.14%**
Net investment income 3.80% 3.87%**
Ratios assuming a reduction of fees and
expenses by PMC and a reduction for fees
paid indirectly:
Net operating expenses 1.82%
Net investment income 3.94%
+ Based upon average shares outstanding and average net assets for the
period presented.
++ Ratios include fees paid indirectly.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment 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.
III. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to provide as high a level of current
income exempt from federal income taxes from a high quality portfolio of
municipal bonds as is consistent with prudent investment risk.
The Fund's policy under normal conditions is to invest at least 80% of the
Fund's portfolio in bonds, notes and other debt instruments issued by or on
behalf of states, territories and possessions of the United States ("U.S.")
and the District of Columbia and their political subdivisions, agencies or
instrumentalities, the interest on which is exempt from federal income tax
(hereinafter "Municipal Bonds" or "tax-exempt securities"). As a defensive
measure during times of adverse market conditions, up to 50% of the Fund's
portfolio may be invested in the short-term taxable investments described in
paragraphs 3 and 4 below.
All of the Fund's investments will be made in accordance with the investment
policies set forth below. The Fund's investments will be limited to:
(1) Tax-exempt securities which are rated AAA, AA, A or BBB by Standard &
Poor's Ratings Service ("S&P" ) or are rated Aaa, Aa, A or Baa by Moody's
Investor Service, Inc. ("Moody's");
(2) Notes of issuers having an issue of outstanding Municipal Bonds rated
AAA, AA or A by S&P or Aaa, Aa or A by Moody's or which are guaranteed by the
U.S. government;
(3) Obligations issued or guaranteed by the U.S. government or its agencies
or instrumentalities;
(4) Obligations of banks (including certificates of deposit and bankers'
acceptances) with $1 billion of assets and repurchase agreements with banks
and broker-dealers; and
(5) Tax-exempt securities which are not rated but which, in the opinion of
the Fund's investment adviser, are of at least comparable quality to the
three highest grades of S&P or Moody's.
Municipal bonds include general obligation bonds and revenue bonds. General
obligation bonds are backed by the taxing power of the issuing municipality.
Revenue bonds are backed by the revenues of a project or facility such as the
tolls from a toll bridge.
No more than 15% of the Fund's total portfolio will be invested in securities
which are not rated or which are rated BBB by S&P or Baa by Moody's.
Securities rated BBB by S&P or Baa by Moody's are considered medium-grade,
neither highly protected nor poorly secured, with some elements of
uncertainty over any great length of time and certain speculative
characteristics as well. The Fund will not invest in securities rated below
BBB by S&P or Baa by Moody's.
The dollar weighted average portfolio maturity of the Fund will not exceed 10
years. Under normal circumstances, the Fund will invest at least 80% of its
assets in securities with remaining maturities of 15 years or less. For
purposes of
4
<PAGE>
these policies, an instrument will be treated as having a maturity earlier
than its stated maturity date if the instrument has technical features (such
as puts, demand, prepayment or redemption features) or a variable rate of
interest which, based on projected cash flows from the instrument, will in
the judgment of PMC result in the instrument being valued in the market as
though it has the earlier maturity.
The Fund intends to minimize the distribution of taxable income to
shareholders. Thus, investments described in paragraphs 3 and 4 above will
generally be purchased only to meet short-term liquidity needs or to offset
any portion of Fund expenses allocable to the Fund's taxable income. If the
Fund cannot find suitable tax-exempt short-term instruments in the quantity
necessary, or if for any reason the Fund earns taxable income, a portion of
the dividends distributed to shareholders may be taxable as ordinary income.
See "Dividends and Tax Status."
The higher quality issues in which the Fund's portfolio will be concentrated
can generally be expected to produce lower yields than issues of lower
quality, though they are generally more marketable.
The net asset value of the shares of an open-end investment company such as
the Fund, which invests primarily in fixed-income tax-exempt securities,
changes as the general levels of interest rates fluctuate. When interest
rates rise, the value of a portfolio invested at lower yields can be expected
to decline. For a description of how to compare yields on Municipal Bonds and
taxable securities, see "Taxable Equivalent Yields" in the Appendix. For the
ratings of S&P and Moody's for Municipal Bonds and a general discussion of
Municipal Bonds and descriptions of short-term investments permitted as Fund
investments, see the Statement of Additional Information.
"When Issued" Securities
Some tax-exempt securities are purchased on a "when-issued" basis, which
means that it may take as long as 60 days or more before the securities are
delivered and paid for. The commitment to purchase a security for which
payment will be made on a future date may be deemed a separate security.
Although the amount of tax-exempt securities for which there may be purchase
commitments on a "when-issued" basis is not limited, it is expected that
under normal circumstances not more than 50% of the total assets of the Fund
will be committed to such purchases. The Fund does not start earning interest
on "when-issued" securities until they are issued. In order to invest the
assets of the Fund immediately while awaiting delivery of securities
purchased on a "when-issued" basis, short-term obligations that offer
same-day settlement and earnings will normally be purchased. Although
short-term investments will normally be in tax-exempt securities, short-term
taxable securities may be purchased if suitable short-term tax-exempt
securities are not available.
When a commitment to purchase a security on a "when-issued" basis is made,
procedures are established consistent with the General Statement of Policy of
the SEC concerning such purchases. Because that policy currently recommends
that an amount of the Fund's assets equal to the amount of the purchase be
held aside or segregated to be used to pay for the commitment, cash or high
quality debt securities sufficient to cover any commitments are always
expected to be available. However, although it is not intended that such
purchases would be made for speculative purposes, and although the Fund
intends to adhere to the provisions of the SEC policy, purchases of
securities on a "when-issued" basis may involve more risk than other types
of purchases. For example, when the time comes to pay for a "when-issued"
security, portfolio securities of the Fund may have to be sold in order for
the Fund to meets its payment obligations, and a sale of securities to meet
such obligations carries with it a greater potential for the realization of
capital gain, which is not tax-exempt.
Also, if it is necessary to sell the "when-issued" security before delivery,
the Fund may incur a loss because of market fluctuations since the time the
commitment to purchase the "when-issued" security was made. Moreover, the
Fund's distributions of any gain resulting from any such sale would not be
tax-exempt. Additionally, because of market fluctuations between the time of
commitment to purchase and the date of purchase, the "when-issued" security
may have a lesser (or greater) value at the time of purchase than the Fund's
payment obligations with respect to the security.
Portfolio Transactions and Turnover
The Fund will be fully managed by purchasing and selling securities, as well
as holding selected securities to maturity. In purchasing and selling
portfolio securities, the Fund seeks to take advantage of market
developments, yield disparities, and variations in the creditworthiness of
issuers. For a description of the strategies which may be used by the Fund in
purchasing and selling portfolio securities, see the Statement of Additional
Information.
While it is not possible to predict accurately the rate of turnover of the
Fund's portfolio on an annual basis, it is anticipated that the rate will not
materially exceed 85%. Securities in the Fund's portfolio will be sold
whenever PMC believes that it is necessary without regard to the length of
time the particular security may have been held. This policy is subject to
certain requirements for continuing the Fund's qualification as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). See "Financial Highlights" for actual turnover rates. Computation of
portfolio turnover excludes transactions in U.S. Treasury obligations and
securities having a maturity of one year or less.
The investment objective and policy to invest under normal circumstances at
least 80% of the Fund's portfolio in Municipal Bonds, may not be changed
without shareholder approval. Because all of the Fund's investments are
subject to fluctuations in yields and value due to changes in earnings,
economic conditions and other factors, there can be no assurance that the
Fund's investment objective will be achieved.
The Statement of Additional Information includes a discussion of other
investment policies and a listing of specific investment restrictions which
govern the Fund's investment
5
<PAGE>
policies. The specific investment restrictions identified in the Statement of
Additional Information as fundamental may not be changed without shareholder
approval.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees has overall responsibility for management and
supervision of the Fund. There are currently eight Trustees, six of whom are
not "interested persons" of the Fund as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"). The Board meets at least quarterly. By
virtue of the functions performed by PMC as investment adviser, the Fund
requires no employees other than its executive officers, all of whom receive
their compensation from PMC or other sources. The Statement of Additional
Information contains the names and general background of each Trustee and
executive officer of the Fund.
Each domestic fixed income portfolio managed by PMC, including the Fund, is
overseen by the Domestic Fixed Income Portfolio Management Committee, which
consists of PMC's most senior domestic fixed income professionals. The
committee is chaired by Mr. David Tripple, PMC's President and Chief
Investment Officer and Executive Vice President of each of the Pioneer mutual
funds. Mr. Tripple joined PMC in 1974 and has had general responsibility for
PMC's investment operations and specific portfolio assignments for over five
years. Fixed income investments at PMC, including those made on behalf of the
Fund, are under the general supervision of Mr. Sherman Russ, Vice President
of PMC. Mr. Russ joined PMC in 1983. Day-to-day management of the Fund has
been the responsibility of Kathleen D. McClaskey since February 1990. Ms.
McClaskey joined PMC in 1986 and is Vice President of PMC. In certain
instances where Ms. McClaskey is unavailable, primary responsibility for the
day-to-day management of the Fund may be assumed temporarily by Mark Winter,
Vice President of PMC. Mr. Winter joined PMC in 1993.
The Fund is managed under a contract with PMC. PMC serves as investment
adviser to the Fund and is responsible for the overall management of the
Fund's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a Delaware corporation. Pioneer Funds Distributor, Inc. ("PFD"), an
indirect wholly-owned subsidiary of PGI, is the principal underwriter of
shares of the Fund. John F. Cogan, Jr., Chairman and President of the Fund,
Chairman of PFD, President and a Director of PGI and Chairman and a Director
of PMC, owned approximately 14% of the outstanding capital stock of PGI as of
March 31, 1996.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive officers are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Fund, PMC assists in the management
of the Fund and is authorized in its discretion to buy and sell securities
for the account of the Fund. PMC pays all the ordinary operating expenses,
including executive salaries and the rental of certain office space, related
to its services for the Fund, with the exception of the following which are
to be paid by the Fund: (a) charges and expenses for fund accounting, pricing
and appraisal services and related overhead, including, to the extent such
services are performed by personnel of PMC or its affiliates, office space
and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and
registrar appointed by the Fund; (d) issue and transfer taxes, chargeable to
the Fund in connection with securities transactions to which the Fund is a
party; (e) 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; (f) fees and expenses
involved in registering and maintaining registrations of the Fund and/or its
shares with regulatory agencies, individual states or blue sky securities
agencies, territories and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
SEC; (g) 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; (h) charges and
expenses of legal counsel to the Fund and to Trustees; (i) distribution fees
paid by the Fund in accordance with Rule 12b-1 promulgated by the SEC
pursuant to the 1940 Act; (j) compensation of those Trustees of the Fund who
are not affiliated with or interested persons of PMC, the Fund (other than as
Trustees), PGI or PFD; (k) the cost of preparing and printing share
certificates; and (l) interest on borrowed money, if any. In addition to the
expenses described 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.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances where two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides brokerage or research services or sells shares of the
Fund. See the Statement of Additional Information for a further description
of PMC's brokerage allocation practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Fund's average daily net assets. The fee is normally computed daily and paid
monthly. During the fiscal year ended December 31, 1995, the Fund would,
absent an expense limitation agreement, have incurred expenses of $940,181
payable to PMC. PMC has voluntarily agreed not to impose management fees as
described in "Expense Information." This agreement is voluntary and temporary
and may be revised or terminated at any time. During the fiscal year ended
December 31, 1995,
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this arrangement resulted in a reduction of expenses for the Fund of $89,114.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class A,
Class B and Class C shares, as described more fully in "How to Buy Fund
Shares." If you do not specify in your instructions to the Fund which Class
of shares you wish to purchase, exchange or redeem, the Fund will assume that
your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a CDSC. Class A
shares are subject to distribution and service fees at a combined annual rate
of up to 0.25% of the Fund's average daily net assets attributable to Class A
shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 3% if redeemed within four years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is available to work for you
from the time you make your investment, but the higher distribution fee paid
by Class B shares will cause your Class B shares (until conversion) to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class B shares will automatically convert to Class
A shares, based on relative net asset value, approximately six years after
the initial purchase.
Class C Shares. Class C shares are sold without an initial sales charge, but
are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least four years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer mutual fund
and shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Pioneer mutual fund originally purchased.
Shares sold outside the U.S. to persons who are not U.S. citizens may be
subject to different sales charges, CDSCs and dealer compensation
arrangements in accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the New York Stock Exchange (the "Exchange") is open, as of the
close of regular trading on the Exchange.
VII. HOW TO BUY FUND SHARES
You may buy Fund shares from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please
call 1-800-225-6292. Shares will be purchased at the public offering price,
that is, the net asset value per share plus any applicable sales charge, next
computed after receipt of a purchase order, except as set forth below.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments and other similar automatic investment plans. Separate minimum
investment requirements apply to retirement plans and to telephone and wire
orders placed by broker-dealers; no sales charges or minimum requirements
apply to the reinvestment of dividends or capital gains distributions. The
minimum subsequent investment is $50 for Class A shares and $500 for Class B
and Class C shares except that the subsequent minimum investment amount for
Class B and Class C share accounts may be as little as $50 if an automatic
investment plan is established (see "Automatic Investment Plans").
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicated otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing mutual fund account; it may not be used to establish a new account.
Proper account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to Individual Retirement Accounts
("IRAs") but may not be available to other types of retirement plan accounts.
Call PSC for more information.
You are strongly urged to consult with your financial representative prior to
requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank
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account of record by completing the appropriate section of your Account
Application or an Account Options Form. PSC will electronically debit the
amount of each purchase from this predesignated bank account. Telephone
purchases may not be made for 30 days after the establishment of your bank of
record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any applicable
sales charge next determined after PSC's receipt of a telephone purchase
instruction and receipt of good funds (usually three days after the purchase
instruction). You may always elect to deliver purchases to PSC by mail. See
"Telephone Transactions and Related Liabilities" for additional information.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the net
asset value per share next computed after receipt of a purchase order, plus a
sales charge as follows:
Dealer
Sales Charge as a Allowance
% of as a % of
----------------- ----------
Net
Offering Amount Offering
Amount of Purchase Price Invested Price
- ----------------------------- ------ ------- ----------
Less than $50,000 3.50% 3.62% 3.00%
$50,000 but less than
$100,000 3.00 3.09 2.50
$100,000 but less than
$500,000 2.50 2.56 2.00
$500,000 but less than
$1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see
below
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by an (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Code, although more than one
beneficiary is involved. The sales charges applicable to a current purchase
of Class A shares of the Fund by a person listed above is determined by
adding the value of shares to be purchased to the aggregate value (at the
then current offering price) of shares of any of the other Pioneer mutual
funds previously purchased and then owned, provided PFD is notified by such
person or his or her broker-dealer each time a purchase is made which would
qualify. Pioneer mutual funds include all mutual funds for which PFD serves
as principal underwriter. See the "Letter of Intention" section of the
Account Application.
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain Group Plans (described
below) subject to a CDSC of 0.50% which may be imposed in the event of a
redemption of Class A shares within 12 months of purchase. See "How to Sell
Fund Shares." PFD may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows: 0.50% on the
first $1 million to $5 million; and 0.10% on the excess over $5 million.
These commissions will not be paid if the purchaser is affiliated with the
broker-dealer or if the purchase represents the reinvestment of a redemption
made during the previous 12 calendar months. Broker-dealers who receive a
commission in connection with Class A share purchases at net asset value by
401(a) or 401(k) retirement plans with 1,000 or more eligible participants or
with at least $10 million in plan assets will be required to return any
commission paid or a pro rata portion thereof if the retirement plan redeems
its shares within 12 months of purchase. See also "How to Sell Fund Shares."
In connection with PGI's acquisition of Mutual of Omaha Fund Management
Company and contingent upon the achievement of certain sales objectives, PFD
may pay to Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of
any sales commission on sales of the Fund's Class A shares through such
dealer.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be sold
at a reduced or eliminated sales charge to certain Group Plans under which a
sponsoring organization makes recommendations to, permits group solicitation
of, or otherwise facilitates purchases by, its employees, members or
participants. Class A shares of the Fund may be sold at net asset value
without a sales charge to 401(k) retirement plans with 100 or more
participants or at least $500,000 in plan assets. Information about such
arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners or employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which
have entered into sales agreements with PFD; (e) members of the immediate
families of any of the foregoing persons; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of investment advisers adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. Class A shares of the Fund may be sold
at net asset value per share without a sales charge to Optional Retirement
Program (the "Program") participants if (i) the employer has authorized a
limited number of investment company providers for the Program, (ii) all
authorized investment company providers offer their shares to Program
participants at net asset value, (iii) the employer has agreed in writing to
actively promote the authorized investment providers to Program participants
and (iv) the Program provides for a matching contribution for each
participant contribution. Shares of the Fund may also be issued at net asset
value without a
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sales charge in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies.
Investors who are clients of a broker-dealer with a current sales agreement
with PFD may purchase shares of the Fund at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from
one or more redemptions by the investor of shares of certain other mutual
funds. In order for a purchase to qualify for this privilege, the investor
must document to the broker-dealer that the redemption occurred within 60
days immediately preceding the purchase of shares of the Fund; that the
client paid a sales charge on the original purchase of the shares redeemed;
and that the mutual fund whose shares were redeemed also offers net asset
value purchases to redeeming shareholders of any of the Pioneer mutual funds.
Further details may be obtained from PFD.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention Procedure, including
its terms, is contained in the Statement of Additional Information.
Class B Shares
You may buy Class B shares at the net asset value per share next computed
after receipt of a purchase order without the imposition of an initial sales
charge; however, Class B shares redeemed within four years of purchase will
be subject to a CDSC at the rates shown in the table below. The charge will
be assessed on the amount equal to the lesser of the current market value or
the original purchase cost of the shares being redeemed. No CDSC will be
imposed on increases in account value above the initial purchase price,
including shares derived from the reinvestment of dividends or capital gains
distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the four-year period. As a result, you will pay
the lowest possible CDSC.
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- ----------------------- --------------------------------
First 3.0%
Second 3.0%
Third 2.0%
Fourth 1.0%
Fifth and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is six years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer mutual fund will convert into Class A shares based on the
date of the initial purchase and the applicable CDSC. Class B shares acquired
through reinvestment of distributions will convert into Class A shares based
on the date of the initial purchase to which such shares relate. For this
purpose, Class B shares acquired through reinvestment of distributions will
be attributed to particular purchases of Class B shares in accordance with
such procedures as the Trustees may determine from time to time. The
conversion of Class B shares to Class A shares is subject to the continuing
availability of a ruling from the Internal Revenue Service ("IRS"), which the
Fund has obtained, or an opinion of counsel that such conversions will not
constitute taxable events for federal tax purposes. There can be no assurance
that such ruling or opinion will continue to be in effect at the time any
particular conversion would occur. The conversion of Class B shares to Class
A shares will not occur if such ruling is no longer in effect and such an
opinion is not available and, therefore, Class B shares would continue to be
subject to higher expenses than Class A shares for an indeterminate period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. The charge will be assessed on
the amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments during
a quarter will be aggregated and deemed to have been made on the first day of
that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of
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the value of the account in the Fund at the time the withdrawal plan is
established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an IRA, 403(b) or employer-sponsored retirement plan, is part
of a series of substantially equal payments made over the life expectancy of
the participant or the joint life expectancy of the participant and his or
her beneficiary or as scheduled periodic payments to a participant (limited
in any year to 10% of the value of the participant's account at the time the
distribution amount is established; a required minimum distribution due to
the participant's attainment of age 70-1/2 may exceed the 10% limit only if
the distribution amount is based on plan assets held by Pioneer); (c) the
distribution is from a 401(a) or 401(k) retirement plan and is a return of
excess employee deferrals or employee contributions or a qualifying hardship
distribution as defined by the Code or results from a termination of
employment (limited with respect to a termination to 10% per year of the
value of the plan's assets in the Fund as of the later of the prior December
31 or the date the account was established unless the plan's assets are being
rolled over to or reinvested in the same class of shares of a Pioneer mutual
fund subject to the CDSC of the shares originally held); (d) the distribution
is from an IRA, 403(b) or employer-sponsored retirement plan and is to be
rolled over to or reinvested in the same class of shares in a Pioneer mutual
fund and which will be subject to the applicable CDSC upon redemption; (e)
the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which
will be subject to the applicable CDSC upon redemption); or (f) the
distribution is from a qualified defined contribution plan and represents a
participant's directed transfer (provided that this privilege has been
pre-authorized through a prior agreement with PFD regarding participant
directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may be
waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareowner or
participant in an employer-sponsored retirement plan; (c) if the
distribution is part of a series of substantially equal payments made over
the life expectancy of the participant or the joint life expectancy of the
participant and his or her beneficiary; or (d) if the distribution is to a
participant in an employer-sponsored retirement plan and is (i) a return of
excess employee deferrals or contributions, (ii) a qualifying hardship
distribution as defined by the Code, (iii) from a termination of employment,
(iv) in the form of a loan to a participant in a plan which permits loans, or
(v) from a qualified defined contribution plan and represents a participant's
directed transfer (provided that this privilege has been pre-authorized
through a prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject to a
CDSC may be waived or reduced for either non-retirement or retirement plan
accounts if: (a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers. An order for any Class of Fund shares received by PFD from a
broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General. The Fund reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to redeem Fund shares on any day the Exchange is open by
selling (redeeming) either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must make
your request in writing (except for exchanges to other Pioneer
mutual funds which can be requested by phone or in writing). Call
1-800-622-0176 for more information.
(bullet) If you are selling shares from a non-retirement account, you may use
any of the methods described below.
Your shares will be sold at the share price next calculated after your order
is received in good order less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
received in good order. The Fund reserves the right to withhold payment of
the sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the
purchase date.
In Writing. You may always sell your shares by delivering a written request,
signed by all registered owners, in good order to PSC, however, you must use
a written request, including a signature guarantee, to sell your shares if
any of the following situations applies:
(bullet) you wish to sell over $50,000 worth of shares,
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(bullet) your account registration or address has changed within the last
30 days,
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with
a different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the
sale to the address of record. Fiduciaries or corporations are required to
submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good order
and accepted by PSC. Good order means that there are no outstanding claims or
requests to hold redemptions on the account, certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last
30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to your bank address of record which must
have been properly pre-designated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. Your broker-dealer must receive
your request before the close of business on the Exchange and transmit it to
PFD before the close of business to receive that day's net asset value. Your
broker-dealer is responsible for providing all necessary documentation to
PFD and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of the
Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held
in this account at net asset value if you have not increased the net asset
value of the account to at least the minimum required amount within six
months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more, or
by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 0.50% of the lesser of the value
of the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable with respect to purchases of Class A shares by 401(a) or
401(k) retirement plans with 1,000 or more eligible participants or with at
least $10 million in plan assets.
General. The Fund has authorized PFD to act as its agent in the repurchase of
shares of the Fund and reserves the right to terminate this procedure at any
time. Redemptions may be suspended or payment postponed during any period in
which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The net
asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Pioneer mutual fund out of which you wish to exchange and the name of the
Pioneer mutual fund into which you wish to exchange, your fund account
number(s), the Class of shares to be exchanged and the dollar amount or
number of shares to be exchanged. Written exchange requests must be signed by
all record owner(s) exactly as the shares are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by
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<PAGE>
writing to the PSC. Proper account identification will be required for each
telephone exchange. Telephone exchanges may not exceed $500,000 per account
per day. Each telephone exchange request, whether by voice or by FactFone,
will be recorded. You are strongly urged to consult with your financial
representative prior to requesting a telephone exchange. See "Telephone
Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
mutual fund account for shares of the same Class in another Pioneer mutual
fund account on a monthly or quarterly basis. The accounts must have
identical registrations and the originating account must have a minimum
balance of $5,000. The exchange will be effective on the 18th day of the
month.
General. Exchanges must be at least $1,000. You may exchange your investment
from one Class of Fund shares at net asset value, without a sales charge, for
shares of the same Class of any other Pioneer mutual fund. Not all Pioneer
mutual funds offer more than one Class of shares. A new Pioneer mutual fund
account opened through an exchange must have a registration identical to that
on the original account.
Shares which would normally be subject to a CDSC upon redemption will not be
charged the applicable CDSC at the time of an exchange. Shares acquired in an
exchange will be subject to the CDSC of the shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
you have owned shares acquired by exchange will be measured from the date you
acquired the original shares and will not be affected by any subsequent
exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements below have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Fund exchanged and a purchase of shares in another fund.
Therefore, an exchange could result in a taxable gain or loss on the shares
sold, depending on the tax basis of these shares and the timing of the
transaction.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making
any exchange. For the protection of the Fund's performance and shareholders,
the Fund and PFD reserve the right to refuse any exchange request or
restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Fund's portfolio management
strategy or its operations. In addition, the Fund and PFD reserve the right
to charge a fee for exchanges or to modify, limit, suspend or discontinue the
exchange privilege with notice to shareholders as required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Fund's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Fund: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Fund's daily
net assets attributable to Class A shares; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on
certain sales of the Fund's Class A shares with no initial sales charge (See
"How to Buy Fund Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan does not provide for the carryover of reimbursable expenses beyond
twelve months from the time the Fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the Fund in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal
year. In the event of termination or non-continuance of the Class A Plan, the
Fund has twelve months to reimburse any expense which it incurs prior to such
termination or non-continuance, provided that payments by the Fund during
such twelve-month period shall not exceed 0.25% of the Fund's average daily
net assets during such period. The Class A Plan may not be amended to
increase materially the annual percentage limitation of average net assets
which may be spent for the services described therein without approval of the
shareholders of the Fund.
Both the Class B Plan and the Class C Plan provide that the Fund will pay a
distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to the applicable Class of shares and will pay PFD a
service fee
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<PAGE>
at the annual rate of 0.25% of the Fund's average daily net assets
attributable to that Class of shares. The distribution fee is intended to
compensate PFD for its distribution services to the Fund. The service fee is
intended to be additional compensation for personal services and/or account
maintenance services with respect to Class B and Class C shares. PFD also
receives the proceeds of any CDSC imposed on the redemption of Class B and
Class C shares.
Commissions of 3%, equal to 2.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase
price of such shares and, as compensation therefore, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
Commissions of up to 1% of the amount invested in Class C shares, consisting
of 0.75% of the amount invested and a first year's service fee of 0.25% of
the amount invested, are paid to broker-dealers who have selling agreements
with PFD. PFD may advance to dealers the first year service fee at a rate up
to 0.25% of the purchase price of such shares and, as compensation therefore,
PFD may retain the service fee paid by the Fund with respect to such shares
for the first year after purchase. Commencing in the 13th month following the
purchase of Class C shares, dealers will become eligible for additional
annual distribution fees and service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
XI. DIVIDENDS AND TAX STATUS
The Fund has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under the Code. Because the
Fund intends to distribute all or substantially all of its net investment
income and net realized capital gains to shareholders in a timely manner, it
is not expected that the Fund will be required to pay any Federal income
taxes. The Code permits tax-exempt interest received by the Fund and
distributed to the Fund's shareholders to flow through as tax-exempt
"exempt-interest dividends," provided that the Fund qualifies as a regulated
investment company and at least 50% of the value of the total assets of the
Fund at the close of each quarter of its taxable year consists of tax-exempt
obligations. However, distributions derived from interest on certain "private
activity bonds" will be subject to the federal alternative minimum tax for
individuals, estates or trusts that are subject to such tax; and all tax
exempt distributions may result in or increase a corporate shareholder's
liability for the federal alternative minimum tax.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of the Fund will not be deductible for federal income tax purposes to
the extent it is deemed related to the Fund's exempt-interest dividends. The
Fund may not be an appropriate investment for persons who are "substantial
users" of facilities financed by industrial revenue or private activity bonds
or persons related to substantial users. Shareholders receiving social
security or certain railroad retirement benefits may be subject to federal
income tax on a portion of such benefits as a result of receiving investment
income, including exempt-interest dividends and other distributions paid by
the Fund.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary (taxable) income (if any) and
net capital gains if it fails to meet certain distribution requirements with
respect to each calendar year. The Fund intends to make distributions in a
timely manner and accordingly does not expect to be subject to the excise
tax.
Each business day the Fund declares a dividend consisting of substantially
all of the Fund's net investment income. 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.
Dividends are normally paid on the last business day of the month or shortly
thereafter. The Fund's net investment income consists of the interest income
it earns, less expenses. In computing interest income, the Fund amortizes
premium or accrues discount on long-term debt securities only to the extent
required for federal income tax purposes.
While the Fund seeks to maximize the percentage of income distributed which
is not subject to federal income taxes, it is possible that under certain
circumstances (see "Investment Objective and Policies") a small portion of
the income dividends paid by the Fund will be subject to federal income tax.
Dividends from the Fund's taxable net investment income, if any, market
discount income and net short-term capital gains are taxable as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable
as long-term capital gains. Fund distributions may also be subject to state
and local income taxes. A state income (and possibly local income and/or
intangible property) tax exemption is generally available to the extent the
Fund's distributions are derived from interest on (or, in the case of
intangibles taxes, the value of its assets is attributable to) certain U.S.
government obligations and/or tax-exempt municipal obligations issued by or
on behalf of the particular state or a political subdivision thereof,
provided in some states that certain thresholds for holdings of such
obligations and/or reporting requirements are satisfied. The federal income
tax status of all distributions will be reported to shareholders annually,
and shareholders are required to report all distributions, including
tax-exempt distributions, on their federal income tax returns.
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<PAGE>
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
above whether a shareholder takes them in cash or reinvests them in
additional shares of the Fund. Information as to the tax status of
distributions will be provided annually to shareholders. See "Distribution
Options" and "Directed Dividends."
Taxable dividends and other distributions which are taxable and the proceeds
of redemptions, exchanges and repurchases of Fund shares paid to individuals
and other non-exempt payees may be subject to 31% backup withholding of
federal income tax if the Fund is not provided with the shareholder's correct
taxpayer identification number and certification that the number is correct
and the shareholder is not subject to such backup withholding or if the Fund
receives notice from the IRS or a broker that such withholding applies.
Please refer to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income tax. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisors regarding applicable
state, local and other tax laws in their particular situations.
XII. SHAREHOLDER SERVICES
PSC is the transfer agent for shares of the Fund. PSC, a Massachusetts
corporation, is a wholly-owned subsidiary of PGI. PSC's offices are located
at 60 State Street, Boston, Massachusetts 02109, and inquiries to PSC should
be mailed to Pioneering Services Corporation, P.O. Box 9014, Boston,
Massachusetts 02205-9014. Brown Brothers Harriman & Co. (the "Custodian")
serves as the custodian of the Fund's portfolio securities and other assets.
The principal business address of the mutual funds division of the Custodian
is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders quarterly for dividend
reinvestment transactions and more frequently for other types of
transactions. The Pioneer Combined Account Statement, mailed quarterly, is
available to all shareholders who have more than one Pioneer Account.
Shareholders whose shares are held in the name of a broker-dealer or other
party will not normally have an account with the Fund and might not be able
to utilize some of the services available to shareholders of record. Examples
of services which might not be available are investment or redemption of
shares by mail, automatic reinvestment of dividends and capital gains
distributions, withdrawal plans, Letters of Intention, Rights of
Accumulation, telephone exchanges and redemptions and newsletters.
Additional Investments
You may add to your account by sending a check ($50 minimum) to PSC; please
indicate your account number and Class of shares clearly. The bottom portion
of a confirmation statement may be used as a remittance slip to make
additional investments. Additions to a shareholder's account, whether by
check or through an Investomatic Plan, are invested in full and fractional
shares of the Fund at the applicable public offering price in effect as of
the close of regular trading on the Exchange on the day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments or through a Pioneer Investomatic Plan. A
Pioneer Investomatic Plan provides for a monthly or quarterly investment by
means of a preauthorized electronic funds transfer or draft drawn on a
checking account. Pioneer Investomatic Plan investments are voluntary, and
you may discontinue the Plan without penalty upon 30 days' written notice to
PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the same Class of the Fund, at the
applicable net asset value per share, unless you indicate another option on
the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer mutual
fund account invested in a second Pioneer mutual fund account. The value of
this second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer
II). Invested dividends may be in any amount, and there are no fees or
charges for this service.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing
the appropriate section on the Account Application when opening a new account
or the Account Options Form for an existing account.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to PSC. See "Share Price,"
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<PAGE>
"How to Sell Fund Shares" and "Telephone Exchanges" for more information. You
may purchase, sell or exchange Fund shares by telephone. See "Share Price"
for more information. For personal assistance, call 1-800-225-6292 between
8:00 a.m. and 9:00 p.m. Eastern Time on weekdays. Computer-assisted
transactions may be available to shareholders who have pre-recorded certain
bank information (See FactFone). You are strongly urged to consult with your
financial representative prior to requesting any telephone transaction. See
"Share Price" for more information. To confirm that each transaction
instruction received by telephone is genuine, the Fund will record each
telephone transaction, require the caller to provide the personal
identification number ("PIN") for the account and send you a written
confirmation of each telephone transaction. Different procedures may apply to
accounts that are registered to non-U.S. citizens or are held in the name of
an institution or in the name of an investment broker-dealer or other
third-party. If reasonable procedures, such as those described above, are not
followed, the Fund may be liable for any loss due to unauthorized or
fraudulent instructions. The Fund may implement other procedures from time to
time. In all other cases, neither the Fund, PSC or PFD will be responsible
for the authenticity of instructions received by telephone; therefore, you
bear the risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer mutual fund shareholders by dialing 1-800-225-4321.
FactFone(SM) allows you to obtain current information on your Pioneer mutual
fund accounts and to inquire about the prices and yields of all publicly
available Pioneer mutual funds. In addition, you may use FactFone(SM) to make
computer-assisted telephone purchases, exchanges and redemptions from your
Pioneer mutual fund accounts if you have activated your PIN. Telephone
purchases and redemptions require the establishment of a bank account of
record. You are strongly urged to consult with your financial representative
prior to requesting any telephone transaction. Shareholders whose accounts
are registered in the name of a broker-dealer or other third party may not be
able to use FactFone(SM). See "How to Buy Shares," "How to Exchange Fund
Shares," "How to Sell Fund Shares" and "Telephone Transactions and Related
Liabilities." Call PSC for assistance.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and your own TDD keyboard equipment, you can
call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m. to
5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B and Class C shares accounts will be
limited to 10% of the value of the account at the time the plan is
implemented. See "Waiver or Reduction of Contingent Deferred Sales Charge"
for more information. Periodic checks of $50 or more will be sent to you,
monthly or quarterly. You may also direct that withdrawal checks be paid to
another person, although if you make this designation after you have opened
your account, a signature guarantee must accompany your instructions.
Purchases of Class A shares of the Fund at a time when you have a SWP in
effect may result in the payment of unnecessary sales charges and may
therefore be disadvantageous. Your periodic redemptions of shares may be
taxable.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales commission in
Class A shares of the Fund if you send a written request to PSC not more than
90 days after your shares were redeemed. Your redemption proceeds will be
reinvested in shares of the Fund at the net asset value next determined after
receipt of the written request for reinstatement, together with the proceeds
that you wish to reinvest. You may realize a taxable gain or loss for federal
income tax purposes as a result of the redemption, and special tax rules may
apply if a reinstatement occurs. Subject to the provisions outlined under
"Exchange Privilege" above, you may also reinvest in any other Pioneer mutual
funds; in this case you must meet the minimum investment requirement for each
fund you enter.
The 90-day reinvestment period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
-----------------------------------
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may also
establish or revise many of them on an existing account by completing an
Account Option Form, which you may request by calling 1-800-225-6292.
XIII. THE FUND
The Fund is a diversified, open-end management investment company (commonly
referred to as a mutual fund) organized as a Massachusetts business trust on
July 24, 1986. The Fund has authorized an unlimited number of shares of
beneficial interest and the Trustees are authorized to create additional
series of the Fund. The Fund is not required to hold annual meetings,
although special meetings may be called for the purposes of electing or
removing Trustees, changing
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<PAGE>
fundamental investment restrictions or approving a management contract. The
Trustees have the authority, without further shareholder approval, to
classify and reclassify the shares of the Fund, or any new series of the
Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of three Classes of shares, designated
Class A, Class B and Class C. The shares of each Class represent an interest
in the same portfolio of investments of the Fund. Each Class has equal rights
as to voting, redemption, dividends and liquidation, except that each Class
bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular Class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares.
XIV. INVESTMENT RESULTS
The Fund may from time to time include yield information in advertisements or
in information furnished generally to existing or proposed shareholders.
Whenever yield information is provided, it includes a standardized yield
calculation computed by dividing the Fund'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 Fund on the last day of such base period. (The Fund's net
investment income per share is determined by dividing the Fund's net
investment income during the base period by the average number of shares of
the Fund entitled to receive dividends during the base period.) The Fund's
30-day yield is then "annualized" by a computation that assumes that the
Fund's net investment income is earned and reinvested for a six-month period
at the same rate as during the 30-day base period and that the resulting
six-month income will be generated over an additional six months.
The Fund may also from time to time advertise its taxable equivalent yield.
The Fund's taxable equivalent yield is determined by dividing that portion of
the Fund'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 Fund's yield that is not tax exempt. For a table of
sample taxable equivalent yields, please see the Appendix.
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal
or state income taxes. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 3.50%; for Class B and
Class C shares the calculation reflects the deduction of any applicable CDSC.
The periods illustrated would normally include one, five and ten years (or
since the commencement of the public offering of the shares of a Class, if
shorter) through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited to
historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment performance of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. All quoted investment results are historical and should not be
considered representative of what an investment in the Fund may earn in any
future period. For further information about the calculation methods and uses
of the Fund's investment results, see the Statement of Additional
Information.
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XV. APPENDIX
Taxable Equivalent Yields*
The tables below show the approximate taxable yields which are equivalent to
hypothetical tax-exempt yields from 5% to 9% under federal income tax laws
applicable to individuals during 1996.
<TABLE>
<CAPTION>
Taxable Yield Required
Single Return Joint Return Tax To Equal A Tax Free Yield Of:
---------------- ----------------- ------------------------------------
(Taxable Income)* Rate 5% 6% 7% 8% 9%
- ------------------------------------- ----- ---- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Up to $24,000 Up to $40,100 15.0% 5.88 7.06 8.24 9.41 10.59
$24,001-$58,150 $40,101-$96,900 28.0% 6.94 8.33 9.72 11.11 12.50
$58,151-$121,300 $96,901-$147,700 31.0% 7.25 8.70 10.14 11.59 13.04
$121,301-$263,750 $147,701-$263,750 36.0% 7.81 9.38 10.94 12.50 14.06
Over $263,750 Over $263,750 39.6% 8.28 9.93 11.59 13.25 14.90
</TABLE>
* Net amount subject to Federal income tax after deductions and exemptions.
Table does not reflect the effect of the Deduction Limitation and
Exemption Phaseout described below** or of the alternative minimum tax, if
any. Table assumes person filing Single Return is not a married individual
filing a separate return, a surviving spouse, or a head of household.
** Deduction Limitation: Each $100 of adjusted gross income ("AGI") in excess
of $117,950 ($58,975 for marrieds filing separately) causes the loss of $3
of itemized deductions. This limitation affects all itemized deductions
other than medical expenses, investment interest, and casualty, theft and
wagering losses. However, not more than 80% of a taxpayer's itemized
deductions can be eliminated. The threshold amounts will be adjusted for
inflation from year to year.
Exemption Phaseout: Each $2,500 or fraction thereof of AGI in excess of
$176,950 for joint filers ($117,950 for single taxpayers) causes taxpayers
to lose 2% of their personal exemptions. The threshold amounts will be
adjusted for inflation from year to year.
The following formula can be used to calculate a taxable yield which is
equivalent to the corresponding tax-free yield:
Tax Free Yield
------------------ = Taxable Equivalent Yield
1-Your Tax Bracket
For example, if you are in the 28% tax bracket and earn a tax-free yield of
7%, the taxable equivalent yield would be 9.72%.
7% .07
---- = --- = 9.72%
1-28% .72
There can be no assurance that the Fund will achieve any specific tax-exempt
yield. While it is expected that a substantial portion of the interest income
distributed to investors in the Fund will be exempt from regular federal
income taxes, portions of such distributions may be subject to regular
federal income tax or federal alternative minimum tax. In addition, all or a
substantial portion of such distributions may be subject to state and local
taxes. Subsequent tax law changes could result in prospective or retroactive
changes in the tax brackets, tax rates and tax equivalent yields set forth
above.
17
<PAGE>
Notes
18
<PAGE>
The Pioneer Family of Mutual Funds
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Money Market Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts.
19
<PAGE>
[Pioneer logo]
Pioneer
Intermediate
Tax-Free
Fund
60 State Street
Boston, Massachusetts 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
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses, applications,
service forms
and telephone transactions ................................... 1-800-225-6292
FactFone(SM)
Automated fund yields, automated
prices and account information ............................... 1-800-225-4321
Retirement plans .............................................. 1-800-622-0176
Toll-free fax ................................................. 1-800-225-4240
Telecommunications Device for the Deaf (TDD) .................. 1-800-225-1997
0496-3264
(C)Pioneer Funds Distributor, Inc.
20
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
April 29, 1996
This Statement of Additional Information is not a Prospectus, but should be read
in conjunction with the Prospectus (the "Prospectus") dated April 29, 1996 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 and is hereby
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............................................... 4
3. Investment Adviser................................................... 8
4 Underwriting Agreement and Distribution Plans........................ 9
5. Shareholder Servicing/Transfer Agent................................. 11
6. Custodian............................................................ 12
7. Principal Underwriter................................................ 12
8. Independent Public Accountants....................................... 12
9. Portfolio Transactions............................................... 12
10. Tax Status........................................................... 13
11. Description of Shares................................................ 16
12. Certain Liabilities.................................................. 17
13. Determination of Net Asset Value..................................... 17
14. Systematic Withdrawal Plan........................................... 17
15. Letter of Intention.................................................. 18
16. Investment Results................................................... 18
17. Financial Statements................................................. 22
Appendix A........................................................... 21
Appendix B........................................................... 22
Appendix C........................................................... 24
Appendix D........................................................... 39
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS
AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORSONLY IF
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's Prospectus 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 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
-2-
<PAGE>
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.
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.
-3-
<PAGE>
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.
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.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (Russian timber joint venture); President and Director of
-4-
<PAGE>
Pioneer Plans Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer
Metals and Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"),
Pioneer First Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega");
Chairman of the Board and Director of Pioneer Goldfields Limited ("PGL") and
Teberebie Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management; Professor
of Public Health, Boston University School of Public Health; Professor of
Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment adviser), Health Payment Review, Inc.
(health care containment software firm), Mediplex Group, Inc. (nursing care
facilities firm), Peer Review Analysis, Inc. (health care facilities firm) and
Springer-Verlag New York, Inc. (publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all of the Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110. Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief Investment
Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl, First Russia,
Omega and Pioneer SBIC Corporation, Executive Vice President and Trustee of all
of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus Funds
(mutual funds) and Trustee of all of the Pioneer mutual funds.
-5-
<PAGE>
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of
NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government Reserves
and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund) and Secretary
of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
KATHLEEN D. MCCLASKEY, Vice President, DOB: January 1952
Vice President of PMC and Pioneer Tax-Free State Series Trust.
The Fund's Amended and Restated Declaration of Trust (the "Declaration of
Trust") provides that the holders of two-thirds of its outstanding shares may
vote to remove a Trustee of the Fund at any meeting of shareholders. See
"Description of Shares" below. The business address of all officers is 60 State
Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned, directly
or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the Fund's
investment adviser, serves as the investment adviser for the Pioneer mutual
funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to the
public and the investment adviser and principal underwriter for each fund.
-6-
<PAGE>
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life insurance
contracts of various insurance companies or for certain qualified pension
plans.
To the knowledge of the Fund, no officer or Trustee of the Fund owned 5.0%
or more of the issued and outstanding shares of PGI as of March 31, 1996, except
Mr. Cogan who then owned approximately 14% of such shares. PFD, 60 State Street,
Boston, MA 02109 owned approximately 51.33% (9,613) of the outstanding Class C
shares of the Fund; Edward R. Gossett & Laverne M. Gossett JTWROS, 3043 Arizona
Dr., Bismarck, ND 58501 owned approximately 38.41% (7,195) of the outstanding
Class C shares of the Fund; Randolph B. Burke & Margaret Gould Burke, RR3 Box
19A, Mandan, ND 58504 owned approximately 10.24% (1,919) of the outstanding
Class C shares of the Fund.
-7-
<PAGE>
The Fund pays no salaries or compensation to any of its officers.
Commencing on January 1, 1996, the Fund will pay an annual trustees' fee to each
Trustee who is not affiliated with PGI, PMC, PFD or PSC consisting of two
components: (a) a base fee of $500 and (b) a variable fee, calculated on the
basis of the average net assets of each series, estimated to be approximately
$86 for 1996. In addition, the Fund will pay a per meeting fee of $120 to each
Trustee who is not affiliated with PGI, PMC, PFD or PSC. The Fund also will pay
an annual committee participation fee to Trustees who serve as members of
committees established to act on behalf of one or more of the of Pioneer mutual
funds. Committee fees will be allocated to the Fund on the basis of the Fund's
average net assets. Each Trustee who is a member of the Audit Committee for the
Pioneer mutual funds will receive an annual fee equal to 10% of the aggregate
annual trustees' fee, except the Committee Chair who will receive an annual
trustees' fee equal to 20% of the aggregate annual trustees' fee. The 1996 fees
for Audit Committee members and the Audit Committee Chair are expected to be
approximately $6,000 and $12,000, respectively. Members of the Pricing Committee
for the Pioneer mutual funds, as well as any other committee which renders
material functional services to the Board of Trustees for the Pioneer mutual
funds, will receive an annual fee equal to 5% of the annual trustees' fee,
except the Committee Chair who will receive an annual trustees' fee equal to 10%
of the annual trustees' fee. The 1996 fees for Pricing Committee members and the
Pricing Committee Chair are expected to be approximately $3,000 and $6,000,
respectively. Any such fees paid to affiliates or interested persons of PGI,
PMC, PFD or PSC are reimbursed to the Fund under its management contract.
For the fiscal year ended December 31, 1995, the Fund paid an annual
trustees' fee of $1,000, and a payment of $100 plus expenses per meeting
attended, to each Trustee who was not affiliated with PGI, PMC, PFD or PSC and
paid an annual trustees' fee of $500 plus expenses to each Trustee affiliated
with PGI, PMC, PFD or PSC. Any such fees and expenses paid to affiliates or
interested persons of PGI, PMC, PFD or PSC were reimbursed to the Fund under its
management contract.
The following table provides information regarding the compensation paid by
the Fund and other Pioneer Funds to the Trustees for their services.
Pension or Total Compen-
Retirement sation from the
Benefits Fund and all
Aggregate Accrued as other
Compensation Part of the Pioneer Mutual
Name of Trustee from the Fund* Fund's Expense Funds**
John F. Cogan, Jr. $ 500 $0 $11,000
Richard H. Egdahl, M.D. 2,142 0 63,315
Margaret B.W. Graham 2,142 0 62,398
John W. Kendrick 2,142 0 62,398
Marguerite A. Piret 2,738 0 76,704
David D. Tripple 500 0 11,000
Stephen K. West 2,417 0 68,180
John Winthrop 2,551 0 71,199
----- - ------
Total $15,132 $0 $426,194
======= == ========
-8-
<PAGE>
* As of the Fund's fiscal year end.
** As of December 31, 1995.
At March 31, 1996, 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, 1995, 1994 and 1993, the management fees were reduced by
$89,114, $183,384 and $188,711, respectively, resulting in actual management
fees paid during those periods to PMC of $319,383, $229,615 and $171,943. See
the Notes to the Financial Statements in the December 31, 1995 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 borne 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
-9-
<PAGE>
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 laws. 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 each Class of shares (the "Class A Plan," "Class B
Plan" and "Class C Plan") (together, the "Plans).
Class A Plan
Pursuant to the Class A Plan, the Fund may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Fund shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus. See "Distribution
Plans" in 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
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.)
Class C Plan
The Class C Plan provides that the Fund will pay PFD, as the Fund's
distributor for its Class C shares, a distribution fee accrued daily and paid
quarterly, equal on an annual basis
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to 0.75% of the Fund's average daily net assets attributable to Class C shares
and will pay PFD a service fee equal to 0.25% of the Fund's average daily net
assets attributable to Class C shares. PFD will in turn pay to securities
dealers which enter into a sales agreement with PFD a distribution fee and a
service fee at rates of up to 0.75% and 0.25%, respectively, of the Fund's
average daily net assets attributable to Class C shares owned by investors for
whom that securities dealer is the holder or dealer of record. The service fee
is intended to be in consideration of personal services and/or account
maintenance services rendered by the dealer with respect to Class C shares. PFD
will advance to dealers the first-year service fee at a rate equal to 0.25% of
the amount invested. As compensation therefor, PFD may retain the service fee
paid by the Fund with respect to such shares for the first year after purchase.
Commencing in the thirteenth month following a purchase of Class C shares,
dealers will become eligible for additional service fees at a rate of up to
0.25% of the amount invested and additional compensation at a rate of up to
0.75% of the net asset value of such shares. Dealers may from time to time be
required to meet certain other criteria in order to receive service fees. PFD or
its affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distribution Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund, for
review by the Trustees, a quarterly written report of the amounts expended under
the respective Plan and the purpose for which such expenditures were made. In
the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is not an
interested person of the Fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the 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
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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 who 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, 1995, the Fund incurred total
distribution fees pursuant to the Fund's Class A Plan and Class B Plan of
$181,894 and $22,195, respectively. The 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. The Fund had not incurred any
distribution fees pursuant to the Class C Plan. Class C shares were first
offered January 31, 1996.
During the fiscal year ended December 31, 1995, CDSCs, at a rate declining
from a maximum of 3.0% of the lower of the cost or market value of the shares
being redeemed, of $9,324 were charged to redemptions of Class B shares made
within 6 years of purchase (as described in "How to Buy Fund Shares" in the
Prospectus). Such CDSCs are paid to PFD in reimbursement of expenses related to
servicing of shareholders accounts and compensation paid to 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 $30.00 per Class A, Class B and Class C
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
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,
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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 1995, 1994 and 1993 fiscal years, net underwriting
commissions retained by PFD in connection with its offering of Fund shares were
approximately $16,256, $26,044 and $93,000, respectively. Commissions reallowed
to dealers by PFD in those periods were approximately $116,073, $299,506 and
$644,000, 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.
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.
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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
Pioneer mutual funds and certain private accounts with investment objectives
similar to those of the Fund. Securities frequently meet the investment
objectives of the Fund, such other 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 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 Pioneer
mutual fund 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.
During the fiscal years ended December 31, 1995, 1994 and 1993, the Fund
paid no brokerage or underwriting commissions.
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 earns, 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.
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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 gains or income which is not
tax-exempt, e.g., purchase non-municipal securities, sell or lend portfolio
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, i.e., obligations described in Section
103(a) of the Code. That part of the Fund's net investment income which is
attributable to interest from tax-exempt obligations 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. 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 earned by the Fund during 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.
If the Fund invests in zero coupon or deferred interest securities, or, in
general, any other securities with original issue discount (or with market
discount if the Fund elects to include market discount in income currently), the
Fund must accrue income on such investments prior to the receipt of the
corresponding cash payments. However, the Fund must distribute, at least
annually, all or substantially all of its net taxable and tax-exempt income,
including such accrued income, to shareholders to qualify as a regulated
investment company under the Code and avoid Federal income and excise taxes.
Therefore, the Fund may have to dispose of its portfolio securities under
disadvantageous circumstances to generate cash, or may have to leverage itself
by borrowing the cash, to satisfy distribution requirements.
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. For the taxable year ended December 31, 1995, the Fund had a
capital loss carryforward of $699,955 which will expire between 2002 and 2003 if
not utilized.
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.
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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
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 (including through the automatic reinvestment of dividends and
distributions) 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 exempt-interest dividends paid 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) and repurchases to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that the Social Security Number
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 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. non-resident alien
withholding tax (or
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U.S. non-resident alien 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, is any, of exempt-interest dividends under applicable state and local
law.
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 three classes of shares of the
Fund, Class A shares, Class B shares and Class C shares. Each share of a class
of the Fund represents an equal proportionate interest in the assets of the Fund
allocable to that class. Upon liquidation of the Fund, shareholders of each
class are entitled to share pro rata in the Fund's net assets allocable to such
class available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
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 State of the Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
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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
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 attributable to that
class, less the Fund's liabilities attributable to the class, and dividing it by
the number of outstanding shares of that 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.
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The Fund's maximum offering price per Class A share is determined by adding
the maximum sales charge to the net asset value per Class A share. Class B and
Class C shares are offered at net asset value without the imposition of an
initial sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of the Fund
deposited by the applicant under this 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. Withdrawals from Class B
and Class C 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
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
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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.
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.
-20-
<PAGE>
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
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
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<PAGE>
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, 1995
determined in accordance with the formula above were 3.68% for Class A shares
and 2.78% for Class B shares, except that absent expense limitations, the yields
on Class A shares and Class B shares of the Fund would have been 3.51% and
2.65%, respectively. Class C shares were first offered on January 31, 1996.
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, 1995 determined in
accordance with such formula was 6.09% and 4.60%, respectively, except that
absent expense limitations, the yield on Class A shares and Class B shares of
the Fund would have been 5.81% and 4.39%, 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 any CDSC on Class B or Class
C shares at the end of the period
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical
$1,000 initial payment made at the beginning of
the designated period (or fractional portion
thereof)
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<PAGE>
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 total returns for Class A and Class B shares of the Fund as of December
31, 1995 are as follows:
Average Annual Total Return (%)
One Year Five Years Since Commencement*
Class A Shares 9.81 6.73 6.31
Class B Shares 9.71 N/A 4.73
*Commencement was 10/22/86 for Class A shares and 4/29/94 for Class B shares.
Class C Shares were first offered January 31, 1996.
PMC temporarily agreed to reduce its management fee and made other
arrangements to limit certain other expenses of the Fund. Had PMC not made such
an arrangement, the total returns for the periods would have been lower.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
(degree) net asset value prices for all Pioneer mutual funds;
(degree) annualized 30-day yields on Pioneer fixed income funds;
(degree) annualized 7-day yields and 7-day effective (compound)
yields for Pioneer money market funds; and
(degree) 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 enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the applicable
maximum sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A, Class B and Class C
shares (except for Pioneer money market funds, which seek a stable $1.00 share
price) will also vary and may be worth more or less at redemption than their
original cost.
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<PAGE>
17. FINANCIAL STATEMENTS
The Fund's Annual Report dated December 31, 1995, attached to and is
incorporated by reference into this Statement of Additional Information in
reliance upon the report of Arthur Andersen LLP, independent public accountants,
as experts. Additional copies of the Fund's Annual Report may be obtained
without charge by calling Shareholder Services at 1-800-225-6292 or by written
request to the Fund at 60 State Street, Boston, Massachusetts 02109.
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<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.
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<PAGE>
APPENDIX B
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat bigger than in Aaa
securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating
agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings indicated do not necessarily represent
ratings which will be given to these securities on the date of the Fund's
fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
-26-
<PAGE>
Standard & Poor's Ratings Group3
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.
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<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) from 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.
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<PAGE>
Pioneer Intermediate Tax-Free A
<TABLE>
<CAPTION>
Initial Net
Date Initial Offering Sales Charge Shares Purchased Net Asset Value Asset
Investment Price Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
10/22/86 $10,000 $10.3600 3.50% 965.251 $10.0000 $9,650
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. From Dividends Total Value
Gains
Reinvested Reinvested
<S> <C> <C> <C> <C>
12/31/86 $9,662 $0 $0 $9,662
12/31/87 $8,639 $0 $645 $9,284
12/31/88 $9,073 $0 $1,398 $10,471
12/31/89 $9,324 $0 $2,170 $11,494
12/31/90 $9,295 $0 $2,937 $12,232
12/31/91 $9,710 $0 $3,888 $13,598
12/31/92 $9,962 $0 $4,813 $14,775
12/31/93 $10,387 $181 $5,844 $16,412
12/31/94 $9,286 $165 $5,973 $15,424
12/31/95 $10,078 $179 $7,295 $17,552
</TABLE>
<PAGE>
Pioneer Intermediate Tax-Free B
<TABLE>
<CAPTION>
Date Initial Offering Sales Charge Shares Net Asset Value Initial Net Asset
Investment Price Included Purchased Per Share Value
<S> <C> <C> <C> <C> <C> <C>
4/29/94 $10,000 $10.0700 3.00% 993.049 $10.0700 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
<S> <C> <C> <C> <C> <C>
12/31/94 $9,584 $2 $265 $9,851
12/31/95 $10,388 $2 $712 $10,802
</TABLE>
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S.
Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits,
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COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
impaired negotiability, or special redemption or call privileges. Where callable
bonds had to be used, the term of the bond was assumed to be a simple average of
the maturity and first call dates minus the current date. The bond was "held"
for the calendar year and returns were computed. Total returns for 1977-1991 are
calculated as the change in the flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology
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<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
similar to that used by Salomon for 1969-1991. Capital appreciation returns were
calculated from yields assuming (at the beginning of each monthly holding
period) a 20-year maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926-1945, the Standard and Poor's
monthly High-Grade Corporate Composite yield data were used, assuming a 4
percent coupon and a 20-year maturity. The conventional present-value formula
for bond price for the beginning and end-of-month prices was used. (This formula
is presented in Ross, Stephen A., and Randolph W. Westerfield, Corporate
Finance, Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The
monthly income return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
The Russell 2000 measures the stock performance of the 2,000 smallest US
companies. The Russell Indexes (TM) are reconstituted annually as of June 1st,
based on May 31 market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
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COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
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<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
-33-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
-34-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
-35-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
-36-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
-37-
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
-38-
<PAGE>
APPENDIX C
Other Pioneer Information
The Pioneer group of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest and most experienced money managers
in the United States.
As of December 31, 1995, PMC employed a professional investment staff
of 44, with a combined average of 15 years' experience in the financial services
industry.
Total assets of all Pioneer mutual funds at December 31, 1995, were
approximately $12 billion representing 982,369 shareholder accounts - 637,060
non-retirement accounts and 345,309 retirement accounts.
-39-
<PAGE>
PIONEER INTERMEDIATE TAX-FREE FUND
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial highlights of the Registrant are included in
Part A of the Registration Statement. The financial
statements of the Registrant have been incorporated by
reference into Part B of the Registration Statement from
the 1995 Annual Report to Shareholders dated December 31,
1995, filed electronically on February 26, 1996 (811-4768;
accession number 0000798172-96-000004).
(b) Exhibits:
1. Amended and Restated Declaration of Trust+
1.1 Establishment and Designation of Classes+
1.2 Establishment and Designation of Classes A, B and C
shares
2. By-Laws+
3. None
4. None
5. Management Contract+
6.1. Underwriting Agreement+
6.2. Form of Dealer Sales Agreement
6.3 Form of Dealer Sales Agreement
7. None
8. Power of Attorney+
8.1 Form of Custodian Agreement with Brown Brothers
Harriman & Co.+
<PAGE>
9. Investment Company Service Agreement+
10. Opinion of Counsel
11. Consent of Arthur Andersen LLP
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+
15.2 Class C Rule 12b-1 Distribution Plan
16. Description of Average Annual Total Return and Yield
Calculation+
17. Financial Data Schedule
18. Power of Attorney+
18.1 Rule 18f-3 Plan for Class A and Class B shares
18.2 Rule 18f-3 Plan for Class A, B and C shares
- ------------------------
+ Previously filed electronically. Incorporated by reference from the
exhibits filed with Post-Effective Amendment No. 11 to the Registration
Statement (File No. 33-7592), as amended, of the Registrant.
Item 25. Persons Controlled By or Under Common Control with Registrant.
Percent State/Country
of of
Company Owned By Shares Incorporation
Pioneering Management Corp. (PMC) PGI 100% DE
Pioneering Services Corp. (PSC) PGI 100% MA
Pioneer Capital Corp. (PCC) PGI 100% MA
<PAGE>
Pioneer Fonds Marketing GmbH (GmbH) PGI 100% MA
Pioneer SBIC Corp. (SBIC) PGI 100% MA
Pioneer Associates, Inc. (PAI) PGI 100% MA
Pioneer International Corp. (PInt) PGI 100% MA
Pioneer Plans Corp. (PPC) PGI 100% MA
Pioneer Goldfields Ltd (PGL) PGI 100% MA
Pioneer Investments Corp. (PIC) PGI 100% MA
Pioneer Metals and Technology,
Inc. (PMT) PGI 100% DE
Pioneer First Polish Trust Fund
Joint Stock Co. (First Polish) PGI 100% Poland
Teberebie Goldfields Ltd. (TGL) PGI 90% Ghana
Pioneer Funds Distributor, Inc.
(PFD) PMC 100% MA
SBIC's outstanding capital stock PCC 100% MA
THE FUNDS: All are parties to management contracts with PMC.
BUSINESS
FUND TRUST
Pioneer International Growth Fund MA
Pioneer Europe Fund MA
Pioneer Emerging Markets Fund DE
Pioneer India Fund DE
Pioneer Growth Trust MA
Pioneer Mid-Cap Fund DE
Pioneer Growth Shares DE
Pioneer Small Company Fund DE
Pioneer Fund MA
Pioneer II MA
Pioneer Real Estate Shares DE
Pioneer Short-Term Income Fund MA
Pioneer America Income Trust MA
Pioneer Bond Fund MA
Pioneer Income Fund DE
Pioneer Intermediate Tax-Free Fund MA
Pioneer Tax-Free Income Fund DE
Pioneer Tax-Free State Series Trust MA
Pioneer Money Market Trust DE
Pioneer Variable Contracts Trust DE
Pioneer Interest Shares, Inc. NE Corporation
OTHER:
. SBIC is the sole general partner of Pioneer Ventures Limited Partnership, a
Massachusetts limited partnership.
. ITI Pioneer AMC Ltd. (ITI Pioneer) (Indian Corp.), is a joint venture
between PMC and Investment Trust of India Ltd. (ITI) (Indian Corp.)
<PAGE>
. ITI and PMC own approximately 54% and 45%, respectively, of the total
equity capital of ITI Pioneer.
JOHN F. COGAN, JR.
Owns approximately 14% of the outstanding shares of PGI.
TRUSTEE/
ENTITY CHAIRMAN PRESIDENT DIRECTOR OTHER
Pioneer Family of
Mutual Funds X X X
PGL X X X
PGI X X X
PPC X X
PIC X X
Pintl X X
PMT X X
PCC X
PSC X
PMC X X
PFD X X
TGL X X
First Polish X Member of
Supervisory Board
Hale and Dorr Partner
GmbH Chairman of
Supervisory Board
<PAGE>
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, 1996:
Class A Class B Class C
Number of Record Holders: 2,299 105 3
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 to which the Registrant would otherwise be
subject by reason of or for willful misfeasance, bad faith, gross negligence or
reckless disregard of such person's duties.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in the Form
ADV, as amended, of Pioneering Management Corporation. The following sections of
such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background of
each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
<PAGE>
David D. Tripple Director Executive Vice
President and Trustee
Steven M. Graziano Senior None
Vice President
Stephen W. Long Senior None
Vice President
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Gail A. Smyth Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Mary Kleeman Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
(c) Not applicable.
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.
<PAGE>
Item 31. Management Services
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and Statement of Additional
Information.
Item 32. Undertaking
(a) Not applicable.
(b) Not applicable.
(c) The Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's annual report to shareholders furnished
pursuant to and meeting the requirements of Rule 30d-1 under the Investment
Company Act of 1940, as amended, from which the specified information is
incorporated by reference, unless such person currently holds securities of the
Registrant and otherwise has received a copy of such report, in which case the
Registrant shall state in the Prospectus that it will furnish, without charge, a
copy of such report on request, and the name, address and telephone number of
the person to whom such a request should be directed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Post-Effective Amendment No. 14 to
its Registration Statement (the "Amendment") pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
The Commonwealth of Massachusetts, on the 22nd day of April, 1996.
PIONEER INTERMEDIATE TAX-FREE FUND
By: /s/John F. Cogan, Jr._
John F. Cogan, Jr.
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 14 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: )
)
)
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
)
Principal Financial and )
Accounting Officer: )
)
)
William H. Keough* )
William H. Keough )
<PAGE>
A MAJORITY OF THE BOARD OF TRUSTEES:
John F. Cogan, Jr.* )
John F. Cogan, Jr. )
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
John W. Kendrick* )
John W. Kendrick )
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
David D. Tripple* )
David D. Tripple )
)
John Winthrop* )
John Winthrop )
)
Margaret B.W. Graham* )
Margaret B.W. Graham )
)
Stephen K. West* )
Stephen K. West
*By: /s/Joseph P. Barri_______
Joseph P. Barri, April 22, 1996
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1.2 Establishment and Designation of Classes A, B and C Shares
6.3 Form of Dealer Sales Agreement
10. Opinion of Counsel
11. Consent of Arthur Andersen LLP
15.2 Class C Rule 12b-1 Distribution Plan
17. Financial Data Schedules
18.1 Rule 18f-3 Plan for Class A and B Shares
18.2 Rule 18f-3 Plan for Class A, B and C Shares
PIONEER INTERMEDIATE TAX-FREE FUND
Establishment and Designation
of
Class A Shares, Class B Shares and Class C Shares
of Beneficial Interest of
Pioneer Intermediate Tax-Free Fund
The undersigned, being a majority of the Trustees of Pioneer Intermediate
Tax-Free Fund, a Massachusetts business trust (the "Fund"), acting pursuant to
Article V, Sections 5.1 and 5.11 of the Amended and Restated Declaration of
Trust dated December 3, 1993 of the Fund (the "Declaration"), do hereby divide
the shares of beneficial interest of the Fund (the "Shares") to create three
classes of Shares of the Fund as follows:
1. The three classes of Shares established and designated hereby are
"Class A Shares," "Class B Shares" and "Class C Shares," respectively.
2. Class A Shares, Class B Shares and Class C 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, Class B Shares and Class C
Shares, the method of determining the net asset value of Class A
Shares, Class B Shares and Class C Shares and the relative dividend
rights of holders of Class A Shares, Class B Shares and Class C Shares
shall be established by the Trustees of the Trust in accordance with
the provisions of the Declaration and shall be set forth in the
Trust'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. The Trustees, acting in their sole discretion, may determine that any
Shares of the Fund issued are Class A Shares, Class B Shares, Class C
Shares or Shares of any other class of the Fund hereinafter
established and designated by the Trustees.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument this 4th
day of October, 1995.
/s/ JOHN F. COGAN, JR. /s/ MARGUERITE A. PIRET
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
/s/ RICHARD H. EGDAHL, M.D. /s/ DAVID D. TRIPPLE
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
/s/ MARGARET B.W. GRAHAM /s/ STEPHEN K. WEST, ESQ.
Margaret B.W. Graham Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
The Keep Sullivan & Cromwell
P.O. Box 110 125 Broad Street
Little Deer Isle, ME 04650 New York, NY 10004
/s/ JOHN W. KENDRICK /s/ JOHN WINTHROP
John W. Kendrick John Winthrop
as Trustee and not individually as Trustee and not individually
6363 Waterway Drive One North Adgers Wharf
Falls Church, VA 22044 Charleston, SC 29401
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SALES AGREEMENT
Gentlemen:
Pioneer Funds Distributor, Inc. (PFD), acts as principal underwriter, as
defined in the Investment Company Act of 1940, for the registered investment
companies (the "Funds") listed on Appendix A attached (as amended from time to
time by PFD.) Acting as a principal, PFD offers to sell shares of the Funds
subject to the conditions set forth in this agreement and subsequent amendments
thereto.
1. Shares purchased from PFD for sale to the public shall be offered and
sold at the price or prices, and on the terms and conditions, set forth in the
currently effective prospectus of the Funds, as amended or supplemented from
time to time (the "Prospectus" or "Prospectuses"). In the sale of such shares to
the public you shall act as dealer for your own account or as agent for your
customer and in no transaction shall you have any authority to act or hold
yourself out as agent for PFD, any of the Funds, the Funds' Custodians, the
Funds' Transfer agent, or any other party, and nothing in this agreement shall
constitute you a partner, employee or agent of ours or give you any authority to
act for PFD. Neither PFD nor the funds shall be liable for any of your acts or
obligations as a broker-dealer under this agreement. Nothing herein shall be
construed to prohibit your acting as agent for one or both customers in the sale
of shares by one customer to another and charging such customer(s) a reasonable
commission.
2. Shares purchased from PFD for sale to the public shall be purchased
only to cover orders previously received by you from your customers. Shares
purchased for your own bona fide investment shall not be reoffered or sold
except to the applicable Fund or to PFD. PFD also agrees to purchase shares only
for investment or to cover orders received.
3. If you purchase shares from your customers, you agree to pay such
customers not less than the redemption price in effect on the date of purchase,
as defined in the prospectus of the applicable Fund. Sales of shares at prices
reflecting a discount, concession, commission or other reallowance shall be made
only to registered broker-dealers which are members of the National Association
of Securities Dealers Inc. (NASD) and who also have entered into sales
agreements with PFD.
4. Only unconditional orders for a designated number of shares or dollar
amount of investment shall be accepted. Procedures relating to handling orders
shall be conveyed to you from time to time. All orders are subject to acceptance
or rejection by PFD in our sole discretion.
5. If any shares sold to or through you under the terms of this agreement
are repurchased by PFD or by the issuer or are tendered for redemption within
seven business days after the date of our confirmation of the original purchase
by you, we both agree to pay to the Fund all commissions on such shares.
6. Sales by you to the public shall earn a commission computed as a
percentage of the applicable offering price and which varies with the size and
nature of each such purchase. The terms and conditions affecting the applicable
offering prices on shares sold with a front-end sales charge , including
features such as combined purchase, rights of accumulation, Letters of Intention
and net asset value purchases, are described in the prospectuses. The schedules
of commissions generally payable with respect to sales of the Funds are outlined
on Appendix A to this agreement. Commission checks for less than $1 will not be
issued.
PFD may, from time to time, offer additional commissions or bonuses on
sales by you or your representatives without otherwise revising this agreement.
Any such additional commissions or bonuses shall take effect in accordance with
the terms and conditions contained in written notification to you.
7. Remittance of the net amount due for shares purchased from PFD shall
be made payable to Pioneering Services Corporation (PSC) Agent for the
Underwriter, in New York or Boston funds, within three days of our confirmation
of sale to you, or within such shorter time as specified by the rules of the
NASD or of a registered clearing agent through which the transaction is settled.
Payments made to PSC should be sent to Post Office Box 9014, Boston, MA 02205
(or wired to an account designated by PSC), along with your transfer
instructions on the appropriate copy of our confirmation of sale to you. If such
payment is not received by PSC, we reserve the right to liquidate the shares
purchased for your account and risk. Promptly upon receipt of payment, shares
sold to you shall be deposited by PSC to an account on the books of the Fund(s)
in accordance with your instructions. Certificates will not be issued unless
specifically requested and we reserve the right to levy a charge for issuance of
certificates.
8. You represent that you are and, at the time of purchasing any shares
of the Funds, will be registered as a broker-dealer with the US. Securities and
Exchange Commission (SEC) or are exempt from such registration; if required to
be registered as a broker-dealer you are a member in good standing of the NASD;
you are qualified to act as a broker-dealer in the states or jurisdictions in
which you intend to offer shares of the Funds; you will abide by all applicable
federal and state statutes and the rules of the NASD; and when making sales to
citizens or residents of foreign countries, that you will abide by all
applicable laws and regulations of that country. Expulsion or suspension from
the NASD or revocation or suspension of SEC registration shall act as an
immediate cancellation of this agreement.
9. No person is authorized to make any representations concerning shares
of any of the Funds except those contained in the then current Prospectus or
Statement of Additional Information for such Fund. In purchasing shares from PFD
you shall rely solely on the representations contained in such Prospectuses and
Statements of Additional Information.
10. Additional copies of the current prospectuses, Statements of
Additional Information (SAI), and other literature will be supplied in
reasonable quantities upon request.
<PAGE>
11. We reserve the right in our discretion to suspend sales or withdraw
the offering of shares of any Fund entirely. Either party hereto has the right
to cancel this agreement upon five days' written notice to the other party. We
reserve the right to amend this agreement at any time and you agree that an
order to purchase shares of any one of the Funds placed by you after notice of
such amendment has been sent to you shall constitute your agreement to any such
amendment.
12. All written communications to PFD should be sent to the above address.
All written communications to you will be sent to your address listed below.
13. This agreement shall become effective upon receipt by us of your
acceptance hereof and supersedes any prior agreement between us with respect to
the sales of Shares of any of the Funds.
14. This agreement shall be construed in accordance with the laws of
Massachusetts. The parties hereby agree that all disputes between us of whatever
subject matter, whether existing on the date hereof or arising hereafter, shall
be submitted to arbitration in accordance with the then current Code of
Arbitration Procedure of the NASD, the Uniform Arbitration Act or similar rules.
Arbitration shall take place in the city of Boston, Massachusetts. Any decision
that shall be made in such arbitration shall be final and binding and shall have
the same force and effect as a judgment made in a court of competent
jurisdiction.
15. You appoint the transfer agent for each Fund as your agent to execute
the purchase transactions of Shares of such Fund in accordance with the terms
and provisions of any account, program, plan or service established or used by
your customers and to confirm each purchase to your customers on your behalf,
except as modified in writing by the transfer agent, and you guarantee to us and
the Fund the legal capacity of your customers so purchasing such Shares and any
other person in whose name the Shares are to be registered.
PIONEER FUNDS DISTRIBUTOR, INC.
Date: ,
By:__________________________________
William A. Misata
Vice President
The undersigned hereby accepts the offer set forth in above letter.
By:__________________________________________________
Title:________________________________________________
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
APPENDIX A
CLASS A
Schedule 1
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Fund Pioneer Mid-Cap Fund* Pioneer Equity-Income Fund
Pioneer II Pioneer Gold Shares Pioneer Growth Shares
Pioneer International Growth Fund Pioneer Europe Fund Pioneer Real Estate Shares
Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund
Pioneer India Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 5.75 5.00%
$ 50,000 - 99,999.......... 4.50 4.00
100,000 - 249,999.......... 3.50 3.00
250,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 2
Pioneer Bond Fund Pioneer America Income Trust Pioneer Tax-Free Income Fund
Pioneer Income Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $100,000.......... 4.50 4.00%
$100,000 - 249,999.......... 3.50 3.00
250,000 - 499,000......... 2.50 2.00
500,000 - 999,999......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 3
Pioneer Intermediate Tax-Free Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 3.50 3.00%
$ 50,000 - 99,999......... 3.00 2.50
100,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 4
Pioneer Short-Term Income Trust
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 2.50 2.00%
$ 50,000 - 99,999......... 2.00 1.75
100,000 - 249,999.......... 1.50 1.25
250,000 - 999,999.......... 1.00 1.00
1,000,000 or more .......... none a) see below
</TABLE>
a) Purchases of $1 million or more, and certain group plans, are not subject to
an initial sales charge. PFD may pay a commission to broker-dealers who initiate
and are responsible for such purchases at the following rate: for funds listed
on schedules 1 and 2 above, the rate is as follows: 1% on the first $5 million
invested, .50 of 1% on the next $45 million and .25 of 1% on the excess over 50
million. For funds listed on schedules 3 and 4 : .50 of 1% on purchases of $1
million to $5 million and .10 of 1% on the excess over $5 million. A one-year
prepaid service fee is included in this commission. These commissions shall not
be payable if the purchaser is affiliated with the broker-dealer or if the
purchase represents the reinvestment of a redemption made during the previous 12
calendar months. A contingent deferred sales charge will be payable on these
investments in the event of share redemption within 12 months following the
share purchase, at the rate of 1% on funds in schedules 1 and 2 ; and .50 of 1%
on funds in schedules 3 and 4, of the lesser of the value of the shares redeemed
(exclusive of reinvested dividend and capital gain distributions) or the total
cost of such shares. For additional information about the broker-dealer
commission and contingent deferred sales charge applicable to these
transactions, refer to the Fund's prospectus.
PLEASE RETAIN THIS COPY
<PAGE>
Schedule 5
Pioneer Cash Reserves Fund Pioneer U.S. Government Money Fund
No Load
CLASS B
Schedule 1 Schedule 2 Schedule 3
---------- ---------- ----------
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Equity Income Fund Pioneer Intermediate Tax-Free Pioneer Short-Term
Pioneer Bond Fund Fund Income Trust
Pioneer Capital Growth Fund
Pioneer Europe Fund
Pioneer Gold Share
Pioneer America Income Trust
Pioneer Emerging Markets Fund
Pioneer India Fund
Pioneer Cash Reserves Fund
Pioneer Growth Shares
Pioneer Income Fund
Pioneer Tax-Free Income Fund
Pioneer Small Company Fund
Pioneer International Growth Fund
Pioneer Real Estate Shares
Pioneer Mid-Cap Fund*
</TABLE>
Broker/Dealer
Commission 4.00% 3.00% 2.00%
- ----------
Year Since
Purchase CDSC% CDSC% CDSC%
First 4.0 3.0 2.0
Second 4.0 3.0 2.0
Third 3.0 2.0 1.0
Fourth 3.0 1.0 none
Fifth 2.0 none none
Sixth 1.0 none To A Class
Seventh none To A Class
Eigth none
Ninth To A Class
a)Dealer Commission includes a first year service fee equal to 0.25% of the
amount invested in all Class B shares.
CLASS C
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer America Income Trust Pioneer Bond Fund Pioneer Capital Growth Fund
Pioneer Cash Reserves Funds Pioneer Emerging Markets Fund Pioneer Equity-Income Fund
Pioneer Europe Fund Pioneer Gold Shares Pioneer Growth Shares
Pioneer Income Fund Pioneer Real Estate Shares Pioneer India Fund
Pioneer Intermediate Tax-Free Fund Pioneer Small Company Fund Pioneer Tax-Free Income Fund
Pioneer International Growth Fund Pioneer Mid-Cap Fund*
</TABLE>
a) 1% Payout to Broker
b) 1% CDSC for One Year
*formerly Pioneer Three Fund
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
You have entered into a Sales Agreement with Pioneer Funds Distributor, Inc.
("PFD") with respect to the Pioneer mutual funds for which PFD serves as
principal underwriter ("the Funds").
This agreement incorporates and supplements that agreement. In consideration of
your sales of shares of the Funds, for providing services to shareholders of the
Funds and of the Pioneer money market funds and assisting PFD and its affiliates
in providing such services, we are authorized to pay you certain service fees as
specified herein. Receipt by you of any such service fees is subject to the
terms and conditions contained in the Funds' prospectuses and/or specified
below, as may be amended from time to time.
1. You agree to cooperate as requested with programs that the Funds, PFD or
their affiliates provide to enhance shareholder service.
2. You agree to take an active role in providing such shareholder services as
processing purchase and redemption transactions and, where applicable, exchanges
and account transfers; establishing and maintaining shareholder accounts;
providing certain information and assistance with respect to the Funds;
responding to shareholder inquiries or advising us of such inquiries where
appropriate.
3., You agree to assign an active registered representative to each shareholder
account on your and our records and to reassign accounts when registered
representatives leave your firm. You also agree, with respect to accounts which
are held in nominee or "street" name, to provide such documentation and
verification that active representatives are assigned to all such accounts as
PFD may require from time to time.
4. You agree to pay to the registered representatives assigned to shareholder
accounts a share of any service fees paid to you pursuant to this agreement. You
also agree to instruct your representatives to regularly contact shareholders
whose accounts are assigned to them.
5. You acknowledge that service fee payments are subject to terms and conditions
set forth herein and in the Funds' prospectuses, Statements of Additional
Information and Plans of Distribution and that this agreement may be terminated
by either party at any time by written notice to the other. Any order to
purchase or sell shares received by PFD from you subsequent to the date of our
notification to you of an amendment of the Agreement shall be deemed to be your
acceptance of such an amendment.
6. You acknowledge that your continued participation in this agreement is
subject to your providing a level of support to PFD's marketing and shareholder
retention efforts that is deemed acceptable by PFD. Factors which may be
considered by PFD in this respect include, but are not limited to, the level of
shareholder redemptions, the level of assistance in disseminating shareholder
communications, reasonable access to your offices and/or representatives by PFD
wholesalers or other employees and whether your compensation system or
"preferential list" unduly discriminates against the sale of shares of the
Funds.
7. Service fees will generally be paid quarterly, at the rates and under the
conditions specified on schedule A hereto.
8. All communications to PFD should be sent to the above address. Any notice to
you shall be duly given if mailed or telegraphed to the address specified by you
below. This agreement, in conjunction with the Sales Agreement, describes the
complete understanding of the parties.
This agreement shall be construed under the laws of the Commonwealth of
Massachusetts.
Accepted: Execute this Agreement in duplicate
and return one ofthe duplicate originals to us.
By:___________________________
By:_________________________________________
Title:________________________ William A. Misata
Vice President
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
WITH PIONEER FUNDS DISTRIBUTOR, INC.
SCHEDULE A
1. Except as specified in Section 4 below, service fees on the aggregate
net asset value of each account assigned to you in Pioneer Fund, Pioneer II, and
Pioneer Mid-Cap Fund** will be paid at the rate of:
a. 0.15% annually on shares acquired prior to August 19, 1991.
b. 0.25% annually on shares acquired on or after August 19, 1991.
2. Except as specified in Section 4 below, service fees on the aggregate
net asset value of each account assigned to you in:
Pioneer America Income Trust Pioneer International Growth Fund
Pioneer Bond Fund Pioneer Growth Shares
Pioneer Intermediate Tax-Free Fund Pioneer Real Estate Shares
Pioneer Europe Fund Pioneer Income Fund
Pioneer Capital Growth Fund Pioneer Tax-Free Income Fund
Pioneer Equity-Income Fund Pioneer Short-Term Income Trust
Pioneer Gold Shares Pioneer India Fund
Pioneer Emerging Markets Fund Pioneer Small Company Fund*
will be paid at the rate of:
a. 0.15% annually if the shares are acquired on or after August 19, 1991,
as a result of an exchange from Pioneer Fund, Pioneer II, or Pioneer Mid-Cap
Fund** of shares owned prior to August 19, 1991.
b. 0.25% annually on all other shares.
3. Except as specified in Section 4 below, service fees will be paid at an
annual rate of 0.15% of the aggregate net asset value of each account assigned
to you in:
Pioneer Cash Reserves Fund
Pioneer US. Government Money Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
4. Exceptions -- Service fees will not be paid on accounts representing:
a. Purchases by you or your affiliates, employees or
representatives.
b Shares which were purchased at net asset value, except for sales
of the money market funds or sales on which you are paid a
commission and which are subject to the contingent deferred sales
charge described in the funds' prospectuses.
c. "House" accounts or any other accounts not assigned to an active
registered representative(s).
d. Accounts established in Pioneer Bond Fund prior to January 1,
1986.
e. Service fees of less than $50 per calendar quarter will not be
paid.
f. Pioneer reserves the right to reduce the service fee paid on
individual accounts of more than $10 million.
g. First year services fees on shares subject to a CDSC are at the
rate of 0.25% and are prepaid as part of the initial sales
commission.
5. Service fees on shares sold with a front-end sales charge normally
begin to be earned as soon as the transaction settles, unless specified
otherwise in the fund prospectus. Since the commission on shares sold with a
CDSC includes a prepaid one year service fee , periodic service fees on such
shares are paid beginning one year following the transaction.
6. Service Fees of 1% on class C shares will begin after first year.
* Service fees begin accruing January 1, 1996
** Formerly Pioneer Three Fund
INVESTMENT COMPANY SERVICE AGREEMENT
____________, 1986
Pioneer Municipal Bond Fund, a Massachusetts business trust with its
principal place of business at 60 State Street, Boston, Massachusetts 02109
("Customer") and Pioneering Services Corporation, a Massachusetts corporation
("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement, PSC
will provide the Customer with the services described in Exhibits A, B, C, and D
(collectively, the "Exhibits") which are affixed hereto and incorporated herein
by reference.
2. EFFECTIVE DATE. This Agreement shall become effective on January 1, 1986
(the "Effective Date") and shall continue in effect until it is terminated in
accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to Customer
and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, records and reports at such times as are
prescribed for each service in the Exhibits attached hereto. Customer agrees to
examine or to ask any other authorized recipient to examine each such report or
copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over
<PAGE>
to Customer and cease to retain in PSC's files, records and documents created
and maintained by PSC pursuant to this Agreement which are no longer needed by
PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of creation, during the first two of
which the same will be in readily accessible form. At the end of six years, such
records and documents, will be turned over to Customer by PSC unless Customer
authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and act in
good faith in performing its duties hereunder. PSC shall incur no liability to
Customer in connection with its performance of services hereunder except to the
extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems consistent
with industry standards in order to safeguard Customer's checks, records and
other data from loss or damage attributable to fire or theft. PSC shall maintain
insurance adequate to protect against the costs of reconstructing checks,
records and other data in the event of such loss and shall notify Customer in
the event of a material adverse change in such insurance coverage. In the event
of damages or loss occurring to Customer's records or data such that PSC is
unable to meet the terms of this Agreement, PSC shall transfer all records and
data to a transfer agent of Customer's choosing upon Customer's written
authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be liable
or responsible for delays or errors occurring by reason of circumstances beyond
its control including acts of civil, military or banking authority, national
emergencies, labor difficulties, fire, flood or other catastrophes, acts of God,
insurrection, war, riots, failure of transportation, communication or power
supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and information
provided by Customer or by the shareholders of the Customer to PSC, except to
the extent disclosures are required by this Agreement, are required by the
Customer's Prospectus or are required by a valid subpoena or warrant issued by a
court of competent jurisdiction or by a state or federal agency or governmental
authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained
-2-
<PAGE>
pursuant to this Agreement for reasonable audit and inspection by Customer or
Customer's agents, including reasonable visitation by Customer or Customer's
agent, including inspecting PSC's operation facilities. PSC shall not be liable
for injury to or responsible in any way for the safety of any individual
visiting PSC's facilities under the authority of this section. The Customer will
keep confidential and will cause to keep confidential all confidential
information obtained by its employees or agents or any other individual
representing the Customer while on PSC's premises. Confidential information
shall include (1) any information of whatever nature regarding PSC's operations,
security procedures, and data processing capabilities, (2) financial information
regarding PSC, its affiliates, or subsidiaries, and (3) any information of
whatever kind or description regarding any customer of PSC, its affiliates or
subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer agrees
to indemnify and hold PSC, its employees, agents and nominees harmless from any
and all claims, demands, actions and suits, whether groundless or otherwise, and
from and against any and all judgments, liabilities, losses, damages, costs,
charges, counsel fees and other expenses of every nature and character arising
out of or in any way relating to PSC's action or non-action upon information,
instructions or requests given or made to PSC by Customer.
Notwithstanding the above, whenever the Customer may be asked to indemnify
or hold PSC harmless, the Customer shall be advised of all pertinent facts
arising from the situation in question. Additionally, PSC will use reasonable
care to indemnify and notify the Customer promptly concerning any situation
which presents,
-3-
<PAGE>
actually or potentially, a claim for indemnification against the Customer. The
Customer shall have the option to defend PSC against any claim for which PSC is
entitled to indemnification from the Customer under the terms hereof, and in the
event the Customer so elects, it will notify PSC and, thereupon, the Customer
shall take over complete defense of the claim and PSC shall sustain no further
legal or other expenses in such a situation for which indemnification shall be
sought or entitled. PSC may in no event confess any claim or make any compromise
in any case in which the Customer will be asked to indemnify PSC except with the
Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by PSC
under this Agreement, Customer agrees to pay a monthly fee to PSC, such fee to
be equal to $.875 per open account and $.40 per closed account (commencing the
month after an account closes). In addition, Customer shall reimburse PSC
monthly for out-of-pocket expenses such as postage, forms, envelopes, checks,
"outside" mailings, telephone lines, mailgrams, mail insurance on certificates
and data processing file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice in advance to the other.
After the date of termination, for so long as PSC in fact continues to
perform any one or more of the services contemplated by this Agreement or any
exhibit hereto, the provisions of this Agreement, including without limitation
the provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following:
A. Two (2) copies of the Declaration of Trust of Customer, and of any
amendments thereto, certified by the proper official of the State
where this Declaration of Trust is filed.
B. Two (2) copies of the following documents, currently certified by the
Secretary or Clerk of Customer:
a. Customer's By-laws and any amendment thereto.
-4-
<PAGE>
b. Certified copies of resolutions of Customer's Board of Trustees
covering the following matters.
(1) Approval of this Agreement, authorization for a specified
officer to execute and deliver this Agreement and
authorization of specified officers to instruct PSC
hereunder.
C. List of all officers of Customer together with specimen signatures of
those officers who are authorized to sign share certificates and to
instruct PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Underwriting Agreement
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization by and
binding effect of this Agreement on Customer, the applicability of the
Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, and the approval by such public authorities as may
be prerequisite to lawful sale and deliver in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith upon
such amendments and changes becoming effective.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and agree
that all liabilities arising, directly or indirectly, under this Agreement, of
any and every nature whatsoever, including without limitation, liabilities
arising in connection with any agreement of the Trust or the Trustees set forth
herein to indemnify any party to this Agreement or any other person, shall be
satisfied out of the assets of the Trust and that no Trustee, officer or holder
of shares of beneficial interest of the Trust shall be personally liable for any
of the foregoing liabilities. The Trust's Declaration of Trust, as amended from
time to time, is on file in the Office of the Secretary of State of The
Commonwealth of Massachusetts. Such Declaration of Trust describes in detail the
respective responsibilities and limitations on liability of the Trustees,
officers, and holders of shares of beneficial interest.
-5-
<PAGE>
14. MISCELLANEOUS. In connection with the operation of this Agreement, PSC
and Customer may agree from time to time on such provisions interpretive of or
in addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this Agreement to be
executed in their respective names by their respective officers thereunto duly
authorized as of the date first written above.
PIONEER SERVICES CORPORATION
By:/s/ William H. Smith
William H. Smith, President
PIONEER MUNICIPAL BOND
By:/s/ Albert L. Runge
Albert L. Runge, Treasurer
-6-
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for Plan Accounts and in accordance with the provisions of
the standard Plan Applications or Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the planholder.
3. Out of the money received in payment for share sales to the Customer's
Custodian the net asset value per share and pay to the underwriter and
to the dealer their commission, if any, on a semimonthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue certificates, upon instruction, resulting from withdrawals from
plan accounts. Maintain records showing name, address, certificate
numbers and number of shares.
6. Deposit certificates to plan accounts when furnished with such
documents as the Bank deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon direction
of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or his
legal representative to substantiate the transfer of ownership of
shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer in
accordance with properly executed transfer instructions furnished to
the Bank.
11. Upon receiving appropriate detailed instructions and written materials
prepared by Customer and, proxy proofs checked by Customer, mail
shareholder reports, proxies and related materials of suitable design
for automatic
<PAGE>
enclosing, receive and tabulate executed proxies, and furnish an
annual meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely
fashion.
16. Provide Customer with such information regarding correspondence as
will enable Customer to comply with related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of the Company.
18. Solicit taxpayer identification numbers.
19. Provide data to enable the Company to file abandoned property reports
for those accounts that have been indicated by the Post Office to be
not at the address of record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to Board
of Trustees outlining the level of service provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as Servicing
Agent for the Redemptions function, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of the Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable by the
Bank on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation; or
b. Written authorization (where no share certificates are issued).
3. Verify there are sufficient available shares in an account to cover
redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's treasury
share account or, if applicable, cancel such shares for retirement.
5. Pay the applicable redemption or repurchase price to the shareholder
in accordance with Customer's Prospectus and the Declaration of Trust
on or before the seventh calendar day succeeding any receipt of
certificates or requests for redemption or repurchase in "good order"
as defined in the Prospectus.
6. Notify the Customer and the underwriter for the Customer of the total
number of shares presented and covered by such requests within a
reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or request for
redemption or repurchase is not in "good order" together with notice
of the documents required to comply with the good order standards.
Upon receipt of the necessary documents the Bank shall effect such
redemption at the net asset value applicable at the date and time of
receipt of such documents.
<PAGE>
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C - To INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use the
proceeds to purchase new shares. Shares of the Fund purchased directly or
acquired through reinvestment of dividends on such shares may be exchanged
for shares of other Pioneer funds (which funds have sales charges) only by
payment of the applicable sales charge. Shares of the Fund acquired by
exchange and through reinvestment of dividends on such shares may be
re-exchanged to another Pioneer Fund at their respective net asset values.
2. Make authorized deductions of fees.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares or a plan statement confirming the exchange
by first class mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a periodic
report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions, either
through reinvestment or in cash, in accordance with shareholder
instructions.
2. On the mailing date, Customer shall make available to PSC collected
funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns of
distributions and, in the case of Federal returns, mail information
copies to shareholders and report and pay Federal income taxes
withheld from distributions made to non-resident aliens.
HALE AND DORR
60 State Street
Boston, Massachusetts 02109
April 24, 1996
Pioneer Intermediate Tax-Free Fund
60 State Street
Boston, MA 02109
Re: Post-Effective Amendment No. 14 to Registration Statement
on Form N-1A (File Nos. 33-7592; 811-4768 (the "Registration Statement")
Ladies and Gentlemen:
Pioneer Intermediate Tax-Free Fund (the "Fund") is a Massachusetts business
trust organized under a written Declaration of Trust dated, executed and
delivered in Boston, Massachusetts on July 24, 1986, as amended and restated on
December 7, 1993, as further amended on March 7, 1994 and November 7, 1995 (as
so amended and restated, the "Declaration of Trust"). The beneficial interests
thereunder are represented by transferable shares of beneficial interest without
par value.
The Trustees of the Fund have the powers set forth in the Declaration of
Trust, subject to the terms, provisions and conditions therein provided.
Pursuant to Article V, Section 5.1 of the Declaration of Trust, the number of
shares of beneficial interest authorized to be issued under the Declaration of
Trust is unlimited and the Trustees are authorized to divide the shares into one
or more series of shares and one or more classes thereof as they deem necessary
or desirable. Pursuant to Article V, Section 5.4 of the Declaration of Trust,
the Trustees may issue shares of any series for such amount and type of
consideration, including cash or property, and on such terms as they may deem
best without action or approval of the shareholders.
We understand that you are about to register under the Securities Act of
1933, as amended, 299,563 shares of beneficial interest by Post-Effective
Amendment No. 14 to the Fund's Registration Statement.
<PAGE>
Pioneer Intermediate Tax-Free Fund
April 24, 1996
Page 2
We have examined the Declaration of Trust, the By-laws, resolutions of the
Board of Trustees, the minutes of the Board of Trustees relating to the
authorization and issuance of shares of beneficial interest of the Fund, and
such other documents as we have deemed necessary or appropriate for the purposes
of this opinion, including, but not limited to, originals, or copies certified
or otherwise identified to our satisfaction, of such documents, Fund records and
other instruments. In our examination of the above documents, we have assumed
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies, the authenticity of the
originals of such latter documents and the legal competence of each individual
executing any documents.
For purposes of this opinion letter, we have not made an independent review
of the laws of any state or jurisdiction other than The Commonwealth of
Massachusetts and express no opinion with respect to the laws of any
jurisdiction other than the laws of The Commonwealth of Massachusetts. Further,
we express no opinion as to compliance with any state or federal securities
laws, including the securities laws of The Commonwealth of Massachusetts.
Our opinion below, as it relates to the non-assessability of the shares of
the Fund, is qualified to the extent that under Massachusetts law, shareholders
of a Massachusetts business trust, such as the Fund, may be held personally
liable for the obligations of such Fund. In this regard, however, please be
advised that the Declaration of Trust disclaims shareholder liability for acts
or obligations of the Fund and provides that notice of such disclaimer may be
given in each note, bond, contract, certificate or undertaking made or issued by
or on behalf of the Fund. Also, the Declaration of Trust provides for
indemnification out of Fund property for all loss and expense of any shareholder
held personally liable solely by reason of his being or having been a
shareholder of the Fund; provided, however, that no Fund property may be used to
indemnify any shareholder of any series of the Fund other than Fund property
allocated or belonging to that series.
<PAGE>
Pioneer Intermediate Tax-Free Fund
April 24, 1996
Page 3
We are of the opinion that all necessary Fund action precedent to the
issuance of the Shares of beneficial interest of the Fund comprising the shares
covered by Post-Effective Amendment No. 14 to the Registration Statement has
been duly taken, and that all such Shares may legally and validly be issued for
cash or property, and when sold will be fully paid and non-assessable by the
Fund upon receipt by the Fund or its agent of consideration thereof in
accordance with the terms described in the Fund's Declaration of Trust and the
Registration Statement, subject to compliance with the Securities Act of 1933,
the Investment Company Act of 1940 and the applicable state laws regulating the
sale of securities.
We consent to your filing this opinion with the Securities and Exchange
Commission as an Exhibit to Post-Effective Amendment No. 14 to the Registration
Statement. Except as provided in this paragraph, this opinion may not be relied
upon by, or filed with, any other parties or used for any other purposes.
Very truly yours,
/s/Hale and Dorr
HALE AND DORR
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated February 2, 1996 included in Pioneer Intermediate Tax-Free Fund's 1995
Annual Report (and to all references to our firm) included in or made a part of
the Pioneer Intermediate Tax-Free Fund Post-Effective Amendment No. 14 to
Registration Statement File No. 33-7592 and Amendment No. 14 to Registration
File No. 811-4768.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 25, 1996
CLASS C SHARES DISTRIBUTION PLAN
PIONEER INTERMEDIATE TAX-FREE FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of January 31, 1996 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 C Shares") of the Trust in accordance with Rule 12b-1 promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
C Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class C Shares in connection with the offering of Class C
Shares, (b) PFD may compensate any Dealer that sells Class C Shares in the
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class C shares, its profits
or any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class C Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class C Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class C Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class C Plan will
benefit the Trust and its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class
C Plan for the Trust as a plan of distribution of Class C Shares in accordance
with Rule 12b-1, on the following terms and conditions:
I. (a) The Trust is authorized to compensate PFD for (1) distribution
services and (2) personal and account maintenance services performed
and expenses incurred by PFD in connection with the Trust's Class C
Shares. Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Trustees may
determine.
(b) The amount of compensation paid during any one year
for distribution services with respect to Class C Shares shall be
.75% of the Trust's average daily net assets attributable to Class
C Shares for such year.
(c) Distribution services and expenses for which PFD may
be compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel
and telephone expenses) of (i) Dealers, brokers and other dealers
who are members of the National Association of Securities Dealers,
Inc. ("NASD") or their officers, sales representatives and
employees, (ii) PFD and any of its affiliates and any of their
respective officers, sales representatives and employees, (iii)
banks and their officers, sales representatives and employees, who
engage in or support distribution of the Trust's Class C Shares;
printing of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of sales
literature and advertising materials.
-2-
<PAGE>
(d) The amount of compensation paid during any one year
for personal and account maintenance services and expenses shall
be .25% of the Trust's average daily net assets attributable to
Class C Shares for such year. As partial consideration for
personal services and/or account maintenance services provided by
PFD to the Class C Shares, PFD shall be entitled to be paid any
fees payable under this clause (d) with respect to Class C shares
for which no dealer of record exists, where less than all
consideration has been paid to a dealer of record or where
qualification standards have not been met.
(e) Personal and account maintenance services for which
PFD or any of its affiliates, banks or Dealers may be compensated
pursuant to this Plan include, without limitation: payments made
to or on account of PFD or any of its affiliates, banks, other
brokers and dealers who are members of the NASD, or their
officers, sales representatives and employees, who respond to
inquiries of, and furnish assistance to, shareholders regarding
their ownership of Class C Shares or their accounts or who provide
similar services not otherwise provided by or on behalf of the
Trust.
(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class C Shares by the Trust and
PFD may retain (or receive from the Trust as the case may be) all
such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant to
clauses (b) and (d) of this paragraph 1 shall be made whenever
necessary to ensure that no payment is made by the Trust in excess
of the applicable maximum cap imposed on asset based, front-end
and deferred sales charges by subsection (d) of Section 26 of
Article III of the Rules of Fair Practice of the NASD.
II. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
-3-
<PAGE>
III. 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.
IV. This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class C Plan or in any agreements
related to the Class C Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class C Plan.
V. This Class C Plan will remain in effect indefinitely, provided that such
continuance is "specifically approved at least annually" by a vote of both a
majority of the Trustees of the Trust and a majority of the Qualified Trustees.
If such annual approval is not obtained, this Class C Plan shall expire on
January 31, 1997.
VI. This Class C Plan may be amended at any time by the Board of Trustees,
provided that this Class C Plan may not be amended to increase materially the
limitations on the annual percentage of average net assets which may be expended
hereunder without the approval of holders of a "majority of the outstanding
voting securities" of Class C of the Trust and may not be materially amended in
any case without a vote of a majority of both the Trustees and the Qualified
Trustees. This Class C Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees or by a vote of the holders of a "majority of
the outstanding voting securities" of Class C of the Trust.
VII. The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class C Plan and the purposes for which such
expenditures were made.
VIII. While this Class C Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
-4-
<PAGE>
IX. For the purposes of this Class C Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
X. The Trust shall preserve copies of this Class C Plan, and each agreement
related hereto and each report referred to in Paragraph 7 hereof (collectively,
the "Records"), for a period of not less than six (6) years from the end of the
fiscal year in which such Records were made and, for a period of two (2) years,
each of such Records shall be kept in an easily accessible place.
XI. This Class C Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
XII. If any provision of this Class C Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Class C Plan
shall not be affected thereby.
-5-
[ARTICLE] 6
[CIK] 0000798172
[NAME] PIONEER INTERMEDIATE TAX FREE
[SERIES]
[NUMBER] 001
[NAME] PIONEER INTERMEDIATE TAX FREE CLASS A
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 75431396
[INVESTMENTS-AT-VALUE] 79760530
[RECEIVABLES] 2493325
[ASSETS-OTHER] 5618
[OTHER-ITEMS-ASSETS] 53173
[TOTAL-ASSETS] 82312646
[PAYABLE-FOR-SECURITIES] 39695
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 288286
[TOTAL-LIABILITIES] 327981
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 78323513
[SHARES-COMMON-STOCK] 7609221
[SHARES-COMMON-PRIOR] 7966299
[ACCUMULATED-NII-CURRENT] 35178
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (699955)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 4325929
[NET-ASSETS] 81984665
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 4743496
[OTHER-INCOME] 0
[EXPENSES-NET] (837717)
[NET-INVESTMENT-INCOME] 3905779
[REALIZED-GAINS-CURRENT] (400733)
[APPREC-INCREASE-CURRENT] 6979005
[NET-CHANGE-FROM-OPS] 10484051
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (3800009)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 567733
[NUMBER-OF-SHARES-REDEEMED] 1158605
[SHARES-REINVESTED] 233794
[NET-CHANGE-IN-ASSETS] 3781789
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (299007)
[OVERDISTRIB-NII-PRIOR] (16448)
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 408497
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 940181
[AVERAGE-NET-ASSETS] 79715525
[PER-SHARE-NAV-BEGIN] 9.62
[PER-SHARE-NII] 0.49
[PER-SHARE-GAIN-APPREC] 0.82
[PER-SHARE-DIVIDEND] (0.49)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.44
[EXPENSE-RATIO] 1.02
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000798172
[NAME] PIONEER INTERMEDIATE TAX FREE
[SERIES]
[NUMBER] 002
[NAME] PIONEER INTERMEDIATE TAX FREE CLASS B
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] DEC-31-1995
[PERIOD-END] DEC-31-1995
[INVESTMENTS-AT-COST] 75431396
[INVESTMENTS-AT-VALUE] 79760530
[RECEIVABLES] 2493325
[ASSETS-OTHER] 5618
[OTHER-ITEMS-ASSETS] 53173
[TOTAL-ASSETS] 82312646
[PAYABLE-FOR-SECURITIES] 39695
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 288286
[TOTAL-LIABILITIES] 327981
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 78323513
[SHARES-COMMON-STOCK] 243992
[SHARES-COMMON-PRIOR] 158485
[ACCUMULATED-NII-CURRENT] 35178
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (699955)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 4325929
[NET-ASSETS] 81984665
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 4743496
[OTHER-INCOME] 0
[EXPENSES-NET] (837717)
[NET-INVESTMENT-INCOME] 3905779
[REALIZED-GAINS-CURRENT] (400733)
[APPREC-INCREASE-CURRENT] 6979005
[NET-CHANGE-FROM-OPS] 10484051
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (86280)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 133711
[NUMBER-OF-SHARES-REDEEMED] 53564
[SHARES-REINVESTED] 5360
[NET-CHANGE-IN-ASSETS] 3781789
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (299007)
[OVERDISTRIB-NII-PRIOR] (16448)
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 408497
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 940181
[AVERAGE-NET-ASSETS] 2229069
[PER-SHARE-NAV-BEGIN] 9.65
[PER-SHARE-NII] 0.41
[PER-SHARE-GAIN-APPREC] 0.80
[PER-SHARE-DIVIDEND] (0.40)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.46
[EXPENSE-RATIO] 1.86
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
PIONEER INTERMEDIATE TAX-FREE FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares and Class B Shares
December 5, 1995
Each class of shares of PIONEER INTERMEDIATE TAX-FREE FUND (the "Fund"),
will have the same relative rights and privileges and be subject to the same
sales charges, fees and expenses, except as set forth below. The Board of
Trustees of the Fund may determine in the future that other distribution
arrangements, allocations of expenses (whether ordinary or extraordinary) or
services to be provided to a class of shares are appropriate and amend this Plan
accordingly without the approval of shareholders of any class. Except as set
forth in the Fund's prospectus, shares may be exchanged only for shares of the
same class of another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial sales
charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
<PAGE>
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class B shares redeemed within a specified
number of years of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class B Shares are sold subject to the minimum purchase requirements
set forth in the Fund's prospectus. Class B Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class B Shares. Class B Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class B shares under the
Class B Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class B Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class B Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class B Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class B shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund at
the end of a specified number of years after the initial purchase date of Class
B shares, except as provided in the Fund's prospectus. Such conversion will
occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote of a
majority (or whatever greater percentage may, from time to time, be required
under Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"Act")) of (a) all of the Trustees of the Fund, and (b) those of the Trustees
who are not "interested persons" of the Fund, as such term may be from time to
time defined under the Act.
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<PAGE>
Article IV. Amendments
No material amendment to the Plan shall be effective unless it is approved
by the Board of Trustees in the same manner as is provided for approval of this
Plan in Article III.
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PIONEER INTERMEDIATE TAX-FREE FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares and Class C Shares
January 31, 1996
Each class of shares of PIONEER INTERMEDIATE TAX-FREE FUND (the "Fund"),
will have the same relative rights and privileges and be subject to the same
sales charges, fees and expenses, except as set forth below. The Board of
Trustees may determine in the future that other distribution arrangements,
allocations of expenses (whether ordinary or extraordinary) or services to be
provided to a class of shares are appropriate and amend this Plan accordingly
without the approval of shareholders of any class. Except as set forth in the
Fund's prospectus, shares may be exchanged only for shares of the same class of
another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial sales
charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class B
<PAGE>
shares redeemed within a specified number of years of purchase will be subject
to a CDSC as set forth in the Fund's prospectus. Class B Shares are sold subject
to the minimum purchase requirements set forth in the Fund's prospectus. Class B
Shares shall be entitled to the shareholder services set forth from time to time
in the Fund's prospectus with respect to Class B Shares. Class B Shares are
subject to fees calculated as a stated percentage of the net assets attributable
to Class B shares under the Class B Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class B Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's Class B Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per
account basis except to the extent, if any, such an allocation would cause the
Fund to fail to satisfy any requirement necessary to obtain or rely on a private
letter ruling from the IRS relating to the issuance of multiple classes of
shares. Class B shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund at
the end of a specified number of years after the initial purchase date of Class
B shares, except as provided in the Fund's prospectus. Such conversion will
occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class C shares redeemed within one year of
purchase will be subject to a CDSC as set forth in the Fund's prospectus. Class
C Shares are sold subject to the minimum purchase requirements set forth in the
Fund's prospectus. Class C Shares shall be entitled to the shareholder services
set forth from time to time in the Fund's prospectus with respect to Class C
Shares. Class C Shares are subject to fees calculated as a stated percentage of
the net assets attributable to Class C shares under the Class C Rule 12b-1
Distribution Plan as set forth in such Distribution Plan. The Class C
Shareholders of the Fund have exclusive voting rights, if any, with respect to
the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees are
allocated to Class C Shares on a
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<PAGE>
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the IRS relating to the issuance of multiple classes
of shares. Class C shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class C shares.
The initial purchase date for Class C shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote of a
majority (or whatever greater percentage may, from time to time, be required
under Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"Act")) of (a) all of the Trustees of the Trust, on behalf of the Fund, and (b)
those of the Trustees who are not "interested persons" of the Trust, as such
term may be from time to time defined under the Act.
Article V. Amendments
No material amendment to the Plan shall be effective unless it is approved
by the Board of Trustees in the same manner as is provided for approval of this
Plan in Article IV.
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