File No. 33-34801
File No. 811-06106
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Check the appropriate box:
[X] Preliminary proxy statement [ ]Confidential, for Use
of the Commission
Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Pioneer Growth Trust
(Name of Registrant as Specified in Its Charter
Pioneer Growth Trust
(Name of Person(s) Filing Proxy Statement)
<PAGE>
PIONEER GROWTH TRUST
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 21, 1998
A Special Meeting of Shareholders of Pioneer Growth Trust, a
Massachusetts business trust (the "Trust") consisting of three series: Pioneer
Capital Growth Fund ("Capital Growth Fund"), Pioneer Equity-Income Fund
("Equity-Income Fund") and Pioneer Gold Shares ("Gold Shares") (each, a "Fund"
and collectively, the "Funds"), will be held at the offices of Hale and Dorr
LLP, 60 State Street, 26th Floor, Boston, Massachusetts 02109, at 2:30 p.m.,
Boston time, on Tuesday, April 21, 1998, to consider and act upon the following
proposals:
(1) To approve new management contracts with Pioneering
Management Corporation, the Funds' investment adviser ("PMC") for (a) Capital
Growth Fund, and (b) Equity-Income Fund, increasing the rate at which management
fees are payable to PMC;
(2) To elect the nine (9) Trustees named in the attached Proxy
Statement to serve on the Board of Trustees until their successors have been
duly elected and qualified;
(3) To approve an Agreement and Plan of Reorganization
pursuant to which the Funds, currently organized as three series of a single
Massachusetts business trust, will be reorganized as three distinct Delaware
business trusts;
(4) To approve amendments to the Funds' fundamental investment
policies, as described in the Proxy Statement;
(5) To ratify the selection of Arthur Andersen LLP as the
Funds' independent public accountants for the fiscal year ending October 31,
1998; and
(6) To transact such other business as may properly come
before the meeting or any adjournments thereof.
<PAGE>
Shareholders of record as of the close of business on February 23,
1998, are entitled to vote at the meeting or any adjournments thereof. The Proxy
Statement and proxy card are being mailed to shareholders on or about March 2,
1998.
By Order Of The Board of Trustees,
Joseph P. Barri, Secretary
Boston, Massachusetts
March 2, 1998
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.
<PAGE>
PIONEER GROWTH TRUST
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
SPECIAL MEETING OF SHAREHOLDERS
APRIL 21, 1998
PROXY STATEMENT
This Proxy Statement is furnished to shareholders of Pioneer Growth
Trust, a Massachusetts business trust (the "Trust") consisting of three series:
Pioneer Capital Growth Fund ("Capital Growth Fund"), Pioneer Equity-Income Fund
("Equity-Income Fund") and Pioneer Gold Shares ("Gold Shares") (each, a "Fund"
and collectively, the "Funds"), in connection with the solicitation of proxies
by the Board of Trustees for use at the Special Meeting of Shareholders of the
Trust, to be held at the offices of Hale and Dorr LLP, 60 State Street, 26th
Floor, Boston, Massachusetts 02109, at 2:30 p.m., Boston time, on Tuesday, April
21, 1998, and at any adjournments thereof (the "Meeting"). This Proxy Statement
and enclosed proxy are being mailed to shareholders on or about March 2, 1998.
The Annual Reports for each Fund for the fiscal period ended October 31, 1997,
have previously been mailed to U.S. shareholders (the Annual Report for each
Fund may be enclosed with the Proxy Statement for certain non-U.S.
shareholders). Additional copies of these reports may be obtained free of charge
by writing to the Funds at their executive offices, 60 State Street, Boston,
Massachusetts 02109 or by calling 1-800-225-6292.
Shareholders of record for each Fund as of the close of business on
February 23, 1998 (the "Record Date") are entitled to vote on all of such Funds'
business at the Meeting or any adjournments thereof. As of the Record Date ,
there were outstanding shares of beneficial interest of Capital Growth Fund,
shares of beneficial interest of Equity Income Fund and shares of beneficial
interest of Gold Shares. To the knowledge of the management of the Trust, no
person beneficially owned more than 5% of the outstanding shares of any of the
Funds as of December 31, 1997.
<PAGE>
PROPOSALS 1(a) AND 1(b)
APPROVAL OF NEW MANAGEMENT CONTRACTS
FOR CAPITAL GROWTH FUND AND
EQUITY-INCOME FUND
SUMMARY
Pioneering Management Corporation ("PMC") has served as the investment
adviser to Capital Growth Fund since July 25, 1990, and to Equity-Income Fund
since July 25, 1990. PMC serves as the investment adviser for the Pioneer family
of mutual funds and for certain other institutional accounts. PMC, a registered
investment adviser under the Investment Advisers Act of 1940, as amended, is a
wholly owned subsidiary of The Pioneer Group, Inc. ("PGI"), a Delaware
corporation with publicly traded shares. PGI is located at 60 State Street,
Boston, Massachusetts 02109.
At a meeting held on January 8, 1998, the Trustees, including all of
the Trustees who are not "interested persons" of the Funds or PMC, unanimously
approved and voted to recommend that the shareholders of Capital Growth Fund and
Equity-Income Fund approve a proposal to terminate the Fund's existing
Management Contract with PMC (each an "Existing Contract") and to adopt a new
Management Contract (each a "Proposed Contract"). Each Existing Contract and
Proposed Contract is also referred to below as a "Contract."
Under the Proposed Contract for Capital Growth Fund, there will be an
increase in the basic rate of management fees paid by the Fund to PMC. As
described more fully below, depending upon the Capital Growth Fund's investment
performance relative to a selected securities index, this basic fee will be
increased or decreased. In all cases, the fee ultimately paid by Capital Growth
Fund will be higher than that paid under the Existing Contract. Under the
Proposed Contract for Equity-Income Fund, the form of which is substantially
identical to the Proposed Contract for Capital Growth Fund, there will also be
an increase in the rate of management fees paid by Equity-Income Fund to PMC, as
more fully described below.
Terms of Existing and Proposed Contracts
Except for the different fee rates, effective dates and renewal dates,
the terms of the Existing and Proposed Contracts are substantially identical.
Pursuant to the terms of each Contract, PMC serves as investment adviser to the
Funds and is responsible for the overall management of the Funds' business
affairs subject only to the authority of the Board of Trustees. PMC is
authorized to buy and sell securities for the accounts of the Funds and to
designate brokers to carry out such transactions. PMC may not make any purchase
the cost of which exceeds funds currently available for a Fund and may not make
any purchase which would violate any fundamental policy or restriction in a
Fund's Prospectus or Statement of Additional Information as in effect from time
to time.
Under each Contract, PMC pays all expenses, including executive
salaries and the rental of office space, related to its services for the Fund
with the exception of the following which are paid by the Fund: (i) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
PMC or its affiliates, office space and facilities and personnel compensation,
training and benefits, (iii) the charges and expenses of any custodian, transfer
agent, plan agent, dividend disbursing agent and registrar appointed by the Fund
with respect to the Portfolio, (iv) issue and transfer taxes, chargeable to the
Fund in connection with securities transactions to which the Fund is a party,
(v) insurance premiums, interest charges, dues and fees for membership in trade
associations and all taxes and corporate fees payable by the Fund to federal,
state or other governmental agencies, (vi) fees and expenses involved in
registering and maintaining registrations of the Fund and of its shares with the
U.S. Securities and Exchange Commission (the "SEC"), state securities agencies
and foreign jurisdictions, including the preparation of prospectuses and
statements of additional information for filing with such regulatory agencies,
(vii) all expenses of shareholders' and Trustees' meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies, (viii) charges and
expenses of legal counsel to the Fund and to the Trustees, (ix) if applicable,
distribution fees paid by the Fund pursuant to a Plan of Distribution in
accordance with Rule 12b-1 promulgated by the SEC pursuant to the Investment
Company Act of 1940, as amended (the "1940 Act"), (x) 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 Pioneer Funds Distributor, Inc., the
Fund's, principle underwriter ("PFD"), (xi) the cost of preparing and printing
share certificates, and (xii) interest on borrowed money, if any. The Fund will
pay all brokers' and underwriting commissions chargeable to the Fund in
connection with securities transactions to which the Fund is a party.
The Existing Contract for Capital Growth Fund was approved by its
shareholders on October 29, 1993, and became effective on November 1, 1993. The
Existing Contract for Equity-Income Fund was approved by its shareholders on
October 29, 1993, and became effective on November 1, 1993. Each Existing
Contract was initially approved by the Trust's Board and its renewal was most
recently approved by the Board at a meeting held in April, 1997. Each Contract
is renewable annually by the vote of a majority of the Trust's Board, including
a majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Trust, PMC or PFD, cast in person at a meeting called for the
purpose of voting on such renewal. Each Contract terminates if assigned (as
defined in the 1940 Act) and may be terminated without penalty by either party
by vote of its Board or a majority of the Fund's outstanding voting securities
and upon 60 days' written notice.
1(a). APPROVAL OF NEW MANAGEMENT CONTRACT FOR CAPITAL GROWTH FUND
Fee Under Existing Contract
As compensation for its management services and certain expenses which
PMC incurs on behalf of the Fund, the Fund pays PMC an annual management fee
under the Existing Contract equal to 0.65% of the Fund's average daily net
assets up to $300 million, 0.60% of the next $200 million, 0.50% of the next
$500 million, and 0.45% of the excess over $1 billion. This fee is computed
daily and paid monthly.
Basic Fee Increase
As compensation for its management services and certain expenses which
PMC incurs on behalf of the Fund, the Fund would pay PMC an annual management
fee under the Proposed Contract (the "Basic Fee") equal to 0.70% of the Fund's
average daily net assets up to $500 million, 0.65% of the next $500 million and
0.625% of the excess over $1 billion. The Basic Fee would be computed daily and
paid monthly.
The Basic Fee represents an increase in the management fee rate payable
to PMC over the rates under the Existing Contract. The Board determined that the
Basic Fee is fair and reasonable, both apart from and together with the
application of the performance fee adjustment, which provides for increases or
decreases in the Basic Fee, based upon the Fund's performance, as described
below.
The effective date of the Proposed Contract is expected to be May 1,
1998 (the "Effective Date"). Accordingly, the Basic Fee will take effect on the
Effective Date if the Proposed Contract is adopted at the Meeting.
Performance Fee Adjustment
The Board of Trustees is proposing the implementation of a performance
adjustment which will either increase or decrease the monthly Basic Fee paid by
the Fund to PMC based on the performance of the Fund as compared to the
investment record (the "record") of a securities index determined by the
Trustees to be appropriate over the same period. The Trustees initially
designated the Lipper Growth Funds Index (the "Index") for this purpose. The
Index is an equally-weighted performance index adjusted for income dividends and
capital gains distributions comprised of the 30 largest funds listed by Lipper
Analytical Services, Inc. as having investment objectives of growth.
From time to time, the Trustees may determine that another securities
index is a more appropriate benchmark than the Index for purposes of evaluating
the performance of the Fund. In such event, a successor index may be substituted
for the Index in prospectively calculating the performance based adjustment to
the Basic Fee. However, the calculation of the performance adjustment for any
portion of the performance period prior to the adoption of the successor index
would still be based upon the Fund's performance compared to the Index.
It is not possible to predict the effect of the performance adjustment
on the overall compensation to PMC in the future since it will depend on the
performance of the Fund relative to the record of the Index.
The Board determined that it would be appropriate to increase PMC's
compensation when the Fund's performance exceeds that of an objective index and,
conversely, to reduce PMC's compensation when the Fund's performance is poorer
than the record of that index. The Index was deemed appropriate for this
comparison because it is broad-based and because the Index is composed of funds
with similar investment objectives and policies to those of the Fund. The Board
believes that a performance adjustment is appropriate for the Fund and that
providing incentives to PMC based on its performance benefits shareholders.
The Board is proposing that there be a performance adjustment which
would increase or decrease the Basic Fee based on the performance of the Class A
shares of the Fund calculated at net asset value. The Basic Fee would be subject
to upward or downward adjustment depending on whether, and to what extent, the
investment performance of the Class A shares of the Fund for the relevant
performance period exceeds, or is exceeded by, the record of the Index over the
same period. This performance comparison would be made at the end of each month.
Each percentage point of difference (up to a maximum difference of +/-0.10
percentage points) would be multiplied by a performance adjustment rate of
0.01%. The maximum adjustment rate is therefore +/-0.10%. An appropriate
percentage of this rate (based upon the number of days in the current month)
would then be multiplied by the average daily net assets of the Fund over the
entire performance period, giving the dollar amount which will be added to (or
subtracted from) the Basic Fee. The monthly performance adjustment will be
further adjusted to the extent necessary to insure that the total annual
adjustment to the Basic Fee does not exceed +/-0.10% of average daily net assets
for that year.
Implementation of Performance Adjustment. The Board is proposing that
the performance adjustment be implemented on a date occurring 12 months after
the Effective Date. Thus, during the initial 12-month period, the Basic Fee
would remain unadjusted. During the following 24 months, Fund performance would
be measured over an increasing period covering the current month and the prior
months dating back to the Effective Date (the "performance period"). Beginning
in the 36th month, the duration of the Fund's performance period would become
fixed. Thereafter, Fund performance would be measured over a rolling 36-month
period covering the current month and the prior 35 months.
Application of Performance Adjustment. The application of the
performance adjustment is illustrated by the following hypothetical example,
assuming that the net asset value of the Fund and the level of the Index were
$10 and 100, respectively, on the first day of the performance period.
Investment Performance* Cumulative Change
---------------------------------------------------------------
Fund Index
First Day $10 100
End of Period $13 123
Absolute Change +$3 +23
Percentage Change +30% +23%
* Reflects performance at net asset value. Any dividends or capital
gains distributions paid by the Fund are treated as if reinvested in
shares of the Fund at net asset value as of the payment date and any
dividends paid on the securities which comprise the Index are treated
as if reinvested on the ex- dividend date.
The difference in relative performance for the performance period is +7
percentage points. Accordingly, the annualized management fee rate for the last
month of the performance period would be calculated as follows: an appropriate
percentage of the Basic Fee rate (based upon the number of days in the month) of
0.70% (assuming Fund assets of up to $1 billion) would be multiplied by the
Fund's average daily net assets for the month resulting in a dollar amount. The
+7 percentage point difference is multiplied by the performance adjustment rate
of 0.01% producing a rate of 0.07%. An appropriate percentage of this rate
(based upon the number of days in the month) is then multiplied by the average
daily net assets of the Fund over the performance period resulting in a dollar
amount which is added to the dollar amount of the Basic Fee. The management fee
paid is the Basic Fee adjusted by the dollar amount of the performance
adjustment calculated for the performance period. If the investment performance
of the Index during the performance period exceeded the performance record of
the Fund, the dollar amount of the performance adjustment would be deducted from
the Basic Fee.
Because the adjustment to the Basic Fee is based on the comparative
performance of the Fund and the record of the Index, the controlling factor is
not whether Fund performance is up or down, but whether it is up or down more or
less than the record of the Index. Moreover, the comparative investment
performance of the Fund is based solely on the relevant performance period
without regard to the cumulative performance over a longer or shorter period of
time.
The Basic Fee will take effect on the Effective Date if the Proposed
Contract is adopted at the Meeting. Accordingly, (1) from May 1, 1998 through
April 30, 1999 the Fund will pay management fees at a rate equal to the Basic
Fee; (2) from May 1, 1999 through April 30, 2001, the Fund will pay management
fees at a rate equal to the Basic Fee plus or minus the amount of the
performance adjustment based upon the current month and the preceding months
dating back to the Effective Date; and (3) beginning on May 1, 2001, the Fund
will pay management fees at a rate equal to the Basic Fee plus or minus the
amount of the performance adjustment based upon the current month and the
preceding 35 months. Because the performance adjustment will be calculated no
earlier than 12 months after the Effective Date and because the performance
adjustment will not reflect the Fund's performance prior to the Effective Date,
the effect of the initial performance adjustment (and all subsequent
adjustments) is unknown and cannot reasonably be estimated at the time of this
proposal.
Effect of the New Management Fee Structure
Under the Existing Contract, the Fund paid management fees at an
effective annual rate of 0.50% based on average daily net assets of
$2,260,769,961 for the twelve months ended October 31, 1997. Under the Proposed
Contract, at this asset level, assuming implementation of the performance
adjustment, the Fund would pay a maximum annual fee of 0.75% and a minimum
annual fee of 0.55% based upon the Fund's performance relative to the Index as
described above.
Set forth below is a chart showing the dollar amount of management fees
paid during the Fund's past fiscal year under the Existing Contract and the
amount of fees that would have been paid under the Proposed Contract at the
maximum, Basic and minimum fee rates. The chart also shows the percentage
differences between the amounts that would have been paid under the Proposed
Contract and the amount paid under the Existing Contract. Also set forth below
is a comparative fee table showing the amount of fees and expenses paid by the
Fund under the Existing Contract as a percentage of average net assets and the
amount of fees and expenses shareholders would have paid if the maximum, Basic
and minimum fees under the Proposed Contract had been in effect. The figures
shown for the Basic Fee represent the amounts that actually would have been paid
had the Proposed Contract been in effect.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DOLLAR AMOUNT OF MANAGEMENT FEES PAID
(fiscal year ended October 31, 1997)
Proposed Contract
Existing
Contract Maximum Basic Minimum
Amount of Fees Paid or that
Would Have Been Paid
$11,315,631 $16,530,582 $14,269,812 $12,009,042
Percentage Difference from
Amount Paid under Existing
Contract N/A + 46.09% + 26.11% + 6.13%
COMPARATIVE FEE TABLES
(fiscal year ended October 31, 1997)
Annual Fund Operating Expenses
(as a percentage of average net assets)
Class A Shares
- ----------------------------------------------- ------------------ --------------------------------------------------
Proposed Contract
- ----------------------------------------------- ------------------ --------------------------------------------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Existing
Fee Maximum Basic Minimum
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Management Fee .50 .75 .65 .55
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
12b-1 Fees .25 .25 .25 .25
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Other Expenses .23 .23 .23 .23
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Total Fund Operating Expenses 0.98 1.23 1.13 1.03
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Class B Shares
- ----------------------------------------------- ------------------ --------------------------------------------------
Proposed Contract
- ----------------------------------------------- ------------------ --------------------------------------------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Existing
Fee Maximum Basic Minimum
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Management Fee .50 .75 .65 .55
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
12b-1 Fees 1.00 1.00 1.00 1.00
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Other Expenses .25 .25 .25 .25
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Total Fund Operating Expenses 1.75 2.00 1.90 1.80
- ----------------------------------------------- ------------------ ----------------------- ----------- --------------
Class C Shares
- ----------------------------------------------- ------------------ --------------------------------------------------
Proposed Contract
- ----------------------------------------------- ------------------ --------------------------------------------------
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
Existing
Fee Maximum Basic Minimum
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
Management Fee .50 .75 .65 .55
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
12b-1 Fees 1.00 1.00 1.00 1.00
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
Other Expenses .23 .23 .23 .23
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
Total Fund Operating Expenses 1.73 1.98 1.88 1.78
- ----------------------------------------------- ------------------ ----------------------- ---------- ---------------
Examples
The following examples illustrate the expenses on a $1,000 investment
under the existing and proposed maximum, Basic and minimum fees stated above,
assuming a 5% annual return and constant expenses, with or without redemption at
the end of each time period:
Class A Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $67 $87 $109 $171
Proposed Fee:
Maximum $69 $94 $121 $198
Basic $68 $91 $116 $187
Minimum $67 $88 $111 $176
<PAGE>
Class B Shares
(assuming complete redemption at end of period)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $58 $85 $115 $186*
Proposed Fee:
Maximum $60 $93 $128 $213
Basic $59 $90 $123 $202
Minimum $58 $87 $117 $191
Class B Shares
(assuming no redemption)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $18 $55 $95 $186*
Proposed Fee:
Maximum $20 $63 $108 $213
Basic $19 $60 $103 $202
Minimum $18 $57 $97 $191
Class C Shares**
(assuming complete redemption at end of period)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $28 $54 $94 $204
Proposed Fee:
Maximum $30 $62 $107 $231
Basic $29 $59 $102 $220
Minimum $28 $56 $96 $209
Class C Shares
(assuming no redemption)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $18 $54 $94 $204
Proposed Fee:
Maximum $20 $62 $107 $231
Basic $19 $59 $102 $220
Minimum $18 $56 $96 $209
- ---------------
*Class B shares convert to Class A shares eight years after purchase; therefore,
Class A expenses are used after year eight. **Class C shares redeemed during the
first year after purchase are subject to a 1% contingent deferred sales charge.
</TABLE>
The purpose of these examples and tables is to assist shareholders in
understanding the various costs and expenses of investing in shares of the Fund.
The examples above should not be considered representations of past or future
expenses of the Fund. Actual expenses may be higher or lower than those shown
above.
Additional Information Pertaining to the Contracts and PMC
For additional information pertaining to the various provisions under
the Existing and Proposed Contracts, see the Appendix. The Appendix also
contains additional information concerning the management, ownership structure,
affiliations, brokerage policies and certain other matters pertaining to PMC.
Factors Considered by the Trustees
The Trustees determined that the terms of the Proposed Contract are
fair and reasonable and that approval of the Proposed Contract on behalf of the
Fund is in the best interests of the Fund. The Trustees considered a number of
factors in deciding to recommend an increase in the management fee and a
performance fee adjustment. In approving performance aspect of the fee proposed
by management, the Trustees considered its structure and the Index on which it
is based. They believed that it provides an appropriate range of incentives for
PMC and joins its interest with those of the shareholders for good relative
investment performance.
At all times during the Trustees' deliberations, which occurred during several
Audit committee meetings held over the course of several months, they were
advised by Fund counsel and their own independent counsel. When the Trustees
were presented with the proposed fee arrangements, they requested and were
furnished with substantial information to assist in their evaluation. In
addition, the Trustees commissioned and relied upon independent studies prepared
by Lipper Analytical Securities Corporation and Morningstar, Inc.
After reviewing the information requested from and provided by PMC and
reports of Lipper Analytical Securities Corporation and Morningstar, Inc., as
described above, the Trustees concluded that the present fee schedule for
services provided under the Existing Contract, which has not changed since the
inception of the Fund in 1990, was out of date and inappropriately low under
present conditions. The Trustees also concluded that the current fee does not
reflect the existing competitive situation within the comparable groups of
growth funds with which it competes. The Trustees believed that the current fee
schedule over time would not provide appropriate resources to maintain and
attract investment management and research talent and provide technology systems
necessary to keep the Fund operating at the level of service provided and to
improve investment performance for the benefit of shareholders in the future.
The Trustees determined that the Index was appropriate based upon a
number of factors, including the fact that the Index is broad-based and is
composed of funds with similar investment objectives and policies to those of
the Fund. It was anticipated that any divergence between the Fund's performance
and that of the Index could be attributed to PMC's skill in selecting securities
within the parameters established by the Fund's objective and policies. Because
of the possible future development of an even more appropriate index for
measuring the Fund's performance, the Trustees believed it advisable to reserve
the ability to substitute a successor index for the Index; provided, in such
event, the calculation of the performance adjustment for any portion of the
performance period prior to the adoption of the successor index would still be
based upon the Fund's performance compared to the Index.
In addition, because of the possible future identification of a more
appropriate class of Fund shares for comparison with the Index, the Trustees
believed it advisable to reserve the ability to substitute the class of Fund
shares designated for the performance comparison with the Index; provided, in
such event, the calculation of the performance adjustment for any portion of the
performance period prior to the designation of a successor class would still be
based upon the performance of the previously designated class of Fund shares.
The time periods to be used in determining any performance adjustment
were also judged to be of appropriate length to ensure proper correlation and to
prevent fee adjustments from being based upon random or insignificant
differences between the Fund and the Index. In this regard, the Trustees
concluded that it would be appropriate for the Basic Fee rate to remain
unadjusted for 12 months before implementation of the performance adjustment,
and that once implemented, the performance adjustment should reflect only the
Fund's performance subsequent to the Effective Date. Moreover, the Trustees
believed that upon reaching the 36th month, the performance period would be
fully implemented, and that the performance adjustment should thereafter be
based upon a 36-month rolling performance period.
Based upon all of the above considerations, the Trustees determined
that both the Basic Fee and the amount of any performance adjustments would be
equitable and fair to the shareholders of the Fund.
Trustees' Recommendation
Based on its evaluation of the materials presented and assisted by the
advice of independent counsel, the Trustees who were present at the meeting on
January 8, 1998, including a majority of the Trustees who are not "interested
persons" of the Fund or PMC, unanimously concluded that the Proposed Contract
was sufficient to provide the resources necessary for the objectives described
above and was fair and reasonable and in the best interests of the Fund's
shareholders and by a vote cast at the meeting, approved and voted to recommend
to the shareholders of the Fund that they approve the proposal to terminate the
Existing Contract and to adopt the Proposed Contract.
Required Vote
Adoption of Proposal 1(a) requires the approval of a majority of the
outstanding voting securities of the Fund, which under the 1940 Act, is defined
to mean the affirmative vote of the lesser of (i) 67% or more of the shares of
the Fund represented at the Meeting, if at least 50% of all outstanding shares
of the Fund are represented at the Meeting, or (ii) 50% or more of the
outstanding shares of the Fund entitled to vote at the Meeting (a "1940 Act
Majority Vote").
If Proposal 1(a) is not approved by the shareholders of the Fund, the
Existing Contract will continue in effect.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES RECOMMEND THAT THE
SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF THE APPROVAL OF THE PROPOSED CONTRACT.
1(b). APPROVAL OF NEW MANAGEMENT CONTRACT FOR EQUITY-INCOME FUND
Fee Under Existing Contract
As compensation for its management services and certain expenses which
PMC incurs on behalf of the Fund, the Fund pays PMC an annual management fee
under the Existing Contract equal to 0.65% of the Fund's average daily net
assets up to $300 million, 0.60% of the next $200 million, 0.50% of the next
$500 million, and 0.45% of the excess over $1 billion. This fee is computed
daily and paid monthly.
Proposed Management Fee Change
As compensation for its management services and certain expenses which
PMC incurs on behalf of the Fund, the Fund would pay PMC an annual management
fee under the Proposed Contract (the "Proposed Fee") equal to 0.60% of the
Fund's average daily net assets up to $10 billion and 0.575% of the excess over
$10 billion. The Proposed Fee would be computed daily and paid monthly.
At the Fund's December 31, 1997 asset level, the Proposed Fee
represents an increase in the management fee rate payable to PMC over the rate
paid under the Existing Contract. The Board determined that the Proposed Fee is
fair and reasonable. The effective date of the Proposed Contract is expected to
be May 1, 1998. Accordingly, the Proposed Fee will take effect on May 1, 1998 if
the Proposed Contract is adopted at the Meeting.
Effect of the New Management Fee Structure
Under the Existing Contract, the Fund paid management fees at an
effective annual rate of 0.59% based on average daily net assets of $700,924,328
at December 31, 1997. Under the Proposed Contract, the Fund would pay management
fees at an effective annual rate of 0.60% at such net asset level.
Set forth below is a chart showing the dollar amount of management fees
that would be paid under the Existing Contract and the amount of fees that would
have been paid under the Proposed Contract at the Proposed Fee rate. The chart
also shows the percentage differences between the amounts that would have been
paid under the Proposed Contract and the amount paid under the Existing
Contract. Also set forth below are comparative fee tables showing the amount of
fees and expenses paid by each class of shares of the Fund under the Existing
Contract as a percentage of average net assets and the amount of fees and
expenses each class of shareholders would have paid if the Proposed Fee under
the Proposed Contract had been in effect.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DOLLAR AMOUNT OF MANAGEMENT FEES PAID
(period ended December 31, 1997)
Existing Contract Proposed Contract
Amount of Fees That Would Be Paid or that Would Have Been Paid $4,149,015* $4,205,545*
Percentage Difference from Amount under Existing Contract N/A 1.36%
- -------------------------
*Reflects annualized amounts based upon fees for the two month period ended
12/31/97. The Fund believes that such numbers provide a more accurate basis for
comparison because of recent asset growth than the amounts for the Fund's past
fiscal year. As of the fiscal year ended 10/31/97, the actual amount of fees
paid was $3,512,705 at an effective annual rate of 0.61%.
COMPARATIVE FEE TABLES
(fiscal year ended October 31, 1997)
Annual Fund Operating Expenses
(as a percentage of average net assets)
Class A Shares
- ----------------------------------------------- -------------------------- ------------------------
Existing Contract Proposed
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Management Fee .59* .60
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
12b-1 Fees .25 .25
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Other Expenses .24 .24
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Total Fund Operating Expenses 1.08* 1.09
- ----------------------------------------------- -------------------------- ------------------------
Class B Shares
- ----------------------------------------------- -------------------------- ------------------------
Existing Contract Proposed
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Management Fee .59* .60
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
12b-1 Fees 1.00 1.00
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Other Expenses .26 .26
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Total Fund Operating Expenses 1.85* 1.86
- ----------------------------------------------- -------------------------- ------------------------
Class C Shares
- ----------------------------------------------- -------------------------- ------------------------
Existing Contract Proposed
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Management Fee .59* .60
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
12b-1 Fees 1.00 1.00
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Other Expenses .30 .30
- ----------------------------------------------- -------------------------- ------------------------
- ----------------------------------------------- -------------------------- ------------------------
Total Fund Operating Expenses 1.89* 1.90
- ----------------------------------------------- -------------------------- ------------------------
* Management Fees have been restated to reflect the effective annual rate as of
12/31/97. The effective annual rate as of 10/31/97 was 0.61%.
Examples
The following examples illustrate the expenses on a $1,000 investment
under the existing and proposed fees stated above, assuming a 5% annual return
and constant expenses, with or without redemption at the end of each time
period:
Class A Shares
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $68 $90 $115 $184
Proposed Fee $68 $90 $114 $182
Class B Shares
(assuming complete redemption at end of period)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $59 $89 $121 $199*
Proposed Fee $59 $88 $120 $197
Class B Shares
(assuming no redemption)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $19 $59 $101 $199*
Proposed Fee $19 $58 $100 $197
Class C Shares**
(assuming complete redemption at end of period)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $29 $60 $103 $223
Proposed Fee $29 $59 $102 $221
Class C Shares
(assuming no redemption)
1 year 3 years 5 years 10 years
------ ------- ------- --------
Existing Fee $19 $60 $103 $223
Proposed Fee $19 $59 $102 $221
- ---------------
*Class B shares convert to Class A shares eight years after purchase; therefore,
Class A expenses are used after year eight. **Class C shares redeemed during the
first year after purchase are subject to a 1% contingent deferred sales charge.
</TABLE>
The purpose of these examples and tables is to assist shareholders in
understanding the various costs and expenses of investing in shares of the Fund.
The examples above should not be considered representations of past or future
expenses of the Fund. Actual expenses may be higher or lower than those shown
above.
Additional Information Pertaining to the Contracts and PMC
For additional information pertaining to the various provisions under
the Existing and Proposed Contracts, see the Appendix. The Appendix also
contains additional information concerning the management, ownership structure,
affiliations, brokerage policies and certain other matters pertaining to PMC.
Factors Considered by the Trustees
The Trustees determined that the terms of the Proposed Contract are
fair and reasonable and that approval of the Proposed Contract on behalf of the
Fund is in the best interests of the Fund. The Trustees considered a number of
factors in deciding to recommend an increase in the management fee at higher net
asset levels of the Fund. At all times during the Trustees' deliberations, which
occurred during several Audit Committee meetings held over the course of several
months, they were advised by Fund counsel and their own independent counsel.
When the Trustees were presented with the Proposed Fee, they requested and were
furnished with substantial information to assist in their evaluation. In
addition, the Trustees commissioned and relied upon independent studies prepared
by Lipper Analytical Securities Corporation and Morningstar, Inc.
After reviewing the information provided by and requested from PMC and
the reports of Lipper Analytical Securities Corporation and Morningstar Inc., as
described above, the Trustees concluded that the present fee schedule for
services provided under the Existing contract, which had not changed since the
inception of the Fund in 1990, does not appropriately reflect the present
circumstances and possibilities in the event of an increase in net assets. The
Trustees believe that the proposed 0.60% fee that would be operative at asset
levels above $500 million ( current assets are approximately $700million at
12/31/97 ) is appropriate in order to provide the resources to keep the Fund
operating at the level of service and performance presently provided to
shareholders and to make it possible to improve the service and performance for
the benefit of shareholders in the future if the Fund's assets remain between
the $500 million and $1 billion level. The Trustees also believe that the
current fee rate of 0.45% for assets over $1 billion, if that level is achieved
in the future, is too low to adequately assure that the necessary investment
talent and technological infrastructure will be of a quality level which the
Trustees believe the shareholders deserve.
Based upon all of the above considerations, the Trustees determined
that the Proposed Fee would be equitable and fair to the shareholders of the
Fund.
Trustees' Recommendation
Based on its evaluation of the materials presented and assisted by the
advice of independent counsel, the Trustees who were present at the meeting on
January 8, 1998, including a majority of the Trustees who are not "interested
persons" of the Fund or PMC, unanimously concluded that the Proposed Contract
was fair and reasonable and in the best interests of the Fund's shareholders and
by a vote cast at the meeting, approved and voted to recommend to the
shareholders of the Fund that they approve the proposal to terminate the
Existing Contract and to adopt the Proposed Contract.
Required Vote
Adoption of Proposal 1(b) requires a 1940 Act Majority Vote by the
shareholders of the Fund. If Proposal 1(b) is not approved by the shareholders
of the Fund, the Existing Contract will continue in effect.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES RECOMMEND THAT THE
SHAREHOLDERS OF THE FUND VOTE IN FAVOR OF THE APPROVAL OF THE PROPOSED CONTRACT.
PROPOSAL 2.
ELECTION OF BOARD OF TRUSTEES
The persons named on the accompanying proxy card intend to vote at the
Meeting (unless otherwise directed) FOR the election of the nine (9) nominees
named below as Trustees of the Trust. All of the nominees currently serve as
Trustees.
Each Trustee will be elected to hold office until the next meeting of
shareholders or until his or her successor is elected and qualified. Each
nominee has consented to being named herein and indicated his or her willingness
to serve if elected. If any such nominee should be unable to serve, an event not
now anticipated, the persons named as proxies may vote for such other person as
shall be designated by the Board of Trustees.
The following table sets forth each nominee's position(s) with the
Trust, age, address, principal occupation or employment during the past five
years and directorships, and indicates the year during which he or she first
became a Trustee of the Trust. The table also shows the number of shares of
beneficial interest of the Trust beneficially owned by each nominee, directly or
indirectly, on December 31, 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name, Age, Position(s) with the Principal Occupation or Employment and First Shares of Beneficial
Trust and Address Trusteeships(1) Became a Interest of Each Fund
Trustee Beneficially Owned and
Percentage of Total
Shares Outstanding on
December 31, 1997(2)
John F. Cogan, Jr.* President, Chief Executive Officer and a 1990 Capital Growth Fund:
(71) Director of The Pioneer Group, Inc. ("PGI");
Chairman of the Board Chairman and a Director of Pioneering 8,425.588
President and Trustee Management Corporation ("PMC") and Pioneer 0.008%
60 State Street Funds Distributor, Inc. ("PFD"); Director of
Boston, MA 02109 Pioneering Services Corporation ("PSC"), Equity-Income Fund:
Pioneer Capital Corporation ("PCC"), Pioneer
Real Estate Advisors, Inc. ("PREA"), Pioneer 7,595.707
Forest, Inc., Pioneer Explorer, Inc., Pioneer 0.028%
Management (Ireland) Ltd. ("PMIL") and Closed
Joint Stock Company "Forest-Starma"; Gold Shares:
President and Director of Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer 28,554.441
International Corp. ("PIntl"), Pioneer First 0.718%
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"),
Pioneer First Polish Trust Fund Joint Stock
Company, S.A. ("PFPT") and Pioneer Czech
Investment Company, A.S. ("Pioneer Czech");
Chairman, President and Trustee of all of the
Pioneer mutual funds; Director of Pioneer
Global Equity Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer DM Cashfonds Plc, Pioneer
European Equity Fund Plc, Pioneer Central &
Eastern Europe Fund Plc and Pioneer US Real
Estate Fund Plc; and Partner, Hale and Dorr
LLP (counsel to PGI and the Fund).
Mary K. Bush President, Bush & Co., an international 1997 Capital Growth Fund:
(49) financial advisory firm, since 1991;
Trustee Director/Trustee of Mortgage Guaranty -0-
4201 Cathedral Ave. NW Insurance Corporation, Novecon Management
Apt. 1016E Company, Hoover Institution, Folger Equity-Income Fund:
Washington, DC 20016 Shakespeare Library, March of Dimes, Project
2000, Inc., Small Enterprise Assistance Fund -0-
and Wilberforce University; Advisory Board
member, Washington Mutual Investors Fund, a Gold Shares:
registered investment company; U.S. Alternate
Executive Director, International Monetary -0-
Fund (1984-1988); and Managing Director,
Federal Housing Finance Board (1989- 1991).
Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
Richard H. Egdahl, M.D. Professor of Management, Boston University 1992 Capital Growth Fund:
(71) School of Management; Professor of Public
Trustee Health, Boston University School of Public 1,939.538
Boston University Health; Professor of Surgery, Boston 0.002%
Health Policy Institute University School of Medicine; Director,
55 Bay State Road Boston University Health Policy Institute and Equity-Income Fund:
Boston, MA 02115 Boston University Medical Center; Executive
Vice President and Vice Chairman of the -0-
Board, University Hospital; Academic Vice
President for Health Affairs, Boston Gold Shares:
University; Director, Essex Investment
Management Company, Inc. (investment -0-
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 Founding Director, The Winthrop Group, Inc. 1990 Capital Growth Fund:
(50) (consulting firm); Manager of Research
Trustee Operations, Xerox Palo Alto Research Center, -0-
The Keep from 1991 to 1994; Professor of Operations
P.O. Box 110 Management and Management of Technology and Equity-Income Fund:
Little Deer Isle, ME 04650 Associate Dean, Boston University School of
Management from 1989 to 1993; and Trustee of -0-
all of the Pioneer mutual funds, except
Pioneer Variable Contracts Trust. Gold Shares:
-0-
John W. Kendrick Professor Emeritus, George Washington 1990 Capital Growth Fund:
(80) University; Director, American Productivity
Trustee and Quality Center; Adjunct Scholar, American 2,017.222
636 Waterway Dr., Enterprise Institute; Economic Consultant; 0.002%
Falls Church, VA 22044 and Trustee of all of the Pioneer mutual
funds, except Pioneer Variable Contracts Equity-Income Fund:
Trust.
295.775
.001%
Gold Shares:
202.983
0.005%
Marguerite A. Piret President, Newbury, Piret & Company, Inc. 1990 Capital Growth Fund:
(49) (merchant banking firm); Trustee of Boston
Trustee Medical Center; and a Member of the Board of 620.529
One Boston Place Governors of the Investment Company Institute 0.001%
Suite 2635 ("ICI"); and Trustee of all of the Pioneer
Boston, MA 02108 mutual funds. Equity-Income Fund:
55.897
0.001%
Gold Shares:
112.940
0.003%
David D. Tripple* Executive Vice President and a Director of 1990 Capital Growth Fund:
(53) PGI; President, Chief Investment Officer and
Executive Vice President and a Director of PMC; Director of PFD, PCC, -0-
Trustee PIntl, First Russia, Omega, Pioneer SBIC
60 State Street Corporation ("Pioneer SBIC"), PMIL, Pioneer Equity-Income Fund:
Boston, MA 02109 Global Equity Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer DM Cashfonds Plc, Pioneer -0-
European Equity Fund Plc, Pioneer Central &
Eastern Europe Fund Plc and Pioneer US Real Gold Shares:
Estate Fund Plc; and Executive Vice President
and Trustee of all of the Pioneer mutual 29,533.748
funds. 0.743%
Stephen K. West Partner, Sullivan & Cromwell (law firm); 1993 Capital Growth Fund:
(69) Trustee, The Winthrop Focus Funds (mutual
Trustee funds); and Trustee of all of the Pioneer -0-
125 Broad Street mutual funds.
New York, NY 10004 Equity-Income Fund:
-0-
Gold Shares:
8,240.027
0.207%
John Winthrop President, John Winthrop & Co., Inc. (private 1990 Capital Growth Fund:
(61) investment firm); Director of NUI Corp., 2,429.615
Trustee (energy sales, services and distribution); 0.002%
One North Adgers Wharf Trustee of Alliance Capital Reserves,
Charleston, SC 29401 Alliance Government Reserves and Alliance Tax Equity-Income Fund:
Exempt Reserves; and Trustee of all of the
Pioneer mutual funds, except Pioneer Variable 1,836.063
Contracts Trust. 0.006%
Gold Shares:
5,905.607
0.148%
* Messrs. Cogan and Tripple are "interested persons" of the Trust and PMC within the meaning of
Section 2(a)(19) of the 1940 Act.
(1) Each nominee also serves as a trustee for each of the open-end investment companies (mutual funds) in
the Pioneer family of mutual funds, for Pioneer Interest Shares, a
closed-end investment company, and for each of the ten portfolios of
the Pioneer Variable Contracts Trust (except Messrs. Kendrick and
Winthrop and Mmes. Graham and Bush, who do not serve as Trustees for
Pioneer Variable Contracts Trust). Except for Ms. Bush, each Trustee
was most recently elected by the shareholders of the Trust in 1993.
Ms. Bush was elected by the other Trustees in 1997.
(2) As of December 31, 1997, the Trustees and officers of the Trust
beneficially owned, directly or indirectly, in the aggregate less than
1% of the Trust's outstanding shares.
</TABLE>
Ms. Piret, Mr. West and Mr. Winthrop serve on the Audit Committee of the
Board of Trustees. The functions of the Audit Committee include recommending
independent auditors to the Trustees, monitoring the independent auditors'
performance, reviewing the results of audits and responding to certain other
matters deemed appropriate by the Trustees. Ms. Graham, Ms. Piret and Mr.
Winthrop also serve on the Nominating Committee of the Board of Trustees. The
primary responsibility of the Nominating Committee is the selection and
nomination of candidates to serve as independent trustees. The Nominating
Committee will also consider nominees recommended by shareholders to serve as
Trustees provided that shareholders submitting such recommendations comply with
all relevant provisions of Rule 14a-8 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
During the fiscal year ended October 31, 1997, the Board of Trustees
held twelve meetings, the Audit Committee held eleven meetings and the
Nominating Committee held one meeting. All of the current Trustees and Committee
Members then serving attended at least 75% of the meetings of the Board of
Trustees or applicable committee, if any, held during the fiscal year ended
October 31, 1997.
Other Executive Officers
In addition to Messrs. Cogan and Tripple, who serve as executive
officers of the Trust, the following table provides information with respect to
the other executive officers of the Trust. Each executive officer is elected by
the Board of Trustees and serves until his successor is chosen and qualified or
until his resignation or removal by the Board. The business address of all
officers of the Trust is 60 State Street, Boston, Massachusetts 02109.
<TABLE>
<CAPTION>
<S> <C>
Name, Age and Principal Occupations(s)
Position with the Trust
William H. Keough, 60, Senior Vice President, Chief Financial
Officer and
Treasurer Treasurer of PGI; Treasurer of PFD, PMC, PSC, PCC,
PIntl, PMT, PGL,
First Russia, Omega,
Pioneer SBIC, and
each fund in the
Pioneer family of
mutual funds.
Joseph P. Barri, 51, Secretary of PGI, PMC, PCC, PIntl, PMT, First Russia,
Secretary Omega and PCC and each fund in the Pioneer family of
mutual funds; Clerk
of PFD and PSC and
Partner, Hale and
Dorr LLP (Counsel to
the Trust).
</TABLE>
Remuneration of Trustees and Officers
The following table provides information regarding the compensation
paid by the Trust and the other investment companies in the Pioneer family of
mutual funds to the Trustees for their services as indicated below. Compensation
paid by the Trust to Messrs. Cogan and Tripple, interested persons of PMC, is
reimbursed to the Trust by PMC. The Trust pays no salary or other compensation
to its officers.
<TABLE>
<CAPTION>
<S> <C> <C>
Total Compensation from the Trust
and Other Funds in the Pioneer
Aggregate Compensation from the Family of Mutual Funds++
Trust+
Trustee
John F. Cogan, Jr. $1,500.00* $12,000.00*
Mary K. Bush** 2,979.00 30,000.00
Richard H. Egdahl, M.D. 8,886.00 62,000.00
Margaret B.W. Graham 8,886.00 60,000.00
John W. Kendrick 8,886.00 55,800.00
Marguerite A. Piret 11,783.00 80,000.00
David D. Tripple 1,500.00 12,000.00
Stephen K. West 9,809.00 63,800.00
John Winthrop 10,250.00 69,000.00
Totals $64,479.00 $444,600.00
---------- -----------
* PMC fully reimbursed the Trust and the other funds in the Pioneer family of mutual funds for
compensation paid to Messrs. Cogan and Tripple.
** Ms. Bush was first elected as a Trustee in June, 1997.
+ For the fiscal year ended October 31, 1997.
++ For the calendar year ended December 31, 1997.
</TABLE>
Investment Adviser
PMC, whose executive offices are located at 60 State Street, Boston,
Massachusetts 02109, serves as investment adviser to the Trust. For additional
information concerning the ownership of PMC, see the Appendix.
Required Vote
In accordance with the Trust's Agreement and Declaration of Trust, the
vote of a plurality of all of the shares of the Trust voted at the Meeting is
sufficient to elect the nominees.
PROPOSAL 3
APPROVAL OF AN AGREEMENT AND PLAN PROVIDING FOR THE REORGANIZATION OF THE
FUNDS FROM SERIES OF A MASSACHUSETTS
BUSINESS TRUST TO THREE DISTINCT DELAWARE BUSINESS TRUSTS
General
At a meeting held on January 8, 1998, the Trustees who were present
unanimously approved, subject to the approval of shareholders of the Funds, an
Agreement and Plan of Reorganization (the "Plan of Reorganization") in the form
attached to this Proxy Statement as Exhibit A. The Plan of Reorganization
provides for the reorganization (the "Reorganization") of the Funds, currently
three series of a single Massachusetts business trust (the "Current Funds"),
into three distinct, newly established Delaware business trusts. Prior to the
Reorganization, the newly established Delaware business trusts will have no
assets or operations other than such minimum assets supplied by PMC or one of
its affiliates as may be required to establish independent SEC registrations.
The Reorganization will entail creating three Delaware business trusts
(the "Successor Funds"). Following the Reorganization, the Successor Funds will
carry on the business of the Current Funds. If the shareholders approve the
proposed changes to the Funds' fundamental investment policies described in
Proposals 4(a),4(b), and 4(c), each Fund's operations will change accordingly,
to the extent approved. If this change is not approved, the Successor Funds will
have investment policies and restrictions that are identical to the investment
policies and restrictions of the Current Funds. Each of the Successor Funds will
also enter into a management contract and other service agreements which provide
the same services on the same terms as those applicable to the Current Funds. In
the event that the Proposed Contracts for Capital Growth Fund and Equity-Income
Fund are approved by such Funds' respective shareholders, the applicable
Successor Funds would enter into contracts substantially identical to the
Proposed Contracts. Shareholders should be aware that there may be deemed to
occur a momentary inconsistency with certain of the Current Funds' policies and
restrictions (such as restrictions on investments in any one issuer and
investments in other investment companies) during the Reorganization.
The principal differences between a Delaware business trust and a
Massachusetts business trust as forms of organization are discussed below under
the caption "Comparison of Business Trusts under Delaware Law and Massachusetts
Law." Approval of the Reorganization also constitutes approval of the
termination of the Current Funds in accordance with Massachusetts law. Following
the Reorganization, PMC will serve as investment adviser for the Successor Funds
under a management contract which will have been approved by the Board of
Trustees of each of the Successor Funds and by the Current Funds, each as sole
shareholder of a corresponding Successor Fund, as further discussed below under
the caption "Summary of the Plan of Reorganization."
Reasons for the Proposed Reorganization
Each of the Current Funds presently is organized as a series of a
single Massachusetts business trust. The proposed form of organization of each
Fund as a distinct Delaware business trust offers certain advantages over the
current form of organization as three series of a single Massachusetts business
trust. The advantages include granting the Trustees greater power to amend the
Delaware Declaration of Trust without shareholder approval, although this
advantage could also be achieved under Massachusetts law by amending the Current
Funds' Declaration of Trust. Other advantages of the Delaware Declaration of
Trust compared to the Current Funds' Declaration of Trust, discussed in more
detail below, include clearer limitations upon liability of shareholders and
trustees and greater flexibility in methods of voting.
Comparison of Business Trusts Under Delaware Law and Massachusetts Law
Limitation of Shareholders' and Series' Liability. Delaware law
provides that the shareholders of a Delaware business trust shall not be subject
to liability for the debts or obligations of the trust. Under Massachusetts law,
shareholders of a Massachusetts business trust (such as the Current Funds'
shareholders) may, under certain circumstances, be liable for the debts and
obligations of that trust. Although the risk of liability of shareholders of a
Massachusetts business trust who do not participate in the management of the
trust may be remote, the Board of Trustees has determined that Delaware law
affords greater protection against potential shareholder liability. Similarly,
Delaware law provides that, to the extent that a Delaware business trust issues
multiple series of shares, each series shall not be liable for the debts or
obligations of any other series, another potential, although remote, risk in the
case of multiple series of a Massachusetts business trust (such as the Current
Funds). While the Trustees believe that a series of a Massachusetts business
trust will only be liable for its own obligations, there is no direct statutory
or judicial support for that position.
Limitation of Trustee Liability. Delaware law provides that, except to
the extent otherwise provided in a trust's declaration of trust or bylaws,
trustees will not be personally liable to any person (other than the business
trust or a shareholder thereof) for any act, omission or obligation of the
business trust or any trustee thereof. Delaware law also provides that a
trustee's actions under a Delaware business trust's declaration of trust or
bylaws will not subject the trustee to liability to the business trust or its
shareholders if the trustee takes such action in good faith reliance on the
provisions of the business trust's declaration of trust or bylaws. The
declaration of trust of a Massachusetts business trust may limit the liability
of a trustee who is not also an officer of the trust, for breach of fiduciary
duty except for, among other things, any act or omission not in good faith which
involves intentional misconduct or a knowing violation of law or any transaction
from which such trustee derives an improper direct or indirect financial
benefit. The Trustees believe that such limitations on liability under Delaware
law are consistent with those applicable to directors of a corporation under
Delaware law and will be beneficial in attracting and retaining in the future
qualified persons to act as trustees.
Shareholder Voting. Delaware law provides that a Delaware business
trust's declaration of trust or bylaws may set forth provisions related to
voting in any manner. This provision appears to permit trustee and shareholder
voting through computer or electronic media. For an investment company with a
significant number of institutional shareholders, all with access to computer or
electronic networks, the use of such voting methods could significantly reduce
the costs of shareholder voting. However, the advantage of such methods may not
be realizable unless the SEC modifies its proxy rules. Also, as required by the
1940 Act, votes on certain matters by trustees would still need to be taken at
actual in-person meetings.
Board Composition. Delaware law explicitly provides that separate
boards of trustees may be authorized for each series of a Delaware business
trust. Whether separate boards of trustees can be authorized for series of a
Massachusetts business trust is unclear under Massachusetts law. As always, the
establishment of any board of trustees of a registered investment company must
comply with applicable securities laws, including the provision of the 1940 Act
regarding the election of trustees by shareholders. Establishing separate boards
of trustees would, among other things, enable the series of a Delaware business
trust to be governed by individuals who are more familiar with such series'
particular operations.
Comparison of the Current Funds' Declaration of Trust under Massachusetts law
and Delaware Declarations of Trust under Delaware law
It is anticipated that the Delaware business trusts will be required to
hold fewer shareholder meetings than the Massachusetts business trust,
potentially further reducing costs. Although neither a Delaware business trust
nor a Massachusetts business trust is required to hold annual shareholder
meetings, Delaware law affords to the Trustees the ability to adapt the Delaware
business trust to future contingencies without the necessity of holding a
special shareholder meeting. The Trustees may have the power to amend the
business trust's governing instrument to create a class or series of beneficial
interest that was not previously outstanding; to dissolve the business trust; to
incorporate the Delaware business trust; to merge or consolidate with another
entity; to sell, lease, exchange, transfer, pledge or otherwise dispose of all
or any part of the business trust's assets; to cause any series to become a
separate trust; and to change the Delaware business trust's domicile -- all
without shareholder vote. Any exercise of authority by the Trustees will be
subject to applicable state and federal law. The flexibility of Delaware
business trusts should help to assure that the Delaware business trusts always
operate under the most advantageous form of organization and are intended to
reduce the expense and frequency of future shareholder meetings for
non-investment-related operational issues.
Trustees' Recommendation
After considering the matters discussed above and other matters deemed
to be relevant, the Trustees determined that the Reorganization (i) is in the
best interest of the Current Funds and (ii) will not result in dilution of the
interest of the shareholders of any of the Current Funds. The Trustees present
at the meeting held on January 8, 1998, unanimously voted to recommend to the
shareholders each of the Current Funds that they approve the Reorganization.
Required Vote
For each of the Current Funds, approval of the Agreement and Plan of
Reorganization requires the affirmative vote of a majority of the outstanding
shares. The Trustees have determined that the Reorganization will not proceed as
described above unless the shareholders of each of the Current Funds approve the
Reorganization. In the event that the shareholders of any of the Current Funds
do not vote in favor of the Reorganization, the Trustees will determine what
further action, if any, to take, including the possibility of resubmitting the
proposal at a later time.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND APPROVE THE AGREEMENT
AND PLAN OF REORGANIZATION PROVIDING FOR THE REORGANIZATION OF THE FUNDS FROM
THREE SERIES OF A SINGLE MASSACHUSETTS BUSINESS TRUST TO THREE DISTINCT DELAWARE
BUSINESS TRUSTS
Summary of the Plan of Reorganization
The following discussion summarizes certain terms of the Plan of
Reorganization. The summary of the Plan of Reorganization is qualified in its
entirety by the provisions of the form of Plan of Reorganization, which is
attached to this Proxy Statement as Exhibit A. Assuming the Plan of
Reorganization is approved, and the Funds are able to obtain the necessary
consent, approval, authorization or order of any court or governmental
authority, it is currently contemplated that the Reorganization will become
effective at the close of business on or about April 30, 1998.
In order to accomplish the Reorganization, three Delaware business
trusts will be formed, each with a single series corresponding to one of the
Current Funds. On the closing date of the Reorganization (the "Closing Date"),
each of the Current Funds will transfer all of its assets to one Successor Fund
in exchange for the assumption by each Successor Fund of all the liabilities of
the corresponding Current Fund and the issuance to each Current Fund of shares
of beneficial interest of the corresponding Successor Fund ("Successor Fund
shares") equal to the value (as determined by using the procedures set forth in
the Current Fund's current prospectus) on the date of the exchange of the
Current Fund's net assets. Each Current Fund as sole shareholder of the
corresponding Successor Fund, will then vote on certain matters that require
shareholder approval, as described below. Immediately thereafter, the Current
Funds will liquidate and distribute corresponding Successor Fund shares to each
Current Fund shareholder pro rata in proportion to the Current Fund
shareholder's beneficial interest in the Current Fund ("Current Fund shares") in
exchange for his or her Current Fund shares. After such distributions of
Successor Fund shares, the Current Funds will each, as soon as practicable
thereafter, be wound up and terminated. Certificates evidencing full or
fractional Successor Fund shares will not be mailed to shareholders. Upon
completion of the Reorganization, each Current Fund shareholder will be the
owner of full and fractional Successor Fund shares equal in number and aggregate
net asset value to his or her corresponding Current Fund shares as of the date
of the exchange.
As described above, the Plan of Reorganization authorizes each of the
Current Funds as the then sole shareholder of a corresponding Successor Fund (i)
to elect as Trustees of the Delaware business trust the persons who currently
serve as Trustees of the Massachusetts business trust; (ii) to ratify the
selection of the independent accountants; (iii) to approve an investment
advisory agreement for the corresponding Successor Fund; and (iv) to approve the
Rule 12b-1 plan of distribution for the corresponding Successor Fund. With
respect to the foregoing matters, each Successor Fund will vote after the Board
of Trustees of such Successor Fund has approved such matters.
The newly elected Trustees will hold office without limit in time
except that (i) any Trustee may resign; (ii) any Trustee may be removed by
written instrument signed by at least a majority of the Trustees prior to
removal; and (iii) a Trustee may be removed at any special meeting of the
shareholders of a Successor Fund by a vote of two-thirds of the outstanding
shares of such Successor Fund. In case a vacancy shall for any reason exist, the
remaining Trustees of the Successor Fund for which the vacancy exists will fill
such vacancy by appointing another Trustee so long as, immediately after such
appointment, at least two-thirds of the Trustees have been elected by the
shareholders of the Successor Fund.
If, at any time prior to the Closing Date, (a) the Trustees determine
that it would not be in the best interest of any of the Current Funds or the
shareholders to proceed with the execution of the Plan of Reorganization, or (b)
the Funds are unable to obtain the consent, approval, authorization or order of
any court or governmental authority, the Reorganization may not go forward,
notwithstanding the approval of the Reorganization by the shareholders at the
Meeting. The obligations of the Current Funds under the Plan of Reorganization
are subject to various conditions as stated therein. In order to provide against
unforeseen events, the Plan of Reorganization may be terminated or amended at
any time prior to the Reorganization by mutual agreement of the Trustees of the
Current Funds and the Successor Funds. The Current Funds and the Successor Funds
may at any time waive compliance with any of the covenants and conditions
contained in, or may amend the Plan of Reorganization; provided that such waiver
or amendment does not materially adversely affect the interests of shareholders
of the Current Funds.
New SEC Registrations
Under the Reorganization, the Successor Fund to Capital Growth Fund
will assume the Trust's existing registration statements under the Securities
Act of 1933, as amended (the "1933 Act") and the 1940 Act. The remaining two
Successor Funds will each establish new 1933 Act and 1940 Act registrations
prior to the Closing Date. Accordingly, following the Reorganization, each
Successor Fund will be separately registered with the SEC. This is necessary
because each Successor Fund is a separate legal entity, whereas the Current
Funds are series of a single Massachusetts business trust.
Continuation of Shareholder Accounts and Services
The Successor Funds' transfer agent, PSC, will establish accounts for
all shareholders of the Successor Funds containing the appropriate number of
Successor Fund shares to be received by that shareholder under the Plan of
Reorganization. Such accounts will be identical in all material respects to the
accounts currently maintained by PSC for each Current Fund shareholder.
Shareholders who have elected to receive a particular service, such as telephone
redemptions or exchanges or Pioneer Investomatic Plans, will continue to receive
such services as shareholders of one of the Successor Funds without any further
action.
Expenses of the Reorganization
PMC will bear all expenses associated with the transactions
contemplated by the Plan of Reorganization.
Tax Consequences of the Reorganization
It is a condition to the consummation of the Reorganization that the
Funds receive on or before the Closing Date an opinion from counsel, Hale and
Dorr LLP, substantially to the effect that, among other things, for federal
income tax purposes the transactions contemplated by the Plan of Reorganization
will constitute a reorganization under Section 368(a)(1) of the Internal Revenue
Code of 1986, as amended, and that, consequently, no gain or loss will be
recognized for federal income tax purposes by the Current Funds or their
shareholders upon (1) the transfer of all of the assets of each Current Fund to
the corresponding Successor Fund in exchange solely for Successor Fund shares
and the assumption by each Successor Fund of the corresponding Current Fund's
liabilities or (2) the distribution, by each Current Fund, of the corresponding
Successor Fund shares, in liquidation of the Current Funds, to the shareholders
in exchange for Current Funds shares. The opinion will further state, among
other things, that (i) the federal tax basis of Successor Fund shares to be
received by shareholders of the Current Funds will be the same as the federal
tax basis of the shares of the Current Funds surrendered in exchange therefor
and (ii) each shareholder's federal tax holding period for his or her Successor
Fund shares will include such shareholder's holding period for the Current Fund
shares surrendered in exchange therefor, provided that such Current Fund shares
were held as capital assets on the date of the exchange.
Description of Certain Provisions of the Successor Funds' Delaware Declarations
of Trust
The following is a summary of certain provisions of the Successor
Funds' Delaware Declarations of Trust.
Series and Classes. As discussed above, each Delaware Declaration of
Trust would permit the Successor Fund to issue series of its shares which would
represent interests in separate portfolios of investments, including the
corresponding Current Fund. No series would be entitled to share in the assets
of any other series or be liable for the expenses or liabilities of any other
series. The Trustees would also be able to authorize the Successor Funds to
issue additional classes of shares without prior shareholder approval.
Limitations on Derivative Actions. In addition to the requirements under
Delaware law, the Delaware Declarations of Trust provide that a shareholder of
one of the Successor Funds may bring a derivative action on behalf of such
Successor Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Successor Fund, or 10% of the outstanding
shares of the series or class of which such action relates, shall join in the
request for the Trustees to commence such action; and (b) the Trustees must be
afforded a reasonable amount of time to consider such shareholder request and to
investigate the basis of such claim. The Trustees shall be entitled to retain
counsel or other advisers in considering the merits of the request and shall
require an undertaking by the shareholders making such request to reimburse the
Successor Fund for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
Shareholder Meetings and Voting Rights. The Successor Funds are not
required to hold annual meetings of shareholders and do not intend to hold such
meetings. In the event that a meeting of shareholders is held for any Successor
Fund, each share of such Successor Fund shall be entitled to one vote on all
matters presented to shareholders including the election of Trustees.
Shareholders of the Successor Funds do not have cumulative voting rights in
connection with the election of Trustees. Meetings of shareholders of the
Successor Funds, or any series or class thereof, may be called by the Trustees,
certain officers or upon the written request of holders of 10% or more of the
shares entitled to vote at such meetings. The shareholders of the Successor
Funds shall only have the right to vote with respect to the limited number of
matters specified in the corresponding Delaware Declaration of Trust and such
other matters as the Trustees shall determine or shall be required by law.
Indemnification. The Delaware Declarations of Trust of the Successor
Funds provide for indemnification of Trustees, officers and agents of each
Successor Fund provided that no such indemnification shall be provided to any
person who is adjudicated (i) to be liable by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such person's office or (ii) not to have acted in good faith in the
reasonable belief that such person's actions were in the best interest of the
Delaware business trust.
Each Delaware Declaration of Trust provides that if any present or
former shareholder of any series of the applicable Successor Fund shall be held
personally liable solely by reason of such person being or having been a
shareholder and not because of such shareholder's acts or omissions or for some
other reason, such shareholder (or their heirs, executors, administrators or
other legal representatives or in the case of any entity, its general successor)
shall be entitled, out of the assets belonging to the applicable series, to be
held harmless from and indemnified against all loss and expense arising from
such liability. The Successor Fund, on behalf of any affected series, shall,
upon request by the shareholder, assume the defense of any claim made against
such shareholder for any act or obligation of the series and satisfy any
judgment thereon from the assets of the series.
Termination. The Delaware Declarations of Trust would permit
termination of a Successor Fund or of any series or class of a Successor Fund
(i) by a majority of the shareholders at a meeting of shareholders of such
Successor Fund, series or class; or (ii) by a majority of the Trustees without
shareholder approval if the Trustees determine that such action is in the best
interest of the Trust or its shareholders. The factors and events that the
Trustees may take into account in making such determination include (i) the
inability of the Successor Fund, or any successor series or class to maintain
their assets at an appropriate size; (ii) changes in laws or regulations
governing them or affecting assets of the type in which they invest; or (iii)
economic developments or trends having a significant adverse impact on their
business or operations. Termination of any of the Current Funds requires the
affirmative 1940 Act Majority Vote of the Fund.
Merger, Consolidation, Sale of Assets, Etc. Each Delaware Declaration
of Trust would authorize the Trustees of a Successor Fund without shareholder
approval to specifically permit such Successor Fund, or any series thereof, to
merge or consolidate with any corporation, association, trust or other
organization or sell or exchange all or substantially all of the property
belonging to the Successor Fund, or any series thereof. The Current Declaration
of Trust does not specifically provide for mergers or consolidations of any of
the Current Funds. A sale of assets of any of the Current Funds requires an
affirmative 1940 Act Majority Vote of the Fund.
Amendments. Each Delaware Declaration of Trust would permit the
Trustees to amend the Delaware Declaration of Trust without a shareholder vote;
provided that shareholders of each of the Successor Funds shall have the right
to vote on any amendment (i) that would affect the voting rights of
shareholders, (ii) with respect to which shareholder approval is required by
law; (iii) that would amend this provision of the Declaration of Trust; and (iv)
with respect to any other matter that the Trustees determine to submit to
shareholders. Any amendment to the Current Funds' Declaration of Trust, except
an amendment changing the name of the Funds or supplying any omission, curing
any ambiguity or curing, correcting or supplementing any defective or
inconsistent provision of the Declaration of Trust, requires the affirmative
1940 Act Majority Vote of each of the Current Funds.
PROPOSALS 4(a), 4(b) and 4(c)
AMENDMENTS TO AND ELIMINATION OF CERTAIN
INVESTMENT RESTRICTIONS
General
The Trustees of the Trust recommend that shareholders approve the
amendments to and elimination of certain of the Trust's investment restrictions
as described in detail below, such restrictions set forth in the Trust's
Statement of Additional Information.
Each Proposal requires the separate approval of the shareholders of the
Trust. Each of these restrictions is a fundamental investment policy that may
only be changed by an affirmative 1940 Act Majority Vote. See "Required Vote"
below.
4(a). AMENDMENT TO FUNDAMENTAL INVESTMENT RESTRICTION REGARDING BORROWING
The Trust's existing fundamental investment restriction regarding
borrowing states that each of the Funds may not:
borrow money, except from banks to meet redemptions in amounts not exceeding
331/3% (taken at the lower of cost or current value) of its total assets
(including the amount borrowed);
If amended as proposed, the restriction will provide that each of the
Funds may not:
borrow money, except from banks as a temporary measure to facilitate the meeting
of redemption requests or for extraordinary or emergency purposes and except
pursuant to reverse repurchase agreements or dollar rolls, in all cases in
amounts not exceeding 331/3% of the Fund's total assets (including the amount
borrowed) taken at market value.
The 1940 Act requires that a fund state a fundamental policy regarding
borrowing. The amendment is being proposed (1) to clarify that each of the Funds
may borrow from banks both for extraordinary or emergency purposes and to meet
redemptions and (2) to give each of the Funds the future ability to engage in
reverse repurchase agreements and dollar rolls without the need for shareholder
approval. Each of the Funds will not purchase securities while outstanding
borrowings exceed 5% of the Fund's total assets.
The Trust has agreed that as long as the Funds are registered in the
Federal Republic of Germany, Austria or Switzerland, no Fund may, subject to the
constraints described in the Statement of Additional Information, borrow money
in amounts exceeding 10% of a Fund's total assets (including the amount
borrowed) taken at market value.
Reverse repurchase agreements involve sales by a fund of portfolio
assets concurrently with an agreement by the fund to repurchase the same assets
at a later date at a fixed price. During the reverse repurchase agreement
period, the fund continues to receive principal and interest on these securities
and also has the opportunity to earn a return on the collateral furnished by the
counterparty to secure its obligation to redeliver the securities. Dollar rolls
are transactions in which a fund sells securities for delivery in the current
month and simultaneously contracts to repurchase similar securities on a
specified future date. During the roll period, the fund forgoes principal and
interest paid on the securities. The fund is compensated by the difference
between the current sales price and the forward price for the future purchase
(often referred to as the "drop") as well as by the interest earned on the cash
proceeds of the initial sale.
In regard to the permitted uses of bank borrowings, clarification is
necessary because the current restriction is not explicit with respect to each
Fund's ability to borrow for extraordinary or emergency purposes other than to
meet redemptions. In regard to reverse repurchase agreements and dollar rolls,
each of the Funds does not currently engage or intend to engage in either of
these investment practices in the coming year. However, because these common
practices may be deemed to constitute borrowings, the Trustees believe it is
best to create the flexibility to introduce such practices at some future time
without the need for shareholder approval if this becomes desirable. In such
event, the Prospectus and Statement of Additional Information would be amended
accordingly, including the addition of appropriate risk disclosure.
4(b). ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTION REGARDING VOTING
SECURITIES OF A SINGLE ISSUER
The Trust's existing fundamental investment restriction regarding
investment in voting securities of a single issuer states that each of the Funds
may not:
purchase securities of an issuer (other than the U.S.
Government, its agencies or instrumentalities), if such
purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the
Fund;
The 1940 Act does not impose any limitation upon investment in voting
securities of a single issuer. This policy originally was adopted in accordance
with state blue sky requirements that are no longer applicable. The change is
being proposed to permit each of the Funds to invest in such securities to the
extent that PMC believes that such investment would be beneficial to the Trust
and would not involve undue risk. In general, PMC believes it would be
advantageous for each of the Funds to have the flexibility to invest in
securities of an issuer without a formal restriction on the percentage of
outstanding voting securities of such issuer owned by each Fund. Nevertheless,
in order to continue to qualify as a "diversified" investment company under the
1940 Act, each Fund is subject to a requirement that it may not invest in more
than 10% of the outstanding voting securities of a single issuer with respect to
75% of its total assets. Each Fund may only be changed to a non-diversified
investment company by vote of the Fund's shareholders. There is no current
intention to change the classification of any of the Funds from diversified to
non-diversified investment companies.
4(c). AMENDMENT OF THE REQUIREMENT FOR SHAREHOLDER APPROVAL FOR THE
MODIFICATION OF CERTAIN INVESTMENT RESTRICTIONS
The Trust's existing investment restriction states that as
long as the Funds are registered in the Federal Republic of Germany, Austria or
Switzerland, no Fund may without the prior approval of its shareholders:
(i) invest in the securities of any other domestic or foreign
investment company or investment fund, except in connection
with a plan of merger or consolidation with or acquisition of
substantially all the assets of such other investment company
or investment fund; (ii) purchase or sell real estate, or any
interest therein, and real estate mortgage loans, except that
a Fund may invest in securities of corporate or governmental
entities secured by real estate or marketable interests
therein or securities issued by companies (other than real
estate limited partnerships, real estate investment trusts and
real estate funds) that invest in real estate or interests
therein; (iii) borrow money in amounts exceeding 10% of a
Fund's total assets (including the amount borrowed) taken at
market value; (iv) pledge, mortgage or hypothecate its assets
in amounts exceeding 10% of a Fund's total assets taken at
market value; (v) purchase securities on margin or make short
sales; (vi) redeem its securities in-kind; or (vii) invest in
interests in oil, gas or other mineral exploration or
development leases or programs.
Further, as long as the Funds are registered in Switzerland, no Fund
may without the prior approval of its shareholders:
(a) purchase gold or silver bullion, coins or other precious
metals or purchase or sell futures contracts or options on any
such precious metals; (b) invest more than 10% of its total
assets in the securities of any one issuer; provided, however,
that this restriction does not apply to cash items and U.S.
Government securities; (c) write (sell) uncovered calls or
puts or any combination thereof or purchase, in an amount
exceeding 5% of its assets, calls, puts, straddles, spreads or
any combination thereof; or (d) invest more than 5% of its
total assets in financial instruments that are used for
non-hedging purposes and which have a leverage effect.
If amended as proposed, the restriction will provide that:
In the case of a change in the laws of Germany, Austria or
Switzerland applicable to the Funds, the Trustees have the
right to adjust the above restrictions accordingly without the
prior approval of the shareholders.
The Trust has agreed to certain investment restrictions as a condition
of registration in the Federal Republic of Germany, Austria and Switzerland.
Currently, the Board of Trustees may not modify these restrictions to take
advantage of changing regulatory policies in foreign jurisdictions without
incurring the expense and delay associated with obtaining shareholder approval.
Proposal 4(c), if approved, would allow the Funds the flexibility to amend the
above investment restrictions to take advantage of changes in regulatory
policies in these jurisdictions without the need to seek shareholder approval.
The investment restrictions could then be changed with the approval of the
Trustees provided the Trustees consider such changes to be in the best interests
of the Funds. No change would be effected until the Funds' Prospectuses and
Statement of Additional Information had been amended or supplemented as
necessary to reflect the change.
Trustees' Recommendations
At a meeting of the Trustees held on January 8, 1998, the Trustees
present unanimously approved, and voted to recommend to the shareholders of the
Trust that they approve the proposed amendments and elimination of certain of
the Trust's investment restrictions. In taking such action and making such
recommendations, the Trustees considered the fact that the proposed changes will
provide clarification relating to certain investment restrictions and
flexibility to adjust to changing regulations and markets and new investment
techniques without continually incurring the significant expense involved in
soliciting proxies and holding shareholder meetings. The Trustees believe that
this increased clarity and flexibility will be beneficial to present
shareholders as well as potential investors.
Except as described in this Proxy Statement, approval of the proposed
changes will not result in changes in the Trustees, officers, investment
programs and services or any operations that are described in the Funds' current
Prospectuses and the Trust's Statement of Additional Information.
Required Vote
Adoption of each of Proposals 4(a), 4(b) and 4(c) requires the
affirmative 1940 Act Majority Vote of the Trust. If any of the proposals are not
approved by the shareholders of the Trust, the Trust will continue to adhere to
the current investment restriction(s)as to which no change has been approved.
Please note that the Trust is registered in Germany, Austria and
Switzerland and that any change made to the Trust's investment restrictions is
subject to review by German, Austrian and Swiss securities authorities. Such
authorities may require investment restrictions more restrictive than those
approved by shareholders. Accordingly, in such event the change to the Trust's
investment restrictions approved hereby will only take effect to the extent
approved by German, Austrian and Swiss securities authorities.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES RECOMMEND
THAT THE SHAREHOLDERS OF THE TRUST VOTE IN FAVOR OF THE
APPROVAL OF THE PROPOSAL TO AMEND THE INVESTMENT RESTRICTION REGARDING
BORROWING, TO ELIMINATE THE
INVESTMENT RESTRICTION REGARDING VOTING SECURITIES
OF A SINGLE ISSUER AND TO AMEND THE
REQUIREMENT FOR SHAREHOLDER
APPROVAL FOR THE MODIFICATION OF
CERTAIN INVESTMENT RESTRICTIONS .
PROPOSAL 5
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP has served as the Trust's independent
public accountant since the Trust's 1990 fiscal year. Audit services during the
fiscal year ended October 31, 1997, consisted of examinations of the Trust's
financial statements for this period and reviews of the Trust's filings with the
SEC.
The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust or PMC, has selected Arthur Andersen LLP as
each Fund's independent public accountants for the fiscal year ending October
31, 1998, subject to shareholder ratification at the Meeting. A representative
of Arthur Andersen LLP is expected to be available at the Meeting to make a
statement if he or she desires to do so and to respond to appropriate questions.
Arthur Andersen LLP has advised the Trust that it has no direct or indirect
financial interest in the Trust.
Required Vote
The ratification of the selection of Arthur Andersen LLP as independent
public accountants for the fiscal year ending October 31, 1998, requires the
affirmative vote of a majority of the shares of the Trust, present in person or
by proxy and entitled to vote at the meeting.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE FUNDS' INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING OCTOBER 31, 1998.
OTHER MATTERS
Shareholder Proposals
Each of the Funds is not required to hold annual meetings of
shareholders and does not currently intend to hold such a meeting of
shareholders in 1999.
Shares Held in Retirement Plans
PGI, as trustee, is permitted to vote any shares held in retirement
plans and will do so if necessary to obtain a quorum.
Proxies, Quorum and Voting at the Meeting
Any person giving a proxy has the power to revoke it at any time prior
to its exercise by executing a superseding proxy or by submitting a notice of
revocation to the Secretary of the Trust. In addition, although mere attendance
at the Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw his or her proxy and vote in person. All properly executed and
unrevoked proxies received in time for the Meeting will be voted in accordance
with the instructions contained in the proxies. If no instruction is given, the
persons named as proxies will vote the shares represented thereby in favor of
the proposals described above and will use their best judgment in connection
with the transaction of such other business as may properly come before the
Meeting or any adjournment thereof.
A majority of the shares entitled to vote--present in person or
represented by proxy--constitutes a quorum for the transaction of business with
respect to any proposal (unless otherwise noted in the Proxy Statement). In the
event that at the time any session of the Meeting is called to order a quorum is
not present in person or by proxy, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of any of the
proposals, including the election of the nominees to the Board of Trustees, have
not been received, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies with
respect to such proposal. Any such adjournment will require the affirmative vote
of more than one half of the shares of the Trust present in person or by proxy
at the session of the Meeting to be adjourned. The persons named as proxies will
vote those proxies which they are entitled to vote in favor of any such proposal
in favor of such an adjournment and will vote those proxies required to be voted
against any such proposal against any such adjournment. A shareholder vote may
be taken on one or more of the proposals in the proxy statement prior to such
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate. Such vote will be considered final regardless of whether
the Meeting is adjourned to permit additional solicitation with respect to any
other proposal.
Shares of the Trust represented at the Meeting (including, shares which
abstain or do not vote with respect to one or more of the proposals) will be
counted for purposes of determining whether a quorum is present at the Meeting.
Abstentions will be treated as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled to
vote with respect to any particular proposal, but will not be counted as a vote
in favor of such proposal. Accordingly, an abstention from voting on a proposal
has the same legal effect as a vote against the proposal.
Adoption by the shareholders of any of proposals 1(a), 1(b), 3, 4(a),
4(b) and 4(c) require the affirmative vote of the lesser of (i) 67% or more of
the voting securities of the Trust (or the Fund, where applicable) present at
the Meeting, if the holders of more than 50% of the shares of the Trust (or the
Fund, where applicable) are present or represented by proxy at the Meeting, or
(ii) 50% or more of the outstanding shares of the Trust (or the Fund, where
applicable). If a broker or nominee holding shares in "street name" indicates on
the proxy that it does not have discretionary authority to vote as to any
proposal, those shares will not be considered as present and entitled to vote as
to that proposal. Accordingly, a "broker non-vote" has no effect on the voting
in determining whether a proposal has been adopted pursuant to item (i) above,
provided that the holders of more than 50% of the outstanding shares (excluding
the "broker non-votes") of the Trust (or the Fund, where applicable) are present
or represented by proxy. However, with respect to determining whether a proposal
has been adopted pursuant to item (ii) above, because shares represented by a
"broker non-vote" are considered outstanding shares, a "broker non-vote" has the
same legal effect as a vote against such proposal.
Other Business
While the Meeting has been called to transact any business that may
properly come before it, the only matters that the Trustees intend to present
are those matters stated in the attached Notice of Special Meeting of
Shareholders. However, if any additional matters properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the proxy in
accordance with their judgment on such matters unless instructed to the
contrary.
Methods of Solicitation and Expenses
The cost of preparing, assembling and mailing this Proxy Statement and
the attached Notice of Special Meeting of Shareholders and the accompanying
proxy card will be borne by PMC. In addition to soliciting proxies by mail, PMC
may, at PMC's expense, have one or more Trust officers, representatives or
compensated third-party agents, including PMC, PSC and PFD, aid in the
solicitation of proxies by personal interview or telephone and telegraph and may
request brokerage houses and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of the shares held of
record by such persons.
The Trust may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly
recorded. The Trust has been advised by counsel that these procedures are
consistent with the requirements of applicable law. If these procedures were
subject to a successful legal challenge, such votes would not be counted at the
Meeting. The Trust is unaware of any such challenge at this time. Shareholders
would be called at the phone number PSC has in its records for their accounts,
and would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the Meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been recorded
correctly, they will also receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the confirmation is incorrect.
Persons holding shares as nominees will be reimbursed by PMC, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
[February __, 1998]
<PAGE>
APPENDIX
Additional Information Pertaining to the Existing and Proposed Contracts
Standard of Care. Under each 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
security on the recommendation of [PMC] . . ." PMC, however, shall not be
protected against liability by reason of its ". . . willful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement."
PMC's Authority. Each Contract provides that PMC shall have full
discretion to act for the Fund in connection with purchase and sale transactions
subject only to the Declaration of Trust, Bylaws, currently effective
registrations under the 1940 Act and the 1933 Act, investment objective,
policies and restrictions of the Fund in effect from time to time, and specific
policies and instructions established from time to time by the Trustees.
Portfolio Trading. Consistent with common practice in the mutual fund
industry and with PMC's most recent management contracts, each Contract
expressly permits PMC to engage in such activity. For a more detailed
description of the Fund's current portfolio brokerage practices, see Portfolio
Transactions in this Appendix.
Expense Limitation. Each Contract provides that if the operating
expenses of the Fund exceed the limits established by state "blue sky"
administrators, PMC's fee will be reduced (but not below $0) to the extent
required by such limits. No such limits are currently in force. Each Contract
also provides that PMC may from time to time agree not to impose all or a
portion of its fee or otherwise take action to reduce expenses of the Fund. Any
such fee limitation or expense reduction is voluntary and may be discontinued or
modified by PMC at any time.
Other Provisions. Each Contract includes provisions that provide that:
(i) the law of The Commonwealth of Massachusetts shall be the governing law of
the contract; (ii) PMC is an independent contractor and not an employee of the
Fund; (iii) the contract is the entire agreement between the parties with
respect to the matters described therein; (iv) the contract may be executed
using counterpart signature pages; (v) invalid or unenforceable provisions of
the contract are severable and do not render the entire agreement invalid or
unenforceable; (vi) the Fund may pay for charges and expenses of counsel to the
"non-interested" Trustees as well as counsel to the Fund; and (vii) subject to
obtaining best execution, PMC may consider sales of other Pioneer mutual funds
when selecting brokers and dealers to execute the Fund's securities
transactions.
Miscellaneous. If approved, each Proposed Contract will become
effective on May 1, 1998 (or on the date of approval if approved after that
date) and will continue in effect until May 31, 1999, and thereafter will
continue from year to year subject to annual approval by the Board of Trustees
in the same manner as the Existing Contract. The Proposed Contract terminates if
assigned (as defined in the 1940 Act) and may terminate without penalty, upon
sixty (60) days' written notice, by either party by vote of its Board or by a
vote of a majority of the outstanding voting securities of the Fund. The
description of the Existing Contract and the Proposed Contract set forth above
and the other information with respect to the Proposed Contract are qualified in
their entirety by reference to the form of Proposed Contract.
Additional Information Pertaining to PMC
Directors. Information regarding the affiliations of Mr. Cogan, Chairman of
PMC, and Mr. Tripple, a Director of PMC, is contained in Proposal 2 of this
Proxy Statement. The following table provides information with respect to the
other Director of PMC:
Name, Age and Address Principal Occupation(s)
Robert L. Butler, 56
60 State Street
Boston, MA 02109 Executive Vice
President and a
Director
Of PGI; President
and a Director of
PFD Director of
PMC, PMIL, PSC,
PIntl and
Pioneer Czech;
Director of
Pioneer Global
Equity Fund Plc,
Pioneer Global Bond
Fund Plc, Pioneer DM
Cashfonds Plc,
Pioneer European
Equity Fund Plc,
Pioneer Central &
Eastern Europe Fund
Plc and Pioneer US
Real Estate Fund
Plc; Vice Chairman
of Pioneer GmbH; and
a Member of the
Supervisory Board of
PFPT
Ownership of PMC. PMC is a wholly-owned subsidiary of PGI. As of
December 31, 1997, Mr. Cogan beneficially owned 3,612,901 shares ( 14.12%) of
the outstanding common stock of PGI. Mr. Cogan's beneficial holdings included
769,136 shares held in trusts with respect to which Mr. Cogan may be deemed to
be a beneficial owner by reason of his interest as a beneficiary and/or position
as a trustee and shares which Mr. Cogan has the right to acquire under
outstanding options within 60 days of December 31, 1997. At such date, Robert L.
Butler and David D. Tripple, PMC's other directors, each owned beneficially less
than 2% of the outstanding common stock of PGI. As of December 31, 1997,
officers and directors of PMC and Trustees and officers of the Trust
beneficially owned an aggregate of shares of common stock of PGI, approximately
17.41% of the outstanding common stock of PGI. During PGI's fiscal year ended
December 31, 1997, there were no transactions in PGI common stock by any
officer, Trustee/Director or nominee for election as Trustee/Director of the
Trust, PMC and/or PFD in an amount equal to or exceeding 1% of the outstanding
common stock of PGI.
Services Provided to the Trust by Affiliates of PMC. PSC serves as the
Trust's transfer agent and shareholder servicing agent. Under the terms of its
contract with the Trust, PSC's duties include: (i) processing sales, redemptions
and exchanges of shares of each of the Funds; (ii) distributing dividends and
capital gains to shareholder accounts; and (iii) maintaining certain account
records and responding to routine shareholder inquires. For the fiscal year
ended October 31, 1997 Capital Growth Fund paid PSC approximately $4,665,790 and
Equity-Income Fund paid PSC approximately $1,044,485 for these services.
PFD, an indirect wholly owned subsidiary of PGI, serves as the Trust's
principal underwriter. Distribution fees are paid to PFD in reimbursement of
expenses related to servicing of shareholder accounts and compensating
broker/dealers and sales personnel. For the fiscal year ended October 31, 1997,
PFD was paid distribution fees and earned underwriting commissions as follows:
(a) Capital Growth Fund paid approximately $3,822,188 in distribution
fees pursuant to the Trust's Class A Distribution Plan, $6,839,473 in
distribution fees pursuant to the Trust's Class B Distribution Plan and
$462,934 in distribution fees pursuant to the Trust's Class C
Distribution Plan. PFD earned net underwriting commissions in
connection with its offering of shares of Capital Growth Fund in the
amount of approximately $9,657,000 of which approximately $8,381,000
was reallowed to dealers.
(b) Equity-Income Fund paid approximately $975,660 in distribution fees
pursuant to the Trust's Class A Distribution Plan, $1,690,659 in
distribution fees pursuant to the Trust's Class B Distribution Plan and
$81,441 in distribution fees pursuant to the Trust's Class C
Distribution Plan. PFD earned net underwriting commissions in
connection with its offering of shares of Equity-Income Fund in the
amount of approximately $2,177,000 of which approximately $1,890,000
was reallowed to dealers.
Similar Funds Managed By PMC. PMC serves as the investment manager to
the following funds with investment objectives similar to the Funds' objectives:
<PAGE>
PMC Managed Funds with Similar
Investment Objectives to
Capital Growth Fund
<TABLE>
<CAPTION>
<S> <C>
Annual Management Fee Rate Name of Fund
(Net Assets as of 12/31/97)
Annual Management Fee Rate Name of Fund
(Net Assets as of 12/31/97)
0.50% of the first $250 million of average net asset; Pioneer Growth Shares*
0.48% of the next $50 million of average net assets; ($765,381,039)
0.45% of the avg. net assets exceeding $300 million
0.625% of average net assets, adjusted by up to plus/minus Pioneer Mid-Cap Fund
.20% to reflect Pioneer Mid-Cap Fund's performance ($ 938,286,204)
0.85% of average net assets Pioneer Small Company Fund
($ 509,066,315)
1.10% of average net assets Pioneer Micro-Cap Fund
($ 123,952,098)
0.70% of average net assets Pioneer Variable Contract
Trust--Growth Shares Portfolio
($ 4,646,484)
0.65% of average net assets Pioneer Variable Contract- Capital
Growth Portfolio
($105,476,236)
- -----------------------
*A proposal has been submitted to the shareholders of Pioneer Growth
Shares to change the annual management fee rate so that the rate will be 0.70%
of the Fund's average daily net assets up to $1 billion, 0.675% of the next $4
billion, 0.65% of the next $5 billion and 0.575% of the excess over $10 billion,
adjusted by up to +.10% to reflect Pioneer Growth Shares' performance.
PMC Managed Funds with Similar
Investment Objectives to
Equity-Income Fund
Annual Management Fee Rate Name of Fund
(Net Assets as of 12/31/97)
0.65% of the first $1 billion of average net asset; Pioneer Balanced Fund
0.60% of the next $4 billion of average net assets; ($ 290,383,854)
0.55% of the average net assets exceeding $5 billion
0.60% of average net assets, adjusted by up to plus/minus .10% to reflect Pioneer Fund
Pioneer Fund's performance ($4,052,996,507)
1.00% of average net assets Pioneer Real Estate Shares
($ 222,694,525)
0.60% of average net assets, adjusted by up to plus/minus .10% to reflect Pioneer II
Pioneer II's performance ($ 71,622,324,997)
0.65% of average net assets Pioneer Variable Contract
Trust--Equity-Income Portfolio
($ 124,213,301)
0.65% of average net assets Pioneer Variable Contract
Trust--Balanced Portfolio
($ 43,831,932)
1.00% of average net assets Pioneer Variable Contract Trust--Real
Estate Growth Portfolio
($ 42,186,712)
0.65% of average net assets] Pioneer Variable Contract
Trust--Growth and Income Portfolio
($ 4,493,491)
</TABLE>
Portfolio Transactions. All orders for the purchase or sale of
portfolio securities are placed on behalf of each Fund by PMC pursuant to
authority contained in the Current and Proposed Contracts. In selecting brokers
or dealers, PMC considers factors relating to execution on the best overall
terms available, including, but not limited to, the size and type of the
transaction; the nature and character of the markets of the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads.
PMC may select broker-dealers which provide brokerage and/or research
services to the Funds and/or other investment companies or accounts managed by
PMC. Such research services must be lawful and must provide appropriate
assistance to PMC in the performance of its investment decision making
responsibilities and could include advice concerning the value of securities;
the advisability of investing in, purchasing or selling securities; the
availability of securities or the purchasers or sellers of securities;
furnishing analysis and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement).
In circumstances where two or more broker-dealers offer comparable
prices and executions, preference may be given to a broker-dealer which has sold
shares of the a Fund as well as shares of other investment companies or accounts
managed by PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Funds. In
addition, if PMC determines in good faith that the amount of commissions charged
by a broker is reasonable in relation to the value of the brokerage and research
services provided by such broker, a Fund may pay commissions to such broker in
an amount greater than the amount another firm may charge. This information
might be useful to PMC in providing services to the Funds as well as to other
investment companies or accounts managed by PMC, although not all of such
research may be useful to the Fund. Conversely, such information provided to PMC
by brokers and dealers through whom other clients of PMC effect securities
transactions might be useful to PMC in providing services to the Funds. The
receipt of such research is not expected to reduce PMC's normal independent
research activities; however, it enables PMC to avoid the additional expense
which might otherwise be incurred if it were to attempt to develop comparable
information through its own staff.
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF
REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of the [] day of
[April], 1998, by and between Pioneer Growth Trust, a Massachusetts business
trust (the "Current Trust"), and Pioneer Capital Growth Fund, Pioneer
Equity-Income Fund and Pioneer Gold Shares, each a business trust duly formed
under the laws of the State of Delaware (the "Successor Trusts").
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368 (a)(1) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code"), and is intended to effect the
conversion of the Current Trust into three distinct Delaware business trusts.
The Current Trust consists of three series, the names of which correspond to
each of the Successor Trusts -- Pioneer Capital Growth Fund, Pioneer
Equity-Income Fund and Pioneer Gold Shares (the "Corresponding Series"). The
conversion will involve the transfer of all of the assets of each of the
Corresponding Series of the Current Trust to that corresponding Successor Trust
having the same name as such individual Corresponding Series, solely in exchange
for (1) the assumption by each Successor Trust of all liabilities of the
Corresponding Series of the Current Trust and (2) the issuance by each Successor
Trust of shares of beneficial interest of each class of such Successor Trust
("Successor Trust Shares") to such Corresponding Series of the Current Trust
equal to the number of shares of each class of beneficial interest of such
Corresponding Series then outstanding, followed by the pro rata distribution on
the Closing Date (as defined below) of such Successor Trust Shares to the
holders of shares of each class of beneficial interest, withoutpar value per
share, of such Corresponding Series of the Current Trust (the "Current Trust
Shareholders") in exchange for their shares of beneficial interest of such class
of such Corresponding Series of the Current Trust ("Current Trust Shares") in
liquidation and dissolution of such Corresponding Series of the Current Trust,
all upon the terms and conditions hereinafter set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth the parties hereto covenant and agree as follows.
1. TRANSFER OF ASSETS OF EACH OF THE CORRESPONDING SERIES OF THE CURRENT
TRUST IN EXCHANGE FOR ASSUMPTION OF LIABILITIES AND ISSUANCE OF SHARES OF THE
RESPECTIVE SUCCESSOR TRUSTS; DISSOLUTION OF THE CURRENT TRUST
1.1 Subject to the terms and conditions set forth herein and on the
basis of the representations and warranties contained herein, each of the
Corresponding Series of the Current Trust agrees to transfer all of its assets
set forth in paragraph 1.2 and assign and transfer all of its liabilities to the
respective Successor Trust established solely for the purpose of acquiring all
of the assets and assuming all of the liabilities of such Corresponding Series
of the Current Trust. As of the date of this Agreement, the Successor Trusts
have not issued any Successor Trust Shares or commenced operations. Other than
such shares as may be issued to Pioneering Management Corporation or one of its
affiliates to establish the necessary minimum capitalization for registration
with the Securities and Exchange Commission ("SEC"), each of the Successor
Trusts agrees that in exchange for all of the assets of the respective
Corresponding Series of the Current Trust (1) such Successor Trust shall assume
all of the liabilities of the respective Corresponding Series, whether
contingent or otherwise, then existing and (2) such Successor Trust shall
deliver to the respective Corresponding Series the number of full and fractional
Successor Trust Shares equal to the number of each class of Current Trust Shares
than outstanding which collectively shall be equal to the value of the assets of
the respective Corresponding Series transferred to, less the liabilities of such
Corresponding Series assumed by, such Successor Trust (the "Net Assets"), as
described in paragraph 3.1 on the Closing Date provided for in paragraph 3.1.
Such transactions shall take place at the Closing provided for in paragraph 3.1.
1.2 The assets of each of the Corresponding Series of the Current Trust
to be acquired by the respective Successor Trust shall include, without
limitation, all cash, cash equivalents, securities, receivables (including
interest and dividends receivable), any claims or rights of action or rights to
register shares under applicable securities laws, any books or records of such
Corresponding Series and other property owned by such Corresponding Series and
any deferred or prepaid expenses shown as assets on the books of such
Corresponding Series on the Closing Date provided for in paragraph 3.1.
1.3 Immediately upon delivery to each of the Corresponding Series of
the Current Trust of Successor Trust Shares of the respective Successor Trust,
any duly authorized officer of such Corresponding Series as the then sole
shareholder of the respective Successor Trust shall (i) elect as Trustees of the
respective Successor Trust the persons who currently serve as Trustees of the
respective Corresponding Series; (ii) ratify the selection of the independent
accountants; (iii) approve a management contract for the respective Successor
Trust with PMC in the form most recently approved for such Corresponding Series;
and (iv) adopt the investment objectives, investment policies and investment
restrictions of such Corresponding Series.
1.4 As provided in paragraph 3.4, on the Closing Date each of the
Corresponding Series of the Current Trust will distribute in liquidation to its
shareholders of record ("Current Trust Shareholders"), determined as of the
close of business on the Closing Date, the Successor Trust Shares of each class
received from the respective Successor Trust pro rata in proportion to their
respective shares of beneficial interest of such class in the respective
Corresponding Series of the Current Trust ("Current Trust Shares"), in exchange
for such Current Trust Shares. Such distribution will be accomplished by the
transfer of the respective Successor Trust Shares then credited to the account
of the respective Corresponding Series on the share records of the respective
Successor Trust to open accounts on those records in the names of such Current
Trust Shareholders and representing the respective pro rata number of the
Successor Trust Shares of each class received from the respective Successor
Trust due such Current Trust Shareholders. The Successor Trusts shall not issue
certificates representing Successor Trust Shares in connection with such
distributions. Fractional Successor Trust Shares shall be rounded to the third
place after the decimal point.
1.5 As soon as practicable after the distribution of the Successor
Trust Shares as set forth in Section 1.4, each of the Corresponding Series of
the Current Trust shall be terminated and any such further actions shall be
taken in connection therewith as are required by applicable law.
1.6 Ownership of the Successor Trust Shares by each Successor Trust
Shareholder shall be maintained separately on the books of Pioneering Services
Corporation as the shareholder services and transfer agent for the Successor
Trusts.
1.7 Any transfer taxes payable upon issuance of Successor Trust Shares
in a name other than the registered holder of the Current Trust Shares on the
books of each of the Corresponding Series of the Current Trust as of that time
shall be paid by the person to whom such Successor Trust Shares are to be
distributed as a condition of such transfer.
2. VALUATION
2.1 The value of the Net Assets of each Corresponding Series of the
Current Trust to be acquired hereunder by the respective Successor Trust shall
be the net asset value computed as of the valuation time provided in the then
current prospectus of the respective Corresponding Series on the Closing Date
using the valuation procedures set forth in the then current prospectus or
statement of additional information.
2.2 The value of full and fractional Successor Trust Shares of each
Successor Trust to be issued in exchange for the Net Assets of each of the
Corresponding Series shall be equal to the value of such Net Assets on the
Closing Date, and the number of such Successor Trust Shares of each class to be
issued by the respective Successor Trusts shall equal the number of full and
fractional Current Trust Shares of each class of the respective Corresponding
Series on the Closing Date.
2.3 All computations of value shall be made by Pioneering Management
Corporation for the Current Trust and the Successor Trusts.
3. CLOSING AND CLOSING DATE
3.1 The transfer of the assets of the Corresponding Series of the
Current Trust in exchange for the assumption by the respective Successor Trusts
of the liabilities of such Corresponding Series and the issuance of Successor
Trust Shares to the respective Corresponding Series, as described above,
together with related acts necessary to consummate such acts (the "Closing"),
shall occur at the offices of [Hale and Dorr LLP at 60 State Street, Boston,
Massachusetts 02109] on [April, 1998] ("Closing Date"), or at such other place
or date on or prior to [December 31, 1998] as the parties may agree in writing.
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the last daily determination of the net asset value of the
Corresponding Series or at such other time and or place as the parties may
agree.
3.2 In the event that on the Closing Date (a) the New York Stock
Exchange is closed to trading or trading thereon is restricted or (b) trading or
reporting of trading on said Exchange or in any market in which portfolio
securities of the Current Trust are traded is disrupted so that accurate
appraisal of the value of the Net Assets of the Current Trust is impracticable,
the Closing shall be postponed until the first business day upon which trading
shall have been fully resumed and reporting shall have been restored.
3.3 Each Corresponding Series of the Current Trust shall deliver at the
Closing a certificate or separate certificates of an authorized officer stating
that it has notified the Custodian, as custodian for the respective
Corresponding Series and the respective Successor Trust, of the conversion of
such Corresponding Series of the Current Trust to the respective Successor
Trust.
3.4 Pioneering Services Corporation, as shareholder services and
transfer agent for the Current Trust, shall deliver at the Closing certificates
as to the conversion on its books and records of the accounts of the
shareholders of the Corresponding Series of the Current Trust to accounts as
holders of shares of the respective Successor Trusts. Each Successor Trust shall
issue and deliver to the Current Trust a confirmation evidencing the shares of
Successor Trust to be credited on the Closing Date or provide evidence
satisfactory to the respective Corresponding Series that such shares of such
Successor Trust have been credited to the account of the Corresponding Series on
the books of such Successor Trust. At the Closing each party shall deliver to
the other such bills of sale, checks, assignments, share certificates, receipts
or other documents as such other party or its counsel may reasonably request.
3.5 Portfolio securities that are not held in book-entry form in the
name of the Custodian as record holder for each of the Corresponding Series of
the Current Trust shall be presented by the respective Corresponding Series of
the Current Trust to the Custodian for examination no later than five business
days preceding the Closing Date. Portfolio securities which are not held in
book-entry form shall be delivered by the respective Corresponding Series of the
Current Trust to the Custodian for the account of the respective Successor Trust
on the Closing Date, duly endorsed in proper form for transfer, in such
condition as to constitute good delivery thereof in accordance with the custom
of brokers, and shall be accompanied by all necessary federal and state stock
transfer stamps or a check for the appropriate purchase price thereof. Portfolio
securities held of record by the Custodian in book- entry form on behalf of a
Corresponding Series of the Current Trust shall be delivered to the respective
Successor Trust by the Custodian by recording the transfer of beneficial
ownership thereof on its records. The cash of a Corresponding Series of the
Current Trust to be delivered shall be in the form of currency or by the
Custodian crediting the respective Successor Trust's account maintained with the
Custodian with immediately available funds.
4. REPRESENTATIONS AND WARRANTIES
4.1 The Current Trust represents and warrants as follows:
4.1.A. The Current Trust is a business trust duly authorized
to exist under the laws of The Commonwealth of Massachusetts and has the power
to own all of its properties and assets and, subject to approval by the
shareholders of the Current Trust, to perform its obligations under this
Agreement. The Current Trust is not required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to qualify would
not subject it to any material liability or disability. The Current Trust has
all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
4.1.B. The Current Trust is a registered investment company
classified as a management company of the open-end diversified type and its
registration with the Securities and Exchange Commission (the "Commission") as
an investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), is in full force and effect;
4.1.C. The Current Trust is not, and the execution, delivery
and performance of this Agreement will not result, in violation of any provision
of its Amended and Restated Declaration of Trust or By-laws, or any agreement,
indenture, instrument, contract, lease or other undertaking to which the Current
Trust is a party or by which the Current Trust is bound;
4.1.D. The Current Trust has no material contracts or other
commitments (other than this Agreement or agreements for the purchase of
securities entered into in the ordinary course of business and consistent with
its obligations under this Agreement) that will not be terminated without
liability to the Current Trust on or prior to the Closing Date;
4.1.E. No material litigation or administrative proceeding or
investigation of or before any court or governmental body presently is pending
or threatened against the Current Trust or any of its properties or assets. The
Current Trust knows of no facts that might form the basis for the institution of
such proceedings and the Current Trust is not a party to, or subject to, the
provisions of any order, decree or judgment of any court or governmental body
that materially and adversely affects its business or its ability to consummate
the transactions herein contemplated;
4.1.F. At the date hereof and at the Closing Date, all
federal, state and other tax returns and reports, including information returns
and payee statements, of the Current Trust required by law to have been filed or
furnished by such dates shall have been filed or furnished and all federal,
state and other taxes, interest and penalties shall have been paid so far as due
or provision shall have been made for the payment thereof and no such return is
currently under audit and no assessment has been asserted with respect to any of
such returns or reports;
4.1.G. The Current Trust has elected that each Corresponding
Series be treated as a regulated investment company under Subchapter M of the
Code, has qualified as such for each taxable year since its inception, and will
qualify as such as of the Closing Date;
4.1.H. The authorized capital of the Current Trust consists of
an unlimited number of shares of beneficial interest, no par value, divided into
three classes (Class A, Class B and Class C) of three separate series--the
Corresponding Series. All issued and outstanding shares of beneficial interest
of the Current Trust are, and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and nonassessable. The Current Trust does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of its shares of beneficial interest, nor is there outstanding any
security convertible into any of its shares of beneficial interest;
4.1.I. The information to be furnished by the Current Trust
for use in applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with federal securities and other laws and regulations
thereunder applicable thereto;
4.1.J. All of the issued and outstanding Current Trust Shares
will at the time of the Closing be held by the persons and in the amounts as, on
behalf of each Corresponding Series, certified in accordance with the provisions
of paragraph 3.4;
4.1.K. At the Closing Date, the Current Trust, on behalf of
each Corresponding Series, will have good and marketable title to the assets to
be transferred to the Successor Trust pursuant to paragraph 1.1, and full right,
power and authority to sell, assign, transfer and deliver such assets hereunder,
and upon delivery and in payment for such assets, the Successor Trust will
acquire good and marketable title thereto subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the
Securities Act of 1933, as amended (the "1933 Act), except as otherwise
disclosed in writing and accepted by the Successor Trust;
4.1.L. The execution, delivery and performance of this
Agreement will have been duly authorized prior to the Closing Date by all
necessary action on the part of the Current Trust and this Agreement constitutes
a valid and binding obligation of the Current Trust enforceable in accordance
with its terms, subject to the approval of the Current Trust's shareholders;
4.1.M. No consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the Current
Trust of the transactions contemplated herein, except such as shall have been
obtained prior to the Closing Date.
4.2 Each of the Successor Trusts represents and warrants individually as
follows:
4.2.A. The Successor Trust is a business trust duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the power to own all of its properties and assets and to perform its
obligations under this Agreement; the Successor Trust is not required to qualify
to do business in any jurisdiction in which it is not so qualified or where
failure to qualify would not subject it to any material liability or disability;
the Successor Trust has all necessary federal, state and local authorizations to
own all of its properties and assets and to carry on its business as now being
conducted; that as of the date hereof and as of the Closing Date, the Successor
Trust consists of one duly established and designated series;
4.2.B. The Successor Trust is not, and the execution, delivery
and performance of this Agreement will not result, in violation of any provision
of the Certificate of Trust, Agreement and Declaration of Trust or By-laws of
the Successor Trust or any agreement, indenture, instrument, contract, lease or
other undertaking to which the Successor Trust is a party or by which the
Successor Trust is bound;
4.2.C. No material litigation or administrative proceeding or
investigation of or before any court or governmental body is presently pending
or threatened against the Successor Trust or any of its properties or assets.
The Successor Trust knows of no facts that might form the basis for the
institution of such proceedings, and the Successor Trust is not a party to, or
subject to, the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transactions herein contemplated;
4.2.D. The Successor Trust intends to qualify as a regulated
investment company under Subsection M of the Code for the taxable year in which
the Closing occurs and to continue to qualify as such for each taxable year;
4.2.E. Other than such shares as may be issued to Pioneering
Management Corporation or one of its affiliates to establish the necessary
minimum capitalization for registration with the SEC, prior to the Closing Date,
there shall be no issued and outstanding Successor Trust Shares or any other
securities of the Successor Trust; Successor Trust Shares issued in connection
with the transactions contemplated herein will be duly and validly issued and
outstanding and fully paid and non-assessable;
4.2.F. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary action on the part of the
Successor Trust and, this Agreement constitutes a valid and binding obligation
of the Successor Trust enforceable against the Successor Trust in accordance
with its terms;
4.2.G. The information to be furnished by the Successor Trust
for use in applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the transactions
contemplated hereby shall be accurate and complete and shall comply in all
material respects with Federal securities and other laws and regulations
applicable thereto; and
4.2.H. No consent, approval, authorization or order of any
court or governmental authority is required for the consummation by the
Successor Trust of the transactions contemplated herein, except such as shall
have been obtained prior to the Closing Date.
5. COVENANTS OF THE CURRENT TRUST AND THE SUCCESSOR TRUSTS
5.1 The Current Trust covenants that the Successor Trust Shares are not
being acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
5.2 The Current Trust covenants that it will assist the Successor
Trusts in obtaining such information as the Successor Trusts may reasonably
request concerning the beneficial ownership of Current Trust Shares.
5.3 The Current Trust will, from time to time, as and when requested by
the Successor Trusts execute and deliver, or cause to be executed and delivered,
all such assignments and other instruments, and will take or cause to be taken
such further action, as the Successor Trusts may deem necessary or desirable in
order to vest in, and confirm to, the Successor Trusts, title to, and possession
of, all the assets of the Current Trust to be sold, assigned, transferred and
delivered to the Successor Trusts hereunder and otherwise to carry out the
intent and purpose of this Agreement.
5.4 The Successor Trusts will, from time to time, as and when requested
by the Current Trust, execute and deliver or cause to be executed and delivered
all such assignments and other instruments, and will take or cause to be taken
such further action, as the Current Trust may deem necessary or desirable in
order to vest in, and confirm to, the Current Trust, title to, and possession
of, the Successor Trust Shares issued, sold, assigned, transferred and delivered
hereunder and otherwise to carry out the intent and purpose of this Agreement.
5.5 The Successor Trusts shall use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act and such
state securities laws as it may deem appropriate in order to operate after the
Closing Date.
5.6 Subject to the provisions of this Agreement, the Successor Trusts
and the Current Trust each will take, or cause to be taken, all action and will
do or cause to be done all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.7 As promptly as practicable, but in any event within 60 days after
the Closing Date, each Corresponding Series of the Current Trust shall furnish
to the respective Successor Trust, in such form as is reasonably satisfactory to
such Successor Trust, a statement of the earnings and profits of such
Corresponding Series of the Current Trust for federal income tax purposes, and
of any capital loss carryovers and other items that will be carried over to the
respective Successor Trust as a result of Section 381 of the Code, and which
statement will be certified by the President or Treasurer of such Corresponding
Series of the Current Trust. Each Corresponding Series of the Current Trust
covenants that it has no earnings and profits that were accumulated by it or any
other entity during a taxable year when it or such entity did not qualify as a
regulated investment company under the Code or, if it has such earnings and
profits, that it will distribute them to its shareholders prior to the Closing
Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST
The obligations of the Corresponding Series of the Current Trust to
consummate the transactions provided for herein shall be subject to the
performance by the respective Successor Trusts of all the obligations to be
performed by the Successor Trusts hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
6.1 All representations and warranties of the Successor Trusts
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date, with the same force and
effect as if made on and as of the Closing Date, and
6.2 The Successor Trusts each shall have delivered on the Closing Date
to the Current Trust a certificate executed in such Successor Trust's name by
its President or Vice President, in form and substance satisfactory to the
Current Trust, dated as of the Closing Date, to the effect that the
representations and warranties of such Successor Trust made in this Agreement
are true and correct at and as of the Closing Date, except as they may be
affected by the transactions contemplated by this Agreement, and as to such
other matters as the Current Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by the Current
Trust.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR TRUSTS
The obligations of the Successor Trusts to consummate the transactions
provided for herein shall be subject to the performance by the Current Trust of
all the obligations to be performed hereunder on or before the Closing Date and,
in addition thereto, to the following further conditions:
7.1 All representations and warranties of the Current Trust contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date, with the same force and effect as if
made on and as of the Closing Date;
7.2 Each Corresponding Series of the Current Trust shall have delivered
to the respective Successor Trust on the Closing Date a statement of its assets
and liabilities, prepared in accordance with generally accepted accounting
principles consistently applied, together with a certificate of the Treasurer or
Assistant Treasurer of such Corresponding Series as to the portfolio securities
of such Corresponding Series and the federal income tax basis and holding period
for each such portfolio security as of the Closing Date; and
7.3 Each Corresponding Series of the Current Trust shall have delivered
to the respective Successor Trust on the Closing Date a certificate executed in
the name of such Corresponding Series by its President or Vice President, in
form and substance satisfactory to the respective Successor Trust, dated as of
the Closing Date, to the effect that the representations and warranties of such
Corresponding Series made in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the respective
Successor Trust shall reasonably request.
Each of the foregoing conditions precedent may be waived by each
Successor Trust.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST AND
THE SUCCESSOR TRUSTS
The obligations of the Current Trust and the Successor Trusts are
subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of each of the Corresponding Series
shareholders in accordance with applicable law;
8.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit or to obtain damages or other relief in connection with,
the transactions contemplated hereby;
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state securities authorities) deemed necessary by the
Successor Trusts or the Current Trust to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of the
Successor Trusts or the Current Trust, provided that either party hereto may for
itself waive any of such conditions;
8.4 The President or Vice President of each of the Successor Trusts
shall have delivered a certificate to the Current Trust on the Closing Date
certifying that such Successor Trust has taken all necessary action so that it
shall be a registered open-end investment company under the 1940 Act.
8.5 The Current Trust and the respective Successor Trust shall have
received on or before the Closing Date an opinion of Hale and Dorr LLP
satisfactory to the Current Trust and the respective Successor Trusts,
substantially to the effect that for federal income tax purposes:
8.5.A. The acquisition of all of the assets of each
Corresponding Series of the Current Trust by the respective Successor
Trusts solely in exchange for the issuance of Successor Trust Shares to
such Corresponding Series and the assumption by the Successor Trusts of
all of the liabilities of respective Corresponding Series, followed by
the distribution in liquidation by such Corresponding Series of
Successor Trust Shares to the shareholders of the such Corresponding
Series in exchange for their shares of such Corresponding Series and
the dissolution of such Corresponding Series, will constitute a
reorganization within the meaning of Section 368(a)(1) of the Code, and
such Corresponding Series and the respective Successor Trust will each
be "a party to a reorganization" within the meaning of Section 368(b)
of the Code;
8.5.B. No gain or loss will be recognized by each
Corresponding Series of the Current Trust upon (i) the transfer of all
of its assets to the respective Successor Trust solely in exchange for
the issuance of Successor Trust Shares to such Corresponding Series and
the assumption by the respective Successor Trust of the liabilities of
such Corresponding Series of the Current Trust and (ii) the
distribution by such Corresponding Series of such Successor Trust
Shares to the shareholders of such Corresponding Series;
8.5.C. No gain or loss will be recognized by each Successor
Trust upon receipt of all of the assets of the respective Corresponding
Series of the Current Trust solely in exchange for the issuance of the
Successor Trust Shares to such Corresponding Series and the assumption
by the respective Successor Trust of all of the liabilities of the
respective Corresponding Series;
8.5.D. The tax basis of the assets of each Corresponding
Series of the Current Trust in the hands of the respective Successor
Trust will be, in each instance, the same as the tax basis of those
assets in the hands of such Corresponding Series immediately before the
transfer;
8.5.E. The tax holding period of the assets of each
Corresponding Series of the Current Trust in the hands of the
respective Successor Trust will, in each instance, include the tax
holding period of such Corresponding Series for those assets;
8.5.F. Current Trust Shareholders will not recognize gain or
loss upon the exchange of all of their shares of the Current Trust
solely for Successor Trust Shares as part of the transaction;
8.5.G. The tax basis of the Successor Trust Shares received by
Current Trust Shareholders in the transaction will be the same as the
tax basis of the shares of the Current Trust surrendered in exchange
therefor; and
8.5.H. The tax holding period of the Successor Trust Shares
received by Current Trust Shareholders will include, for each
shareholder, the tax holding period for the Current Trust Shares
surrendered in exchange therefor, provided that such Current Trust
Shares were held as capital assets on the date of the exchange.
Each of the Corresponding Series of the Current Trust and the
respective Successor Trust each agree to make and provide representations with
respect to such Corresponding Series and the respective Successor Trusts which
are reasonably necessary to enable Hale and Dorr LLP to deliver an opinion
substantially as set forth in this paragraph 8.5, which opinion may address such
other federal income tax consequences, if any, that Hale and Dorr LLP believes
to be material to the transaction.
Each of the foregoing conditions precedent to the obligations of a
party, except for the receipt of the opinion of Hale and Dorr LLP set forth in
paragraph 8.5, may be waived by that party.
9. BROKERAGE FEES AND EXPENSES
9.1 Each Successor Trust and the respective Corresponding Series of the
Current Trust each represent and warrant to the other that there are no broker's
or finder's fees payable in connection with the transactions contemplated
hereby.
9.2 Each of the Corresponding Series of the Current Trust and the
respective Successor Trust shall each be liable for its own expenses incurred in
connection with entering into and carrying out the provisions of this Agreement
whether or not the transactions contemplated hereby are consummated; if the
transactions are consummated, such expenses of each Corresponding Series of the
Current Trust will be assumed by the respective Successor Trust as part of the
transaction.
10. ENTIRE AGREEMENT
Each of the Successor Trusts and the respective Corresponding Series of
the Current Trust agree that neither party has made any representation, warranty
or covenant not set forth herein and that this Agreement constitutes the entire
agreement between the parties. The representations, warranties and covenants
contained herein or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the
Successor Trust and the Current Trust. In addition, either a Successor Trust or
the Current Trust may at its option terminate this Agreement at or prior to the
Closing Date because:
11.1.A. There exists a material breach by the other party of
any representations, warranties or agreements contained herein to be
performed at or prior to the Closing Date; or
11.1.B. A condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met.
11.2 In the event of any such termination, there shall be no liability
for damages on the part of the Successor Trust or the Current Trust, or their
respective trustees or officers, to the other party or its trustees or officers.
12. AMENDMENT
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the parties; provided, however,
that following the approval of this Agreement by Current Trust Shareholders, no
such amendment may have the effect of changing the provisions for determining
the number of Successor Trust Shares to be paid to Current Trust Shareholders
under this Agreement to the detriment of Current Trust Shareholders without
their further approval.
13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
13.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts.
13.4 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any person, firm or corporation other than the parties hereto and their
respective successors and assigns any rights or remedies under or by reason of
this Agreement.
13.5 All persons dealing with the Current Trust and the Successor
Trusts must look solely to the property of the Current Trust and the Successor
Trust for the enforcement of any claims against such Trust as neither the
Trustees, officers, agents or shareholders of either Trust assume any personal
liability for obligations entered into on behalf of the Current Trust and the
Successor Trusts.
13.6 A copy of the Agreement and Declaration of Trust of the Current
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Current Trust as trustees and not individually and
that the obligations of this instrument are not binding upon any of the
trustees, officers, or shareholders of the current Trust individually, but are
binding only upon the assets and property of the Current Trust.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Current Trust or the
Successor Trusts, each at 60 State Street, Boston, Massachusetts 02109,
Attention: Secretary.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officer.
PIONEER GROWTH TRUST,
a Massachusetts business trust,
on behalf of each of Pioneer Capital Growth Fund,
Pioneer Equity-Income Fund and Pioneer Gold Shares
By:_________________________________
Its:_________________________________
PIONEER CAPITAL GROWTH FUND,
a Delaware business trust
By:__________________________________
Its:__________________________________
PIONEER EQUITY-INCOME FUND,
a Delaware business trust
By:________________________________
Its:________________________________
PIONEER GOLD SHARES,
a Delaware business trust
By:________________________________
Its:________________________________
<PAGE>
PROXY PROXY
PIONEER GROWTH TRUST
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
To be held April 21, 1998
The undersigned, having received notice of the meeting and management's
proxy statement therefor, and revoking all prior proxies, hereby appoint(s) John
F. Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each
of them, attorneys or attorney of the undersigned (with full power of
substitution in them and each of them) for and in the name(s) of the undersigned
to attend the Special Meeting of Shareholders of Pioneer Growth Trust, a
Massachusetts business trust (the "Trust") consisting of three series: Pioneer
Capital Growth Fund ("Capital Growth Fund"), Pioneer Equity-Income Fund
("Equity-Income Fund") and Pioneer Gold Shares (each, a "Fund" and collectively,
the "Funds") to be held on Tuesday, April 21, 1998 at 2:30 p.m. (Boston time)
at the offices of Hale and Dorr LLP, counsel to the Trust, 60 State Street, 26th
Floor, Boston, Massachusetts 02109 (the "Meeting"), and any adjourned session or
sessions thereof, and there to vote and act upon the following matters (as more
fully described in the accompanying Proxy Statement) in respect of all shares of
the Trust which the undersigned will be entitled to vote or act upon, with all
the powers the undersigned would possess if personally present:
(1)(a) To approve a new Management Contract with Pioneering Management
Corporation, the Funds' investment adviser, ("PMC") for Capital Growth
Fund increasing the rate at which management fees are payable to PMC:
_ FOR _ AGAINST _ ABSTAIN
(1)(b) To approve a new Management Contract with PMC for Equity-Income Fund
increasing the rate at which management fees are payable to PMC:
_ FOR _ AGAINST _ ABSTAIN
<PAGE>
(2) To elect Trustees:
The nominees for Trustees are: M.K. Bush, J.F. Cogan, Jr., Dr. R.H.
Edgahl, M.B.W. Graham, J.W. Kendrick, M.A. Piret, D.D. Tripple, S.K.
West and J. Winthrop.
_ FOR electing all the nominees (except as marked above)
To withhold authority to vote for one or more of the
nominees, circle those nominees names above.
_ WITHHOLD authority to vote for all nominees
(3) To approve an Agreement and Plan of Reorganization pursuant to which
the Funds, currently organized as three series of a single
Massachusetts business trust, will be reorganized as three distinct
Delaware business trusts:
_ FOR _ AGAINST _ ABSTAIN
(4)(a) To approve an amendment to the Funds' fundamental investment
restriction regarding borrowing:
_ FOR _ AGAINST _ ABSTAIN
(4)(b) To eliminate the Funds' fundamental investment restriction regarding
investment in voting securities of a single issuer:
_ FOR _ AGAINST _ ABSTAIN
(4)(c) To approve an amendment to the Funds' investment restriction
requiring shareholder approval for the modification of certain
investment restrictions:
_ FOR _ AGAINST _ ABSTAIN
(5) To ratify the selection of Arthur Andersen LLP as the Funds'
independent public accountants for the fiscal year ending October 31,
1998:
_ FOR _ AGAINST _ ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL(S).
----------------------------
Signature of Shareholder(s)
----------------------------
Signature of Joint
Shareholder(s) (if any)
Dated: ____________, 1998 In signing, please write name(s) exactly as
appearing hereon. When signing as attorney, executor, administrator or other
fiduciary, please give your full title as such. Joint owners should each sign
personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED
<PAGE>
Pioneer Capital Growth Fund
60 State Street
Boston, MA 02109
February 1998
Dear Fellow Shareowner,
I am writing to let you know that a special meeting will be held April 21, 1998
for shareowners to vote on a number of important proposals for Pioneer Capital
Growth Fund (the Fund). The Fund is one of three funds in Pioneer Growth Trust.
As a shareowner in the Fund, you have the opportunity to voice your opinion on
these matters.
This package contains information about the proposals, along with a yellow proxy
card for you to vote by mail. Please take a moment to read the enclosed
materials and cast your vote using the proxy card.
Your prompt vote will help save money. If a majority of shareowners have not
voted prior to the meeting, we must try to obtain their votes with additional
mailings or phone solicitation. Both of these are costly processes.
(callout in margin) VOTING YOUR SHARES BY MAIL IS QUICK AND EASY. EVERYTHING YOU
NEED IS ENCLOSED.
Each of the proposals has been reviewed by the Board of Trustees, whose primary
role is to protect your interests as a shareowner. In the Trustees' opinion, the
proposals are fair and reasonable. The Trustees recommend that you vote FOR each
proposal. Proposal 1(b) is not a proposal to be considered by Pioneer Capital
Growth Fund shareowners.
(callout in margin) THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR EACH
PROPOSAL.
HERE IS WHAT A FOR VOTE MEANS FOR EACH OF THE PROPOSALS.
PROPOSAL 1(A):
APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT CORPORATION (PMC),
including a performance-based management fee. Depending upon the Fund's
investment performance, relative to a selected securities index, the fee paid by
the Fund may be lower or higher than the proposed basic fee. The proposed basic
fee is higher than the management fee currently paid by the Fund to PMC.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the enclosed Proxy Statement.
<PAGE>
PROPOSALS 4(A), 4(B)and 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
enclosed Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
Cast your vote by completing and signing the proxy card. Please mail your
completed and signed proxy as quickly as possible, using the postage-paid
envelope provided.
(callout in margin) PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW
MANY SHARES YOU OWN.
Please feel free to call Pioneer at 1-800-225-6292 if you have any questions
about the proposals or the process for voting your shares. Thank you for your
prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
1097-4523
<PAGE>
Pioneer Equity-Income Fund
60 State Street
Boston, MA 02109
February 1998
Dear Fellow Shareowner,
I am writing to let you know that a special meeting will be held April 21, 1998
for shareowners to vote on a number of important proposals for Pioneer
Equity-Income Fund (the Fund). The Fund is one of three funds in Pioneer Growth
Trust. As a shareowner in the Fund, you have the opportunity to voice your
opinion on these matters.
This package contains information about the proposals, along with a yellow proxy
card for you to vote by mail. Please take a moment to read the enclosed
materials and cast your vote using the proxy card.
Your prompt vote will help save money. If a majority of shareowners have not
voted prior to the meeting, we must try to obtain their votes with additional
mailings or phone solicitation. Both of these are costly processes.
(callout in margin) VOTING YOUR SHARES BY MAIL IS QUICK AND EASY. EVERYTHING YOU
NEED IS ENCLOSED.
Each of the proposals has been reviewed by the Board of Trustees, whose primary
role is to protect your interests as a shareowner. In the Trustees' opinion, the
proposals are fair and reasonable. The Trustees recommend that you vote FOR each
proposal. Proposal 1(a) is not a proposal to be considered by Pioneer
Equity-Income Fund shareowners.
(callout in margin) THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR EACH
PROPOSAL.
HERE IS WHAT A FOR VOTE MEANS FOR EACH OF THE PROPOSALS.
PROPOSAL 1(B):
APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT CORPORATION (PMC).
Depending upon the Fund's asset levels, the proposed fee rate may represent an
increase or a decrease in PMC's current management fee rate stated as a percent
of the Fund's average daily net assets.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the enclosed Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
enclosed Proxy Statement.
<PAGE>
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
Cast your vote by completing and signing the proxy card. Please mail your
completed and signed proxy as quickly as possible, using the postage-paid
envelope provided.
(callout in margin) PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW
MANY SHARES YOU OWN.
Please feel free to call Pioneer at 1-800-225-6292 if you have any questions
about the proposals or the process for voting your shares. Thank you for your
prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
1097-4521
<PAGE>
Pioneer Gold Shares
60 State Street
Boston, MA 02109
February 1998
Dear Fellow Shareowner,
I am writing to let you know that a special meeting will be held April 21, 1998
for shareowners to vote on a number of important proposals for Pioneer Gold
Shares (the Fund), which is one of the three funds in Pioneer Growth Trust. As a
shareowner in the Fund, you have the opportunity to voice your opinion on these
matters.
This package contains information about the proposals, along with a yellow proxy
card for you to vote by mail. Please take a moment to read the enclosed
materials and cast your vote using the proxy card.
Your prompt vote will help save money. If a majority of shareowners have not
voted prior to the meeting, we must try to obtain their votes with additional
mailings or phone solicitation. Both of these are costly processes.
(callout in margin) VOTING YOUR SHARES BY MAIL IS QUICK AND EASY. EVERYTHING YOU
NEED IS ENCLOSED.
Each of the proposals has been reviewed by the Board of Trustees, whose primary
role is to protect your interests as a shareowner. In the Trustees' opinion, the
proposals are fair and reasonable. The Trustees recommend that you vote FOR each
proposal. Proposals 1(a) and 1(b) are not proposals to be considered by Pioneer
Gold Shares shareowners.
(callout in margin) THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR EACH
PROPOSAL.
HERE IS WHAT A FOR VOTE MEANS FOR EACH OF THE PROPOSALS.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the enclosed Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
enclosed Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
<PAGE>
Cast your vote by completing and signing the proxy card. Please mail your
completed and signed proxy as quickly as possible, using the postage-paid
envelope provided.
(callout in margin) PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW
MANY SHARES YOU OWN.
Please feel free to call Pioneer at 1-800-225-6292 if you have any questions
about the proposals or the process for voting your shares. Thank you for your
prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
1097-4519
<PAGE>
Pioneer Capital Growth Fund
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
Not too long ago we sent you a proxy card and materials for Pioneer Capital
Growth Fund (the Fund) explaining the proposals up for a vote at the April 21,
1998 shareowner meeting. WE NEED YOU TO CAST YOUR VOTE!
If you have not already completed and returned the yellow proxy card included in
our earlier package, PLEASE TAKE A MOMENT NOW TO COMPLETE THE ENCLOSED PROXY
CARD AND MAIL IT TO US IN THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your prompt
response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
PROPOSAL 1:
APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT CORPORATION (PMC),
including a performance-based management. Depending upon the Fund's investment
performance, relative to a selected securities index, the fee paid by the Fund
may be lower or higher than the proposed basic fee. The proposed basic fee is
higher than the management fee currently paid by the Fund to PMC.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A) 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
1097-4524
<PAGE>
Pioneer Equity-Income Fund
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
Not too long ago we sent you a proxy card and materials for Pioneer
Equity-Income Fund (the Fund) explaining the proposals up for a vote at the
April 21, 1998 shareowner meeting. WE NEED YOU TO CAST YOUR VOTE!
If you have not already completed and returned the yellow proxy card included in
our earlier package, PLEASE TAKE A MOMENT NOW TO COMPLETE THE ENCLOSED PROXY
CARD AND MAIL IT TO US IN THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your prompt
response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
PROPOSAL 1:
APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT CORPORATION (PMC).
Depending upon the Fund's asset levels, the proposed fee rate may represent an
increase or a decrease in PMC's current management fee rate stated as a percent
of the Fund's average daily net assets.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
1097-4522
<PAGE>
Pioneer Gold Shares
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
Not too long ago we sent you a proxy card and materials for Pioneer Gold Shares
(the Fund) explaining the proposals up for a vote at the April 21, 1998
shareowner meeting. WE NEED YOU TO CAST YOUR VOTE!
If you have not already completed and returned the yellow proxy card included in
our earlier package, PLEASE TAKE A MOMENT NOW TO COMPLETE THE ENCLOSED PROXY
CARD AND MAIL IT TO US IN THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your prompt
response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
Proposals 1(a) and 1(b) are not applicable to Pioneer Gold Shares shareowners.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A), 4(B)AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.
1097-4520
<PAGE>
Pioneer Capital Growth Fund
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
TIME IS RUNNING OUT. You have not yet returned the proxy cards we sent for
voting on the proposals for consideration at the April 21, 1998 shareowner
meeting. WE NEED YOU TO CAST YOUR VOTE TODAY!
Voting now will help save money. If a majority of shareowners have not voted
before April 21, we must delay the meeting and begin the proposal and voting
process all over again. This would be extremely costly.
If you have not already completed and returned your proxy card, PLEASE TAKE A
MOMENT NOW TO COMPLETE THE ENCLOSED YELLOW PROXY CARD AND MAIL IT TO US TODAY IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your
immediate response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
PROPOSAL 1: APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT
CORPORATION (PMC), including a
performance-based management fee. Depending upon the Fund's investment
performance, relative to a selected securities index, the fee paid by the Fund
may be lower or higher than the proposed basic fee. The proposed basic fee is
higher than the management fee currently paid by the Fund to PMC.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES
YOU OWN.
- ---------
<PAGE>
Pioneer Equity-Income Fund
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
TIME IS RUNNING OUT. You have not yet returned the proxy cards we sent for
voting on the proposals for consideration at the April 21, 1998 shareowner
meeting. WE NEED YOU TO CAST YOUR VOTE TODAY!
Voting now will help save money. If a majority of shareowners have not voted
before April 21, we must delay the meeting and begin the proposal and voting
process all over again. This would be extremely costly.
If you have not already completed and returned your proxy card, PLEASE TAKE A
MOMENT NOW TO COMPLETE THE ENCLOSED YELLOW PROXY CARD AND MAIL IT TO US TODAY IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your
immediate response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
PROPOSAL 1:
APPROVE A NEW MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT CORPORATION (PMC).
Depending upon the Fund's asset levels, the proposed fee rate may represent an
increase or a decrease in PMC's current management fee rate stated as a percent
of the Fund's average daily net assets.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES
YOU OWN.
- ---------
<PAGE>
Pioneer Gold Shares
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE YOUR SHARES TODAY
Dear Fellow Shareowner,
TIME IS RUNNING OUT. You have not yet returned the proxy cards we sent for
voting on the proposals for consideration at the April 21, 1998 shareowner
meeting. WE NEED YOU TO CAST YOUR VOTE TODAY!
Voting now will help save money. If a majority of shareowners have not voted
before April 21, we must delay the meeting and begin the proposal and voting
process all over again. This would be extremely costly.
If you have not already completed and returned your proxy card, PLEASE TAKE A
MOMENT NOW TO COMPLETE THE ENCLOSED YELLOW PROXY CARD AND MAIL IT TO US TODAY IN
THE POSTAGE-PAID ENVELOPE PROVIDED.
The proposals in the Proxy Statement have been reviewed by the Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.
VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN.
Please feel free to call us at 1-800-225-6292 if you have any questions about
the proposals or the process for voting your shares. Thank you for your
immediate response.
Sincerely,
John F. Cogan, Jr.
Chairman and President
<PAGE>
[back page]
Here is what a FOR vote means for each of the proposals being considered.
Proposals 1(a) and 1(b) are not applicable to Pioneer Gold Shares shareowners.
PROPOSAL 2:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees.
PROPOSAL 3:
ALLOW THE FUND TO BE REORGANIZED AS A SEPARATE DELAWARE BUSINESS TRUST.
Currently, Pioneer Growth Trust is registered as a single Massachusetts business
trust with three funds, one of which is your Fund. As a separate Delaware
business trust, the Fund and its shareowners could benefit from a decreased
possibility of shareowner and trustee liability and various potential operating
efficiencies described in the Proxy Statement.
PROPOSALS 4(A), 4(B) AND 4(C):
MODERNIZE CERTAIN INVESTMENT RESTRICTIONS to conform to current standards in the
mutual fund industry. The Trustees believe the proposed changes are appropriate
and necessary to provide future flexibility in the Fund's investment operations.
For details on each of the proposed changes, we encourage you to review the
Proxy Statement.
PROPOSAL 5:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending October 31, 1998.
PLEASE VOTE TODAY! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES
YOU OWN.
- ---------
