As filed with the Securities and Exchange Commission on March 30, 1995.
File Nos. 33-47613
811-6657
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
Pre-Effective Amendment No. __
/----/
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Post-Effective Amendment No. 3 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 / X /
Amendment No. 4 /_X_ /
(Check appropriate box or boxes)
PIONEER SHORT-TERM INCOME TRUST
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(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
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(Address of principal executive office) Zip Code
Registrant's Telephone Number, including Area Code: (617) 742-7825
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Joseph P. Barri, Esq., Hale and Dorr,
60 State Street, Boston, MA 02109
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(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box)
/____/ immediately upon filing pursuant to paragraph (b), or
/_X__/ on March 30, 1995 pursuant to paragraph (b), or
/____/ 60 days after filing pursuant (a), or
/____/ on (date) pursuant to paragraph (a) of Rule 485
The Registrant has registered an indefinite number of shares pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant filed
the notice required by Rule 24f-2 for its most recent fiscal year on or about
January 28, 1995.
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
CLASS A AND CLASS B SHARES
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form
<TABLE>
<CAPTION>
Location in Prospectus
or Statement of
Form N-1A Item Number and Caption Additional Information
<S> <C>
1. Cover Page............................Prospectus - Cover Page
2. Synopsis..............................Prospectus - Expense Information
3. Condensed Financial Information.......Prospectus - Financial Highlights
4. General Description of Registrant.....Prospectus - Investment Objective
and Policies; The Trust
5. Management of the Fund................Prospectus - Management of the Trust
6. Capital Stock and Other Securities....Prospectus -Investment Objective
and Policies; The Trust
7. Purchase of Securities Being Offered..Prospectus - Trust Share Alternatives; How to Buy
Trust Shares; Shareholder Services; Distribution
Plans
8. Redemption or Repurchase..............Prospectus - Trust Share Alternatives;
How to Sell Trust Shares; Shareholder
Services
9. Pending Legal Proceedings.............Not Applicable
10. Cover Page............................Statement of Additional Information - Cover Page
11. Table of Contents.....................Statement of Additional Information - Cover Page
<PAGE>
12. General Information and History.......Statement of Additional Information - Cover Page;
Description of Shares
13. Investment Objectives and Policies....Statement of Additional Information
- Investment Policies and Restrictions
14. Management of the Fund................Statement of Additional Information
- Management of the Trust; Investment Adviser
15. Control Persons and Principal Holders
of Securities.......................Statement of Additional Information
- Management of the Trust
16. Investment Advisory and Other
Services............................Statement of Additional Information
- Management of the Trust; Investment
Adviser; Shareholder Servicing/Transfer Agent;
Underwriting Agreement
and Distribution Plans;
Custodians; Independent Accountants
17. Brokerage Allocation and Other
Practices...........................Statement of Additional Information
- Portfolio Transactions
18. Capital Stock and Other Securities....Statement of Additional Information
- Description of Shares; Certain Liabilities
19. Purchase Redemption and Pricing of
Securities Being Offered............Statement of Additional Information
- Determination of Net Asset Value;
Letter of Intention; Systematic Withdrawal Plan
20. Tax Status............................Statement of Additional Information
- Tax Status
<PAGE>
21. Underwriters..........................Statement of Additional Information
- Principal Underwriter; Underwriting
Agreement and Distribution Plans
22. Calculation of Performance Data.......Statement of Additional Information
- Investment Results
23. Financial Statements..................Balance Sheet; Report of Independent
Public Accountants
</TABLE>
<PAGE>
[Pioneer logo]
Pioneer
Short-Term Income
Trust
Class A and Class B Shares
Prospectus
March 30, 1995
The investment objective of the Pioneer Short-Term Income Trust (the "Trust")
is a high level of current income consistent with a relatively high level of
principal stability. The Trust is a diversified open-end investment company.
The Trust invests primarily in high grade, short-term debt securities. Under
normal circumstances, the Trust invests at least 85% of its total assets in
securities issued or guaranteed by the United States ("U.S.") government or
its agencies or instrumentalities and other debt securities of U.S. and
foreign issuers rated within the three highest grades by the major recognized
rating services or, if not rated, judged to be of comparable quality by the
Trust's investment adviser. The Trust may invest the remainder of its
portfolio in debt securities rated in the fourth highest grade by the major
rating services or, if not rated, judged to be of comparable quality. The
Trust invests only in securities with remaining maturities of five years or
less. Under normal circumstances, the Trust will maintain a dollar weighted
average maturity of not more than three years.
The Trust is designed for investors seeking:
* a higher level of current income than normally provided by money market
investments; and
* less price volatility than investments in intermediate and long-term fixed
income securities.
Unlike certain money market instruments, an investment in the Trust is
neither insured nor guaranteed and its net asset value will fluctuate. The
Trust's yield will normally be more sensitive to interest rate fluctuations
than that of a fund investing primarily in securities with intermediate or
long-term remaining maturities.
The value of your account upon redemption may be more or less than your
purchase price. Shares in the Trust are not deposits or obligations of, or
guaranteed or endorsed by, any bank or other depository institution, and the
shares are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.
This Prospectus (Part A of the Registration Statement) provides the
information about the Trust that you should know before investing. Please
read and retain it for your future reference. More information about the
Trust is included in the Statement of Additional Information (Part B of the
Registration Statement), also dated March 30, 1995, which is incorporated
into this Prospectus by reference. A copy of the Statement of Additional
Information may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Trust at 60 State Street, Boston,
Massachusetts 02109. Additional information about the Trust has also been
filed with the Securities and Exchange Commission (the "SEC") and is
available upon request and without charge.
TABLE OF CONTENTS PAGE
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
IV. MANAGEMENT OF THE TRUST 6
V. TRUST SHARE ALTERNATIVES 7
VI. SHARE PRICE 7
VII. HOW TO BUY TRUST SHARES 8
Class A Shares 8
Class B Shares 9
VIII. HOW TO SELL TRUST SHARES 10
IX. HOW TO EXCHANGE TRUST SHARES 11
X. DISTRIBUTION PLANS 12
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 13
XII. SHAREHOLDER SERVICES 13
Account and Confirmation Statements 13
Additional Investments 14
Automatic Investment Plans 14
Financial Reports and Tax Information 14
Distribution Options 14
Directed Dividends 14
Direct Deposit 14
Voluntary Tax Withholding 14
Telephone Transactions and Related Liabilities 14
Retirement Plans 14
Telecommunications Device for the Deaf (TDD) 14
Systematic Withdrawal Plans 15
Reinstatement Privilege (Class A Shares Only) 15
XIII. THE TRUST 15
XIV. INVESTMENT RESULTS 15
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Trust. The table reflects estimated annual operating expenses based on
actual expenses for the fiscal year ended November 30, 1994.
Class A Class B
Shareholder Transaction Expenses:
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) 2.50% none
Maximum Sales Charge on Reinvestment
of Dividends none none
Maximum Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable) none(1) 2.00%
Redemption Fee(2) none none
Exchange Fee none none
Annual Operating Expenses
(as a percentage of average net assets):(3)
Management Fees(4) 0.50% 0.50%
12b-1 Fees 0.25% 1.00%
Other Expenses Estimated (including
accounting expenses and transfer agent,
professional and registration fees) 0.45% 0.32%
Total Operating Expenses 1.20% 1.82%
Management Fee Reduction and Expense Limitation (0.35)% (0.41)%
Net Operating Expenses 0.85% 1.41%
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject to
a contingent deferred sales charge as further described under "How to Sell
Trust Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) Class B shares were first offered April 4, 1994.
(4) Pioneering Management Corporation ("PMC") has agreed not to impose a
portion of its management fee and to make other arrangements, if necessary,
to limit other operating expenses of the Fund to the extent required to
reduce Class A expenses to 0.85% of the average daily net assets attributable
to Class A shares; the portion of fund-wide expenses attributable to Class B
shares will be reduced only to the extent such expenses are reduced for Class
A shares. This agreement is voluntary and temporary and may be revised or
terminated at any time.
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return and redemption at the end of each of the time periods:
1 Year 3 Years 5 Years 10 Years
Class A Shares $33 $52 $71 $128
Class B Shares
--Assuming complete redemption
at end of period $34 $55 $77 $133*
--Assuming no redemption $14 $45 $77 $133*
* Class B shares convert to Class A shares five years after purchase;
therefore, Class A expenses are used after year five.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual fund
expenses and return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Trust, including information regarding the basis upon which
fees and expenses are reduced or reallocated, see "Management of the Trust,"
"Distribution Plans" and "How To Buy Trust Shares" in this Prospectus and
"Management of the Trust" and "Underwriting Agreement and Distribution Plans"
in the Statement of Additional Information. The Trust's imposition of a 12b-1
fee may result in long-term shareholders indirectly paying more than the
economic equivalent of the maximum sales charge permitted under the Rules of
Fair Practice of the National Association of Securities Dealers, Inc.
("NASD").
The maximum initial sales charge is reduced on purchases of specified amounts
of Class A shares and the value of shares owned in other Pioneer mutual funds
is taken into account in determining the applicable initial sales charge. See
"How to Buy Trust Shares." No sales charge is applied to exchanges of shares
of the Trust for shares of other publicly available Pioneer mutual funds. See
"How to Exchange Trust Shares."
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from the financial statements of
the Trust which have been audited by Arthur Andersen LLP, independent public
accountants, in connection with their examination of the Fund's financial
statements. Arthur Andersen LLP's report on the Trust's financial statements
for the fiscal year ending November 30, 1994 appears in the Trust's Annual
Report, which is incorporated by reference in the Statement of Additional
Information. The information listed below should be read in conjunction with
the financial statements contained in the Annual Report. The Annual Report
includes more information about the Trust's performance and is available free
of charge by calling Shareholder Services at 1-800-225-6292.
PIONEER SHORT-TERM INCOME TRUST
Financial Highlights for Each Class A Share Outstanding Throughout Each
Period:
<TABLE>
<CAPTION>
August 10
For the Year Ended to
November 30 November 30
1994+ 1993 1992
<S> <C> <C> <C>
Net asset value, beginning of period $ 3.95 $ 3.95 $ 4.00
Income from investment operations:
Net investment income $ 0.22 $ 0.24 $ 0.08
Net realized and unrealized loss on investments (0.21) 0.00 (0.05)
Total income from investment operations $ 0.01 $ 0.24 $ 0.03
Distributions to shareholders from:
Net investment income $ (0.21) $ (0.24) $ (0.08)
Net decrease in net asset value $ (0.20) $ 0.00 $ (0.05)
Net asset value, end of period $ 3.75 $ 3.95 $ 3.95
Total return* 0.32% 6.28% 0.79%
Ratio of net operating expenses to average net assets 0.85% 0.66% 0.50%**
Ratio of net investment income to average net assets 5.89% 5.80% 5.93%**
Portfolio turnover rate 49.09% 83.25% 146.45%**
Net assets, end of period (in thousands) $59,088 $57,482 $15,588
Ratios assuming no reduction of fees or expenses by PMC:
Net operating expenses 1.20% 1.33% 3.40%**
Net investment income 5.54% 5.13% 3.03%**
</TABLE>
Financial Highlights for Each Class B Share Outstanding
Throughout Each Period:***
April 4
to
November 30, 1994+
Net asset value, beginning of period $ 3.89
Income from investment operations:
Net investment income $ 0.15
Net realized and unrealized loss on investments (0.16)
Total loss from investment operations $(0.01)
Distributions to shareholders from:
Net investment income $(0.13)
Net decrease in net asset value $(0.14)
Net asset value, end of period $ 3.75
Total return* (0.24%)
Ratio of net operating expenses to average net assets 1.41%**
Ratio of net investment income to average net assets 6.05%**
Portfolio turnover rate 49.09%
Net assets, end of period (in thousands) $3,182
Ratios assuming no reduction of fees or expenses by PMC:
Net operating expenses 1.82%**
Net investment income 5.64%**
+Based upon average shares outstanding and average net assets for the
period presented.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
***Class B shares were first offered on April 4, 1994.
<PAGE>
III. INVESTMENT OBJECTIVE AND POLICIES
The Trust's investment objective is a high level of current income consistent
with a relatively high level of principal stability. The Trust invests in:
* Debt securities issued or guaranteed by the U.S. government or its agencies
or instrumentalities;
* Other debt securities including corporate debt securities such as bonds,
notes and debentures; mortgage-backed securities including collateralized
mortgage obligations; other asset-backed securities; debt securities of
foreign issuers including foreign corporations, banks, governments and
supranational organizations; and commercial paper, including variable and
floating rate paper; and
* Short-term money market instruments including time deposits and
certificates of deposit maturing in one year or less, repurchase agreements
maturing in one week or less, and banker's acceptances.
Although the Trust may invest without limit in short-term obligations of
foreign issuers when PMC as the Trust's investment adviser deems it
advantageous to do so, under normal circumstances not more than 25% of the
Trust's total assets will be invested in securities of foreign issuers (see
"Foreign Investments" below). The Fund may also purchase securities on a
"when-issued" or forward commitment basis and may lend portfolio securities
having a value up to 5% of its total assets.
Quality
Under normal circumstances, the Trust invests at least 85% of its total
assets in securities that are issued or guaranteed by the U.S. government or
its agencies or instrumentalities or that are rated in the highest three
grades by the major recognized rating services or, if unrated, are judged to
be of comparable quality by PMC. The remainder of the Trust's investments
must be rated within the four highest grades of the major rating services
(i.e., at least "Baa" by Moody's Investors Service or "BBB" by Standard &
Poor's Ratings Group, or their equivalents) or, if not rated, judged to be of
comparable quality. Securities rated BBB or Baa are considered investment
grade securities having adequate capacity to pay interest and repay
principal. Such securities may have speculative characteristics, however, and
changes in economic and other conditions are more likely to lead to a
weakened capacity of the issuer of such securities to make principal and
interest payments than is the case with higher rated securities. In the event
that the credit quality of a security falls below investment grade subsequent
to purchase, the Trust will sell such security as soon as PMC determines it
is prudent to do so. No more than 5% of the Trust's assets may be invested in
securities that are rated below investment grade. For a description of
ratings, see the Statement of Additional Information.
Maturity
The dollar-weighted average maturity of the Trust's portfolio will not exceed
three years. Generally, the Trust invests only in securities with remaining
maturities of five years or less. For purposes of these policies, an
instrument will be treated as having a maturity earlier than its stated
maturity date if the instrument has technical features (such as puts, demand,
prepayment or redemption features) or a variable rate of interest which,
based on projected cash flows from the instrument, will in the judgment of
PMC result in the instrument being valued in the market as though it has the
earlier maturity. If a security's estimated remaining maturity changes from
under five years to over five years, PMC will decide either to sell or retain
the security based on its determination of the best interests of the Trust.
U.S. Government Securities and
Mortgage and Other Asset Backed Securities
Subject to its policies concerning remaining maturities and average portfolio
maturity, the Trust may invest in a variety of U.S. government securities,
including (1) U.S. Treasury obligations, which differ only in their interest
rates, stated maturities and times of issuance: U.S. Treasury bills (stated
maturities of one year or less), U.S. Treasury notes (stated maturities of
one to ten years) and U.S. Treasury bonds (generally stated maturities of
greater than ten years) and (2) obligations of varying stated maturities
issued or guaranteed by certain agencies and instrumentalities of the U.S.
government, such as mortgage participation certificates guaranteed by the
Government National Mortgage Association ("GNMA"), the Federal National
Mortgage Association ("FNMA") and the Federal Home Loan Mortgage Corporation
("FHLMC") and Federal Housing Administration debentures.
Certain U.S. government securities, including U.S. Treasury bills, notes and
bonds, and GNMA certificates, are supported by the full faith and credit of
the United States. Certain other U.S. government securities issued or
guaranteed by Federal agencies or government sponsored enterprises, such as
securities of the Federal Home Loan Banks, are not supported by the full
faith and credit of the U.S., but may be supported by the right of the issuer
to borrow from the U.S. Treasury. Other obligations, such as those of FHLMC
and FNMA, are supported by the discretionary authority of the U.S. government
to purchase the agency's securities although it has no legal obligation to do
so. Still other obligations are supported only by the credit of the
instrumentality itself.
GNMA, FHLMC and FNMA, as well as private entities, issue mortgage-backed
securities which provide monthly payments which are, in effect, a
"pass-through" of the monthly interest and principal payments (including any
prepayments) made by the individual borrowers on the pooled mortgage loans.
Private issuers of such securities include banks, broker-dealers, mortgage
corporations and other financial institutions.
The Trust may invest in collateralized mortgage obligations ("CMOs"), which
are obligations fully collateralized by a portfolio of mortgages or
mortgage-related securities. Payments of principal and interest on the
mortgages are passed through to the holders of the CMOs on the same schedule
as they are received, although certain classes of CMOs have priority over
others with respect to the receipt of prepayments on the mortgages.
Therefore, depending on the type of CMOs in which the Trust invests, the
investment may be subject to a greater or lesser risk of prepayment than
other types of mortgage-related securities. A real estate mortgage investment
conduit ("REMIC") is a form of CMO that qualifies for special tax treat-
<PAGE>
ment under the Internal Revenue Code of 1986, as amended (the "Code"). The
Trust may acquire "regular" interests in REMICs but does not intend, under
current tax law, to acquire residual interests in REMICs. Mortgage-backed
securities may be less effective than traditional debt obligations of similar
maturity at maintaining yields during periods of declining interest rates.
Other asset-backed securities in which the Trust may invest represent
interests in pools of consumer loans unrelated to mortgage loans and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend on payment of the underlying loans by individuals,
although the securities may be supported by letters of credit or other credit
enhancements. The value of such asset-backed securities may also depend on
the creditworthiness of the servicing agent for the loan pool, the originator
of the loans or the financial institution providing the credit enhancement.
Foreign Investments
Under normal circumstances the Trust does not invest more than 25% of its
total assets in the securities of foreign issuers (which term excludes for
these purposes Canadian issuers). When PMC believes, however, that it is in
the best interest of the Trust, the Trust may invest without any limitation
in short-term foreign debt securities. These foreign investments may be
issued by foreign governments, banks or corporations, as well as foreign
branches of U.S. banks and certain supranational organizations such as the
World Bank and the European Community. The Trust's foreign investments may be
denominated in U.S. dollars or selected foreign currencies. Foreign
investments are subject to the Trust's quality and maturity policies
described above.
Investing in securities of foreign companies and countries involves certain
considerations and risks which are not typically associated with investing in
U.S. government securities and securities of domestic companies. Foreign
companies are not subject to uniform accounting, auditing and financial
standards and requirements comparable to those applicable to U.S. companies.
There may also be less government supervision and regulation of foreign
securities exchanges, brokers and listed companies than exists in the United
States. Interest paid by foreign issuers may be subject to withholding and
other foreign taxes which will decrease the net return on such investments as
compared to interest paid to the Trust by the U.S. government or by domestic
companies. In addition, there may be the possibility of expropriation,
confiscatory taxation, political, economic or social instability, or
diplomatic developments which could affect assets of the Trust held in
foreign countries.
In addition, the value of foreign securities may also be adversely affected
by fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. There may be less
publicly available information about foreign companies compared to reports
and ratings published about U.S. companies. Foreign securities markets have
substantially less trading volume than domestic markets and securities of
some foreign companies are less liquid and more volatile than securities of
comparable U.S. companies. Transaction costs on foreign securities exchanges
are generally higher than in the U.S.
The Trust's investments in securities denominated in foreign currencies are
also subject to currency risk, as the U.S. dollar value of these securities
may be favorably or unfavorably affected by changes in foreign currency
exchange rates and exchange control regulations. Currency exchange rates may
fluctuate significantly over short periods of time causing, among other
factors, the Trust's net asset value to fluctuate as well. Currency exchange
rates are generally determined by forces of supply and demand and the
perceived relative merits of investments in various countries, but can be
affected unpredictably by intervention from U.S. and foreign governments or
central banks, political events and currency control measures.
The Trust has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes
in foreign currency exchange rates. A forward foreign currency contract
involves an obligation to purchase or sell a specific currency on a future
date, at a price set at the time of the contract. The Trust might sell a
foreign currency on either a spot or forward basis to hedge against an
anticipated decline in the dollar value of securities in its portfolio or
securities it intends or has contracted to sell or to preserve the U.S.
dollar value of dividends, interest or other amounts it expects to receive.
Although this strategy could minimize the risk of loss due to a decline in
the value of the hedged foreign currency, it could also limit any potential
gain which might result from an increase in the value of the currency.
Alternatively, the Trust might purchase a foreign currency or enter into a
forward purchase contract for the currency to preserve the U.S. dollar price
of securities it is authorized to purchase or has contracted to purchase.
The Trust may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated
in a different currency, if PMC determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include
entering into a forward transaction involving two foreign currencies, using
one foreign currency as a proxy for the U.S. dollar to hedge against
variations in the other foreign currency if PMC determines that there is a
pattern of correlation between the proxy currency and the U.S. dollar. To the
extent that the expected correlation between two particular currencies is
imperfect, a forward transaction will not be an effective hedge and the Trust
may be exposed to a loss, which loss may exceed the loss that would have
occurred if a cross-hedge were not attempted.
If the Trust enters into a forward contract to buy foreign currency for any
purpose, the Trust will be required to place cash or high grade liquid debt
securities in a segregated account of the Trust in an amount equal to the
value of the Trust's total assets committed to the consummation of the
forward contract. The Trust may enter into forward currency contracts having
an intrinsic value of up to 25% of its net assets. Forward contracts are
subject to the risk that the counterparty to such contract will default on
its obligations.
<PAGE>
Since a forward contract is not guaranteed by an exchange or clearinghouse, a
default would deprive the Trust of unrealized profits or the benefits of a
currency hedge and may force the Trust to cover its purchase or sale
commitments, if any, at the current market price.
Portfolio Trading
The Trust's portfolio is fully managed by purchasing and selling securities,
as well as holding selected securities to maturity. While the Trust does not
normally engage in trading for short-term profits, the Trust engages in
portfolio trading of securities regardless of the length of time the Trust
has held the securities if it believes a transaction net of costs (including
custodian's fees) will contribute to the achievement of its investment
objective.
Any such changes in the portfolio may result in increases or decreases in the
Trust's current income available for distribution to shareholders and in its
holding of debt securities which sell at moderate to substantial premiums or
discounts from face value. If the Trust's expectations of changes in interest
rates or its evaluation of the normal yield relationships between two
securities prove to be incorrect, the Trust's income, net asset value and
potential gain may be reduced or its potential loss may be increased. An
increase in interest rates will generally reduce the value of portfolio
investments (and, therefore, the net asset value of the shares of the Trust),
and a decline in interest rates will generally increase their value.
The Trust does not expect that its portfolio turnover rate will exceed 200%.
A high rate of portfolio turnover (i.e., 100% or higher) will result in
correspondingly higher transaction costs to the Trust and may, under some
circumstances, make it more difficult for the Trust to qualify as a regulated
investment company under the Code.
Repurchase Agreements
The Trust may enter into repurchase agreements, generally not exceeding seven
days. Such repurchase agreements will be fully collateralized with U.S.
Treasury and/or U.S. government agency obligations with a market value of not
less than 100% of the obligation, valued daily. Collateral will be held by
the Trust's custodian in a segregated, safekeeping account for the benefit of
the Trust. In the event that a repurchase agreement is not fulfilled, the
Trust could suffer a loss to the extent that the value of the collateral
falls below the repurchase price or if the Trust is prevented from realizing
the value of the collateral by reason of an order of a court with
jurisdiction over an insolvency proceeding with respect to the other party to
the repurchase agreement.
The Trust's investment objective is fundamental and cannot be changed without
shareholder approval. Other investment policies and restrictions are
described in the Statement of Additional Information. Since all investments
are subject to risks and fluctuations in value due to economic conditions and
other factors, there can be no assurance that the Trust will achieve its
investment objective.
IV. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for management and
supervision of the Trust. There are currently eight Trustees, six of whom are
not "interested persons" of the Trust as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"). The Board meets at least quarterly.
By virtue of the functions performed by PMC as investment adviser, the Trust
requires no employees other than its executive officers, all of whom receive
their compensation from PMC or other sources. The Statement of Additional
Information contains the names and general business and professional
background of each Trustee and executive officer of the Trust.
Each fixed income portfolio managed by PMC, including the Trust, is overseen
by a Fixed Income Committee, which consists of PMC's most senior fixed income
professionals, and a Portfolio Management Committee, which consists of PMC's
fixed income portfolio managers. Both committees are chaired by Mr. David
Tripple, PMC's President and Chief Investment Officer and Executive Vice
President of each of the Pioneer mutual funds. Mr. Tripple joined PMC in 1974
and has had general responsibility for PMC's investment operations and
specific portfolio assignments for over five years. Fixed income investments
at PMC, including those made on behalf of the Trust, are under the general
supervision of Mr. Sherman Russ, a Senior Vice President of PMC. Mr. Russ
joined PMC in 1983. Day-to-day management of the Trust is the responsibility
of Richard A. Schlanger who joined PMC in 1988 and is Vice President of PMC
and of the Trust. In certain instances where Mr. Schlanger is unavailable,
primary responsibility for the day-to-day management of the Trust may be
assumed temporarily by Mr. Russ.
The Trust is managed under a contract with PMC. PMC serves as investment
adviser to the Trust and is responsible for the overall management of the
Trust's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a publicly-traded Delaware corporation. Pioneer Funds Distributor,
Inc. ("PFD"), a wholly-owned subsidiary of PGI, is the principal underwriter
of shares of the Trust.
In addition to the Trust, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Trust, PMC assists in the management
of the Trust and is authorized in its discretion to buy and sell securities
for the account of the Trust. PMC pays all the expenses, including executive
salaries and the rental of office space, relating to its services for the
Trust, with the exception of the following which are to be paid by the Trust:
(a) taxes and other governmental charges, if any; (b) interest on borrowed
money, if any; (c) legal fees and expenses; (d) auditing fees; (e) insurance
premiums; (f) dues and fees for membership in trade associations; (g) fees
and expenses of registering and maintaining registrations by the Trust of its
shares with the SEC, individual states, territories and foreign jurisdictions
and of preparing reports to government agencies; (h) fees and expenses of
Trustees not affiliated with or interested persons of PMC; (i) fees and
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expenses of the custodian, dividend disbursing agent, transfer agent and
registrar; (j) issue and transfer taxes chargeable to the Trust in connection
with securities transactions to which the Trust is a party; (k) costs of
reports to shareholders, shareholders' meetings and Trustees' meetings; (l)
the cost of certificates representing shares of the Trust; (m) bookkeeping
and appraisal charges; and (n) certain distribution fees pursuant to its plan
of distribution. The Trust also pays all brokerage commissions in connection
with its portfolio transactions.
Orders for the Trust's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund. See the Statement of Additional
Information for a further description of PMC's brokerage allocation
practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.50% per annum of the
Trust's average daily net assets up to $100 million, 0.45% of the next $200
million, and 0.40% on assets over $300 million. The fee is normally computed
daily and paid monthly.
During the fiscal year ended November 30, 1994, the Trust incurred expenses
of $815,063, including management fees paid or payable to PMC of $337,731.
Effective December 31, 1993, PMC agreed not to impose a portion of its
management fee and to make other arrangements, if necessary, to limit other
operating expenses of the Fund to the extent required to reduce Class A
expenses to 0.85% of the average daily net assets attributable to Class A
shares; the portion of fund-wide expenses attributable to Class B shares will
be reduced only to the extent such expenses are reduced for Class A shares.
This agreement is voluntary and temporary and may be revised or terminated at
any time. During the fiscal year ended November 30, 1994, this agreement
resulted in PMC's reduction of management fees in the amount of $235,347.
John F. Cogan, Jr., Chairman and President of the Trust, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of the date of
this Prospectus.
V. TRUST SHARE ALTERNATIVES
The Trust continuously offers two Classes of shares designated as Class A and
Class B shares, as described more fully in "How to Buy Trust Shares." If you
do not specify in your instructions to the Trust which Class of shares you
wish to purchase, exchange or redeem, the Trust will assume that your
instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a contingent deferred
sales charge ("CDSC"). Class A shares are subject to distribution and service
fees at a combined annual rate of up to 0.25% of the Trust's average daily
net assets attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 2% if redeemed within three years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Trust's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is available to work for you
from the time you make your investment, but the higher distribution fee paid
by Class B shares will cause your Class B shares (until conversion) to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class B shares will automatically convert to Class
A shares, based on relative net asset value, approximately five years after
the initial purchase.
Purchasing Class A or Class B Shares. The decision as to which Class to
purchase depends on the amount you invest, the intended length of the
investment and your personal situation. If you are making an investment that
qualifies for reduced sales charges, you might consider Class A shares. If
you prefer not to pay an initial sales charge on an investment of $250,000 or
less and you plan to hold the investment for at least three years, you might
consider Class B shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer fund and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Trust originally purchased. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSCs and dealer compensation arrangements in
accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Trust are sold at the public offering price, which is the net
asset value per share plus any applicable sales charge. Net asset value per
share of a Class of the Trust is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the New York Stock Exchange (the "Exchange") is open, as of the
close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation, or securities for which sales prices are not generally reported,
are valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Trust's independent pricing services.
Generally, trading in foreign securities is substantially
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completed each day at various times prior to the close of regular trading on
the Exchange. The values of such securities used in computing the net asset
value of the Trust's shares are determined as of such times. Foreign currency
exchange rates are also generally determined prior to the close of regular
trading on the Exchange. Occasionally, events which affect the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of regular trading on the Exchange and will
therefore not be reflected in the computation of the Trust's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities are valued at their fair value as determined in
good faith by the Trustees. All assets of the Trust for which there is no
other readily available valuation method are valued at their fair value as
determined in good faith by the Trustees.
VII. HOW TO BUY TRUST SHARES
You may buy Trust shares at the public offering price from any securities
broker-dealer which has a sales agreement with PFD. If you do not have a
securities broker-dealer, please call 1-800-225-6292 for assistance.
The minimum initial investment is $5,000 for Class A and Class B shares
except as specified below. The minimum initial investment is $100 for Class A
accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $100 for Class A shares
and $500 for Class B shares except that the subsequent minimum investment
amount for Class B share accounts may be as little as $50 if an automatic
investment plan is established (see "Automatic Investment Plans").
Class A Shares
You may buy Class A shares at the public offering price, that is, at the net
asset value per share next computed after receipt of a purchase order, plus a
sales charge as follows:
Dealer
Sales Charge as a % of Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
Less than $50,000 2.50% 2.56% 2.00%
$50,000 but less than
$100,000 2.00 2.06 1.75
$100,000 but less than
$250,000 1.50 1.52 1.25
$500,000 but less than
$1,000,000 1.00 1.01 1.00
$1,000,000 or more -0- -0- see below
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain group plans ("Group Plans")
(described below) subject to a CDSC of 0.50% which may be imposed in the
event of a redemption of Class A shares within 12 months of purchase. See
"How to Sell Trust Shares." PFD may, in its discretion, pay a commission to
broker-dealers who initiate and are responsible for such purchases as
follows: 0.50% on sales of $1 million to $5 million; and 0.10% on the excess
over $5 million. These commissions will not be paid if the purchaser is
affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell Trust Shares." In connection with PGI's acquisition of
Mutual of Omaha Fund Management Company and contingent upon the achievement
of certain sales objectives, PFD pays to Mutual of Omaha Investor Services,
Inc. 50% of PFD's retention of any sales commission on sales of the Trust's
Class A shares through such dealer.
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Internal Revenue Code of 1986, as
amended (the "Code"), although more than one beneficiary is involved. The
sales charges applicable to a current purchase of Class A shares of the Fund
by a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of
shares of any of the other Pioneer mutual funds previously purchased and then
owned (except directly purchased Class A shares of Pioneer Money Market
Trust), provided PFD is notified by such person or his or her broker-dealer
each time a purchase is made which would qualify. Pioneer mutual funds
include all mutual funds for which PFD serves as principal underwriter. See
the "Letter of Intention" section of the Account Application.
Qualifying for a Reduced Sales Charge. Class A shares of the Trust may be
sold at a reduced or eliminated sales charge to certain Group Plans under
which a sponsoring organization makes recommendations to, permits group
solicitation of, or otherwise facilitates purchases by, its employees,
members or participants. Information about such arrangements is available
from PFD.
Class A shares of the Trust may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Trust and partners or employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiaries or affiliates of such persons; (d) current or former officers,
partners, employees or registered representatives of broker-dealers which
have entered into sales agreements with PFD; (e) members of the immediate
<PAGE>
families of any of the persons above; (f) any trust, custodian, pension,
profit-sharing or other benefit plan of the foregoing persons; (g) insurance
company separate accounts; (h) certain "wrap accounts" for the benefit of
clients of financial planners adhering to standards established by PFD; (i)
other funds and accounts for which PMC or any of its affiliates serves as
investment adviser or manager; and (j) certain unit investment trusts. Shares
so purchased are purchased for investment purposes and may not be resold
except through redemption or repurchase by or on behalf of the Trust. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. In addition, Class A shares of a Fund
may be sold at net asset value per share without a sales charge to Optional
Retirement Program participants if (i) the employer has authorized a limited
number of investment providers for the Program, (ii) all authorized providers
offer their shares to Program participants at net asset value, (iii) the
employer has agreed in writing to actively promote the authorized investment
providers to Program participants and (iv) the Program provides for a
matching contribution for each participant contribution. Class A shares of
the Trust may also be issued at net asset value without a sales charge in
connection with certain reorganization, liquidation or acquisition
transactions involving other investment companies or personal holding
companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Trust shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention procedure, including
its terms, is contained in the Statement of Additional Information. Investors
who are clients of a broker-dealer with a current sales agreement with PFD
may purchase Class A shares of the Trust at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from
one or more redemptions by the investor of shares of certain other mutual
funds. In order for a purchase to qualify for this privilege, the investor
must document to the broker-dealer that the redemption occurred within 60
days immediately preceding the purchase of Class A shares of the Trust; that
the client paid a sales charge on the original purchase of the shares
redeemed; and that the mutual fund whose shares were redeemed also offers net
asset value purchases to redeeming shareholders of any of the Pioneer mutual
funds. Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within three years of
purchase will be subject to a CDSC at the rates shown in the table below. The
charge will be assessed on the amount equal to the lesser of the current
market value or the original purchase cost of the shares being redeemed. No
CDSC will be imposed on increases in account value above the initial purchase
price, including shares derived from the reinvestment of dividends or capital
gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Trust will first redeem shares not subject to any CDSC, and then
shares held longest during the three-year period. As a result, you will pay
the lowest possible CDSC.
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
First 2.0%
Second 2.0%
Third 1.0%
Fourth and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Trust in connection with the sale of Class B shares, including the
payment of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is five years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For this purpose,
Class B shares acquired through reinvestment of distributions will be
attributed to particular purchases of Class B shares in accordance with such
procedures as the Trustees may determine from time to time. The conversion of
Class B shares to Class A shares is subject to the continuing availability of
a ruling from the Internal Revenue Service ("IRS"), which the Trust has
obtained, or an opinion of counsel that such conversions will not constitute
taxable events for federal tax purposes. There can be no assurance that such
ruling or opinion will continue to be in effect at the time any particular
conversion would normally occur. The conversion of Class B shares to Class A
shares will not occur if such ruling or opinion is no longer available and,
therefore, Class B shares would continue to be subject to higher expenses
than Class A shares for an indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares and on any Class A shares subject to a CDSC may be waived or reduced for
non-retirement accounts if: (a) the redemption results from the death of all
registered owners of an account (in the case of UGMAs, UTMAs and trust accounts,
waiver applies upon the death of all beneficial owners) or a total and permanent
disability (as defined in Section 72 of the Code) of all registered owners
occurring after the purchase of the shares being redeemed or (b) the redemption
is made in connection with limited automatic redemptions as set forth in
"Systematic Withdrawal Plans" (limited in any year to 10% of the value of the
account in the Trust at the time the withdrawal plan is established).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may be
waived or reduced for retirement plan accounts if: (a) the redemption results
from the death or a
<PAGE>
total and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareholder or participant
in an employer-sponsored retirement plan; (b) the distribution is to a
participant in an Individual Retirement Account ("IRA"), 403(b) or
employer-sponsored retirement plan, is part of a series of substantially equal
payments made over the life expectancy of the participant or the joint life
expectancy of the participant and his or her beneficiary or as scheduled
periodic payments to a participant (limited in any year to 10% of the value of
the participant's account at the time the distribution amount is established; a
required minimum distribution due to the participant's attainment of age 70-1/2
may exceed the 10% limit only if the distribution amount is based on plan assets
held by Pioneer); (c) the distribution is from a 401(a) or 401(k) retirement
plan and is a return of excess employee deferrals or employee contributions or a
qualifying hardship distribution as defined by the Code or results from a
termination of employment (limited with respect to a termination to 10% per year
of the value of the plan's assets in the Trust as of the later of the prior
December 31 or the date the account was established unless the plan's assets are
being rolled over to or reinvested in the same class of shares of a Pioneer
mutual fund subject to the CDSC of the shares originally held); (d) the
distribution is from an IRA, 403(b) or employer-sponsored retirement plan and is
to be rolled over to or reinvested in the same class of shares in a Pioneer
mutual fund and which will be subject to the applicable CDSC upon redemption;
(e) the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which will
be subject to the applicable CDSC upon redemption); or (f) the distribution is
from a qualified defined contribution plan and represents a participant's
directed transfer (provided that this privilege has been pre-authorized through
a prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may be
waived or reduced for either non-retirement or retirement plan accounts if: (a)
the redemption is made by any state, county, or city, or any instrumentality,
department, authority, or agency thereof, which is prohibited by applicable laws
from paying a CDSC in connection with the acquisition of shares of any
registered investment management company; or (b) the redemption is made pursuant
to the Trust's right to liquidate or involuntarily redeem shares in a
shareholder's account.
Broker-Dealers. An order for either Class of Trust shares received by PFD
from a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General. The Trust reserves the right in its sole discretion to withdraw all
or any part of the offering of shares when, in the judgment of the Trust's
management, such withdrawal is in the best interest of the Trust. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL TRUST SHARES
You can arrange to sell (redeem) Trust shares on any day the Exchange is open
by selling (redeeming) either some or all of your shares to the Trust.
You may sell your shares either through your broker-dealer or directly to the
Trust.
* If you are selling shares from a retirement account, you must make your
request in writing (except for exchanges to other Pioneer mutual funds which
can be requested by phone or in writing). Call 1-800-622-0176 for more
information.
* If you are selling shares from a non-retirement account, you may use any of
the methods described below.
Your shares will be sold at the share price next calculated after your order
is received and accepted less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
accepted. The Trust reserves the right to withhold payment of the sale
proceeds until checks received by the Trust in payment for the shares being
sold have cleared, which may take up to 15 calendar days from the purchase
date.
In Writing. You may sell your shares by delivering a written request in good
order to Pioneering Services Corporation ("PSC"), however, you must use a
written request, including a signature guarantee, to sell your shares if any
of the following situations applies:
* you wish to sell over $50,000 worth of shares,
* your account registration or address has changed within the last 30 days,
* the check is not being mailed to the address on your account (address of
record),
* the check is not being made out to the account owners, or
* the sale proceeds are being transferred to a Pioneer account with a different
registration.
Your request should include your name, the Trust's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the
sale to the address of record. Fiduciaries or corporations are required to
submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good order
and accepted by PSC. Good order means that there are no outstanding claims or
requests to hold redemptions on the account, certificates are endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) are
guaranteed by an eligible guarantor. You should be able to obtain a signature
guarantee from a bank, broker, dealer, credit union (if authorized under
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by
<PAGE>
facsimile ("fax"). For additional information about the necessary
documentation for redemption by mail, please contact PSC at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be required
for each telephone redemption. The telephone redemption option is not available
to retirement plan accounts. A maximum of $50,000 may be redeemed by telephone
or fax and the proceeds may be received by check or by bank wire. To receive the
proceeds by check: the check must be made payable exactly as the account is
registered and the check must be sent to the address of record which must not
have changed in the last 30 days. To receive the proceeds by bank wire: the wire
must be sent to the bank wire address of record which must have been properly
pre-designated either on your Account Application or on an Account Options Form
and which must not have changed in the last 30 days. To redeem by fax, send your
redemption request to 1-800-225-4240. You may always elect to deliver redemption
instructions to PSC by mail. See "Telephone Transactions and Related
Liabilities" below. Telephone and fax redemptions will be priced as described
above.
By Check. If requested by you, the Trust will establish a checking account
for you with The First National Bank of Omaha (the "Bank"). Checks may be
drawn for not less than $500 nor more than $250,000. When a check is
presented to the Bank for payment, it will cause the Trust to redeem, at the
net asset value next determined after presentation, a sufficient number of
your shares to cover the check. You will receive the daily dividends declared
on your shares until the day the check clears. Please allow 1 to 2 weeks for
receipt of personalized checks.
The checking account will be subject to the Bank's rules and regulations
governing checking accounts. If there is an insufficient number of shares in
your account when a check is presented to the Bank for payment, the check
will be returned.
Since the aggregate value of a shareholder's account in the Trust changes
each day, you should not attempt to withdraw the full amount in your account
by using a check. The checkwriting privilege is generally not available for
retirement plan accounts or accounts subject to backup withholding (see
"Retirement Plans" below).
Selling Shares Through Your Broker-Dealer. The Trust has authorized PFD to
act as its agent in the repurchase of shares of the Trust from qualified
broker-dealers and reserves the right to terminate this procedure at any
time. Your broker-dealer must receive your request before the close of
business on the Exchange and transmit it to PFD before PFD's close of
business to receive that day's redemption price. Your broker-dealer is
responsible for providing all necessary documentation to PFD and may charge
you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of the
Trust in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Trust may redeem the shares held
in this account at net asset value if you have not increased the net asset
value of the account to at least the minimum required amount within six
months of notice by the Trust to you of the Trust's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more, or
by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 0.50% of the lesser of the value
of the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original 12-month period expires. However, no
CDSC is payable with respect to purchases of Class A shares by 401(a) or
401(k) retirement plans with 1,000 or more eligible participants or with at
least $10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any period
in which any of the following conditions exist: the Exchange is closed or
trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Trust of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Trust to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The net
asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE TRUST SHARES
You may not exchange Class A shares of the Trust, except as noted below, for
shares of any other Pioneer funds for a period of 12 months following their
purchase; following this 12-month period, you may exchange your Class A
shares of the Trust at net asset value, without a sales charge, for shares of
the same Class of any other publicly available Pioneer mutual fund. Accounts
established under a Group Plan and Class A shares purchased at net asset
value without a sales charge are exempt from the 12-month holding period
requirement. Accounts established to utilize Automatic Exchange (see below)
for scheduled periods of 12 months or longer meet this minimum holding
period. Not all Pioneer mutual funds offer more than one Class of shares.
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
fund out of which you wish to exchange and the name of the fund into which
you wish to exchange, your fund account number(s), the Class of shares to be
exchanged and the dollar amount or number of shares to be exchanged. Written
exchange requests must be signed by all record owner(s) exactly as the shares
are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless
<PAGE>
you indicated otherwise on your Account Application or by writing to PSC.
Proper account identification will be required for each telephone exchange.
Telephone exchanges may not exceed $500,000 per account per day. All
telephone exchange requests will be recorded. See "Telephone Transactions and
Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
account for shares of the same Class in another Pioneer account on a monthly
or quarterly basis. The accounts must have identical registrations and the
originating account must have a minimum balance of $5,000. The exchange will
be effective on the 18th day of the month.
General. Exchanges must be at least $1,000. A new Pioneer account opened
through an exchange must have a registration identical to that on the
original account.
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of an
exchange. Shares acquired in an exchange will be subject to the CDSC of the
shares originally held. For purposes of determining the amount of any
applicable CDSC, the length of time you have owned Class B shares acquired by
exchange will be measured from the date you acquired the original shares and
will not be affected by any subsequent exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements below have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Trust exchanged and a purchase of shares in another
fund. Therefore, an exchange could result in a gain or loss on the shares
sold, depending on the tax basis of these shares and the timing of the
transaction, and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making
any exchange. To prevent abuse of the exchange privilege to the detriment of
other Trust shareholders, the Trust and PFD reserve the right to limit the
number and/or frequency of exchanges and/or to charge a fee for exchanges.
The exchange privilege may be changed or discontinued and may be subject to
additional limitations, including certain restrictions on purchases by market
timer accounts.
X. DISTRIBUTION PLANS
The Trust has adopted a Plan of Distribution for both Class A shares ("Class
A Plan") and Class B shares ("Class B Plan") in accordance with Rule 12b-1
under the 1940 Act pursuant to which certain distribution and service fees
are paid.
Pursuant to the Class A Plan, the Trust reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Trust's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Trust: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Trust's
daily net assets attributable to Class A shares; (ii) reimbursement to PFD
for its expenditures for broker-dealer commissions and employee compensation
on certain sales of the Trust's Class A shares with no initial sales charge
(See "How to Buy Trust Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Trust pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Trust's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Trust in a given year. The Class A
Plan may not be amended to increase materially the annual percentage
limitation of average net assets which may be spent for the services
described therein without approval of the shareholders of the Trust. The
Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the Trust is first invoiced for an expense.
The limited carryover provision in the Class A Plan may result in an expense
invoiced to the Trust in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Trust as having been incurred in the subsequent fiscal
year. In the event of termination or non-continuance of the Class A Plan,
the Trust has 12 months to reimburse any expense which it incurs prior to
such termination or non-continuance, provided that payments by the Trust
during such 12-month period shall not exceed 0.25% of the Trust's average
daily net assets during such period.
The Class B Plan provides that the Trust will pay a distribution fee at the
annual rate of 0.75% of the Trust's average daily net assets attributable to
Class B shares and will pay PFD a service fee at the annual rate of 0.25% of
the Trust's average daily net assets attributable to Class B shares. The
distribution fee is intended to compensate PFD for its distribution services
to the Trust. The service fee is intended to be additional compensation for
personal services and/or account maintenance services with respect to Class B
shares. PFD also receives the proceeds of any CDSC imposed on the redemption
of Class B shares.
Commissions of 2%, equal to 1.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase
price
<PAGE>
of such shares and, as compensation therefor, PFD may retain the service fee
paid by the Trust with respect to such shares for the first year after
purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Trust has elected to be treated, has qualified, and intends to qualify
each year as a "regulated investment company" under Subchapter M of the Code
so that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Trust will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed ordinary income and capital
gains if it fails to meet certain distribution requirements with respect to
each calendar year. The Trust intends to make distributions in a timely
manner and accordingly does not expect to be subject to the excise tax.
A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Trust's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of
its assets is attributable to) certain U.S. government securities, provided
in some states that certain thresholds for holdings of such securities and/or
reporting requirements are satisfied. The Trust will report annually to its
shareholders the percentage of interest income earned from U.S. government
securities during the preceding year. Each shareholder is advised to consult
his own tax adviser regarding the exemptions, if any, available under
applicable state and local law.
In computing its income for dividend purposes, the Trust attempts to conform
its accounting to the requirements for federal income tax purposes.
Each business day the Trust declares a dividend consisting of substantially
all of the Trust's net investment income (which includes earned interest and
certain other income, less expenses). Shareholders begin earning dividends on
the first business day following receipt of payment for purchased shares.
Shares continue to earn dividends up to and including the date of redemption.
Dividends are normally paid on the last business day of the month or shortly
thereafter. Monthly distributions may also include a portion of any original
issue discount, market discount, income from securities lending, certain net
realized foreign exchange gains, and any net short-term capital gains
realized by the Trust. Distributions from net long-term capital gains, if
any, will be made annually, generally in December. Additional distributions
may be made at such times as may be necessary to avoid federal income or
excise tax on the Trust.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Trust. The Trust's monthly dividend distributions from the sources described
above are taxable as ordinary income, and dividends from the Trust's net
long-term capital gains are taxable as long-term capital gains, regardless
of your holding period for the shares of the Trust. For federal income tax
purposes, all dividends are taxable as described above, whether a shareholder
takes them in cash or reinvests them in additional shares of the Trust.
Information as to the federal tax status of dividends and distributions will
be provided annually. For further information on the distribution options
available to shareholders, see "Distribution Options" and "Directed
Dividends" below.
The Trust may be subject to foreign withholding taxes or other foreign taxes
on income (possibly including some capital gains) from certain foreign
investments. The Trust expects that it generally will not qualify to pass
such taxes through to its shareholders, who consequently generally will
neither include such taxes in their gross incomes nor be entitled to
associated foreign tax credits or deductions.
Dividends and other distributions and the proceeds of redemptions,
repurchases or exchanges of Trust shares paid to individuals and other
non-exempt payees will be subject to a 31% backup withholding of federal
income tax if the Trust is not provided with the shareholder's correct
taxpayer identification number and certification that the number is correct
and the shareholder is not subject to such backup withholding or the Trust
receives notice from the IRS or a broker that such withholding applies.
Please refer to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents, or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income taxes. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisers regarding state, local and
other applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Trust.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O.
Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co.
("the Custodian") serves as the custodian of the Trust's portfolio securities
and other assets. The principal business address of the mutual funds division
of the Custodian is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders as transactions occur,
except automatic investment plan transactions which are confirmed quarterly.
The Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer account.
<PAGE>
Shareholders whose shares are held in the name of a broker-dealer or other party
will not normally have an account with the Trust and might not be able to
utilize some of the services available to shareholders of record. Examples of
services that might not be available are investment or redemption of shares by
mail, automatic reinvestment of dividends and capital gains distributions,
withdrawal plans, Letters of Intention, Rights of Accumulation, telephone
exchanges and redemptions and newsletters.
Additional Investments
You may add to your account by sending a check ($100 minimum for Class A
shares and $500 for Class B shares) to PSC (account number and Class of
shares should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer Investomatic
Plan, are invested in full and fractional shares of the Trust at the
applicable offering price in effect as of the close of the Exchange on the
day of receipt.
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized electronic funds transfer
or draft drawn on a checking account. Pioneer Investomatic Plan investments
are voluntary and you may discontinue the Plan without penalty upon 30 days'
written notice to PSC. PSC acts as agent for the purchasers, the
broker-dealer and PFD in maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semi-annually.
In January of each year the Trust will mail to you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Trust, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer mutual fund. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations; i.e., "PGI IRA Cust for John Smith"
may only go into another account registered "PGI IRA Cust for John Smith."
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking or NOW bank account. You may establish this service by completing
the appropriate section on the Account Application when opening a new account
or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gain distributions paid from an account (before any reinvestment) and
forward the amount withheld to the IRS as a credit against federal income
taxes. This option is not available for retirement plan accounts or for
accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may sell or exchange your Trust shares by telephone by
calling 1-800-225-6292 between 8:00 a.m. and 8:00 p.m. Eastern Time on
weekdays. See "Share Price" for more information. To confirm that each
transaction instruction received by telephone is genuine, the Trust will
record each telephone transaction, require the caller to provide the personal
identification number (PIN) for the account and send you a written
confirmation of each telephone transaction. Different procedures may apply to
accounts that are registered to non-U.S. citizens or that are held in the
name of an institution or in the name of an investment broker-dealer or other
third-party. If reasonable procedures, such as those described above, are not
followed, the Trust may be liable for any loss due to unauthorized or
fraudulent instructions. The Trust may implement other procedures from time
to time. In all other cases, neither the Trust, PSC or PFD will be
responsible for the authenticity of instructions received by telephone,
therefore, you bear the risk of loss for unauthorized or fraudulent telephone
transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the
Trust by telephone to institute a redemption or exchange. You should
communicate with the Trust in writing if you are unable to reach the Trust by
telephone.
Retirement Plans
Interested persons should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to retirement plans for businesses,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
Section 401(k) salary reduction plans and Section 403(b) retirement plans for
employees of certain non-profit organizations and public school systems, all
of which are available in conjunction with investments in the Trust. The
Account Application accompanying this Prospectus should not be used to
establish such plans. Separate applications are required.
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and your own TDD keyboard equipment, you can
call our TDD number toll-free at 1-800-
<PAGE>
225-1997, weekdays from 8:30 a.m. to 5:30 p.m. Eastern Time, to contact our
telephone representatives with questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000, you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the plan is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information. Periodic
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable
to you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Trust at a
time when you have a SWP in effect may result in the payment of unnecessary
sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Trust, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Trust if you send a written request to PSC not more
than 90 days after your shares were redeemed. Your redemption proceeds will
be reinvested at the next determined net asset value of the Class A shares of
the Trust in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules apply if a reinvestment
occurs. Subject to the provisions outlined under "How to Exchange Trust
Shares" above, you may also reinvest in Class A shares of other Pioneer
mutual funds; in this case you must meet the minimum investment requirements
for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the Trust. You may
establish the services described in this section when you open your account.
You may also establish or revise many of them on an existing account by
completing an Account Options Form, which you may obtain by calling
1-800-225-6292.
XIII. THE TRUST
The Trust is an open-end diversified management investment company (commonly
referred to as a mutual fund) organized as a Massachusetts business trust on
August 10, 1992. The Trust has authorized an unlimited number of shares of
beneficial interest and the Trustees are authorized to create additional
series of the Trust. The Trust is not required to hold annual meetings,
although special meetings may be called for the purposes of electing or
removing Trustees, changing fundamental investment restrictions or approving
a management contract. The Trustees have the authority, without further
shareholder approval, to classify and reclassify the shares of the Trust, or
any new series of the Trust, into one or more classes. As of the date of this
Prospectus, the Trustees have authorized the issuance of two Classes of
shares, designated Class A and Class B. The shares of each Class represent an
interest in the same portfolio of investments of the Trust. Each Class has
equal rights as to voting, redemption, dividends and liquidation, except that
each Class bears different distribution and transfer agent fees and may bear
other expenses properly attributable to the particular Class. Class A and
Class B shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares.
XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Trust may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal
or state income taxes. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 2.50%; for Class B
shares the calculation reflects the deduction of any applicable CDSC. The
periods illustrated would normally include one, five and ten years (or since
the commencement of the public offering of the shares of a Class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited to
historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Trust's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or to unmanaged market indexes,
indicators of economic activity or averages of mutual funds results may be
cited or compared with the investment results of the Trust. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Trust's investment results will vary from time to time depending on
market conditions, the composition of the Trust's portfolio and operating
expenses of the Trust. All quoted investment results are historical and
should not be considered representative of what an investment in the Trust
may earn in any future period. For further information about the calculation
methods and uses of the Trust's investment results, see the Statement of
Additional Information.
<PAGE>
[Pioneer logo]
Pioneer
Short-Term
Income Trust
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
RICHARD A. SCHLANGER, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call...
Existing accounts and new accounts, prospectuses,
applications, service forms and
telephone transactions .................................... 1-800-225-6292
Automated fund yields, prices and
account information ....................................... 1-800-225-4321
Retirement plans ........................................... 1-800-622-0176
Toll-free fax .............................................. 1-800-225-4240
Telecommunications Device for the Deaf (TDD) ............... 1-800-225-1997
0395-2370
(C) Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A and Class B Shares
March 30, 1995
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus dated March 30, 1995 of Pioneer Short-Term Income Trust (the
"Trust"). A copy of the Prospectus can be obtained free of charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the Trust at 60
State Street, Boston, Massachusetts 02109. The Annual Report to Shareholders
dated November 30, 1994 is attached to this Statement of Additional Information
and is hereby incorporated in this Statement of Additional Information by
reference.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions.........................2
2. Management of the Trust......................................8
3. Investment Adviser...........................................13
4. Underwriting Agreement and Distribution Plans................14
5. Shareholder Servicing/Transfer Agent.........................16
6. Custodian....................................................17
7. Principal Underwriter........................................17
8. Independent Public Accountants...............................18
9. Portfolio Transactions.......................................18
10. Tax Status...................................................20
11. Description of Shares........................................23
12. Certain Liabilities..........................................24
13. Determination of Net Asset Value.............................25
14. Systematic Withdrawal Plan...................................26
15. Letter of Intention..........................................26
16. Investment Results...........................................27
Appendix A...................................................A-1
Appendix B...................................................B-1
Appendix C...................................................C-1
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Prospectus (the "Prospectus") of Pioneer Short-Term Income Trust
(the "Trust") identifies the investment objective and the principal investment
policies of the Trust. Other investment policies of the Trust are set forth
below. The Trust's investment adviser is Pioneering Management Company ("PMC").
Asset-Backed Securities
The Trust may invest in asset-backed securities, which are securities
that represent a participation in, or are secured by and payable from, a stream
of payments generated by particular assets, most often a pool or pools of
similar assets (e.g., trade receivables). The credit quality of these securities
depends primarily upon the quality of the underlying assets and the level of
credit support and/or enhancement provided.
The underlying assets (e.g., loans) are subject to prepayments which
shorten the securities' weighted average maturity and may lower their return. If
the credit support or enhancement is exhausted, losses or delays in payment may
result if the required payments of principal and interest are not made. The
value of these securities also may change because of changes in the market's
perception of the creditworthiness of the servicing agent for the pool, the
originator of the pool, or the financial institution providing the credit
support or enhancement.
Mortgage-Backed Securities
The Trust may invest in mortgage-backed securities issued or guaranteed
by the U.S. government, its agencies or instrumentalities and private entities.
Some of these securities, such as GNMA certificates, are backed by the full
faith and credit of the U.S. Treasury while others, such as Freddie Mac
certificates, are not.
Mortgage-backed securities are securities representing interests in a
pool of mortgages. Principal and interest payments made on the mortgages in the
underlying mortgage pool are passed through to the Trust. Unscheduled
prepayments of principal shorten the securities' weighted average life and may
lower their total return. The value of these securities also may change because
of changes in the market's perception of the creditworthiness of the federal
agency that issued them. In addition, the mortgage securities market in general
may be adversely affected by changes in governmental regulations or tax
policies.
2
<PAGE>
When-Issued Securities
The Trust may from time to time purchase securities on a "when-issued"
basis, provided that at any time not more than 5% of the Trust's net assets may
consist of "when-issued" securities. The price of such securities, which may be
expressed in yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment for the when-issued securities take place at a
later date. It is possible that the value of such securities will increase or
decrease prior to the Trust's actual receipt of them. Normally, the settlement
date occurs within one month of the purchase.
Securities of Foreign Issuers
The Trust may invest in securities issued by foreign issuers and
securities of foreign branches of U.S. banks, such as negotiable certificates of
deposit. Such investments are subject to the Trust's quality and maturity
standards (set forth in the Prospectus).
Forward Foreign Currency Transactions
The foreign currency transactions of the Trust may be conducted on a
spot, i.e., cash, basis at the spot rate for purchasing or selling currency
prevailing in the foreign exchange market. The Trust also has authority to deal
in forward foreign currency exchange contracts involving currencies of the
different countries in which it will invest as a hedge against possible
variations in the foreign exchange rate between these currencies and the U.S.
dollar. This is accomplished through contractual agreements to purchase or sell
a specified currency at a specified future date and price set at the time of the
contract. The Trust's dealings in forward foreign currency contracts will be
limited to hedging either specific transactions or portfolio positions.
Transaction hedging is the purchase or sale of forward foreign currency
contracts with respect to specific receivables or payables of the Trust accruing
in connection with the purchase and sale of its portfolio securities denominated
in foreign currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in such
foreign currencies. There is no guarantee that the Trust will be engaged in
hedging activities when adverse exchange rate movements occur. The Trust will
not attempt to hedge all of its foreign portfolio positions and will enter into
such transactions only to the extent, if any, deemed appropriate by the Trust's
investment adviser. The Trust will not enter into speculative forward foreign
currency contracts.
If the Trust enters into a forward contract to purchase foreign
currency, its custodian bank will segregate cash or high grade liquid debt
securities in a separate account of the Trust in an amount equal to the value of
the Trust's total assets committed to the consummation of such forward contract.
3
<PAGE>
Those assets will be valued at market daily and if the value of the assets in
the separate account declines, additional cash or securities will be placed in
the account so that the value of the account will equal the amount of the
Trust's commitment with respect to such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the Trust to hedge against a devaluation that is so generally
anticipated that the Trust is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The cost to the Trust of engaging in foreign currency transactions
varies with such factors as the currency involved, the size of the contract, the
length of the contract period and the market conditions then prevailing. Since
transactions in foreign currency and forward contracts are usually conducted on
a principal basis, no fees or commissions are involved. The Trust may close out
a forward position in a currency by selling the forward contract or entering
into an offsetting forward contract.
Lending of Portfolio Securities
The Trust may lend portfolio securities to member firms of the New York
Stock Exchange, under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or U.S. Treasury Bills
maintained on a current basis at an amount at least equal to the market value of
the securities loaned. The Trust would continue to receive the equivalent of the
interest paid by the issuer on the securities loaned and would also receive
compensation based on investment of the collateral. The Trust would not,
however, have the right to vote any securities having voting rights during the
existence of the loan, but would call the loan in anticipation of an important
vote to be taken among holders of the securities or of the giving or withholding
of their consent on a material matter affecting the investment.
As with other extensions of credit there are risks of delay in recovery
or even loss of rights in the collateral should the borrower of the securities
fail financially. The Trust has no present intention to engage in any material
portfolio lending in the future. The Trust will lend portfolio securities only
to firms which have been approved in advance by the Trust's Board of Trustees,
which will monitor the creditworthiness of any such firms. The value of the
securities loaned will not exceed 5% of the value of the Trust's total assets.
4
<PAGE>
Restricted Securities
The Trust may invest up to 5% of its total assets in "restricted
securities" (i.e., securities that would be required to be registered prior to
distribution to the public), including restricted securities eligible for resale
to certain institutional investors pursuant to Rule 144A under the Securities
Act of 1933. The Board of Trustees may adopt guidelines and delegate to PMC the
daily function of determining and monitoring the liquidity of restricted
securities. The Board, however, will retain sufficient oversight and be
ultimately responsible for the determinations. Since it is not possible to
predict with assurance exactly how this market for restricted securities sold
and offered under Rule 144A will develop, the Board will carefully monitor the
Trust's investments in these securities, focusing on such important factors,
among others, as valuation, liquidity and availability of information. This
investment practice could have the effect of increasing the level of illiquidity
in the Trust to the extent that qualified institutional buyers become for a time
uninterested in purchasing these restricted securities.
Investment Restrictions
Fundamental Investment Restrictions. The Trust has adopted certain
fundamental investment restrictions which may not be changed without the
affirmative vote of the holders of a majority of the Trust's outstanding voting
securities. As used in the Prospectus and Statement of Additional Information,
such approval means the approval of the lesser of (i) the holders of 67% or more
of the shares represented at a meeting if the holders of more than 50% of the
outstanding shares are present in person or by proxy, or (ii) the holders of
more than 50% of the outstanding shares.
The Trust may not:
(1) Issue senior securities, except as permitted by paragraphs (2), (6)
and (7) below. For purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts and repurchase agreements
entered into in accordance with the Trust's investment policy, and the pledge,
mortgage or hypothecation of the Trust's assets within the meaning of paragraph
(3) below are not deemed to be senior securities.
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33 1/3% of the Trust's
total assets (including the amount borrowed) taken at market value. The Trust
will not use leverage to attempt to increase income. The Trust will not purchase
securities while outstanding borrowings exceed 5% of the Trust's total assets.
5
<PAGE>
(3) Pledge, mortgage, or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the Trust's total assets
taken at market value.
(4) Act as an underwriter, except to the extent that, in connection
with the disposition of portfolio securities, the Trust may be deemed to be an
underwriter for purposes of the Securities Act of 1933.
(5) Purchase or sell real estate or any interest therein, except that
the Trust may invest in securities secured by real estate or marketable
interests therein or securities issued by companies (other than real estate
limited partnerships) that invest in real estate or interests therein.
(6) Make loans, except that the Trust may lend portfolio securities,
enter into repurchase agreements, and purchase bank certificates of deposit, a
portion of an issue of publicly distributed bonds, bank loan participation
agreements, bankers' acceptances, debentures and other securities, whether or
not the purchase is made upon the original issuance of the securities, in
accordance with its investment policies.
(7) Invest in commodities or commodity contracts or in puts, calls, or
combinations of both, except interest rate futures contracts, options on
securities, securities indices, currency and other financial instruments,
futures contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the Trust's
investment policies.
(8) Purchase securities of an issuer (other than the U.S. Government,
its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the Trust's
total assets taken at market value to be invested in the securities of
such issuer, or
(b) such purchase would at the time result in more than 10% of
the outstanding voting securities of such issuer being held by the
Trust.
With the exception of forward foreign currency exchange contracts,
forward commitments and repurchase agreements, the Trust does not intend to
invest more than 5% of its assets during the current fiscal year in any of the
investments permitted by the exceptions set forth in paragraph (7) above.
It is the policy of the Trust not to concentrate its investments in
securities of companies in any particular industry. In the opinion of the staff
6
<PAGE>
of the Securities and Exchange Commission (the "SEC"), investments are
concentrated in a particular industry if such investments aggregate 25% or more
of the Trust's total assets. The Trust's policy does not apply to investments in
U.S. Government Securities.
Non-fundamental Investment Restrictions. The following restrictions
have been designated as non-fundamental and may be changed by a vote of the
Trust's Board of Trustees without approval of shareholders. The Trust has agreed
to many of these non-fundamental restrictions in connection with the offering of
its shares in various states and foreign countries.
The Trust may not:
(a) Participate on a joint-and-several basis in any securities trading
account. The "bunching" of orders for the sale or purchase of marketable
portfolio securities with other accounts under the management of the Adviser to
save commissions or to average prices among them is not deemed to result in a
securities trading account.
(b) Purchase securities on margin or make short sales unless by virtue
of its ownership of other securities, the Trust has the right to obtain
securities equivalent in kind and amount to the securities sold and, if the
right is conditional, the sale is made upon the same conditions, except that the
Trust may obtain such short-term credits as may be necessary for the clearance
of purchases and sales of securities and in connection with transactions
involving forward foreign currency exchange transactions.
(c) Purchase a security if, as a result, (i) more than 10% of the
Trust's assets would be invested in securities of closed-end investment
companies, (ii) such purchase would result in more than 3% of the total
outstanding voting securities of any one such closed-end investment company
being held by the Trust, or (iii) more than 5% of the Trust's assets would be
invested in any one such closed-end investment company. The Trust will not
invest in the securities of any open-end investment company.
(d) Purchase securities of any issuer which, together with any
predecessor, has a record of less than three years' continuous operations prior
to the purchase if such purchase would cause investments of the Trust in all
such issuers to exceed 5% of the value of the total assets of the Trust.
(e) Invest in companies for the purpose of exercising control or
management.
(f) Purchase warrants of any issuer, if, as a result of such purchases,
more than 2% of the value of the Trust's net assets would be invested in
7
<PAGE>
warrants which are not listed on the New York Stock Exchange or the American
Stock Exchange or more than 5% of the value of the net assets of the Trust would
be invested in warrants generally, whether or not so listed. For these purposes,
warrants are to be valued at the lesser of cost or market, but warrants acquired
by the Trust in units with or attached to debt securities shall be deemed to be
without value.
(g) Knowingly purchase or retain securities of an issuer if one or more
of the Trustees or officers of the Trust or directors or officers of the Adviser
or any investment management subsidiary of the Adviser individually owns
beneficially more than 0.5% and together own beneficially more than 5% of the
securities of such issuer.
(h) Purchase interests in oil, gas or other mineral leases or
exploration programs; however, this policy will not prohibit the acquisition of
securities of companies engaged in the production or transmission of oil, gas or
other minerals.
(i) Invest in any security, including any repurchase agreement maturing
in more than seven days, which is illiquid if more than 15% of the total assets
of the Trust, taken at market value, would be invested in such securities.
(j) Purchase puts, calls, straddles, spreads and any combination
thereof if the value of its investment in such securities will exceed 5% of its
total assets.
(k) Write put or call options, or enter into futures contracts with
respect to more than 25% of its net assets.
Many of these restrictions may not be changed without the approval of
the regulatory agencies in such states or foreign countries.
2. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees provides broad supervision over the
affairs of the Trust. The officers of the Trust are responsible for the Trust's
operations. The Trustees and executive officers of the Trust are listed below,
together with their principal occupations during the past five years. An
asterisk indicates those Trustees who are interested persons of the Trust within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, President and Director of The
Chairman of the Board, Pioneer Group, Inc. ("PGI");
President and Trustee Chairman and Director of Pioneering
Management Corporation ("PMC");
Chairman of the Board and Chief
Executive Officer of Pioneer Winthrop
Advisers ("PWA") since 1993; Chairman
of the Board of Pioneer Funds
Distributor, Inc. ("PFD"); Director of
Pioneering Services Corporation ("PSC")
and Pioneer Capital Corporation
("PCC"); President and Director of
Pioneer Plans Corporation ("PPC"),
Pioneer Investment Corp. ("PIC"),
Pioneer International Corp. ("PIntl"),
and Pioneer Metals & Technology, Inc.
("PMT"); Chairman, President and
Director of Pioneer Goldfields Limited
("PGL"); Chairman of the Supervisory
Board of Pioneer Fonds Marketing GmbH;
and Chairman and Partner, Hale and Dorr
(counsel to the Trust).
RICHARD H. EGDAHL, M.D., Professor of Management, Boston
Trustee University School of Management;
53 Bay State Road Professor of Public Health,
Boston, Massachusetts Boston University School of Public
Health; Professor of Surgery, Boston
University School of Medicine and
Boston University Health Policy
Institute; Director, Boston University
Medical Center; Executive Vice
President and Vice Chairman of the
Board, University Hospital; Academic
Vice President for Health Affairs,
Boston University; Director, Essex
Investment Management Company, Inc.
(investment adviser), Health Payment
Review, Inc. (health care containment
software firm), Mediplex Group, Inc.
(nursing care facilities firm), Peer
Review Analysis, Inc. (health care
utilization management firm) and
Springer-Verlag New York, Inc.
(publisher); Honorary Director,
Franciscan Children's Hospital. Boston
University Health Policy Institute.
MARGARET B.W. GRAHAM, Manager of Research Operations,
Trustee Xerox Palo Alto Research Center,
The Keep since September 1991; Professor of
Post Office Box 110 Operations Management and Management
Little Deer Isle, Maine of Technology, Boston University
School of Management ("BUSM"), since
1989; Associate Dean, BUSM, 1988 to
1990 and previously, Associate
Professor, Department of Operations
Management, BUSM.
JOHN W. KENDRICK, Professor Emeritus, George
Trustee Washington University; Economic
6363 Waterway Drive Consultant and Director, American
Falls Church, Virginia Productivity and Quality Center.
MARGUERITE A. PIRET, President, Newbury, Piret & Company,
Trustee Inc. (a merchant banking firm).
One Boston Place,
Suite 2635
Boston, Massachusetts.
DAVID D. TRIPPLE*, Executive Vice President and
Trustee and Executive Director of PGI and PWA (since
Vice President 1993); Director of PFD,
since 1989; Director of PCC and Pioneer
SBIC Corporation; President (since
1993), Director and Chief Investment
Officer of PMC.
STEPHEN K. WEST, Partner, Sullivan & Cromwell (a law
Trustee firm).
125 Broad Street
New York, New York
JOHN WINTHROP, President, John Winthrop & Co., Inc.
Trustee (a private investment firm);
One North Adgers Wharf Director of NUI Corp., and Trustee
Charleston, South Carolina of Alliance Capital Reserves, Alliance
Government Reserves and Alliance Tax
Exempt Reserves.
RICHARD A. SCHLANGER, Vice President of PMC.
Vice President
WILLIAM H. KEOUGH, Senior Vice President, Chief
Treasurer Financial Officer and Treasurer of PGI
and Treasurer of PFD, PMC, PSC, PCC,
PPC, PIC, PIntl, PMT, PWA and Pioneer
SBIC Corporation.
JOSEPH P. BARRI, Secretary of PGI, PMC, PCC, PPC,
Secretary PIC, PIntl, PMT and PWA; Clerk
of PFD and PSC and Partner, Hale and
Dorr (counsel to the Trust).
ROBERT NAULT, General Counsel of PGI since 1995;
Assistant Secretary formerly of Hale and Dorr (counsel to
the Trust) where he most recently
served as a junior partner.
ERIC RECKARD, Manager of Fund Accounting
Assistant Treasurer and Compliance of PMC since
May, 1994; Manager of Auditing and
Business Analysis of PGI prior to May,
1994
Each of the above (except for Mr. Schlanger) is also an officer and/or
Trustee or Director of the Pioneer mutual funds (listed below).
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
<TABLE>
<CAPTION>
Investment Principal
Fund Name Adviser Underwriter
<S> <C> <C>
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Winthrop Real Estate Note 1 PFD
Investment Fund
Pioneer Europe Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double PMC PFD
Tax-Free Fund
Pioneer Cash Reserves Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 2
Pioneer Variable Contracts Trust PMC Note 3
-------------
Note 1 Pioneer Winthrop Advisers is the investment adviser for this
fund. Note 2 This is a closed-end fund and it is underwritten by Mellon
Bank.
Note 3 This is a series of seven separate portfolios designed to
provide investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
</TABLE>
The Trust's Declaration of Trust provides that the holders of
two-thirds of its outstanding shares may vote to remove a Trustee of the Trust
at any meeting of shareholders. See "Description of Shares" below. The business
address of all officers is 60 State Street, Boston, Massachusetts 02109.
At February 28, 1995, the Trustees and officers of the Trust
beneficially owned, in the aggregate, less than 1% of the outstanding shares of
the Trust. At February 28, 1995, Merrill Lynch Pierce Fenner & Smith, Inc. and
Donaldson Lufkin Jenrette Securities Corporation owned of record, respectively,
1,496,484 Class A shares (9.89% of the Class A shares outstanding), and 805,418
Class A shares (5.32% of the Class A shares outstanding) of the Trust. At
February 28, 1995, PGI Rollover IRA Cust for Robert E. Bramblett and Adler
Coleman Clearing Corporation owned of record, respectively, 29,432 Class B
shares (5.69% of the Class B shares outstanding) and 26,979 Class B shares
(5.21% of the Class B shares outstanding) of the Trust. All of the outstanding
capital stock of PMC and PSC is owned by PGI, a publicly-owned Delaware
corporation. All of the outstanding capital stock of PFD is owned by PMC. PMC,
the Trust's investment adviser, manages the investments of certain institutional
private accounts. Messrs. Cogan, Tripple, Keough, Schlanger, and Barri, officers
and/or Trustees of the Trust, are also officers and/or directors of PFD (except
Mr. Schlanger), PMC, PSC (except Mr. Tripple and Mr. Schlanger) and PGI (except
Mr. Schlanger).
To the knowledge of the Trust, no individual officer or Trustee of the
Trust owned 5% or more of the issued and outstanding shares of PGI on the date
of the Prospectus, except Mr. Cogan who then owned approximately 15% of such
shares. The Trust pays no salaries or compensation to any of its officers. The
Trust pays an annual trustees' fee of $500 to each Trustee who is not affiliated
with PMC, PFD or PSC and pays an annual trustees' fee of $500 plus expenses to
each Trustee affiliated with PMC, PFD or PSC.
<TABLE>
<CAPTION>
Total Compensation from
the Trust and other
Aggregate Retirement funds in the
Compensation Benefits Pioneer Family
Director From the Fund Accrued of Mutual Funds**
<S> <C> <C> <C>
John F. Cogan, Jr. $500* $0 $ 9,000*
Richard H. Egdahl, M.D. 500 0 55,650
Margaret B.W. Graham 500 0 55,650
John W. Kendrick 500 0 55,650
Marguerite A. Piret 750 0 66,650
David D. Tripple 500* 0 9,000*
Stephen K. West 700 0 63,650
John Winthrop 700 0 63,650
---- --- -------
Totals $4,650 $0 $378,900
===== =======
--------
<FN>
* PMC fully reimbursed the Trust and the other funds in the Pioneer Family of
Mutual Funds for compensation paid to Messrs. Cogan and Tripple.
** For the calendar year ended December 31, 1994.
</FN>
</TABLE>
Any fees and expenses paid to affiliates or interested persons of PMC,
PFD or PSC are reimbursed to the Trust under its Management Contract.
3. INVESTMENT ADVISER
The Trust has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. PMC assists in the management
of the Trust and is authorized in its discretion to buy and sell securities for
the account of the Trust, subject to the right of the Trust's trustees to
disapprove any such purchase or sale. A description of the services provided to
the Trust under the management contract and the expenses paid by the Trust under
the contract is set forth in the Prospectus under the caption "Management of the
Trust."
The management contract expires initially on April 30, 1994, but it is
renewable annually after such date by the vote of a majority of the Board of
Trustees of the Trust (including a majority of the Board of Trustees who are not
parties to the contract or interested persons of any such parties) cast in
person at a meeting called for the purpose of voting on such renewal. This
13
<PAGE>
contract terminates if assigned and may be terminated without penalty by either
party, by the giving of sixty days' written notice.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 0.50% per annum on the first $100
million; 0.45% on the next $200 million; and 0.40% on assets over $300 million.
The fee is normally computed daily and paid monthly.
Effective December 1, 1993, PMC agreed not to impose its management fee
to the extent necessary to limit the Trust's expenses to 0.85% of its average
daily net assets. This agreement is voluntary and temporary and may be revised
or terminated at any time.
During the fiscal years ended November 30, 1994 and 1993 and the period
from August 10, 1992 (commencement of operations) to November 30, 1992, PMC
would have earned management fees of $337,731, $156,492 and $12,343,
respectively, if a voluntary expense limitation had not been in effect. However,
pursuant to the expense limitation agreement described above, PMC reduced its
management fees during the fiscal year ended November 30, 1994 by $235,347, and,
PMC voluntarily agreed not to impose any management fees during the periods
ended November 30, 1993 and 1992.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Trust has entered into an Underwriting Agreement with PFD. The
Underwriting Agreement provides that PFD will bear any distribution expenses not
borne by the Trust.
PFD bears all expenses it incurs in providing services under the
Underwriting Agreement. Such expenses include compensation to its employees and
representatives and to securities dealers for distribution related services
performed for the Trust. PFD also pays certain expenses in connection with the
distribution of the Trust's shares, including the cost of preparing, printing
and distributing advertising or promotional materials, and the cost of printing
and distributing prospectuses and supplements to prospective shareholders. The
Trust bears the cost of registering its shares under federal, state and foreign
securities law.
The Trust and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Trust.
14
<PAGE>
The Trust has adopted a plan of distribution pursuant to Rule 12b-1
under the 1940 Act with respect to Class A shares (the "Class A Plan") and a
plan of distribution with respect to Class B shares (the "Class B Plan")
(together, the "Plans").
Class A Plan
Pursuant to the Class A Plan, the Trust may reimburse PFD for its
expenditures in financing any activity primarily intended to result in the sale
of Trust shares. Certain categories of such expenditures have been approved by
the Board of Trustees and are set forth in the Prospectus. See "Distribution
Plans" in the Prospectus. The expenses of the Trust pursuant to the Class A Plan
are accrued on a fiscal year basis and may not exceed, with respect to Class A
shares, the annual rate of 0.25% of the Trust's average annual net assets
attributable to Class A shares. The Plan does not provide for the carryover of
reimbursable expenses beyond twelve months from the date they are incurred.
Class B Plan
The Class B Plan provides that the Trust shall pay PFD, as the Trust's
distributor for its Class B shares, a daily distribution fee equal on an annual
basis to 0.75% of the Trust's average daily net assets attributable to Class B
shares and will pay PFD a service fee equal to 0.25% of the Trust's average
daily net assets attributable to Class B shares (which PFD will in turn pay to
securities dealers which enter into a sales agreement with PFD at a rate of up
to 0.25% of the Trust's average daily net assets attributable to Class B shares
owned by investors for whom that securities dealer is the holder or dealer of
record). This service fee is intended to be consideration for personal services
and/or account maintenance services rendered by the dealer with respect to Class
B shares. PFD will advance to dealers the first-year service fee at a rate equal
to 0.25% of the amount invested. As compensation therefore, PFD may retain the
service fee paid by the Trust with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the thirteenth month following purchase.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is
to compensate PFD for its distribution services to the Trust. PFD pays
commissions to dealers as well as expenses of printing prospectuses and reports
used for sales purposes, expenses with respect to the preparation and printing
15
<PAGE>
of sales literature and other distribution related expenses, including, without
limitation, the cost necessary to provide distribution-related services or
personnel, travel, office expenses and equipment. The Class B Plan also provides
that PFD will receive all CDSC's attributable to Class B shares. (See
"Distribution Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Trust
for review by the Trustees a quarterly written report of the amounts expended
under the respective Plan and the purpose for which such expenditures were made.
In the Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Trust, nor any Trustee of the Trust who is
not an interested person of the Trust, has any direct financial interest in the
operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Trust and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Trust, as defined in the 1940 Act (none of whom had or
have any direct or indirect financial interest in the operation of the Plans),
cast in person at a meeting called for the purpose of voting on the Plans. In
approving the Plans, the Trustees identified and considered a number of
potential benefits which the Plans may provide. The Board of Trustees believes
that there is a reasonable likelihood that the Plans will benefit the Trust and
its current and future shareholders. Under their terms, the Plans remain in
effect from year to year provided such continuance is approved annually by vote
of the Trustees in the manner described above. The Plans may not be amended to
increase materially the annual percentage limitation of average net assets which
may be spent for the services described therein without approval of the
shareholders of the Trust affected thereby, and material amendments of the Plans
must also be approved by the Trustees in the manner described above. A Plan may
be terminated at any time, without payment of any penalty, by vote of the
majority of the Trustees who are not interested persons of the Trust and have no
direct or indirect financial interest in the operation of the Plan, or by a vote
of a majority of the outstanding voting securities (as defined in the 1940 Act)
of the respective class of the Trust. A Plan will automatically terminate in the
event of its assignment (as defined in the 1940 Act).
16
<PAGE>
During the fiscal year ended November 30, 1994, the Trust incurred
total distribution fees pursuant to the Class A and Class B Plans of $167,207
and $6,632, respectively. Distribution fees were paid by the Trust to PFD in
reimbursement of expenses related to compensating dealers and sales personnel.
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Trust has contracted with PSC, 60 State Street, Boston,
Massachusetts, to act as shareholder servicing agent and transfer agent for the
Trust. This contract terminates if assigned and may be terminated without
penalty by either party by vote of its Board of Directors or Trustees or a
majority of its outstanding voting securities and the giving of ninety days'
written notice.
Under the terms of its contract with the Trust, PSC will service
shareholder accounts, and its duties will include: (i) processing sales,
redemptions and exchanges of shares of the Trust; (ii) distributing dividends
and capital gains associated with Trust portfolio accounts; and (iii)
maintaining account records and responding to routine shareholder inquiries.
PSC receives an annual fee of $22.45 per Class A and Class B
shareholder account from the Trust as compensation for the services described
above. This fee is set at an amount determined by vote of a majority of the
Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies.
6. CUSTODIAN
Brown Brothers Harriman (the "Custodian") is the custodian of the
Trust's assets. The Custodian's responsibilities include safekeeping and
controlling the Trust's cash and securities, handling the receipt and delivery
of securities, and collecting interest and dividends on the Trust's investments.
The Custodian does not determine the investment policies of the Trust or decide
which securities the Trust will buy or sell. The Trust may, however, invest in
securities, including repurchase agreements, issued by the Custodian and may
deal with the Custodian as principal in securities transactions. Portfolio
securities may be deposited into the Federal Reserve-Treasury Department Book
Entry System or the Depository Trust Company.
7. PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts, serves as the principal
underwriter for the Trust in connection with the continuous offering of its
shares.
The Trust will not generally issue Trust shares for consideration other
than cash. At the Trust's sole discretion, however, it may issue Trust shares
17
<PAGE>
for consideration other than cash in connection with an acquisition of portfolio
securities (other than municipal debt securities issued by state political
subdivisions or their agencies or instrumentalities) or pursuant to a bona fide
purchase of assets, merger or other reorganization provided (i) the securities
meet the investment objectives and policies of the Trust; (ii) the securities
are acquired by the Trust for investment and not for resale; (iii) the
securities are not restricted as to transfer either by law or liquidity of
market; and (iv) the securities have a value which is readily ascertainable (and
not established only by evaluation procedures) as evidenced by a listing on the
American Stock Exchange or the New York Stock Exchange or by quotation on the
NASD Automated Quotation System. An exchange of securities for Trust shares will
generally be a taxable transaction to the shareholder.
The Trust has elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which the Trust is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the Trust's net asset value during any 90-day
period for any one shareholder.
During the fiscal years ended November 30, 1994 and November 30, 1993
and the period from August 10, 1992 (commencement of operations) to November 30,
1992, net underwriting commissions earned by PFD in connection with its offering
of Trust shares were approximately $306,710, $617,000 and $173,000,
respectively. Commissions reallowed to dealers by PFD in the same periods were
approximately $257,537, $538,000 and $173,000, respectively.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP is the Trust's independent public accountant,
providing audit services, tax return review, and assistance and consultation
with respect to the preparation of filings with the Securities and Exchange
Commission.
9. PORTFOLIO TRANSACTIONS
The Trust intends to fully manage its portfolio by buying and selling
securities, as well as holding securities to maturity. In managing its
portfolio, the Trust seeks to take advantage of market developments and yield
disparities, which may include use of the following strategies:
(1) shortening the average maturity of its portfolio in anticipation of a
rise in interest rates so as to minimize depreciation of principal;
(2) lengthening the average maturity of its portfolio in anticipation of a
decline in interest rates so as to maximize yield;
(3) selling one type of debt security and buying another when disparities
arise in the relative values of each; and
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(4) changing from one debt security to an essentially similar
debt security when their respective yields appear distorted due to
market factors.
The Trust engages in portfolio trading if it believes a transaction net
of costs (including custodian charges) will help in achieving the Trust's
investment objective.
Decisions relating to the purchase and sale of securities for the
Trust, the allocation of portfolio transactions and, where applicable, the
negotiation of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in which and broker-dealers through which it seeks this result. Debt
securities are traded principally in the over-the-counter market on a net basis
through dealers acting for their own account and not as brokers. The cost of
securities purchased from underwriters includes an underwriter's commission or
concession, and the prices at which securities are purchased and sold from and
to dealers include a dealer's markup or markdown. PMC attempts to negotiate with
underwriters to decrease the commission or concession for the benefit of the
Trust. PMC normally seeks to deal directly with the primary market makers
unless, in its opinion, better prices are available elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management contract, be bought
from or sold to dealers who furnish statistical research and other information
or services to PMC and the Trust, or who sell shares of the Trust. Brokerage and
research services may include advice concerning the value of securities; the
advisability of investing in, purchasing or selling securities; the availability
of securities or the purchasers or sellers of securities; and furnishing
analyses, manuals and reports concerning issuers, securities, economic factors
and trends, portfolio strategy, performance of accounts, comparative fund
statistics and credit rating service information. PMC maintains a listing of
dealers who provide such services on a regular basis. Management believes that
no exact dollar value can be calculated for such services.
The Trustees periodically review PMC's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the Trust and review the dealer spreads paid by the Trust over
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representative periods of time to determine if they are reasonable in relation
to the benefits to the Trust.
The Trust is managed by PMC which also serves as investment adviser to
other mutual funds in the Pioneer group and certain private accounts with
investment objectives similar to those of the Trust. Securities frequently meet
the investment objectives of the Trust, such other funds and such private
accounts. In such cases, the decision to recommend a purchase to one fund or
account rather than another is based on a number of factors. The determining
factors in most cases are the amount of securities of the issuer then
outstanding, the value of those securities and the market for them. Other
factors considered in the investment recommendations include other investments
which each fund or account presently has in a particular industry and the
availability of investment funds in each fund or account.
It is possible that at times identical securities will be held by more
than one fund and/or account. However, positions in the same issue may vary and
the length of time that any fund or account may choose to hold its investment in
the same issue may likewise vary. To the extent that the Trust, another mutual
fund in the Pioneer group or a private account managed by PMC may not be able to
acquire as large a position in such security as it desires, it may have to pay a
higher price for the security. Similarly, the Trust may not be able to obtain as
large an execution of an order to sell or as high a price for any particular
portfolio security if PMC decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the Trust or the account. In the event more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each.
During the fiscal years ended November 30, 1994 and November 30, 1993
and the period from August 10, 1992 (commencement of operations) to November 30,
1992, the Trust paid no brokerage or underwriting commissions.
10. TAX STATUS
It is the Trust's policy to meet the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code") for qualification as
a regulated investment company. These requirements relate to the sources of its
income, diversification of its assets, and distribution of its income to
shareholders. If the Trust meets all such requirements and distributes to its
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shareholders, in accordance with the Code's timing requirements, all investment
company taxable income and net capital gain, if any, which it receives, the
Trust will be relieved of the necessity of paying federal income tax.
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains, are taxable as ordinary
income, whether received in cash or in additional shares. Dividends from net
long-term capital gain in excess of net short-term capital loss, if any, whether
received in cash or additional shares, are taxable to the Trust's shareholders
as long-term capital gains for federal income tax purposes without regard to the
length of time shares of the Trust have been held. The federal income tax status
of all distributions will be reported to shareholders annually. Because none of
the Trust's income is expected to arise from dividends paid by U.S. domestic
corporations, no part of the distributions to its corporate shareholders will
qualify for the dividends-received deduction for corporations.
Any dividend declared by the Trust in October, November or December as
of a record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the Trust in connection
with certain transactions involving foreign currency-denominated debt
securities, forward foreign currency contracts, foreign currencies, or payables
or receivables denominated in a foreign currency are subject to Section 988 of
the Code, which generally causes such gains and losses to be treated as ordinary
income and losses and may affect the amount, timing and character of
distributions to shareholders. Any such transactions that are not directly
related to the Trust's investment in securities may increase the amount of gain
it is deemed to recognize from the sale of certain investments held for less
than 3 months, which gain is limited under the Code to less than 30% of its
annual gross income, and may under future Treasury regulations produce income
not among the types of "qualifying income" from which the Trust must derive at
least 90% of its annual gross income. If the net foreign exchange loss for a
year were to exceed the Trust's investment company taxable income (computed
without regard to such loss) the resulting overall ordinary loss for such year
would not be deductible by the Trust or its shareholders in future years.
If the Trust invests in certain PIKs, zero coupon securities, or, in
general, any other securities with original issue discount (or with market
discount if the Trust elects to include market discount in income currently),
the Trust must accrue income on such investments prior to the receipt of the
corresponding cash payments. However, the Trust must distribute, at least
annually, all or substantially all of its net income, including such accrued
income, to shareholders to qualify as a regulated investment company under the
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Code and avoid Federal income and excise taxes. Therefore, the Trust may have to
dispose of its portfolio securities under disadvantageous circumstances to
generate cash, or may have to leverage itself by borrowing the cash, to satisfy
distribution requirements.
At the time of an investor's purchase of Trust shares, a portion of the
purchase price is often attributable to realized or unrealized appreciation in
the Trust's portfolio or undistributed taxable income of the Trust.
Consequently, subsequent distributions on such shares may be taxable to such
investor even if the net asset value of the investor's shares is, as a result of
the distributions, reduced below the investor's cost for such shares and the
distributions in reality represent a return of a portion of the investment.
Any loss realized upon the redemption of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gain with
respect to such shares.
In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinvestment privilege, the sales charge paid on such shares is not
included in their tax basis under the Code, and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
certain redemptions may be disallowed under "wash sale" rules in the event of
other investments in the Trust within a period of 61 days beginning 30 days
before and ending 30 days after a redemption or other sale of shares.
For federal income tax purposes, the Trust is permitted to carry
forward a net capital loss in any year to offset capital gains, if any, during
the eight years following the year of the loss. To the extent subsequent capital
gains are offset by such losses, they would not result in federal income tax
liability to the Trust and are not expected to be distributed as such to
shareholders.
The Trust may be subject to withholding and other taxes imposed by
foreign countries with respect to its investments in those countries. Tax
conventions between certain countries and the U.S. may reduce or eliminate such
taxes. The Trust does not expect to satisfy the requirements for passing through
to shareholders their pro rata shares of foreign taxes paid by the Trust, with
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the result that shareholders will not include such taxes in their gross incomes
(in addition to dividends actually received) and will not be entitled to a tax
deduction or credit for such taxes on their own tax returns.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
The Trust is not subject to Massachusetts corporate excise or franchise
taxes. Provided that the Trust qualifies as a regulated investment company under
the Code, it will also not be required to pay any Massachusetts income tax.
Federal law requires that the Trust withhold 31% of reportable
payments, including dividends, capital gain dividends, and the proceeds of
redemptions (including exchanges) and repurchases to shareholders who have not
complied with IRS regulations. In order to avoid this withholding requirement,
shareholders must certify on their Applications, or on separate W-9 Forms, that
the Social Security or other Taxpayer Identification Number they provide is
their correct number and that they are not currently subject to backup
withholding, or that they are exempt from backup withholding. The Trust may
nevertheless be required to withhold if it receives notice from the IRS or a
broker that the number provided is incorrect or backup withholding is applicable
as a result of previous underreporting of interest or dividend income.
The description above relates only to U.S. federal income tax
consequences for shareholders who are U.S. persons, i.e., U.S. citizens or
residents and U.S. domestic corporations, partnerships trusts or estates, and
who are subject to U.S. federal income taxation. The description does not
address the special tax rules applicable to particular types of investors, such
as banks, insurance companies, or tax-exempt entities. Investors other than U.S.
persons may be subject to different U.S. tax treatment, including a possible 30%
U.S. withholding tax (or a U.S. withholding tax at a lower treaty rate) on
amounts treated as ordinary dividends from the Trust and, unless an effective
IRS Form W-8 or authorized substitute is on file, to 31% backup withholding on
certain other payments from the Trust. Shareholders should consult their own tax
advisors on these matters and on state, local and other applicable tax laws.
11. DESCRIPTION OF SHARES
The Trust's Declaration of Trust permits its Board of Trustees to
authorize the issuance of an unlimited number of full and fractional shares of
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beneficial interest (without par value) which may be divided into such separate
series as the Trustees may establish. The Trustees may establish additional
series of shares, and may divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interests
in the Trust. The Declaration of Trust further authorizes the Trustees to
classify or reclassify any series of the shares into one or more classes.
Pursuant thereto, the Trustees have authorized the issuance of two classes of
shares of the Trust, Class A shares and Class B shares. Each share of a class of
the Trust represents an equal proportionate interest in the assets of the Trust
allocable to that class. Upon liquidation of the Trust, the shareholders of each
class are entitled to share pro rata in the Trust's net assets allocable to such
class available for distribution to shareholders. The Trust reserves the right
to create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
The shares of the Trust are entitled to vote separately to approve
investment advisory agreements or changes in investment restrictions, but
shareholders of all series vote together in the election and selection of
Trustees and accountants. Shares of the Trust vote together as a class on
matters that affect the Trust in substantially the same manner. As to matters
affecting a single class, shares of such class will vote separately.
Although Trustees are not elected annually by the shareholders,
shareholders holding 10% or more of the outstanding shares of the Trust may
cause the Trust to hold a meeting of shareholders for the purpose of voting upon
the question of the removal of one or more trustees. Removal shall require the
affirmative vote of the holders of two-thirds of the shares of the Trust
outstanding and entitled to vote at a meeting called for such purpose. No
amendment that adversely affects the rights of shareholders may be made to the
Trust's Declaration of Trust without the affirmative vote of a majority of its
shares. Shares have no preemptive or conversion rights. Shares are fully paid
and non-assessable, except as set forth below. See "Certain Liabilities."
12. CERTAIN LIABILITIES
As a Massachusetts business trust, the Trust's operations are governed
by its Declaration of Trust dated April 30, 1992, a copy of which is on file
with the Office of the Secretary of State of the Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust or any series of the Trust and
provides that notice of such disclaimer be given in each agreement, obligation
or instrument entered into or executed by the Trust or its Trustees. Moreover,
the Declaration of Trust provides for the indemnification out of Trust property
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of any shareholders held personally liable for any obligations of the Trust or
any series of the Trust. The Declaration of Trust also provides that the Trust
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss beyond his or
her investment because of shareholder liability would be limited to
circumstances in which the Trust itself will be unable to meet its obligations.
In light of the nature of the Trust's business and the nature and amount of its
assets, the possibility of the Trust's liabilities exceeding its assets, and
therefore a shareholder's risk of personal liability, is remote.
The Declaration of Trust further provides that the Trust shall
indemnify each of its Trustees and officers against liabilities and expenses
reasonably incurred by them, in connection with, or arising out of, any action,
suit or proceeding, threatened against or otherwise involving such Trustee or
officer, directly or indirectly, by reason of being or having been a Trustee or
officer of the Trust. The Declaration of Trust does not authorize the Trust to
indemnify any Trustee or officer against any liability to which he or she would
otherwise be subject by reason of or for willful misfeasance, bad faith, gross
negligence or reckless disregard of such person's duties.
13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Trust is determined
as of the close of regular trading (currently 4:00 p.m., Eastern Time) on each
day on which the New York Stock Exchange is open for trading. As of the date of
this Statement of Additional Information, the New York Stock Exchange is open
for trading every weekday except for the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of each class
of the Trust is also determined on any other day in which the level of trading
in its portfolio securities is sufficiently high so that the current net asset
value per share might be materially affected by changes in the value of its
portfolio securities. The Trust is not required to determine its net asset value
per share on any day in which no purchase orders for the shares of the Trust
become effective and no shares are tendered for redemption.
The net asset value per share of each class the Trust is computed by
taking the value of all of its assets, less the Trust's liabilities attributable
to the class, and dividing it by the number of outstanding shares of the class.
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For purposes of determining net asset value, expenses of the Trust are accrued
daily.
The Board of Trustees has directed that the fair market value of the
Trust's assets should be determined as follows. Ordinarily, investments in debt
securities are valued on the basis of information furnished by a pricing service
which utilizes primarily a matrix system (which reflects such factors as
security prices, yields, maturities and ratings), supplemented by dealer and
exchange quotations, to recommend valuations for normal institutional-sized
trading units of debt securities. In addition, the Board has instructed advisory
personnel not to rely exclusively on this pricing service if the fair market
value of certain securities may be more accurately determined on the basis of
information available from other sources. Temporary cash investments are valued
at cost, which approximates market value.
The Trust's maximum offering price per Class A share is determined by
adding the maximum sales charge to the net asset value per Class A share. Class
B shares are offered at net asset value without the imposition of an initial
sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from Class A
shares of the Trust deposited by the applicant under this SWP. The applicant
must deposit or purchase for deposit with PSC Class A shares of the Trust having
a total value of not less than $10,000. Periodic checks of $50 or more will be
sent to the applicant, or any person designated by him, monthly or quarterly. A
designation of a third party to receive checks requires an acceptable signature
guarantee. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the
SWP will be credited to the SWP account on the payment date in full and
fractional shares at the net asset value per share in effect on the record date.
SWP payments are made from the proceeds of the redemption of shares
deposited under the SWP in a SWP account. Share redemptions are taxable
transactions to shareholders. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. In addition, the amounts received by a shareholder
cannot be considered as an actual yield or income on his or her investment
because part of such payments may be a return of his or her investment.
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The SWP may be terminated at any time (1) by written notice to PSC or
from PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of
the shareholder's death; or (3) when all shares under the SWP have been
redeemed. The fees of PSC for maintaining SWPs are paid by the Trust.
15. LETTER OF INTENTION
Purchases of $50,000 or over of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Trust Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Trust
shares of $50,000 over a 13-month period would be charged at the 2.0% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all shares of record held in the Trust and other Pioneer Funds (except
Class A shares of Pioneer Money Market Trust) as of the date of the Letter of
Intention as a credit toward determining the applicable scale of sales charge
for the Class A shares to be purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Trust to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention contained in the Account Application
carefully before signing.
16. INVESTMENT RESULTS
The Trust's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this Statement of Additional Information
or in advertising are calculated by standard methods prescribed by the SEC.
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of the Trust may be illustrated
and/or compared with that of other mutual funds with similar investment
objectives, and to other relevant indices. For example, the Trust may compare
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its yield to the Shearson Lehman Hutton Government Index, U.S. Government bond
rates, or other comparable indices or investment vehicles.
In addition, the performance of the classes of the Trust may be
compared to alternative investment or savings vehicles and/or to indices or
indicators of economic activity, e.g., inflation or interest rates. Performance
rankings and listings reported in newspapers or national business and financial
publications, such as Barron's, Business Week, Consumer Digest, Consumer
Reports, Financial World, Forbes, Fortune, Investors Business Daily, Kiplinger's
Personal Finance Magazine, Money Magazine, New York Times, Personal Investor,
Smart Money, USA Today, U.S. News and World Report, The Wall Street Journal, and
Worth may also be cited (if the Trust is listed in any such publication) or used
for comparison, as well as performance listings and rankings from various other
sources including Bloomberg Financial Markets, CDA/Wiesenberger, Donoghue's
Mutual Fund Almanac, Investment Company Data, Inc., Ibbotson Associates,
Johnson's Charts, Kanon Block Carre and Co., Lipper Analytical Services, Inc.,
Micropal, Inc., Morningstar, Inc., Schabacker Investment Management and Tower
Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements, in sales
literature, or in reports to shareholders of the Trust.
One of the primary methods used to measure the performance of a class
of the Trust is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in the
class, over any period up to the lifetime of the class. Total return
calculations will usually assume the reinvestment of all dividends and capital
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will not usually be annualized; total return percentages for
periods longer than one year will usually be accompanied by total return
percentages for each year within the period and/or by the average annual
compounded total return for the period. The income and capital components of a
given return may be separated and portrayed in a variety of ways in order to
illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages or by reference to
historical information depicting the value of a hypothetical account in the
Trust since the Trust's inception. Past performance cannot guarantee any
particular future result.
In representing investment results of a class, the Trust may also
include references to certain financial planning concepts, including (a) an
investor's need to evaluate his financial assets and obligations to determine
how much to invest; (b) his need to analyze the objectives of various
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investments to determine where to invest; and (c) his need to analyze his time
frame for future capital needs to determine how long to invest. The investor
controls these three factors, all of which affect the use of investments in
building assets.
Standardized Yield Quotations
The yield of a class is computed by dividing the class's net investment
income per share during a base period of 30 days, or one month, by the maximum
offering price per share of the class on the last day of such base period in
accordance with the following formula:
a-b
YIELD = 2[ ( ----- +1)6-1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = the maximum offering price per share on the last
day of the period
For purposes of calculating interest earned on debt obligations as
provided in item "a" above:
(i) The yield to maturity of each obligation held by the Trust is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on settlement date, and with
respect to obligations sold during the month the sale price (plus actual accrued
interest, if any) between the trade and settlement dates.
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period.
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled.
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(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date.
With respect to the treatment of discount and premium on mortgage or
other receivables-backed obligations which are expected to be subject to monthly
payments of principal and interest ("pay downs"), the Trust accounts for gain or
loss attributable to actual monthly pay downs as an increase or decrease to
interest income during the period. In addition, the Trust may elect (i) to
amortize the discount or premium remaining on a security, based on the cost of
the security, to the weighted average maturity date, if such information is
available, or to the remaining term of the security, if the weighted average
maturity date is not available, or (ii) not to amortize the remaining discount
or premium on a security.
For purposes of computing yield, interest income is recognized by
accruing 1/360 of the stated interest rate of each obligation in the Trust's
portfolio each day that the obligation is in the portfolio. Expenses of a class
accrued during any base period, if any, pursuant to the respective Distribution
Plan are included among the expenses accrued during the base period.
The yield on Class A and Class B shares of the Trust for the 30-day
period ended November 30, 1994 computed as above was 6.05% and 5.42%,
respectively, except that absent expense limitations, the yield on Class A and
Class B shares of the Fund would have been 5.68% and 5.09%, respectively.
Standardized Average Annual Total Return Quotations.
Average annual total return quotations for Class A and Class B shares
are computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in the class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P= a hypothetical initial payment of $1,000, less the
maximum sales load of $25 for Class A shares
or the deduction of the CDSC on Class B shares at
the end of the period.
T = average annual total return
n = number of years
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ERV = ending redeemable value of the hypothetical $1,000
initial payment made at the beginning of the designated
period (or fractional portion thereof)
For purposes of the above computation, it is assumed that the maximum
sales charge of 2.5% was deducted from the initial investment and that all
dividends and distributions made by the Trust are reinvested at net asset value
during the designated period. The average annual total return quotation is
determined to the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts are
taken into consideration. For any account fees that vary with the size of the
account, the account fee used for purposes of the above computation is assumed
to be the fee that would be charged to the Trust's mean account size.
The average annual total returns for period ending November 30, 1994
were:
A Shares B Shares
1 year -2.16 N/A
Life-of-the Trust 2.06 -2.17
Automated Information Line
FactFone, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed-income funds;
o annualized 7-day yields and 7-day effective (compound)
yields for Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer
mutual funds.
Yields are calculated in accordance with SEC mandated standard formulas.
In addition, by using a personal identification number (PIN),
shareholders may access their account balance and last three transactions and
may order a duplicate statement.
31
<PAGE>
All performance numbers communicated through FactFone represent past
performance; figures for all quoted bond funds include the maximum applicable
sales charge. A shareholder's actual yield and total return will vary with
changing market conditions. The value of Class A and Class B shares (except for
Pioneer money market funds, which seek a stable $1.00 share price) will also
vary and may be worth more or less at redemption than their original cost.
<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
--------
The ratings described below are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Trust's fiscal year-end.
Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable. Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.
<PAGE>
Standard & Poor's Corporation3
AAA: Bonds rated AAA are highest grade obligations. This rating
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
A-1
<PAGE>
APPENDIX B
Comparative Performance Statistics
INDEX DESCRIPTIONS
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
LONG-TERM CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before
removing the bond from future portfolios. Over 1926-1968 the total returns were
calculated by summing the capital appreciation returns and the income returns.
For the period 1946-1968, Ibbotson and Sinquefield backdated the Salomon
Brothers' index, using Salomon Brothers' monthly yield data with a methodology
similar to that used by Salomon for 1969-1991. Capital appreciation returns were
calculated from yields assuming (at the beginning of each monthly holding
period) a 20-year maturity, a bond price equal to par, and a coupon equal to the
beginning-of-period yield. For the period 1926-1945, the Standard and Poor's
monthly High-Grade Corporate Composite yield data were used, assuming a 4
percent coupon and a 20-year maturity. The conventional present-value formula
for bond price for the beginning and end-of-month prices was used. (This formula
is presented in Ross, Stephen A., and Randolph W. Westerfield, Corporate
Finance, Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The
monthly income return was assumed to be one-twelfth the coupon.
LONG-TERM GOVERNMENT BOND TOTAL RETURN
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate
School of Business, University of Chicago. Each year, a one-bond portfolio with
a term of approximately 20 years and a reasonably current coupon was used, and
whose returns did not reflect potential tax benefits, impaired negotiability, or
special redemption or call privileges. Where callable bonds had to be used, the
term of the bond was assumed to be a simple average of the maturity and first
call dates minus the current date. The bond was "held" for the calendar year and
returns were computed. Total returns for 1977-1991 are calculated as the change
in the flat price or and-interest price.
INTERMEDIATE-TERM GOVERNMENT BONDS TOTAL RETURN
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns over
1934-1986 are obtained from the CRSP Government Bond File. Each year, one-bond
portfolios are formed, the bond chosen is the shortest noncallable bond with a
maturity not less than 5 years, and this bond is "held" for the calendar year.
Monthly returns are computed. (Bonds with impaired negotiability or special
redemption privileges are omitted, as are partially or fully tax-exempt bonds
starting with 1943.) Over 1934-1942, almost all bonds with maturities near 5
years were partially or full tax-exempt and were selected using the rules
described above. Personal tax rates were generally low in that period, so that
yields on tax-exempt bonds were similar to yields on taxable bonds. Over
1926-1933, there are few bonds suitable for construction of a series with a
5-year maturity. For this period, five year bond yield estimates are used.
U.S. (30 DAY) TREASURY BILL TOTAL RETURNS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure
holding period returns for the one-bill portfolio, the bill is priced as of the
last trading day of the previous month-end and as of the last trading day of the
current month.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
6 MONTH CD
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
Source for Long Term Corporate Bonds, Long Term Government Bonds, Intermediate
Government Bonds, and U.S. Treasury Bills: Ibbotson Associates
Source for Bank Savings Account and 6 Month CD: Towers Data Systems
<PAGE>
<TABLE>
<CAPTION>
U.S. Long Term U.S. Long Term U.S. Interm. U.S.(30Day) Bank Savings
Corporate Bds Govt Bonds Govt Bonds Treasury Bill Account 6 Month CD
%Total Return * %Total Return * %Total Return * %Total Return * %Total Return** %Total Return **
<S> <C> <C> <C> <C> <C> <C> <C>
Dec 1928 2.84 0.10 0.92 3.56 N/A N/A
Dec 1929 3.27 3.42 6.01 4.75 N/A N/A
Dec 1930 7.98 4.66 6.72 2.41 5.30 N/A
Dec 1931 -1.85 -5.31 -2.32 1.07 5.10 N/A
Dec 1932 10.82 16.84 8.81 0.96 4.10 N/A
Dec 1933 10.38 -0.07 1.83 0.30 3.40 N/A
Dec 1934 13.84 10.03 9.00 0.16 3.50 N/A
Dec 1935 9.61 4.98 7.01 0.17 3.10 N/A
Dec 1936 6.74 7.52 3.06 0.18 3.20 N/A
Dec 1937 2.75 0.23 1.56 0.31 3.50 N/A
Dec 1938 6.13 5.53 6.23 -0.02 3.50 N/A
Dec 1939 3.97 5.94 4.52 0.02 3.40 N/A
Dec 1940 3.39 6.09 2.96 0.00 3.30 N/A
Dec 1941 2.73 0.93 0.50 0.06 3.10 N/A
Dec 1942 2.60 3.22 1.94 0.27 3.00 N/A
Dec 1943 2.83 2.08 2.81 0.35 2.90 N/A
Dec 1944 4.73 2.81 1.80 0.33 2.80 N/A
Dec 1945 4.08 10.73 2.22 0.33 2.50 N/A
Dec 1946 1.72 -0.10 1.00 0.35 2.20 N/A
Dec 1947 -2.34 -2.62 0.91 0.50 2.30 N/A
Dec 1948 4.14 3.40 1.85 0.81 2.30 N/A
Dec 1949 3.31 6.45 2.32 1.10 2.40 N/A
Dec 1950 2.12 0.06 0.70 1.20 2.50 N/A
Dec 1951 -2.69 -3.93 0.36 1.49 2.60 N/A
Dec 1952 3.52 1.16 1.63 1.66 2.70 N/A
Dec 1953 3.41 3.64 3.23 1.82 2.80 N/A
Dec 1954 5.39 7.19 2.68 0.86 2.90 N/A
Dec 1955 0.48 -1.29 -0.65 1.57 2.90 N/A
Dec 1956 -6.81 -5.59 -0.42 2.46 3.00 N/A
Dec 1957 8.71 7.46 7.84 3.14 3.30 N/A
Dec 1958 -2.22 -6.09 -1.29 1.54 3.38 N/A
Dec 1959 -0.97 -2.26 -0.39 2.95 3.53 N/A
Dec 1960 9.07 13.78 11.76 2.66 3.86 N/A
Dec 1961 4.82 0.97 1.85 2.13 3.90 N/A
Dec 1962 7.95 6.89 5.56 2.73 4.08 N/A
Dec 1963 2.19 1.21 1.64 3.12 4.17 N/A
Dec 1964 4.77 3.51 4.04 3.54 4.19 4.18
Dec 1965 -0.46 0.71 1.02 3.93 4.23 4.68
Dec 1966 0.20 3.65 4.69 4.76 4.45 5.75
Dec 1967 -4.95 -9.18 1.01 4.21 4.67 5.48
Dec 1968 2.57 -0.26 4.54 5.21 4.68 6.44
Dec 1969 -8.09 -5.07 -0.74 6.58 4.80 8.71
Dec 1970 18.37 12.11 16.86 6.52 5.14 7.06
Dec 1971 11.01 13.23 8.72 4.39 5.30 5.36
Dec 1972 7.26 5.69 5.16 3.84 5.37 5.38
Dec 1973 1.14 -1.11 4.61 6.93 5.51 8.60
Dec 1974 -3.06 4.35 5.69 8.00 5.96 10.20
Dec 1975 14.64 9.20 7.83 5.80 6.21 6.51
Dec 1976 18.65 16.75 12.87 5.08 6.23 5.22
Dec 1977 1.71 -0.69 1.41 5.12 6.39 6.12
Dec 1978 -0.07 -1.18 3.49 7.18 6.56 10.21
Dec 1979 -4.18 -1.23 4.09 10.38 7.29 11.90
Dec 1980 -2.76 -3.95 3.91 11.24 8.78 12.33
Dec 1981 -1.24 1.86 9.45 14.71 10.71 15.50
Dec 1982 42.56 40.36 29.10 10.54 11.19 12.18
Dec 1983 6.26 0.65 7.41 8.80 9.71 9.65
Dec 1984 16.86 15.48 14.02 9.85 9.92 10.65
Dec 1985 30.09 30.97 20.33 7.72 9.02 7.82
Dec 1986 19.85 24.53 15.14 6.16 7.84 6.30
Dec 1987 -0.27 -2.71 2.90 5.47 6.92 6.58
Dec 1988 10.70 9.67 6.10 6.35 7.20 8.15
Dec 1989 16.23 18.11 13.29 8.37 7.91 8.27
Dec 1990 6.78 6.18 9.73 7.81 7.8 7.85
Dec 1991 19.89 19.30 15.46 5.60 4.61 4.95
Dec 1992 9.39 8.05 7.19 3.51 2.89 3.27
Dec 1993 13.19 18.24 11.24 2.90 2.73 2.88
Dec 1994 -5.76 -7.77 -5.14 3.90 4.96 5.4
<FN>
* Source: Ibbotson Associates
** Source: Towers Data Systems
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pioneer Short Term Income Trust A
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
8/10/92 $10,000 $4.10 2.50% 2439.024 $4.00 $9,750
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
<S> <C> <C> <C> <C>
12/31/92 $9,659 $0 $256 $9,915
12/31/93 $9,634 $0 $863 $10,497
12/31/94 $9,122 $0 $1,395 $10,517
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Pioneer Short Term Income Trust B
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
4/4/94 $10,000 $3.89 0.00% 2570.694 $3.89 $10,000
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
<S> <C> <C> <C> <C>
12/31/94 $9,589 $0 $385 $9,974
Value of shares if redeemed $9,551
</TABLE>
<PAGE>
APPENDIX C
OTHER PIONEER INFORMATION
The Pioneer family of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest, most respected and
successful money managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff
of 46, with a combined average of 14 years' experience in the financial services
industry.
At December 31, 1994, there were 591,192 non-retirement shareholder
accounts and 337,577 retirement shareholder accounts in Pioneer's funds. Total
assets for all Pioneer Funds were $10,038,000,000 representing a total of
928,769 shareholder accounts.
C-1
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
RICHARD A. SCHLANGER, Vice President
WILLIAM B. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, Massachusetts 02109
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
60 State Street Statement of Additional
Boston, Massachusetts 02109 Information
CUSTODIAN Class A and Class B Shares
BROWN BROTHERS HARRIMAN & CO. March 30, 1995
40 Water Street
Boston, Massachusetts 02109
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN & CO.
One International Place
Boston, Massachusetts 02110
LEGAL COUNSEL
HALE AND DORR
60 State Street
Boston, Massachusetts 02109
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone 1-800-225-6292
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
The financial statements of Pioneer Short-Term Income
Trust (the "Registrant") are incorporated by reference
from the 1994 Annual Report to Shareholders which is
incorporated by reference into Part B, the Statement of
Additional Information. The 1994 Annual Report to
Shareholders is attached hereto as Exhibit 12.
(b) Exhibits:
1.1 Declaration of Trust*_
1.2 Establishment and Designation of Classes****_
2. By-Laws*_
3. None
4. Specimen Stock Certificate**
5. Form of Management Contract*_
6.1 Form of Underwriting Agreement*_
6.2 Form of Dealer Sales Agreement****_
7. None
8. Form of Custodian Agreement**_
9. Form of Investment Company Service Agreement*_
10. None
11. Consent of Independent Public Accountants__
12. 1994 Annual Report to Shareholders__
13. Form of Stock Purchase Agreement*_
14. None
15.1 Amended Form of Distribution Plan**_
15.2 Form of Class B Rule 12b-1 Distribution
Plan****_
16.1 Schedule of Computation of Total Return***_
16.2 Schedule of Computation of Yield***_
17. Financial Data Schedule
18.1 Powers of Attorney (John F. Cogan, Jr.; David D.
Tripple; William H. Keough; Franklin R. Johnson;
John W. Kendrick; Marguerite A. Piret; John
Winthrop)**_
18.2 Powers of Attorney (Richard H. Egdahl, M.D.;
Margaret B. W. Graham)***_
18.3 Powers of Attorney (Stephen K. West)****_
---------------
* Incorporated by reference from the Registrant's
Registration Statement on Form N-1A (File Nos.
33-47613 and 811-6657) as filed with the
Securities and Exchange Commission (the "SEC")
on May 4, 1992.
** Incorporated by reference from the Registrant's
Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (File Nos.
33-47613 and 811-6657) as filed with the SEC on
July 28, 1992.
*** Incorporated by reference from the Registrant's
Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (File Nos.
33-47613 and 811-6657) as filed with the SEC on
February 10, 1993.
**** Incorporated by reference from the Registrant's
Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A (File Nos.
33-47613 and 811-6657) as filed with the SEC on
January 25, 1994.
_ Refiled electronically herewith in accordance
with EDGAR requirements.
__ Filed electronically herewith in accordance with
EDGAR requirements.
Item 25. Persons Controlled By or Under
Common Control With Registrant
The Pioneer Group, Inc., a Delaware corporation ("PGI"), owns 100%
of the outstanding capital stock of Pioneering Management Corporation, a
Delaware corporation ("PMC"), Pioneering Services Corporation ("PSC"), Pioneer
Capital Corporation ("PCC"), Pioneer Fonds Marketing GmbH ("GmbH"), Pioneer SBIC
Corp. ("SBIC"), Pioneer Associates, Inc., Pioneer International Corporation,
Pioneer Plans Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and
Pioneer Investments Corporation ("PIC"), all Massachusetts corporations. PGI
also owns 100% of the outstanding capital stock of Pioneer Metals and
Technology, Inc. ("PMT"), a Delaware corporation, and Pioneer First Polish Trust
Fund Joint Stock Company ("First Polish"), a Polish corporation. PGI owns 90% of
the outstanding shares of Teberebie Goldfields Limited ("TGL"). PMC owns 100% of
the outstanding capital stock of Pioneer Funds Distributor, Inc. ("PFD"), a
Massachusetts corporation. Pioneer Winthrop Advisers ("PWA"), a Massachusetts
general partnership, is a joint venture between PGI and Winthrop Financial
Associates, a Limited Partnership, a Delaware limited partnership. Pioneer Fund,
Pioneer II, Pioneer Three, Pioneer Bond Fund, Pioneer Intermediate Tax-Free
Fund, Pioneer Growth Trust, Pioneer Europe Fund, Pioneer International Growth
Fund, Pioneer Short-Term Income Trust, Pioneer Tax-Free State Series Trust,
Pioneer Money Market Trust, Pioneer America Income Trust and the Registrant
(each of the foregoing, a Massachusetts business trust), and Pioneer Interest
Shares, Inc. (a Nebraska corporation) and Pioneer Growth Shares, Pioneer Income
Fund, Pioneer India Fund, Pioneer Tax-Free Income Fund and Pioneer Emerging
Markets Fund (each of the foregoing, a Delaware business trust) are all parties
to management contracts with PMC. Pioneer Winthrop Real Estate Investment Fund
is a party to a sub-investment management contract with PMC. PCC owns 100% of
the outstanding capital stock of SBIC. SBIC is the sole general partner of
Pioneer Ventures Limited Partnership, a Massachusetts limited partnership. John
F. Cogan, Jr. owns approximately 15% of the outstanding shares of PGI. Mr. Cogan
is Chairman of the Board, President and Trustee of the Registrant and of each of
the Pioneer investment companies; Director and President of PGI; President and
Director of PPC, PIC, Pioneer International Corporation and PMT; Director of PCC
and PSC; Chairman of the Board and Director of PMC, PFD and TGL; Chairman,
President and Director of PGL; Chairman of the Supervisory Board of GmbH;
Chairman and Chief Executive Officer of PWA; Chairman and Member of Supervisory
Board of First Polish; and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities
The following table sets forth the approximate number of
recordholders of each class of securities of the Registrant as of February 28,
1995:
Class A Class B
Number of Record Holders: 2,563 123
Item 27. Indemnification
Except for the Declaration of Trust dated April 30, 1992,
establishing the Registrant as a trust under Massachusetts law, there is no
contract, arrangement or statute under which any director, officer, underwriter
or affiliated person of the Registrant is insured or indemnified. The
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
Item 28. Business and Other Connections of Investment Adviser
All of the information required by this item is set forth in the
Forms ADV, as amended, of the Registrant's Manager, Pioneering Management
Corporation. The following sections of each such Form ADV are incorporated
herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section IV, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
<TABLE>
<CAPTION>
Positions and Offices Positions and Offices
Name with Underwriter with Registrant
<S> <C> <C>
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
James L. Spencer Director and Executive None
Vice President
David D. Tripple Director Executive Vice
President and Trustee
Stephen W. Long Senor Vice President None
Alicja Malecka Vice President None
Richard C. Dolan,
Jr. Vice President None
John W. Drachman Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant Vice None
President
Gail A. Smyth Assistant Vice None
President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
</TABLE>
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's office
at 60 State Street, Boston, Massachusetts; contact the Treasurer.
Item 31. Management Services
The Registrant is a party to one contract, described in the
Prospectus and the Statement of Additional Information, under which it receives
management and advisory services from Pioneering Management Corporation.
Item 32. Undertakings
(A) None.
(B) None.
(C) The Registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is sent or
given, a copy of the Registrant's annual report to shareholders furnished
pursuant to and meeting the requirements of Rule 30d-1 from which the specified
information is incorporated by reference, unless such person currently holds
securities of the Registrant and otherwise has received a copy of such report,
in which case the Registrant shall state in the Prospectus that it will furnish,
without charge, a copy of such report on request, and the name, address and
telephone number of the person to whom such a request should be directed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 3 to its Registration Statement (the "Amendment")
(which meets all the requirements for effectiveness pursuant to paragraph (b) of
Rule 485 and the Securities Act of 1933) to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston and The
Commonwealth of Massachusetts, on the 28th day of March, 1995.
PIONEER SHORT-TERM INCOME TRUST
By: /s/Joseph P. Barri
Joseph P. Barri
Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 3 to the Registration Statement of Pioneer
Short-Term Income Trust (File Nos. 33-47613; 811-6657) has been signed below by
the following persons in the capacities and on the dates indicated:
Signature Date
Principal Executive Officer: )
)
)
/s/John F. Cogan, Jr. )
John F. Cogan, Jr.* )
)
)
Principal Financial and ) March 28, 1995
Accounting Officer: )
)
)
)
/s/William H. Keough )
William H. Keough, Treasurer* )
<PAGE>
A MAJORITY OF THE BOARD OF TRUSTEES:
)
/s/John F. Cogan, Jr. )
John F. Cogan, Jr.* )
)
)
/s/John W. Kendrick )
John W. Kendrick* )
)
)
/s/Marguerite A. Piret )
Marguerite A. Piret* )
)
)
/s/David D. Tripple )
David D. Tripple* )
)
)
/s/John Winthrop ) March 28, 1995
John Winthrop* )
)
)
/s/Margaret B.W. Graham )
Margaret B.W. Graham* )
)
)
/s/Richard H. Egdahl, M.D. )
Richard H. Egdahl, M.D.* )
)
)
/s/Stephen K. West )
Stephen K. West* )
*By: /s/Joseph P. Barri
Joseph P. Barri
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit
Number Document Title
1.1 Declaration of Trust
1.2 Establishment and Designation of Classes
2. By-Laws
4. Specimen Stock Certificate
5.1 Form of Management Contract
6.1 Form of Underwriting Agreement
6.2 Form of Dealer Sales Agreement
8. Form of Custodian Agreement
9. Form of Investment Company Service Agreement
11. Consent of Arthur Andersen LLP
12. 1994 Annual Report to Shareholders
13. Form of Stock Purchase Agreement
15.1 Amended Form of Distribution Plan
15.2 Form of Class B Rule 12b-1 Distribution Plan
16.1 Schedule of Computation of Total Return
16.2 Schedule of Computation of Yield
17. Financial Data Schedule
18.1 Powers of Attorney (John F. Cogan Jr.; David D. Tripple; William
H. Keough; Franklin R. Johnson; John W. Kendrick; Marguerite A.
Piret; John Winthrop)
18.2 Powers of Attorney (Richard H. Egdahl, M.D.; Margaret B. W.
Graham)
18.3 Powers of Attorney (Stephen K. West)
DECLARATION OF TRUST
OF
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
Dated April 30, 1992
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TABLE OF CONTENTS
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ARTICLE I - NAME AND DEFINITIONS ...............................................................1
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Section 1.1. Name...........................................................1
Section 1.2. Definitions....................................................1
ARTICLE II - TRUSTEES ...............................................................3
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Section 2.1. General Powers.................................................3
Section 2.2. Investments....................................................4
Section 2.3. Legal Title....................................................6
Section 2.4. Issuance and Repurchase of Shares..............................6
Section 2.5. Delegation; Committees.........................................7
Section 2.6. Collection and Payment.........................................7
Section 2.7. Expenses.......................................................7
Section 2.8. Manner of Acting; By-laws......................................7
Section 2.9. Miscellaneous Powers...........................................8
Section 2.10. Principal Transactions.........................................9
Section 2.11. Litigation.....................................................9
Section 2.12. Number of Trustees.............................................9
Section 2.13. Election and Term..............................................9
Section 2.14. Resignation and Removal........................................10
Section 2.15. Vacancies......................................................10
Section 2.16. Delegation of Power to Other
Trustees.......................................................11
ARTICLE III - CONTRACTS ...............................................................11
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Section 3.1. Underwriting Contract..........................................11
Section 3.2. Advisory or Management Contract................................11
Section 3.3. Administration Agreement.......................................12
Section 3.4. Service Agreement..............................................12
Section 3.5. Transfer Agent.................................................13
Section 3.6. Custodian......................................................13
Section 3.7. Affiliations of Trustees or
Officers, Etc..................................................13
Section 3.8. Compliance with 1940 Act.......................................14
ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS,.............................................14
TRUSTEES AND OTHERS...............................................................14
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Section 4.1. No Personal Liability of
Shareholders, Trustees, Etc....................................14
Section 4.2. Non-Liability of Trustees, Etc.................................15
Section 4.3. Mandatory Indemnification......................................15
Section 4.4. No Bond Required of Trustees...................................17
Section 4.5. No Duty of Investigation; Notice
in Trust Instruments, Etc......................................17
Section 4.6. Reliance on Experts, Etc.......................................18
ARTICLE V - SHARES OF BENEFICIAL INTEREST..........................................................18
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Section 5.1. Beneficial Interest............................................18
Section 5.2. Rights of Shareholders.........................................19
Section 5.3. Trust Only.....................................................19
Section 5.4. Issuance of Shares.............................................19
Section 5.5. Register of Shares.............................................20
Section 5.6. Transfer of Shares.............................................20
Section 5.7. Notices........................................................21
Section 5.8. Treasury Shares................................................21
Section 5.9. Voting Powers..................................................21
Section 5.10. Meetings of Shareholders.......................................22
Section 5.11. Series or Class Designation....................................22
Section 5.12. Assent to Declaration of Trust.................................27
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ARTICLE VI - REDEMPTION AND REPURCHASE OF SHARES...................................................27
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Section 6.1. Redemption of Shares...........................................27
Section 6.2. Price..........................................................27
Section 6.3 Payment........................................................27
Section 6.4. Effect of Suspension of Determination
of Net Asset Value.............................................28
Section 6.5. Repurchase of Agreement........................................28
Section 6.6 Redemption of Shareholder's
Interest.......................................................28
Section 6.7. Redemption of Shares in Order to
Qualify as Regulated Investment
Company; Disclosure of Holding.................................28
Section 6.8 Reductions in Number of Outstanding
Shares Pursuant to Net Asset Value
Formula........................................................29
Section 6.9. Suspension of Right of Redemption..............................29
ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET
INCOME AND DISTRIBUTIONS.........................................................30
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Section 7.1. Net Asset Value................................................30
Section 7.2. Distributions to Shareholders..................................31
Section 7.3. Determination of Net Income;
Constant Net Asset Value;
Reduction of Outstanding Shares................................32
Section 7.4. Power to Modify Foregoing
Procedures.....................................................33
ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A SERIES
OR CLASS; AMENDMENT; MERGERS, ETC...................................................33
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Section 8.1. Duration.......................................................33
Section 8.2. Termination of the Trust of a
Series or a Class..............................................33
Section 8.3. Amendment Procedure............................................35
Section 8.4. Merger, Consolidation and
Sale of Assets.................................................36
Section 8.5. Incorporation..................................................36
ARTICLE IX - REPORTS TO SHAREHOLDERS...............................................................37
ARTICLE X - MISCELLANEOUS ...............................................................37
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Section 10.1. Execution and Filing...........................................37
Section 10.2. Governing Law..................................................37
Section 10.3. Counterparts...................................................38
Section 10.4. Reliance by Third Parties......................................38
Section 10.5. Provisions in Conflict with Law
or Regulations.................................................38
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DECLARATION OF TRUST
OF
PIONEER SHORT-TERM INCOME TRUST
Dated April 30, 1992
DECLARATION OF TRUST made this 30th day of April, 1992 by John F. Cogan, Jr. and
David D. Tripple (together with all other persons from time to time duly
elected, qualified and serving as Trustees in accordance with the provisions of
Article II hereof, the "Trustees").
NOW, THEREFORE, the Trustees declare that all money and property contributed to
the trust fund hereunder shall be held and managed in trust under this
Declaration of Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is "Pioneer Short-Term
Income Trust" (the "Trust").
Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:
(a)"Administrator" means the party, other than the
Trust, to the contract described in Section 3.3 hereof.
(b)"By-laws" means the By-laws referred to in
Section 2.8 hereof, as from time to time amended.
(c)"Class" means any division of shares within a
Series, which Class is or has been established within such Series in accordance
with the provisions of Article V.
(d)The terms "Commission" and "Interested Person"
have the meanings given them in the 1940 Act. Except as such term may ----------
----------------- be otherwise defined by the Trustees in conjunction with the
establishment of any Series of Shares, the term "vote of a majority of the
Shares outstanding and entitled to vote" shall have the same meaning as is
assigned to the term "vote of a majority of the outstanding voting securities"
in the 1940 Act.
(e)"Custodian" means any Person other than the
Trust who has custody of any Trust Property as required by Section 17(f) of the
1940 Act, but does not include a system for the central handling of securities
described in said Section 17(f).
(f)"Declaration" means this Declaration of Trust
as amended from time to time. Reference in this Declaration of Trust to
"Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to
this Declaration rather than exclusively to the article or section in which such
words appear.
(g)"Distributor" means the party, other than the
Trust, to the contract described in Section 3.1 hereof.
(h)"Fund" or "Funds," individually or
collectively, means the separate Series of Shares of the Trust, together with
the assets and liabilities assigned thereto.
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(i)"Fundamental Restrictions" means the investment
restrictions set forth in the Prospectus and Statement of Additional Information
and designated as fundamental restrictions therein.
(j)"His" shall include the feminine and neuter, as
well as the masculine, genders.
(k)"Investment Adviser" means the party, other
than the Trust, to the contract described in Section 3.2 hereof.
(l)The "1940 Act" means the Investment Company Act
of 1940, as amended from time to time.
(m)"Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures and other
entities, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
(n)"Prospectus" means the Prospectus and Statement
of Additional Information included in the Registration Statement of the Trust
under the Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o)"Series" individually or collectively means the
separately managed component(s) of the Trust (or, if the Trust shall have only
one such component, then that one) as may be established and designated from
time to time by the Trustees pursuant to Section 5.11 hereof.
(p)"Shareholder" means a record owner of
Outstanding Shares.
(q)"Shares" means the equal proportionate units of
interest into which the beneficial interest in the Trust shall be divided from
time to time, including the Shares of any and all Series or of any Class within
any Series (as the context may require) which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares.
"Outstanding" Shares means those Shares shown from time to time on the books of
the Trust or its Transfer Agent as then issued and outstanding, but shall not
include Shares which have been redeemed or repurchased by the Trust and which
are at the time held in the treasury of the Trust.
(r)"Transfer Agent" means any Person other than
the Trust who maintains the Shareholder records of the Trust, such as the list
of Shareholders, the number of Shares credited to each account, and the like.
(s) "Trust" means Pioneer Short-Term Income Trust.
(t)The "Trustees" means the persons who have
signed this Declaration, so long as they shall continue in office in accordance
with the terms hereof, and all other persons who now serve or may from time to
time be duly elected, qualified and serving as Trustees in accordance with the
provisions of Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.
(u)"Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or held by or for the
account of the Trust or the Trustees, including any and all assets of or
allocated to any Series or Class, as the context may require.
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ARTICLE II
TRUSTEES
Section 2.1. General Powers. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the same
extent as if the Trustees were the sole owners of the Trust Property and
business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the Commonwealth of Massachusetts,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to promote the
interests of the Trust although such things are not herein specifically
mentioned. Any determination as to what is in the interests of the Trust made by
the Trustees in good faith shall be conclusive. In construing the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as limiting
the aforesaid powers. Such powers of the Trustees may be exercised without order
of or resort to any court.
Section 2.2. Investments. The Trustees shall have the power:
(a)To operate as and carry on the business of an
investment company, and exercise all the powers necessary and appropriate to the
conduct of such operations.
(b)To invest in, hold for investment, or reinvest
in, cash; securities, including common, preferred and preference stocks;
warrants; subscription rights; profit-sharing interests or participations and
all other contracts for or evidence of equity interests; bonds, debentures,
bills, time notes and all other evidences of indebtedness; negotiable or
non-negotiable instruments; government securities, including securities of any
state, municipality or other political subdivision thereof, or any governmental
or quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; and the Trustees shall be deemed to have the foregoing powers
with respect to any additional securities in which the Trust may invest should
the Fundamental Restrictions be amended.
(c)To acquire (by purchase, subscription or
otherwise), to hold, to trade in and deal in, to acquire any rights or options
to purchase or sell, to sell or otherwise dispose of, to lend and to pledge any
such securities, to enter into repurchase agreements, reverse repurchase
agreements, firm commitment agreements, and forward foreign currency exchange
contracts, to purchase and sell options on securities, indices, currency or
other financial assets, futures contracts and options on futures contracts of
all descriptions and to engage in all types of hedging and risk management
transactions.
(d)To exercise all rights, powers and privileges
of ownership or interest in all securities and repurchase agreements included in
the Trust Property, including the right to vote thereon and otherwise act with
respect thereto and to do all acts for the preservation, protection, improvement
and enhancement in value of all such securities and repurchase agreements.
(e)To acquire (by purchase, lease or otherwise)
and to hold, use, maintain, develop and dispose of (by sale or otherwise) any
property, real or personal, including cash or foreign currency, and any interest
therein.
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(f)To borrow money and in this connection issue
notes or other evidence of indebtedness; to secure borrowings by mortgaging,
pledging or otherwise subjecting as security the Trust Property; and to endorse,
guarantee, or undertake the performance of any obligation or engagement of any
other Person and to lend Trust Property.
(g)To aid by further investment any corporation,
company, trust, association or firm, any obligation of or interest in which is
included in the Trust Property or in the affairs of which the Trustees have any
direct or indirect interest; to do all acts and things designed to protect,
preserve, improve or enhance the value of such obligation or interest; and to
guarantee or become surety on any or all of the contracts, stocks, bonds, notes,
debentures and other obligations of any such corporation, company, trust,
association or firm.
(h)To enter into a plan of distribution and any
related agreements whereby the Trust may finance directly or indirectly any
activity which is primarily intended to result in sale of Shares.
(i)To adopt on behalf of the Trust or any Series
thereof an alternative purchase plan providing for the issuance of multiple
Classes of Shares (as authorized herein at Section 5.11), such Shares being
differentiated on the basis of purchase method and allocation of distribution
expenses.
(j)In general to carry on any other business in
connection with or incidental to any of the foregoing powers, to do everything
necessary, suitable or proper for the accomplishment of any purpose or the
attainment of any object or the furtherance of any power hereinbefore set forth,
either alone or in association with others, and to do every other act or thing
incidental or appurtenant to or arising out of or connected with the aforesaid
business or purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers, and the
foregoing enumeration of specific powers shall not be held to limit or restrict
in any manner the general powers of the Trustees.
The Trustees shall not be limited to investing in obligations maturing before
the possible termination of the Trust, nor shall the Trustees be limited by any
law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust or any Series of the Trust, or
in the name of any other Person as nominee, on such terms as the Trustees may
determine, provided that the interest of the Trust therein is deemed
appropriately protected. The right, title and interest of the Trustees in the
Trust Property and the Property of each Series of the Trust shall vest
automatically in each person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in Shares and, subject to the
provisions set forth in Articles VI and VII and Section 5.11 hereof, to apply to
any such repurchase, redemption, retirement, cancellation or acquisition of
Shares any funds or property of the Trust, whether capital or surplus or
otherwise, to the full extent now or hereafter permitted by the laws of the
Commonwealth of Massachusetts governing business corporations.
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Section 2.5. Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust and
the Trust Property, to delegate from time to time to such of their number or to
officers, employees or agents of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or any Series of
the Trust or the names of the Trustees or otherwise as the Trustees may deem
expedient, to the same extent as such delegation is permitted by the 1940 Act.
Section 2.6. Collection and Payment. Subject to Section 5.11 hereof, the
Trustees shall have power to collect all property due to the Trust; to pay all
claims, including taxes, against the Trust Property; to prosecute, defend,
compromise or abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligations, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 2.7. Expenses. Subject to Section 5.11 hereof, the Trustees shall have
the power to incur and pay any expenses which in the opinion of the Trustees are
necessary or incidental to carry out any of the purposes of this Declaration,
and to pay reasonable compensation from the funds of the Trust to themselves as
Trustees. The Trustees shall fix the compensation of all officers, employees and
Trustees.
Section 2.8. Manner of Acting; By-Laws. Except as otherwise provided herein or
in the By-laws, any action to be taken by the Trustees may be taken by a
majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of a majority of the
entire number of Trustees then in office. The Trustees may adopt By-laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-laws to the extent such power is not
reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in addition to
such provisions or any other provision of this Declaration or of the By-Laws,
the Trustees may by resolution appoint a committee consisting of less than the
whole number of Trustees then in office, which committee may be empowered to act
for and bind the Trustees and the Trust, as if the acts of such committee were
the acts of all the Trustees then in office, with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any action, suit
or proceeding which shall be pending or threatened to be brought before any
court, administrative agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the Trustees
shall have the power to: (a) employ or contract with such Persons as the
Trustees may deem desirable for the transaction of the business of the Trust or
any Series thereof; (b) enter into joint ventures, partnerships and any other
combinations or associations; (c) remove Trustees or fill vacancies in or add to
their number, elect and remove such officers and appoint and terminate such
agents or employees as they consider appropriate, and appoint from their own
number, and terminate, any one or more committees which may exercise some or all
of the power and authority of the Trustees as the Trustees may determine; (d)
purchase, and pay for out of Trust Property or the Property of the appropriate
Series of the Trust, insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, administrators, distributors,
selected dealers or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit-sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust or any Series thereof has dealings,
including the Investment Adviser, Administrator, Distributor, Transfer Agent and
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selected dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust or any Series thereof and the method by which its
accounts shall be kept; and (i) adopt a seal for the Trust, but the absence of
such seal shall not impair the validity of any instrument executed on behalf of
the Trust.
Section 2.10. Principal Transactions. Except in transactions not permitted by
the 1940 Act or rules and regulations adopted by the Commission, the Trustees
may, on behalf of the Trust, buy any securities from or sell any securities to,
or lend any assets of the Trust or any Series thereof to any Trustee or officer
of the Trust or any firm of which any such Trustee or officer is a member acting
as principal, or have any such dealings with the Investment Adviser, Distributor
or Transfer Agent or with any Interested Person of such Person; and the Trust or
a Series thereof may employ any such Person, or firm or company in which such
Person is an Interested Person, as broker, legal counsel, registrar, transfer
agent, dividend disbursing agent or custodian upon customary terms.
Section 2.11. Litigation. The Trustees shall have the power to engage in and to
prosecute, defend, compromise, abandon, or adjust by arbitration, or otherwise,
any actions, suits, proceedings, disputes, claims, and demands relating to the
Trust, and out of the assets of the Trust or any Series thereof to pay or to
satisfy any debts, claims or expenses incurred in connection therewith,
including those of litigation, and such power shall include without limitation
the power of the Trustees or any appropriate committee thereof, in the exercise
of their or its good faith business judgment, to dismiss any action, suit,
proceeding, dispute, claim, or demand, derivative or otherwise, brought by any
person, including a Shareholder in its own name or the name of the Trust,
whether or not the Trust or any of the Trustees may be named individually
therein or the subject matter arises by reason of business for or on behalf of
the Trust.
Section 2.12. Number of Trustees. The number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed by a majority of
the Trustees, provided, however, that the number of Trustees shall in no event
be less than two (2) nor more than fifteen (15).
Section 2.13. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.15 hereof, the Trustees may
succeed themselves and shall be elected by the Shareholders owning of record a
plurality of the Shares voting at a meeting of Shareholders on a date fixed by
the Trustees. Except in the event of resignations or removals pursuant to
Section 2.14 hereof, each Trustee shall hold office until such time as less than
a majority of the Trustees holding office have been elected by Shareholders. In
such event the Trustees then in office will call a Shareholders' meeting for the
election of Trustees. Except for the foregoing circumstances, the Trustees shall
continue to hold office and may appoint successor Trustees.
Section 2.14. Resignation and Removal. Any Trustee may resign his trust (without
the need for any prior or subsequent accounting) by an instrument in writing
signed by him and delivered to the other Trustees and such resignation shall be
effective upon such delivery, or at a later date according to the terms of the
instrument. Any of the Trustees may be removed (provided the aggregate number of
Trustees after such removal shall not be less than two) with cause, by the
action of two-thirds of the remaining Trustees or by action of two-thirds of the
outstanding Shares of the Trust (for purposes of determining the circumstances
and procedures under which any such removal by the Shareholders may take place,
the provisions of Section 16(c) of the 1940 Act shall be applicable to the same
extent as if the Trust were subject to the provisions of that Section). Upon the
resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining Trustees shall
require for the purpose of conveying to the Trust or the remaining Trustees any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
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Section 2.15. Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of his death, retirement, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit, made by a written instrument signed by a majority of the Trustees
then in office. Any such appointment shall not become effective, however, until
the person named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of the
Declaration. An appointment of a Trustee may be made in anticipation of a
vacancy to occur at a later date by reason of retirement, resignation or
increase in the number of Trustees, provided that such appointment shall not
become effective prior to such retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in this Section 2.15, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the Declaration.
A written instrument certifying the existence of such vacancy signed by a
majority of the Trustees in office shall be conclusive evidence of the existence
of such vacancy.
Section 2.16. Delegation of Power to Other Trustees. Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six (6) months at any
one time to any other Trustee or Trustees; provided that in no case shall fewer
than two (2) Trustees personally exercise the powers granted to the Trustees
under this Declaration except as herein otherwise expressly provided.
ARTICLE III
CONTRACTS
Section 3.1. Underwriting Contract. The Trustees may in their discretion from
time to time enter into an exclusive or nonexclusive distribution contract or
contracts providing for the sale of the Shares to net the Trust or the
applicable Series of the Trust not less than the amount provided for in Section
7.1 of Article VII hereof, whereby the Trustees may either agree to sell the
Shares to the other party to the contract or appoint such other party as their
sales agent for the Shares, and in either case on such terms and conditions, if
any, as may be prescribed in the By-laws, and such further terms and conditions
as the Trustees may in their discretion determine not inconsistent with the
Provisions of this Article III or of the By-laws; and such contract may also
provide for the repurchase of the Shares by such other party as agent of the
Trustees.
Section 3.2. Advisory or Management Contract. Subject to approval by a vote of a
majority of Shares outstanding and entitled to vote, the Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers, or any of them, under any such contracts
(subject to such general or specific instructions as the Trustees may from time
to time adopt) to effect purchases, sales, loans or exchanges of portfolio
securities and other investments of the Trust on behalf of the Trustees or may
authorize any officer, employee or Trustee to effect such purchases, sales,
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loans or exchanges pursuant to recommendations of such Investment Advisers, or
any of them (and all without further action by the Trustees). Any such
purchases, sales, loans and exchanges shall be deemed to have been authorized by
all of the Trustees. The Trustees may, in their sole discretion, call a meeting
of Shareholders in order to submit to a vote of Shareholders at such meeting the
approval or continuance of any such investment advisory or management contract.
If the Shareholders of any one or more of the Series of the Trust should fail to
approve any such investment advisory or management contract, the Investment
Adviser may nonetheless serve as Investment Adviser with respect to any Series
whose Shareholders approve such contract.
Section 3.3. Administration Agreement. The Trustees may in their discretion from
time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof of the Trust and furnish the Trust or a Series or a Class thereof with
office facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms and conditions as the
Trustees may in their discretion determine.
Section 3.4. Service Agreement. The Trustees may in their discretion from time
to time enter into Service Agreements with respect to one or more Series or
Classes of Shares whereby the other parties to such Service Agreements will
provide administration and/or support services pursuant to Administration Plans
and Service Plans, and all upon such terms and conditions as the Trustees in
their discretion may determine.
Section 3.5. Transfer Agent. The Trustees may in their discretion from time to
time enter into a transfer agency and shareholder service contract whereby the
other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine not inconsistent
with the Declaration. Such services may be provided by one or more Persons.
Section 3.6. Custodian. The Trustees may appoint or otherwise engage one or more
banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-Laws of the Trust. The Trustees may also authorize
the Custodian to employ one or more sub-custodians, including such foreign banks
and securities depositories as meet the requirements of applicable provisions of
the 1940 Act, and upon such terms and conditions as may be agreed upon between
the Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 3.7. Affiliations of Trustees or Officers, Etc. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust or any Series thereof is a shareholder, director, officer,
partner, trustee, employee, manager, adviser or distributor of or for
any partnership, corporation, trust, association or other organization
or of or for any parent or affiliate of any organization, with which a
contract of the character described in Sections 3.1, 3.2, 3.3 or 3.4
above or for services as Custodian, Transfer Agent or disbursing agent
or for related services may have been or may hereafter be made, or that
any such organization, or any parent or affiliate thereof, is a
Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
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been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Section 3.8. Compliance with 1940 Act. Any contract entered into
pursuant to Sections 3.1 or 3.2 shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendment thereof or
other applicable Act of Congress hereafter enacted), as modified by any
applicable order or orders of the Commission, with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
with respect to such Person; and all such Persons shall look solely to the Trust
Property, or to the Property of one or more specific Series of the Trust if the
claim arises from the conduct of such Trustee, officer, employee or agent with
respect to only such Series, for satisfaction of claims of any nature arising in
connection with the affairs of the Trust. If any Shareholder, Trustee, officer,
employee, or agent, as such, of the Trust or any Series thereof, is made a party
to any suit or proceeding to enforce any such liability of the Trust or any
Series thereof, he shall not, on account thereof, be held to any personal
liability. The Trust shall indemnify and hold each Shareholder harmless from and
against all claims and liabilities, to which such Shareholder may become subject
by reason of his being or having been a Shareholder, and shall reimburse such
Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) out of the Trust
Property for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of
assets of the one or more Series whose Shares were held by said Shareholder at
the time the act or event occurred which gave rise to the claim against or
liability of said Shareholder. The rights accruing to a Shareholder under this
Section 4.1 shall not impair any other right to which such Shareholder may be
lawfully entitled, nor shall anything herein contained restrict the right of the
Trust or any Series thereof to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee
or agent of the Trust or any Series thereof shall be liable to the Trust, its
Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
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(i) every person who is, or has been, a Trustee, officer,
employee or agent of the Trust (including any individual who serves at
its request as director, officer, partner, trustee or the like of
another organization in which it has any interest as a shareholder,
creditor or otherwise) shall be indemnified by the Trust, or by one or
more Series thereof if the claim arises from his or her conduct with
respect to only such Series, to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil,
criminal, or other, including appeals), actual or threatened; and the
words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or officer:
(i) against any liability to the Trust, a Series thereof or
the Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interest of the Trust or a
Series thereof;
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(ii)
resulting in a payment by a Trustee or officer, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:
(A) by the court or other body approving the
settlement or other disposition;
(B) based upon a review of readily available facts
(as opposed to a full trial-type inquiry) by (x) vote of a
majority of the Non-interested Trustees acting on the matter
(provided that a majority of the Non-interested Trustees then
in office act on the matter) or (y) written opinion of
independent legal counsel; or
(C) a vote of a majority of the Shares outstanding
and entitled to vote (excluding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors, administrators
and assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust or any Series thereof other
than Trustees and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust or a Series thereof prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 4.3, provided that either:
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(i) such undertaking is secured by a surety bond or some
other appropriate security provided by the recipient, or the Trust or Series
thereof shall be insured against losses arising out of any such advances; or
(ii) a majority of the Non-interested Trustees acting on the
matter (provided that a majority of the Non-interested Trustees act on the
matter) or an independent legal counsel in a written opinion shall determine,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient ultimately will be
found entitled to indemnification.
As used in this Section 4.3, a "Non-interested Trustee" is one who (i)
is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order of
the Commission), and (ii) is not involved in the claim, action, suit or
proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series thereof
shall be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer, employee or agent or
be liable for the application of money or property paid, loaned, or delivered to
or on the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking, and every other act or thing
whatsoever executed in connection with the Trust shall be conclusively presumed
to have been executed or done by the executors thereof only in their capacity as
Trustees under this Declaration or in their capacity as officers, employees or
agents of the Trust or a Series thereof. Every written obligation, contract,
instrument, certificate, Share, other security of the Trust or a Series thereof
or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees individually. The Trustees shall at all times maintain insurance for
the protection of the Trust Property or the Trust Property of the applicable
Series, its Shareholders, Trustees, officers, employees and agents in such
amount as the Trustees shall deem adequate to cover possible tort liability, and
such other insurance as the Trustees in their sole judgment shall deem
advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust or a Series thereof, upon an opinion of
counsel, or upon reports made to the Trust or a Series thereof by any of its
officers or employees or by the Investment Adviser, the Administrator, the
Distributor, Transfer Agent, selected dealers, accountants, appraisers or other
experts or consultants selected with reasonable care by the Trustees, officers
or employees of the Trust, regardless of whether such counsel or expert may also
be a Trustee.
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ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited. The Trustees shall have the exclusive authority without
the requirement of Shareholder approval to establish and designate one or more
Series of shares and one or more Classes thereof as the Trustees deem necessary
or desirable. Each Share of any Series shall represent an equal proportionate
Share in the assets of that Series with each other Share in that Series. Subject
to the provisions of Section 5.11 hereof, the Trustees may also authorize the
creation of additional Series of Shares (the proceeds of which may be invested
in separate, independently managed portfolios) and additional Classes of Shares
within any Series. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split in Shares,
shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration. The
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may determine with respect
to any Series or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the Trustees, partners or members of
a joint stock association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, except that only Shares previously contracted to be sold may be issued
during any period when the right of redemption is suspended pursuant to Section
6.9 hereof, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares of the Trust or, if
the Shares be divided into Series or Classes, of any Series or any Class thereof
of the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such series or Class. Contributions to the Trust or
Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or 1/1,000ths of a Share or integral multiples thereof.
Section 5.5. Register of Shares. A register shall be kept at the
principal office of the Trust or an office of the Transfer Agent which shall
contain the names and addresses of the Shareholders and the number of Shares
held by them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or distributions or otherwise to exercise or enjoy
the rights of Shareholders. No Shareholder shall be entitled to receive payment
of any dividend or distribution, nor to have notice given to him as provided
herein or in the By-laws, until he has given his address to the Transfer Agent
or such other officer or agent of the Trustees as shall keep the said register
for entry thereon. It is not contemplated that certificates will be issued for
the Shares; however, the Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate rules and regulations
as to their use.
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Section 5.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any transfer agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices. Any and all notices to which any Shareholder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
Section 5.8. Treasury Shares. Shares held in the treasury shall, until
resold pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Section 2.13; (ii) with
respect to any investment advisory contract entered into pursuant to Section
3.2; (iii) with respect to termination of the Trust or a Series or Class thereof
as provided in Section 8.2; (iv) with respect to any amendment of this
Declaration to the extent and as provided in Section 8.3; (v) with respect to
any merger, consolidation or sale of assets as provided in Section 8.4; (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 8.5; (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or a Series thereof or the Shareholders of either; (viii)
with respect to any plan adopted pursuant to Rule 12b-l (or any successor rule)
under the 1940 Act, and related matters; and (ix) with respect to such
additional matters relating to the Trust as may be required by this Declaration,
the By-laws or any registration of the Trust as an investment company under the
1940 Act with the Commission (or any successor agency) or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote. On any matter submitted to a
vote of Shareholders, all Shares shall be voted by individual Series except (1)
when permitted by the 1940 Act, Shares shall be voted in the aggregate and not
by individual Series; and (2) when the Trustees have determined that the matter
affects only the interests of one or more Series or Class thereof, then only the
Shareholders of such Series or Class thereof shall be entitled to vote thereon.
The Trustees may, in conjunction with the establishment of any further Series or
any Classes of Shares, establish conditions under which the several Series or
Classes of Shares shall have separate voting rights or no voting rights. There
shall be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take any
action required by law, this Declaration or the By-laws to be taken by
Shareholders. The By-laws may include further provisions for Shareholders' votes
and meetings and related matters.
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Section 5.10. Meetings of Shareholders. No annual or regular meetings
of Shareholders are required. Special meetings of the Shareholders, including
meetings involving only the holders of Shares of one or more but less than all
Series or Classes thereof, may be called at any time by the Chairman of the
Board, President, or any Vice-President of the Trust, and shall be called by the
President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the holder or holders of
ten percent (10%) or more of the total number of Shares then issued and
outstanding of the Trust entitled to vote at such meeting. Meetings of the
Shareholders of any Series of the Trust shall be called by the President or the
Secretary at the written request of the holder or holders of ten percent (10%)
or more of the total number of Shares then issued and outstanding of such Series
of the Trust entitled to vote at such meeting. Any such request shall state the
purpose of the proposed meeting.
Section 5.11. Series or Class Designation. (a) Without limiting the
authority of the Trustees set forth in Section 5.1 to establish and designate
any further Series, it is hereby confirmed that the Trust consists of the
presently Outstanding Shares of a single Series (the "Existing Series").
(b) Without limiting the authority of the Trustees set forth in Section
5.1 to establish and designate any further Classes, it is hereby confirmed that
the Trust Shares consist of a single Class.
(c) The Shares of the existing Series and such Classes thereof herein
established and designated and any Shares of any further Series and Classes
thereof that may from time to time be established and designated by the Trustees
shall be established and designated, and the variations in the relative rights
and preferences as between the different Series shall be fixed and determined,
by the Trustees (unless the Trustees otherwise determine with respect to further
Series or Classes at the time of establishing and designating the same);
provided, that all Shares shall be identical except that there may be variations
so fixed and determined between different Series or Classes thereof as to
investment objective, policies and restrictions, purchase price, payment
obligations, distribution expenses, right of redemption, special and relative
rights as to dividends and on liquidation, conversion rights, exchange rights,
and conditions under which the several Series shall have separate voting rights,
all of which are subject to the limitations set forth below. All references to
Shares in this Declaration shall be deemed to be Shares of any or all Series or
Classes as the context may require.
(d) As to any existing Series and Classes, both heretofore and herein
established and designated, and any further division of Shares of the Trust into
additional Series or Classes, the following provisions shall be applicable:
(i) The number of authorized Shares and the number of Shares
of each Series or Class thereof that may be issued shall be unlimited.
The Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired of any Series or Class into one
or more Series or one or more Classes that may be established and
designated from time to time. The Trustees may hold as treasury shares
(of the same or some other Series or Class), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii) All consideration received by the Trust for the issue or
sale of Shares of a particular Series or Class, together with all
assets in which such consideration is invested or reinvested, all
income, earnings, profits, and proceeds thereof, including any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
for all purposes, subject only to the rights of creditors of such
Series and except as may otherwise be required by applicable tax laws,
and shall be so recorded upon the books of account of the Trust. In the
event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series, the Trustees shall allocate them
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among any one or more of the Series established and designated from
time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have
any claim on or right to any assets allocated or belonging to any other
Series.
(iii) The assets belonging to each particular Series shall be
charged with the liabilities of the Trust in respect of that Series or
the appropriate Class or Classes thereof and all expenses, costs,
charges and reserves attributable to that Series or Class or Classes
thereof, and any general liabilities, expenses, costs, charges or
reserves of the Trust which are not readily identifiable as belonging
to any particular Series shall be allocated and charged by the Trustees
to and among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in
their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Series and
Classes for all purposes. The Trustees shall have full discretion, to
the extent not inconsistent with the 1940 Act, to determine which items
are capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders. The assets of a
particular Series of the Trust shall, under no circumstances, be
charged with liabilities attributable to any other Series or Class
thereof of the Trust. All persons extending credit to, or contracting
with or having any claim against a particular Series or Class of the
Trust shall look only to the assets of that particular Series for
payment of such credit, contract or claim.
(iv) The power of the Trustees to pay dividends and make
distributions shall be governed by Section 7.2 of this Declaration with
respect to any Series or Classes which represent the interests in the
assets of the Trust immediately prior to the establishment of two or
more Series or Classes. With respect to any other Series or Class,
dividends and distributions on Shares of a particular Series or Class
may be paid with such frequency as the Trustees may determine, which
may be daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees
may determine, to the holders of Shares of that Series or Class, from
such of the income and capital gains, accrued or realized, from the
assets belonging to that Series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series
or Class. All dividends and distributions on Shares of a particular
Series or Class shall be distributed pro rata to the Shareholders of
that Series or Class in proportion to the number of Shares of that
Series or Class held by such Shareholders at the time of record
established for the payment of such dividends or distribution.
(v) Each Share of a Series of the Trust shall represent a
beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or Class thereof shall be entitled to receive his
pro rata share of distributions of income and capital gains made with
respect to such Series or Class net of expenses. Upon redemption of his
Shares or indemnification for liabilities incurred by reason of his
being or having been a Shareholder of a Series or Class, such
Shareholder shall be paid solely out of the funds and property of such
Series of the Trust. Upon liquidation or termination of a Series or
Class thereof of the Trust, Shareholders of such Series or Class
thereof shall be entitled to receive a pro rata share of the net assets
of such Series. A Shareholder of a particular Series of the Trust shall
not be entitled to participate in a derivative or class action on
behalf of any other Series or the Shareholders of any other Series of
the Trust.
(vi) On each matter submitted to a vote of Shareholders, all
Shares of all Series and Classes shall vote as a single class;
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provided, however, that (1) as to any matter with respect to which a
separate vote of any Series or Class is required by the 1940 Act or is
required by attributes applicable to any Class or is required by any
Rule 12b-l plan, such requirements as to a separate vote by that Series
or Class shall apply; (2) to the extent that a matter referred to in
(l) above, affects more than one Class or Series and the interests of
each such Class or Series in the mater are identical, then, subject to
(3) below, the Shares of all such affected Classes or Series shall vote
as a single Class; (3) as to any matter which does not affect the
interests of a particular Series or Class, only the holders of Shares
of the one or more affected Series or Classes shall be entitled to
vote; and (4) the provisions of the following sentence shall apply. On
any matter that pertains to any particular Class of a particular Series
or to any Class expenses with respect to any Series which matter may be
submitted to a vote of Shareholders, only Shares of the affected Class,
as the case may be, or that Series shall be entitled to vote except
that: (i) to the extent said matter affects Shares of another Class or
Series, such other Shares shall also be entitled to vote, and in such
cases Shares of the affected Class, as the case may be, of such Series
shall be voted in the aggregate together with such other Shares; and
(ii) to the extent that said matter does not affect Shares of a
particular Class of such Series, said Shares shall not be entitled to
vote (except where otherwise required by law or permitted by the
Trustees acting in their sole discretion) even though the matter is
submitted to a vote of the Shareholders of any other Class or Series.
(vii) Except as otherwise provided in this Article V, the
Trustees shall have the power to determine the designations,
preferences, privileges, payment obligations, limitations and rights,
including voting and dividend rights, of each Class and Series of
Shares. Subject to compliance with the requirement of the 1940 Act, the
Trustees shall have the authority to provide that the holders of Shares
of any Series or Class shall have the right to convert or exchange said
Shares into Shares of one or more Series or Classes of Shares in
accordance with such requirements, conditions and procedures as may be
established by the Trustees.
(viii) The establishment and designation of any Series or
Classes of Shares shall be effective upon the execution by a majority
of the then Trustees of an instrument setting forth such establishment
and designation and the relative rights and preferences of such Series
or Classes, or as otherwise provided in such instrument. At any time
that there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that Series
or Class and the establishment and designation thereof. Each instrument
referred to in this section shall have the status of an amendment to
this Declaration.
Section 5.12. Assent to Declaration of Trust. Every Shareholder, by
virtue of having become a Shareholder, shall be held to have expressly assented
and agreed to the terms hereof and to have become a party hereto.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust. The
Trust may require any Shareholder to pay a sales charge to the Trust, the
underwriter, or any other person designated by the Trustees upon redemption or
repurchase of Shares in such amount and upon such conditions as shall be
determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trustees may determine) at such office or
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agency as may be designated from time to time for that purpose by the Trustees.
The Trustees may from time to time specify additional conditions, not
inconsistent with the 1940 Act, regarding the redemption of Shares in the
Trust's then effective Prospectus.
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall have theretofore prescribed by resolution. In the absence of
such resolution, the redemption price of Shares deposited shall be based on the
net asset value of such Shares next determined as set forth in Section 7.1
hereof after receipt of such application. The amount of any contingent deferred
sales charge or redemption Fee payable upon redemption of Shares may be deducted
from the Proceeds of such redemption.
Section 6.3. Payment. Payment of the redemption price or Shares of the
Trust or any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940 Act
or other applicable laws, as may be specified from time to time in the Trust's
then effective Prospectus, subject to the provisions of Section 6.4 hereof.
Notwithstanding the foregoing, the Trustees may withhold from such redemption
proceeds any amount arising (i) from a liability of the redeeming Shareholder to
the Trust or (ii) in connection with any Federal or state tax withholding
requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of
the determination of net asset value with respect to Shares of the Trust or of
any Series or Class thereof, the rights of Shareholders (including those who
shall have applied for redemption pursuant to Section 6.1 hereof but who shall
not yet have received payment) to have Shares redeemed and paid for by the Trust
or a Series or Class thereof shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any Share certificates
on deposit. The redemption price of Shares for which redemption applications
have not been revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such suspension,
and payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of one or
more Series or Class thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a) If the Trustees shall, at any
time and in good faith, be of the opinion that direct or indirect ownership of
Shares or other securities of the Trust has or may become concentrated in any
Person to an extent which would disqualify the Trust or any Series of the Trust
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as a regulated investment company under the Internal Revenue Code of 1986, then
the Trustees shall have the power by lot or other means deemed equitable by them
(i) to call for redemption by any such Person a number, or principal amount, of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in Section 6.1.
(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code of 1986, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series of the Trust pursuant to the provisions of Section
7.3.
Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Series
thereof of securities owned by it is not reasonably practicable or it is not
reasonably practicable for, the Trust or a Series thereof fairly to determine
the value of its net assets, or (iv) during any other period when the Commission
may for the protection of Shareholders of the Trust by order permit suspension
of the right of redemption or postponement of the date of payment or redemption;
provided that applicable rules and regulations of the Commission shall govern as
to whether the conditions prescribed in (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trust shall be conclusive). In the case
of a suspension of the right of redemption, a Shareholder may either withdraw
his request for redemption or receive payment based on the net asset value
existing after the termination of the suspension.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each outstanding
Share of the Trust or of each Series or Class thereof shall be determined on
such days and at such time or times as the Trustees may determine. The value of
the assets of the Trust or any Series thereof may be determined (i) by a pricing
service which utilizes electronic pricing techniques based on general
institutional trading, (ii) by appraisal of the securities owned by the Trust or
any Series of the Trust, (iii) in certain cases, at amortized cost, or (iv) by
such other method as shall be deemed to reflect the fair value thereof,
determined in good faith by or under the direction of the Trustees. From the
total value of said assets, there shall be deducted all indebtedness, interest,
taxes, payable or accrued, including estimated taxes on unrealized book profits,
expenses and management charges accrued to the appraisal date, net income
determined and declared as a distribution and all other items in the nature of
liabilities which shall be deemed appropriate, as incurred by or allocated to
the Trust or any Series or Class of the Trust. The resulting amount which shall
represent the total net assets of the Trust or Series or Class thereof shall be
divided by the number of Shares of the Trust or Series or Class thereof
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outstanding at the time and the quotient so obtained shall be deemed to be the
net asset value of the Shares of the Trust or Series or Class thereof. The net
asset value of the Shares shall be determined at least once on each business
day, as of the close of regular trading on the New York Stock Exchange or as of
such other time or times as the Trustees shall determine. The power and duty to
make the daily calculations may be delegated by the Trustees to the Investment
Adviser, the Administrator, the Custodian, the Transfer Agent or such other
Person as the Trustees by resolution may determine. The Trustees may suspend the
daily determination of net asset value to the extent permitted by the 1940 Act.
It shall not be a violation of any provision of this Declaration of Trust if
Shares are sold, redeemed or repurchased by the Trust at a price other than one
based on net asset value if the net asset value is affected by one or more
errors inadvertently made in the pricing of portfolio securities or in accruing
income, expenses or liabilities.
Section 7.2. Distributions to Shareholders. (a) The Trustees shall from
time to time distribute ratably among the Shareholders of the Trust or of a
Series or Class thereof such proportion of the net profits, surplus (including
paid-in surplus), capital, or assets of the Trust or such Series held by the
Trustees as they may deem proper. Such distributions may be made in cash or
property (including without limitation any type of obligations of the Trust or
Series or Class or any assets thereof), and the Trustees may distribute ratably
among the Shareholders of the Trust or Series or Class thereof additional Shares
of the Trust or Series or Class thereof issuable hereunder in such manner, at
such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
exclude Shares for which orders have been placed subsequent to a specified time
on the date the distribution is declared or on the next preceding day if the
distribution is declared as of a day on which Boston banks are not open for
business, all as described in the then effective prospectus under the Securities
Act of 1933. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or a Series or
Class thereof or to meet obligations of the Trust or a Series or Class thereof,
or as they may deem desirable to use in the conduct of its affairs or to retain
for future requirements or extensions of the business. The Trustees may adopt
and offer to Shareholders such dividend reinvestment plans, cash dividend payout
plans or related plans as the Trustees shall deem appropriate. The Trustees may
in their discretion determine that an account administration fee or other
similar charge may be deducted directly from the income and other distributions
paid on Shares to a Shareholder's account in each Series or Class.
(b) Inasmuch as the computation of net income and gains for Federal
income tax purposes may vary from the computation thereof on the books, the
above provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or a Series or Class thereof to avoid or reduce liability for
taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 hereof, the net income
of the Series and Classes thereof of the Trust shall be determined in such
manner as the Trustees shall provide by resolution. Expenses of the Trust or of
a Series or Class thereof, including the advisory or management fee, shall be
accrued each day. Each Class shall bear only expenses relating to its Shares and
an allocable share of Series expenses in accordance with such policies as may be
established by the Trustees from time to time and as are not inconsistent with
the provisions of this Declaration of Trust or of any applicable document filed
by the Trust with the Commission or of the Internal Revenue Code of 1986, as
amended. Such net income may be determined by or under the direction of the
Trustees as of the close of trading on the New York Stock Exchange on each day
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on which such market is open or as of such other time or times as the Trustees
shall determine, and, except as provided herein, all the net income of any
Series or Class of the Trust, as so determined, may be declared as a dividend on
the Outstanding Shares of such Series or Class. If, for any reason, the net
income of any Series or Class of the Trust determined at any time is a negative
amount, the Trustees shall have the power with respect to such Series or Class
(i) to offset each Shareholder's pro rata share of such negative amount from the
accrued dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of such Series or Class by reducing the number of Shares in
the account of such Shareholder by that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of the Trust an asset account in the amount of
such negative net income, which account may be reduced by the amount, provided
that the same shall thereupon become the property of the Trust with respect to
such Series or Class and shall not be paid to any Shareholder, of dividends
declared thereafter upon the Outstanding Shares of such Series or Class on the
day such negative net income is experienced, until such asset account is reduced
to zero. The Trustees shall have full discretion to determine whether any cash
or property received shall be treated as income or as principal and whether any
item of expense shall be charged to the income or the principal account, and
their determination made in good faith shall be conclusive upon the
Shareholders. In the case of stock dividends received, the Trustees shall have
full discretion to determine, in the light of the particular circumstances, how
much if any of the value thereof shall be treated as income, the balance, if
any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
of the Foregoing provisions of this Article VII, but subject to Section 5.11
hereof, the Trustees may prescribe, in their absolute discretion, such other
bases and times for determining the per Share net asset value of the Shares of
the Trust or a Series or Class thereof or net income of the Trust or a Series or
Class thereof, or the declaration and payment of dividends and distributions as
they may deem necessary or desirable. Without limiting the generality of the
foregoing, the Trustees may establish several Series or Classes of Shares in
accordance with Section 5.11, and declare dividends thereon in accordance with
Section 5.11(d)(iv).
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII.
Section 8.2. Termination of the Trust or a Series or a Class. The Trust
or any Series or Class thereof may be terminated by (i) the affirmative vote of
the holders of not less than two-thirds of the Shares outstanding and entitled
to vote at any meeting of Shareholders of the Trust or the appropriate Series or
Class thereof, (ii) by an instrument or instruments in writing without a
meeting, consented to by the holders of two-thirds of the Shares of the Trust or
a Series or Class thereof; provided, however, that, if such termination is
recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares of the Trust or a Series or Class thereof outstanding and
entitled to vote shall be sufficient authorization, or (iii) notice to
Shareholders by means of an instrument in writing signed by a majority of the
Trustees, stating that a majority of the Trustees has determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of such Series or a Class, the Trust or their respective shareholders
as a result of such factors or events adversely affecting the ability of such
Series or a Class or the Trust to conduct its business and operations in an
economically viable manner. Such factors and events may include (but are not
limited to) the inability of a Series or Class or the Trust to maintain its
assets at an appropriate size, changes in laws or regulations governing the
Series or Class or the Trust or affecting assets of the type in which such
Series or Class or the Trust invests or economic developments or trends having a
significant adverse impact on the business or operations of such Series or Class
or the Trust. Upon the termination of the Trust or the Series or Class,
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(i) The Trust, Series or Class shall carry on no business
except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust, Series or Class and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust, Series or
Class shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust, Series or Class, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose
of all or any part of the remaining Trust Property or Trust Property
allocated or belonging to such Series or Class to one or more persons a
public or private sale for consideration which may consist in whole or
in part of cash, securities or other property of any kind, discharge or
pay its liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property or Trust Property allocated or belonging to such Series or
Class that requires Shareholder approval in accordance with Section 8.4
hereof shall receive the approval so required.
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or Class
according to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Office of the
Secretary of the Commonwealth of Massachusetts an instrument in writing setting
forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties with respect to the Trust or
the terminated Series or Class, and the rights and interests of all Shareholders
of the Trust or the terminated Series or Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended
by a vote of the holders of a majority of the Shares outstanding and entitled to
vote or by any instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of a majority of the Shares
outstanding and entitled to vote. The Trustees may amend this Declaration
without the vote or consent of Shareholders if they deem it necessary to conform
this Declaration to the requirements of applicable federal or state laws or
regulations or the requirements of the regulated investment company provisions
of the Internal Revenue Code, but the Trustees shall not be liable for failing
so to do. The Trustees may also amend this Declaration without the vote or
consent of Shareholders if they deem it necessary or desirable to change the
name of the Trust or series or to make any other changes in the Declaration
which do not adversely affect the rights of Shareholders hereunder.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series or Class thereof by
reducing the amount payable thereof, upon liquidation of the Trust or Series or
Class thereof or by diminishing or eliminating any voting rights pertaining
thereto, except with the vote or consent of the holders of two-thirds of the
Shares of the Trust or such Series or Class outstanding and entitled to vote.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees and agents of the Trust or to permit assessments
upon Shareholders.
(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
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Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or Trust Property allocated or belonging to such
Series, including its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of Shareholders called for
the purpose by the affirmative vote of the holders of two-thirds of the Shares
of the Trust or such Series outstanding and entitled to vote, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of the Shares of the Trust or such Series; provided,
however, that, if such merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares of the Trust or such Series outstanding and entitled to
vote shall be sufficient authorization; and any such merger, consolidation,
sale, lease or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.
Section 8.5. Incorporation. With the approval of the holders of a
majority of the Shares of the Trust or a Series thereof outstanding and entitled
to vote, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or the Trust Property allocated or belonging to such Series or to
carry on any business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust Property or the Trust
Property allocated or belonging to such Series to any such corporation, trust,
association or organization in exchange for the shares or securities thereof or
otherwise, and to lend money to, subscribe for the shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust or such Series holds or is about to acquire
shares or any other interest. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such organization or
entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series a written financial report of the transactions of the Trust,
including financial statements which shall at least annually be certified by
independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Execution and Filing. This Declaration and any amendment
hereto shall be filed in the office of the Secretary of The Commonwealth of
Massachusetts and in such other places as may be required under the laws of
Massachusetts and may also be filed or recorded in such other places as the
Trustees deem appropriate. Each amendment so filed shall be accompanied by a
certificate signed and acknowledged by a Trustee stating that such action was
duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
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such amendment shall be effective upon its execution. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and filed with the Secretary of The Commonwealth of
Massachusetts. A restated Declaration shall, upon execution, be conclusive
evidence of all amendments contained therein and may thereafter be referred to
in lieu of the original Declaration and the various amendments thereto.
Section 10.2. Governing Law. This Declaration is executed by the
Trustees and delivered in The Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying (a) the number or identity of Trustees or Shareholders,
(b) the due authorization of the execution of any instrument or writing, (c) the
form of any vote passed at a meeting of Trustees or Shareholders, (d) the fact
that the number of Trustees or Shareholders present at any meeting or executing
any written instrument satisfies the requirements of this Declaration, (e) the
form of any By-laws adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986 or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of the Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
________, day of April, 1992.
/s/David D. Tripple
David D. Tripple,
as Trustee and not individually
6 Woodbine Road
Belmont, Massachusetts 02178
/s/John F. Cogan, Jr.
John F. Cogan, Jr.,
as Trustee and not individually
975 Memorial Drive, #802
Cambridge, Massachusetts 02138
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PIONEER SHORT-TERM INCOME TRUST
Establishment and Designation
of
Class A Shares and Class B Shares
of Beneficial Interest of
Pioneer Short-Term Income Trust
The undersigned, being a majority of the Trustees of Pioneer Short-Term
Income Trust, a Massachusetts business trust (the "Fund"), acting pursuant to
Sections 5.1 and 5.11 of the Amended and Restated Declaration of Trust dated
April 30, 1992 of the Fund, as amended from time to time (the "Declaration"), do
hereby divide the shares of beneficial interest of the Fund (the "Shares"), to
create two classes of Shares of the Fund as follows:
1. The two classes of Shares established and designated hereby are
"Class A Shares" and "Class B Shares," respectively.
2. Class A Shares and Class B Shares shall each be entitled to all
of the rights and preferences accorded to Shares under the
Declaration.
3. The purchase price of Class A Shares and of Class B Shares, the
method of determining the net asset value of Class A Shares and
of Class B Shares, and the relative dividend rights of holders of
Class A Shares and of holders of Class B Shares shall be
established by the Trustees of the Fund in accordance with the
provisions of the Declaration and shall be set forth in the
Fund's Registration Statement on Form N-1A under the Securities
Act of 1933 and/or the Investment Company Act of 1940, as amended
and as in effect at the time of issuing such Shares.
4. All Shares of the Fund issued prior to the filing of this
instrument with the Secretary of State of The Commonwealth of
Massachusetts shall be deemed Class A Shares and the Trustees,
acting in their sole discretion, may determine that any Shares of
the Fund issued after such time are Class A Shares, Class B
Shares or Shares of any other class of the Fund hereafter
established and designated by the Trustees.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
_____ day of December, 1993.
John F. Cogan, Jr. Marguerite A. Piret
as Trustee and not individually as Trustee and not individually
975 Memorial Drive, #802 162 Washington Street
Cambridge, MA 02138 Belmont, MA 02178
Richard H. Egdahl, M.D. David D. Tripple
as Trustee and not individually as Trustee and not individually
Health Policy Institute 6 Woodbine Road
53 Bay State Road Belmont, MA 02178
Boston, MA 02215
Margaret B.W. Graham Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
776 Garland Drive Sullivan & Cromwell
Palo Alto, CA 94303 125 Broad Street
New York, NY 10004
John W. Kendrick John Winthrop
as Trustee and not individually as Trustee and not individually
Hyatt Residence, Apt. 1521 52 King Street
8100 Connecticat Ave. Charleston, SC 29401
Chevy Chase, MD 20815
BY-LAWS
of
PIONEER SHORT-TERM INCOME TRUST
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a Chairman, a President,
a Treasurer, a Secretary, and such other officers with such other titles as
provided for herein or as the Trustees may from time to time elect. It shall not
be necessary for any Trustee or other officer to be a holder of shares in the
Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The Chairman and President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their successors
are duly chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President, the Trustees or the Secretary,
which shall take effect upon such filing unless it is specified to be effective
at some other time or upon the happening of some other event. Any officer may be
removed at any time, with or without cause, by vote of a majority of the
Trustees.
SECTION 4. Vacancies. The Trustees may fill any vacancy occurring in any office
for any reason and may, in their discretion, leave unfilled for such period as
they may determine any offices other than those of Chairman, President,
Treasurer and Secretary. Each such successor shall hold office until his
successor is duly chosen and qualified.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to fully
carry out that responsibility.
SECTION 2. Executive and other Committees. The Trustees may elect from their own
number an Executive Committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, and such other powers and duties as the Trustees
may from time to time delegate to such Committee. The Trustees may also elect
from their own number other Committees from time to time, the number composing
such Committees and the powers conferred upon the same to be determined by vote
of the Trustees.
SECTION 3. Chairman of the Trustees. The Chairman shall preside at all meetings
of the Trustees and he may be the chief executive, financial and accounting
officer of the Trust. The Chairman may also perform such other duties as the
Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief operating officer of the
Trust and, subject to the Trustees, shall have general supervision over the
business and policies of the Trust. The President shall have full power and
authority to bind the Trust and in connection therewith may execute and deliver
in the name and on behalf of the Trust any and all agreements, instruments,
notes and writings of any nature that he may consider necessary or appropriate
in connection with the management of the Trust. The President shall perform such
duties additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. The Treasurer may be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank(s) or trust compan(ies) as
the Trustees shall employ as Custodian(s) in accordance with Section 3.6 of the
Declaration of Trust and these By-Laws. He shall have the custody of the seal of
the Trust. He shall make annual reports in writing of the business conditions of
the Trust, which reports shall be preserved upon its records, and he shall
furnish such other reports regarding its business and condition as the Trustees
may from time to time require. The Treasurer shall perform such duties
additional to all of the foregoing as the Trustees or the President may from
time to time designate.
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SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings.
The Secretary shall perform such duties and possess such powers additional to
the foregoing as the Trustees or the President may from time to time designate.
SECTION 7. Vice Presidents. Each Vice President of the Trust shall perform such
duties and possess such powers as the Trustees or the President may from time to
time designate. In the event of the absence, inability or refusal to act of the
President, the Vice President (or if there shall be more than one, the Vice
Presidents in the order determined by the Trustees) shall perform the duties of
the President and when so performing shall have all the powers of and be subject
to all the restrictions upon the President.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust shall
perform such duties and possess such powers as the Trustees, the President or
the Treasurer may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION 1. General. Voting powers and meetings of Shareholders shall be governed
by applicable provisions of law, the Declaration of Trust and as hereinafter
provided by these By-Laws.
SECTION 2. Special Meetings. A special meeting of the Shareholders of any Series
shall be called by the Secretary whenever ordered by the Trustees or requested
in writing by the holder or holders of at least one-tenth of the outstanding
Shares of any such Series entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such special
meeting, the Trustees or the Shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
SECTION 3. Notices. Except as above provided, notices of any special meeting of
the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, a written
or printed notification of such meeting, at least fifteen days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
SECTION 4. Place of Meeting. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in Boston, Massachusetts or
at such other place in the United States as the Trustees may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Meetings. Meetings of the Trustees shall be called orally or in
writing by the Chairman or at his order or direction or by any two other
Trustees, and if the Secretary when so requested refuses or fails for more than
one day to call such meeting, the Chairman, or such two other Trustees, may in
the name of the Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
SECTION 2. Quorum. A majority of the Trustees shall constitute a quorum for the
transaction of business.
SECTION 3. Notices. Except as otherwise provided, notice of any meeting of the
Trustees shall be given by the Secretary to each Trustee, by mailing to him,
postage prepaid, addressed to him at his address as registered on the books of
the Trust or, if not so registered, at his last known address, a written or
printed notification of such meeting at least three days before the meeting or
by delivering such notice to him at least two days before the meeting, or by
telephoning him or by sending to him at least one day before the meeting, by
prepaid telegram, addressed to him at his said registered address, if any, or if
he has no such registered address, at his last known address, notice of such
meeting.
SECTION 4. Place of Meeting. All meetings of the Trustees shall be held at the
principal place of business of the Trust in Boston, Massachusetts, or such other
place within or without the Commonwealth as the person or persons requesting
said meeting to be called may designate, but any meeting may adjourn to any
other place.
SECTION 5. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
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meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 6. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by a majority of the Trustees and
filed with the records of the Trustees' meetings, or by telephone consent
provided a quorum of Trustees participate in any such telephone meeting. Such
consent shall be treated as a vote of the Trustees for all purposes, provided
however, no such consent shall be effective if the Investment Company Act of
1940 requires that a particular action be taken only at a meeting of the
Trustees.
ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust and the
status of the owners thereof shall be defined, established and governed by
applicable provisions of law, the Declaration of Trust and as herein provided by
these By-Laws.
SECTION 2. Transfers. Shares may be transferred on the books of the Trust by
written request to the Trust or its transfer agent, with such proof of authority
or the authenticity of signature as the Trust or its transfer agent may
reasonably require. Except as may be otherwise required by law, by the
Declaration of Trust or by these By-Laws, the Trust shall be entitled to treat
the record holder of shares of beneficial interest as shown on its books as the
owner of such shares for all purposes, including the payment of dividends and
the right to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such shares until the shares have been transferred on the
books of the Trust in accordance with the requirements of these By-Laws.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what extent, and
at what times and places, and under what conditions and regulations the accounts
and books of the Trust or any of them shall be open to the inspection of the
shareholders; and no shareholder shall have any right to inspect any account or
book or document of the Trust except as conferred by law or otherwise by the
Trustees or by resolution of the shareholders.
ARTICLE VII
Custodian
The Custodian(s) employed by the Trust pursuant to Section 3.6 of the
Declaration of Trust shall be required to enter into a contract with the Trust
which shall contain in substance the following provisions:
(a) The Trust will cause all securities and funds owned by the
Trust to be delivered or paid to the Custodian(s).
(b) The Custodian(s) will receive and receipt for any moneys due
to the Trust and deposit the same in its own banking
department and in such other banking institutions, if any,
as the Custodian(s) and the Trustees may approve. The
Custodian(s) shall have the sole power to draw upon any such
account.
(c) The Custodian(s) shall release and deliver securities owned
by the Trust in the following cases only:
(1) Upon the sale of such securities for the account
of the Trust and receipt of payment therefor;
(2) To the issuer thereof or its agent when such
securities are called, redeemed, retired or
otherwise become payable; provided that in any
such case, the cash is to be delivered to the
Custodian(s);
(3) To the issuer thereof or its agent for transfer
into the name of the Trust, the Custodian(s) or a
nominee of either, or for exchange for a different
number of bonds or certificates representing the
same aggregate face amount or number of units;
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provided that in any such case the new securities
are to be delivered to the Custodian(s);
(4) To the broker selling the same for examination, in
accord with the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities
of the issuer of such securities or pursuant to
provisions to any deposit agreement; provided
that, in any such case, the new securities and
cash, if any, are to be delivered to the
Custodian(s);
(6) In the case of warrants, rights, or similar
securities, the surrender thereof in the exercise
of such warrants, rights or similar securities or
the surrender of interim receipts or temporary
securities for definitive securities;
(7) To any pledge by way of pledge or hypothecation to
secure any loan; and
(8) For deposit in a system for the central handling
of securities.
(d) The Custodian(s) shall pay out moneys of the Trust only upon
the purchase of securities for the account of the Trust and
the delivery in due course of such securities to the
Custodian(s), or in connection with the conversion, exchange
or surrender of securities owned by the Trust as set forth
in (c), or for the redemption or repurchase of shares issued
by the Trust or for the making of any disbursements
authorized by the Trustees pursuant to the Declaration of
Trust or these By-laws, or for the payment of any expense or
liability incurred by the Trust; provided that, in every
case where payment is made by the Custodian(s) in advance of
receipt of the securities purchased, the Custodian(s) shall
be absolutely liable to the Trust for such securities to the
same extent as if the securities had been received by the
Custodian(s).
(e) The Custodian(s) shall make deliveries of securities and
payments of cash only upon written instructions signed or
initialed by such officer or officers or other agent or
agents of the Trust as may be authorized to sign or initial
such instructions by resolution of the Trustees; it being
understood that the Trustees may from time to time authorize
a different person or persons to sign or initial
instructions for different purposes.
The contract between the Trust and the Custodian(s) may contain any such
other provisions not inconsistent with the provisions of Section 3.6 of the
Declaration of Trust or with these By-laws as the Trustees may approve.
Such contract shall be terminable by either party upon written notice to
the other within such time not exceeding sixty (60) days as may be specified in
the contract; provided, however, that upon termination of the contract or
inability of the Custodian(s) to continue to serve, the Custodian(s) shall, upon
written notice of appointment of another bank or trust company as custodian,
deliver and pay over to such successor custodian all securities and moneys held
by it for account of the Trust. In such case, the Trustees shall promptly
appoint a successor custodian, but in the event that no successor custodian can
be found having the required qualifications and willing to serve, it shall be
the duty of the Trustees to call as promptly as possible a special meeting of
the Shareholders to determine whether the Trust shall function without a
custodian or shall be liquidated. If so directed by vote of the holders of a
majority of the outstanding Shares, the Custodian(s) shall deliver and pay over
all property of the Trust held by it as specified in such vote.
Such contract shall also provide that, pending appointment of a successor
custodian or a vote of the shareholders specifying some other disposition of the
funds and property, the Custodian(s) shall not deliver funds and property of the
Trust to the Trust, but it may deliver them to a bank or trust company doing
business in Boston, Massachusetts, of its own selection having aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than $2,000,000 as the property of the Trust to be held under terms
similar to those on which they were held by the retiring custodian.
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Any sub-custodian employed by the Custodian(s) pursuant to authorization to
do so granted by the Trust pursuant to Section 3.6 of the Declaration of Trust
shall be required to enter into a contract with the Custodian containing in
substance the same provisions as those described in paragraphs (a) through (e)
above, except that any contract with a sub-custodian performing its duties
outside the United States and its territories and possessions, may omit or limit
any of such conditions, provided that, any such omission or limitation shall be
expressly approved by a majority of the Trustees of the Trust.
ARTICLE VIII
Miscellaneous Provisions
SECTION 1. Seal. The seal of the Trust shall be circular in form bearing the
inscription:
"PIONEER SHORT-TERM INCOME TRUST"
"A MASSACHUSETTS BUSINESS TRUST 1992"
SECTION 2. Fiscal Year. The fiscal year of the Trust shall be the period of
twelve months ending on the last day of November in each calendar year.
SECTION 3. Reports to Shareholders. The Trustees shall at least semi-annually
submit to the shareholders a written financial report of the transactions of the
Trust including financial statements which shall at least annually be certified
by independent public accountants.
SECTION 4. Voting of Securities. Except as the Trustees may otherwise designate,
the President or Treasurer may waive notice of, and act as, or appoint any
person or persons to act as, proxy or attorney-in-fact for the Trust (with or
without power of substitution) at, any meeting of stockholders or shareholders
of any corporation or other organization, the securities of which may be held by
the Trust.
SECTION 5. Evidence of Authority. A certificate by the Secretary or Assistant
Secretary, or a temporary Secretary, as to any action taken by the shareholders,
Trustees, any committee or any officer or representative of the Trust shall as
to all persons who rely on the certificate in good faith be conclusive evidence
of such action.
SECTION 6. Declaration of Trust. All references in these By-Laws to the
Declaration of Trust shall be deemed to refer to the Declaration of Trust of the
Trust dated April __, 1992, and known as "Pioneer Short-Term Income Trust," as
amended and in effect from time to time.
SECTION 7 Severability. Any determination that any provision of these By-Laws is
for any reason inapplicable, illegal or ineffective shall not affect or
invalidate any other provision of these By-Laws or the Declaration of Trust.
SECTION 8. Pronouns. All pronouns used in these By-Laws shall be deemed to refer
to the masculine, feminine or neuter, singular or plural, as the identity of the
person or persons may require.
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MANAGEMENT CONTRACT
THIS AGREEMENT dated this 4th day of August, 1992 between Pioneer
Short-Term Income Trust, a Massachusetts business trust (the "Fund"), and
Pioneering Management Corporation, a Delaware corporation, (the "Manager").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended.
WHEREAS, the parties hereto deem it mutually advantageous that the Manager
should assist the Fund's Board of Trustees and officers in the management of the
securities portfolio.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Fund and the Manager do hereby agree as follows:
1. The Manager is authorized to buy and sell securities and to designate
brokers to carry out such transactions, subject to the following limitations.
The Manager may not:
a. make any purchase the cost of which exceeds funds currently available;
b. make any purchase that would violate any fundamental policy or
restriction in the Fund's Prospectus or Statement of Additional
Information as in effect from time to time.
2. Further, the Manager's discretion is limited by the following general
rules:
a. notice of each purchase or sale of securities shall be forwarded
promptly to each Trustee;
b. if any three Trustees disapprove in writing of any transaction within
forty-eight hours after dispatch of such notice, the Manager shall
immediately repurchase or resell the security involved in such
transaction, as the case may be, at the expense and risk of the Fund;
c. all transactions will be made at the best price and execution
available.
3. The Manager, at its own expense, shall furnish to the Fund with office
space in the offices of the Manager or in such other place as may be agreed upon
from time to time, and all necessary office facilities, equipment and personnel
for managing the affairs and investments and supervising the keeping of the
books of the Fund and shall arrange, if desired by the Fund, for members of the
Manager's organization to serve as officers or agents of the Fund.
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The Manager shall pay directly or reimburse the Fund for: (i) the
compensation (if any) of the Trustees who are affiliated with, or interested
persons of, Manager and all officers of the Fund as such, (ii) all expenses not
hereinafter specifically assumed by the Fund where such expenses are incurred by
the Manager or by the Fund in connection with the management of the affairs and
assets of the Fund, and (iii) all fees of subadvisers who are employed from time
to time by the Manager and the Fund to manage portions of the Fund's assets
(collectively, the "Subadvisers").
The Fund shall assume and shall pay: (i) charges and expenses for
determining from time to time the value of the Fund's net assets and the keeping
of its books and records, (ii) the charges and expenses of auditors, (iii) the
charges and expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by the Fund, (iv) brokers' commissions,
and issue and transfer taxes, chargeable to the Fund in connection with
securities transactions to which the Fund is a party, (v) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies, (vi) fees and expenses involved in registering and
maintaining registrations of the Fund and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission, (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies, (viii)
charges and expenses of legal counsel (ix) distribution fees paid by the Fund in
accordance with Rule 12b-1 promulgated by the Commission pursuant to the 1940
Act, and (x) compensation of those Trustees of the Fund who are not affiliated
with or interested persons of the Manager, the Fund (other than as Trustees),
The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.
4. It is understood that the Manager may employ one or more Subadvisers
under agreements with each such Subadviser. The authorization given to the
Manager in Section 1 hereof may be delegated by it under any such agreement to
any of the Subadvisers, provided that the Subadvisers shall be subject to the
same restrictions and limitations on investments and brokerage discretion as the
Manager. While the Manager shall be responsible for allocating assets among the
Subadvisers and monitoring their relative performances, the Fund agrees that the
Manager should not be accountable to the Fund or its shareholders for any loss
or other liability relating to specific investments directed by any Subadviser
(even though the Manager retains the right to reverse any such investment),
because the Fund and the Manager will be relying almost exclusively on the
expertise of the Subadvisers for the selection and monitoring of specific
investments directed by the Subadvisers.
5. The Fund shall pay to the Manager, as compensation for the Manager's
services hereunder, .50 of 1% per annum of the Fund's average daily net assets
up to $100 million, .45 of 1% of the next $200 million, and .40 of 1% of all
assets over $300 million. The management fee payable hereunder shall be computed
daily and paid monthly.
6. Either party hereto may, without penalty, terminate this contract by
vote of its Board of Directors or its Board of Trustees, as the case may be, or
by vote of a majority of its outstanding voting securities and the giving of
sixty days' written notice to the party.
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7. This contract shall terminate on April 30 of any year, beginning on
April 30, 1994, in which its terms and renewal shall not have been approved by a
majority vote of the Trustees of the Fund voting in person, including a majority
of its Trustees who are not parties to this contract or interested persons (as
the term "interested persons" is defined in the 1940 Act) of any such parties,
at a meeting of Trustees called for the purpose of voting on such approval.
8. The Manager and its directors, officers, agents, employees and
stockholders may engage in other businesses and may render investment advisory
services to other investment companies or to any other corporation, association,
firm, individual or account.
9. Except as provided in Section 7 hereof, this contract shall continue in
full force and effect until terminated by one of the parties hereto as provided
in Section 6 hereof.
10. This contract shall automatically terminate in the event of its
assignment. For purposes of this contract, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
11. This contract shall become effective as of the date of execution
hereof.
12. Nothing in this contract shall be deemed to relieve or deprive the
Board of Trustees of the Fund of its responsibility for and control of the Fund.
13. The parties to this contract acknowledge and agree that all liabilities
arising hereunder, whether direct or indirect, and of any and every nature
whatsoever, including without limitation, liabilities arising in connection with
the agreement, if any, of the Fund or its Trustees set forth herein to indemnify
any party to this contract or any other person, shall be satisfied out of the
assets of the Fund and that no Trustee, officer or holder of shares of
beneficial interest of the Fund shall be personally liable for any of the
foregoing liabilities. The Fund's Declaration of Trust, as amended from time to
time, is on file in the Office of the Secretary of State of The Commonwealth of
Massachusetts. Such Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of shares of beneficial interest.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER SHORT-TERM INCOME TRUST
_________________________ By:____________________________
Secretary President
ATTEST: PIONEERING MANAGEMENT CORPORATION
_________________________ By:____________________________
Secretary President
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UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 4th day of August, 1992 by and
between Pioneer Short-Term Income Trust ("Pioneer") and Pioneer Funds
Distributor, Inc. (the "Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer, a Massachusetts business trust, is registered as an
open end, diversified, management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and has filed a registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "Commission") for the purpose of registering shares of
beneficial interest for public offering under the Securities Act of 1933, as
amended;
WHEREAS, the Underwriter, a corporation organized under the laws of the
Commonwealth of Massachusetts in 1989, engages in the purchase and sale of
securities both as a broker and dealer and is registered as a broker-dealer with
the Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of Pioneer which the Trustees may establish from time
to time (individually, a "Portfolio and collectively, the Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, Pioneer and the Underwriter do hereby agree as follows:
1. Pioneer does hereby grant to the Underwriter the right and option to
purchase shares of beneficial interest of a Portfolio of Pioneer (the "Shares")
for sale to investors either directly or indirectly through other
broker-dealers. The Underwriter is not required to purchase any specified number
of Shares, but will purchase from Pioneer only a sufficient number of Shares as
may be necessary to fill unconditional orders received from time to time by the
Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering
price based upon the net asset value of the Shares, to be calculated as
described in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, plus sales charges as
approved by the Underwriter and the Trustees of Pioneer and as further outlined
in Pioneer's Prospectus. The offering price shall be subject to any provisions
set forth in the Prospectus from time to time with respect thereto, including,
without limitation, rights of accumulation, letters of intention,
exchangeability of shares, reinstatement privileges, net asset value purchases
by certain persons and reinvestments of dividends and capital gain
distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement may be terminated by either party upon sixty days'
written notice.
5. This Agreement shall terminate on any anniversary hereof if its
terms and renewal have not been approved by a majority vote of the Trustees of
Pioneer voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the
Underwriter upon similar notice to Pioneer. This Agreement may also be
terminated by a party upon five (5) days written notice to the other party in
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the event that the Commission has issued an order or obtained an injunction or
other court order suspending effectiveness of the Registration Statement
covering these shares of Pioneer. Finally, this Agreement may also be terminated
by Pioneer upon five (5) days written notice to the Underwriter provided either
of the following events has occurred: (i) the NASD has expelled the Underwriter
or suspended its membership in that organization; or (ii) the qualification,
registration, license or right of the Underwriter to sell shares in a particular
state has been suspended or cancelled in a state in which sales of the shares of
Pioneer during the most recent 12 month period exceeded 10% of all shares of
Pioneer sold by the Underwriter during such period.
6. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii)
those amounts payable to the Underwriter as reimbursement of expenses pursuant
to any distribution plan for Pioneer which may be in effect. Nothing contained
herein shall relieve Pioneer of any obligation under its management contract or
any other contract with any affiliate of the Underwriter.
7. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, of any nature
whatsoever, including without limitation, liabilities arising in connection with
any agreement of Pioneer or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of Pioneer and that no Trustee, officer or holder of shares of
beneficial interest of Pioneer shall be personally liable for any of the
foregoing liabilities. Pioneer's Declaration of Trust, as amended from time to
time, is on file in the Office of Secretary of State of The Commonwealth of
Massachusetts. The Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of shares of beneficial interest.
8. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
9. In the event of any dispute between the parties, this Agreement
shall be construed according to the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers and their seal to be hereto
affixed as of day and year first above written.
ATTEST: PIONEER SHORT-TERM INCOME TRUST
___________________________ By:____________________________
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
___________________________ By:____________________________
Clerk President
2
<PAGE>
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER SHORT TERM INCOME TRUST
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 4th day of August, 1992 between PIONEER SIIORT TERM
INCOME TRUST (the "Fund") and Brown Brothers Harriman & Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the Custodian
as a custodian for the term arid subject to the provisions of this Agreement.
The Custodian shall not be under any duty or obligation to require the Fund to
deliver to it any securities or funds owned by the Fund and shall have no
responsibility or liability for or on account of securities or funds not so
delivered. The Fund will deposit with the Custodian copies of the Declaration of
Trust or Certificate of Incorporation and By-Laws (or comparable documents) of
the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the Fund held
by the Custodian: Except for securities and funds held by any Subcustodians or
held by the Custodian through a non-U.S. securities depository appointed
pursuant to the provisions of Section 3 hereof, the Custodian shall have and
perform the following powers and duties:
A. Safekeeping - To keep safely the securities and other assets of the Fund
that have been delivered to the Custodian and, on behalf of the Fund, from time
to time to receive delivery of securities for safekeeping.
B. Manner of Holding Securities - To hold securities of the Fund (1) by
physical possession of the share certificates or other instruments representing
such securities in registered or bearer form, or (2) in book-entry form by a
Securities System (as said term is defined in Section 2U).
C. Registered Name; Nominee - To hold registered securities of the Fund (1)
in the name or any nominee name of the Custodian or the Fund, or in the name or
any nominee name of any Agent appointed pursuant to Section 6F, or (2) in street
certificate form, so-called, and in any case with or without any indication of
fiduciary capacity, provided that securities are held in an account of the
Custodian containing only assets of the Fund or only assets held as fiduciary or
custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined in Section X
on Page 16, insofar as funds are available for the purpose, to pay for and
receive securities purchased for the account of the Fund, payment being made
only upon receipt of the securities (1) by the Custodian, or (2) by a clearing
corporation of a national securities exchange of which the Custodian is a
member, or (3) by a Securities System. However,(i) in the case of repurchase
agreements entered into by the Fund, the Custodian (as well as an Agent) may
release funds to a Securities System or to a Subcustodian prior to the receipt
of advice from the Securities System or Subcustodian that the securities
underlying such repurchase agreement have been transferred by book entry into
the Account (as defined in Section 2U) of the Custodian (or such Agent)
maintained with such Securities System or Subcustodian, so long as such payment
instructions to the Securities System or Subcustodian include a requirement that
delivery is only against payment for securities, (ii) in the case of foreign
exchange contracts, options, time deposits, call account deposits, currency
deposits, and other deposits, contracts or options pursuant to Sections 2J, 2L,
2M and 2N, the Custodian may make payment therefor without receiving an
instrument evidencing said deposit, contract or option so long as such payment
instructions detail specific securities to be acquired, and (iii) in the case of
securities in which payment for the security and receipt of the instrument
evidencing the security are under generally accepted trade practice or the terms
of the instrument representing the security expected to take place in different
locations or through separate parties, such as commercial paper which is indexed
to foreign currency exchange rates, derivatives and similar securities, the
Custodian may make payment for such securities prior to delivery thereof in
accordance with such generally accepted trade practice or the terms of the
instrument representing such security.
<PAGE>
E. Exchanges - Upon receipt of proper instructions, to exchange securities
held by it for the account of the Fund for other securities in connection with
any reorganization, recapitalization, split-up of shares, change of par value,
conversion or other event relating to the securities or the issuer of such
securities and to deposit any such securities in accordance with the terms of
any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System; provided,
however, that (i) in the case of delivery of physical certificates or
instruments
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive and retain
confirmations or other documents evidencing the purchase of writing of an option
on a security or securities index by the Fund; to deposit and maintain in a
segregated account, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and to release
and/or transfer such securities or other assets only in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
relating to such securities or other assets a notice or other communication
evidencing the expiration, termination or exercise of such covered option
furnished by The Options Clearing Corporation, the securities or options
exchange on which such covered option is traded or such other organization as
may be responsible for handling such options transactions.
K. Borrowings - Upon receipt of proper instructions, to deliver securities
of the Fund to lenders or their agents as collateral for borrowings effected by
the Fund, provided that such borrowed money is payable to or upon the
Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an account or
accounts in the name of the Fund on the Custodian's books subject only to draft
or order by the Custodian. All funds received by the Custodian from or for the
account of the Fund shall be deposited in said account(s). The responsibilities
of the Custodian to the Fund for deposits accepted on the Custodian's books
shall be that of a U. S. bank for a similar deposit. If and when authorized by
proper instructions, the Custodian may open and operate an additional account(s)
in such other banks or trust companies as may be designated by the Fund in such
instructions (any such bank or trust company so designated by the Fund being
referred to hereafter as a "Banking Institution"), provided that such account(s)
(hereinafter collectively referred to as "demand deposit bank accounts") shall
be in the name of the Custodian for account of the Fund and subject only to the
Custodian's draft or order. Such demand deposit accounts may be opened with
Banking Institutions in the United States and in other countries and may be
denominated in either U. S. Dollars or other currencies as the Fund may
determine. All such deposits shall be deemed to be portfolio securities of the
Fund and accordingly the responsibility of the Custodian therefore shall be the
same as and no greater than the Custodian's responsibility in respect of other
portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest bearing fixed
term and call deposits with such banks and in such amounts as the Fund may
authorize pursuant to proper instructions. Such deposits may be placed with the
Custodian or with Subcustodians or other Banking Institutions as the Fund may
3
<PAGE>
determine. Deposits may be denominated in U. S. Dollars or other currencies and
need not be evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records with respect
to the assets of the Fund appropriate notation as to the amount and currency of
each such deposit, the accepting Banking Institution and other appropriate
details, and shall retain such forms of advice or receipt evidencing the
deposit, if any, as may be forwarded to the Custodian by the Banking
Institution. Such deposits, other than those placed with the Custodian, shall be
deemed portfolio securities of the Fund and the responsibilities of the
Custodian therefor shall be the same as those for demand deposit bank accounts
placed with other banks, as described in Section K of this Agreement. The
responsibility of the Custodian for such deposits accepted on the Custodian's
books shall be that of a U.S. bank for a similar deposit.
N. Foreign Exchange Transactions and Futures Contracts Pursuant to proper
instructions, to enter into foreign exchange contracts or options to purchase
and sell foreign currencies for spot and future delivery on behalf and for the
account of the Fund. Such transactions may be undertaken by the Custodian with
such Banking Institutions, including the Custodian and Subcustodian(s) as
principals, as approved and authorized by the Fund. Foreign exchange contracts
and options other than those executed with the Custodian, shall be deemed to be
portfolio securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts placed with
other banks as described in Section 2L of this agreement. Upon receipt of proper
instructions, to receive and retain confirmations evidencing the purchase or
sale of a futures contract or an option on a futures contract by the Fund; to
deposit and maintain in a segregated account, for the benefit of any futures
commission merchant or to pay to such futures commission merchant, assets
designated by the fund as initial, maintenance or variation "margin" deposits
intended to secure the Fund's performance of its obligations under any futures
contracts purchased or sold or any options on futures contracts written by the
Fund, in accordance with the provisions of any agreement or agreements among any
of the Fund, the Custodian and such futures commission merchant, designated to
comply with the rules of the Commodity Futures Trading Commission and/or any
contract market, or any similar organization or organizations, regarding such
margin deposits; and to release and/or transfer assets in such margin accounts
only in accordance with any such agreements or rules.
0. Stock Loans - Upon receipt of proper instructions, to deliver securities
of the Fund, in connection with loans of securities by the Fund, to the borrower
thereof prior to receipt of the collateral, if any, for such borrowing, provided
that for stock loans secured by cash collateral the Custodian's instructions to
the Securities System require that the Securities System may deliver the
securities to the borrower thereof only upon receipt of the collateral for such
borrowing.
P. Collections - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; provided, that the payment is to be made in such form and manner
and at such time, which may be after delivery by the Custodian of the instrument
representing the security,, as is in accordance with the terms of the instrument
representing the security, or such proper instructions as the Custodian may
receive, or governmental regulations, the rules of Securities Systems or other
U.S. securities depositories and clearing agencies or, with respect to
securities referred to in clause (iii) of the last sentence of Section 2D, in
accordance with generally accepted trade practice; (ii) to execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with receipt of inconie or other payments with respect to securities
of the Fund or in connection with transfer of securities, and (iii) pursuant to
proper instructions to take such other actions with respect to collection or
receipt of funds or transfer of securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodiaii shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
4
<PAGE>
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the Fund all
forms of proxies and all notices of meetings and any other notices or
announcements affecting or relating to securities owned by the Fund that are
received by the Custodian, and upon receipt of proper instructions, to execute
and deliver or cause its nominee to execute and deliver such proxies or other
authorizations as may be required. Neither the Custodian nor its nominee shall
vote upon any of such securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except as otherwise
herein provided) unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express
authorization from the Fund, (1) to attend to all nondiscretionary details in
connection with the sale, exchange, substitution, purchase, transfer or other
dealings with securities, funds or other property of the Portfolio held by the
Custodian except as otherwise directed from time to time by the Directors or
Trustees of the Fund, and (2) to make payments to itself or others for minor
expenses of handling securities or other similar items relating to the
Custodian's duties under this Agreement, provided that all such payments shall
be accounted for to the Fund.
T. Bills - Upon receipt of proper instructions, to pay or cause to be paid,
insofar as funds are available for the purpose,, bills, statements, or other
obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may deposit
and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart 0 of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0, or (iii)
any other domestic clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 which acts
as a securities depository and whose use the Fund has previously approved in
writing (each of the foregoing being referred to in this Agreement as a
"Securities System"). Utilization of a Securities System shall be in accordance
with applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund securities, either
directly or through one or more Agents appointed by the Custodian
(provided that any such agent shall be qualified to act as a custodian
of the Fund pursuant to the Investment Company Act of 1940 and the
rules and regulations thereunder), in a Securities System provided
that such securities are represented in an account ("Account") of the
Custodian or such Agent in the Securities System which shall not
include any assets of the Custodian or Agent other than assets held as
a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that
such securities have been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon (i) receipt
of advice from the Securities System that payment for such securities
has been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and paymeiit
for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian or an
Agent as referred to above, and be provided to the Fund at its
request. The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business
day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System; and the
Custodian and such Agents shall send to the Fund such reports on their
own systems of internal accounting control as the Fund may reasonably
request from time to time.
5
<PAGE>
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
W. Investment Limitations - In performing its duties generally, and more
particularly in connection with the purchase, sale and exchange of securities
made by or for the Fund, the Custodian may assume unless and until notified in
writing to the contrary that proper instructions received by it are not in
conflict with or in any way contrary to any provisions of the Fund's Declaration
of Trust or Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Directors of the Fund. The Custodian
shall in no event be liable to the Fund and shall be indemnified by the Fund for
any violation which occurs in the course of carrying out instructions given by
the Fund of any investment limitations to which the Fund is subject or other
limitations with respect to the Fund's powers to make expenditures, encumber
securities, borrow or take similar actions affecting the Fund.
X. Restricted Securities. Notwithstanding any other provision of this
Agreement, the Custodian shall not be liable for failure to take any action in
respect of a "restricted security" (as hereafter defined) if the Custodian has
not received Proper Instructions to take such action (including but not limited
to the failure to exercise in a timely manner any right in respect of any
restricted security) unless the Custodian's responsibility to take such action
is set forth in a writing, agreed upon by the Custodian and the Fund or the
investment adviser of the Fund, which specifies particular actions the Custodian
is to take without Proper Instructions in respect of specified rights and
obligations pertaining to a particular restricted security. Further, the
Custodian shall not be responsible for transmitting to the Fund information
concerning a restricted security, such as with respect to exercise periods and
expiration dates for rights relating to the restricted security, except such
information which the Custodian actually receives or which is published in a
source which is publicly distributed and generally recognized as a major source
of information with respect to corporate actions of securities similar to the
particular restricted security. As used herein, the term "restricted securities"
shall mean securities which are subject to restrictions on transfer, whether by
reason of contractual restrictions or federal, state or foreign securities or
similar laws, or securities which have special rights or contractual features
which do not apply to publicly-traded shares of, or comparable interests
representing, such security.
Y. Proper Instructions - Proper instructions shall mean a tested telex from
the Fund or a written request, direction, instruction or certification signed or
initialled on behalf of the Fund by one or more person or persons as the Board
of Directors or Trustees of the Fund shall have from time to time authorized,
provided, however, that no such instructions directing the delivery of
securities or the payment of funds to an authorized signatory of the Fund shall
be signed by such person. Those persons authorized to give proper instructions
may be identified by the Board of Directors or Trustees by name, title or
position and will include at least one officer empowered by the Board to name
other individuals who are authorized to give proper instructions on behalf of
the Fund. Telephonic or other oral instructions given by any one of the above
persons will be considered proper instructions if the Custodian reasonably
believes them to have been given by a person authorized to give such
instructions with respect to the transaction involved. Oral instructions will be
confirmed by tested telex or in writing in the manner set forth above but the
lack of such confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions. The Fund authorizes the
Custodian to tape record any and all telephonic or other oral instructions given
to the Custodian by or on behalf of the Fund (including any of its officers,
Directors, Trustees, employees or agents) and will deliver to the Custodian a
similar authorization from any investment manager or adviser or person or entity
with similar reponsibilities which is authorized to give proper instructions on
behalf of the Fund to the Custodian. Proper instructions may relate to specific
transactions or to types or classes of transactions, and may be in the form of
standing instructions. Proper instructions may include communications effected
directly between electromechanical or electronic devices or systems, in addition
to tested telex, provided that the Fund and the Custodian agree to the use of
such device or system.
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<PAGE>
Z. Segregated Account - The Custodian shall upon receipt of proper
instructions establish and maintain on its books a segregated account or
accounts for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities of the Fund, including securities maintained
by the Custodian pursuant to Section 2U hereof, (i) in accordance with the
provisions of any agreement among the Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 and a member of the
National Association of Securities Dealers, Inc. (or any futures commission
merchant registered under the Commodity Exchange Act) relating to compliance
with the rules of the Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or securities in connection with
options purchased, sold or written by the Fund or commodity futures contracts or
options thereon purchased or sold by the Fund, (iii) for the purposes of
compliance by the Fund with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies, and (iv) as mutually agreed from time to time
between the Fund and the Custodian.
3. Powers and Duties of the Custodian with Respect to the Appointment of
Subcustodians: The Fund hereby authorizes and instructs the Custodian to hold
securities, funds and other property of the Fund which are maintained outside
the United States at subcustodians appointed pursuant to the provisions of this
Section 3 (a "Subcustodian"). The Fund shall approve in writing (1) the
appointment of each Subcustodian and the subcustodian agreement to be entered
into between such Subcustodian and the Custodian, and (2) if the Subcustodian is
organized under the laws of a country other than the United States, the country
or countries in which the Subcustodian is authorized to hold securities, cash
and other property of the Fund. The Fund hereby further authorizes and instructs
the Custodian and any Subcustodian to utilize such securities depositories
located outside the United States which are approved in writing by the Fund to
hold securities, cash and other property of the Fund. Upon such approval by the
Fund, the Custodian is authorized on behalf of the Fund to notify each
Subcustodian of its appointment as such. The Custodian may, at any time in its
discretion, remove any Subcustodian that has been appointed as such but will
promptly notify the Fund of any such action.
Those Subcustodians, and the countries where and the securities
depositories through which they or the Custodian may hold securities, cash and
other property of the Fund which the Fund has approved to date are set forth on
Appendix A hereto. Such Appendix shall be amended from time to time as
Subcustodians, and/or countries and/or securities depositories are changed,
added or deleted. The Fund shall be responsible for informing the Custodian
sufficiently in advance of a proposed investment which is to be held in a
country not listed on Appendix A, in order that there shall be sufficient time
for the Fund to give the approval required by the preceding paragraph and for
the Custodian to put the appropriate arrangements in place with such
Subcustodian, including negotiation of a subcustodian agreement and submission
of such subcustodian agreement to the Fund for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
In the event that any Subcustodian appointed pursuant to the provisions of
this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
7
<PAGE>
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree oval of
the successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3. In the event the Custodian
receives a claim from a Subcustodian under the indemnification provisions of any
subcustodian agreement, the Custodian shall promptly give written notice to the
Fund of such claim. No more than thirty days after written notice to the Fund of
the Custodian's intention to make such payment, the Fund will reimburse the
Custodian the amount of such payment except in respect of any negligence or
misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may assist
generally in the preparation of reports to Fund shareholders and others, audits
of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as Financial
Agent: The Fund hereby also appoints the Custodian as the Funds financial agent.
With respect to the appointment as financial agent, the Custodian shall have and
perform the following powers and duties:
A. Records - To create, maintain and retain such records relating to its
activities and obligations under this Agreement as are required under the
Investment Company Act of 1940 and the rules and regulations thereunder
(including Section 31 thereof and Rules 3la-1 and 3la-2 thereunder) and under
applicable Federal and State tax laws. All such records will be the property of
the Fund and in the event of termination of this Agreement shall be delivered to
the successor custodian.
B. Accounts - To keep books of account and render statements, including
interim monthly and complete quarterly financial statements, or copies thereof,
from time to time as reasonably requested by proper instructions.
C. Access to Records - The books and records maintained by the Custodian
pursuant to Sections 5A and 5B shall at all times during the Custodian's regular
business hours be open to inspection and audit by officers of, attorneys for and
auditors employed by the Fund and by employees and agents of the Securities and
Exchange Commission, provided that all such individuals shall observe all
security requirements of the Custodian applicable to its own employees having
access to similar records within the Custodian and such regulations as may be
reasonably imposed by the Custodian.
D. Disbursements - Upon receipt of proper instructions, to pay or cause to
be paid, insofar as funds are available for the purpose, bills, statements and
other obligations of the Fund (including but not limited to interest charges,
taxes, management fees, compensation to Fund officers and employees, and other
operating expenses of the Fund).
6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper Instructions; Evidence
of Authority, Etc.
The Custodian shall not be liable for any action taken or omitted in
reliance upon proper instructions believed by it to be genuine or upon any other
written notice, request, direction, instruction, certificate or other instrument
believed by it to be genuine and signed by the proper party or parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Agreement.
8
<PAGE>
The Custodian shall be entitled, at the expense of the Fund, to receive and
act upon advice of (i) counsel regularly retained by the Custodian in respect of
custodian matters, (ii) counsel for the Fund, or (iii) such other counsel as the
Fund and the Custodian may agree upon, with respect to all matters, and the
Custodian shall be without liability for any action reasonably taken or omitted
pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities System -
With respect to the portfolio securities, cash and other property of the
Fund held by a Securities System, the Custodian shall be liable to the Fund only
for any loss or damage to the Fund resulting from use of the Securities System
if caused by any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage to the Fund if and to the extent
that the Fund has not been made whole for any such loss or damage.
C. Liability of the Custodian with respect to Subcustodians
The Custodian shall be liable to the Fund for any loss or damage to the
Fund caused by or resulting from the acts or omissions of any Subcustodian to
the extent that under the terms set forth in the subcustodian agreement between
the Custodian and the Subcustodian (or in the subcustodian agreement between a
Subcustodian and any secondary Subcustodian), the Subcustodian (or secondary
Subcustodian) has failed to perform in accordance with the standard of conduct
imposed under such subcustodian agreement as determined in accordance with the
law which is adjudicated to govern such agreement and in accordance with any
determination of any court as to the duties of said Subcustodian pursuant to
said agreement. The Custodian shall also be liable to the Fund for its own
negligence in transmitting any instructions received by it from the Fund and for
its own negligence in connection with the delivery of any securities or funds
held by it to any Subcustodian.
D. Standard of Care; Liability; Indemnification -
The Custodian shall be held only to the exercise of reasonable care and
diligence in carrying out the provisions of this Agreement, provided that the
Custodian shall not thereby be required to take any action which is in
contravention of any applicable law.
The Fund agrees to indemnify and hold harmless the Custodian and its
nominees from all claims and liabilities (including counsel fees) incurred or
assessed against it or its nominees in connection with the performance of this
Agreement, except such as may arise from its or its nominee's breach of the
relevant standard of conduct set forth in this Agreement. Without limiting the
foregoing indemnification obligation of the Fund, the Fund agrees to indemnify
the Custodian and any nominee in whose name portfolio securities or other
property of the Fund is registered against any liability the Custodian or such
nominee may incur by reason of taxes assessed to the Custodian or such nominee
or other costs, liability or expense incurred by the Custodian or such nominee
resulting directly or indirectly from the fact that portfolio securities or
other property of the Fund is registered in the name of the Custodian or such
nominee.
It is also understood that the Custodian shall not be liable for any loss
involving any securities, currencies, deposits or other property of the Fund,
whether maintained by it, a Subcustodian, a securities depository, an agent of
the Custodian or a Subcustodian, a Securities System, or a Banking Institution,
or for any loss arising from a foreign currency transaction or contract, where
the loss results from a Sovereign Risk or where the entity maintaining such
securities, currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the Custodian or
a Subcustodian, a Securities System or a Banking Institution, has exercised
reasonable care maintaining such property or in connection with the transaction
involving such property. A "Sovereign Risk" shall mean nationalization,
expropriation, devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto or de
jure; or enactment, promulgation, imposition or enforcement by any such
governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. Reimbursement of Advances -
9
<PAGE>
The Custodian shall be entitled to receive reimbursement from the Fund on
demand, in the manner provided in Section 7, for its cash disbursements,
expenses and charges (including the fees and expenses of any Subcustodian or any
Agent) in connection with this Agreement, but excluding salaries and usual
overhead expenses.
F. Security for Obliqations to Custodian -
If the Fund shall require the Custodian to advance cash or securities for
any purpose for the benefit of the Fund, including in connection with foreign
exchange contracts or options (collectively, an "Advance"), or if the Custodian
or any nominee thereof shall incur or be assessed any taxes, charges, expenses,
assessments, claims or liabilities in connection with the performance of this
Agreement (collectively a "Liability"), except such as may arise from its or
such nominee's breach of the relevant standard of conduct set forth in this
Agreement, then in such event any property at any time held for the account of
the Fund by the Custodian or a Subcustodian shall be security for such Advance
or Liability and if the Fund shall fail to repay or indemnify the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund's property, including securities, to the extent necessary to
obtain reimbursement or indemnification.
G. Appointment of Agents -
The Custodian may at any time or times in its discretion appoint (and may
at any time remove) any other bank or trust company as its agent (an "Agent") to
carry out such of the provisions of this Agreement as the Custodian may from
time to time direct, provided, however, that the appointment of such Agent
(other than an Agent appointed pursuant to the third paragraph of Section 3)
shall not relieve the Custodian of any of its responsibilities under this
agreement.
H. Powers of Attorney -
Upon request, the Fund shall deliver to the Custodian such proxies, powers
of attorney or other instruments as may be reasonable and necessary or desirable
in connection with the performance by the Custodian or any Subcustodian of their
respective obligations under this Agreement or any applicable subcustodian
agreement.
7. Compensation of the Custodian:
The Fund shall pay the Custodian a custody fee based on such fee schedule
as may from time to time be agreed upon in writing by the Custodian and the
Fund. Such fee, together with all amounts for which the Custodian is to be
reimbursed in accordance with Section 6D, shall be billed to the Fund in such a
manner as to permit payment by a direct cash payment to the Custodian.
8. Termination; Successor Custodian:
This Agreement shall continue in full force and effect until terminated by
either party by an instrument in writing delivered or mailed, postage to the
other party, such termination to take effect not prepaid, to the other party,
such termination to take effect not sooner than seventy five (75) days after the
date of such delivery or mailing. In the event of termination the Custodian
shall be entitled to receive prior to delivery of the secur ities, funds and
other property held by it all accrued fees and unreimbursed expenses the payment
of which is contemplated by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed that
the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment:
This Agreement constitutes the entire understanding and agreement of the
parties hereto with respect to the subject matter hereof. No provision of this
Agreement may be amended or terminated except by a statement in writing signed
by the party against which enforcement of the amendment or termination is
sought.
In connection with the operation of this Agreement, the Custodian and the
Fund may agree in writing from time to time on such provisions interpretative of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. No interpretative or
10
<PAGE>
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law:
This instrument is executed and delivered in The Commonwealth of
Massachusetts and shall be governed by and construed according to the laws of
said Commonwealth.
11. Notices:
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to the Fund at 60 State Street, Boston, Massachusetts 02109 or to such
other address as the Fund may have designated to the Custodian in writing, or to
the Custodian at 40 Water Street, Boston, Massachusetts 02109, Attention:
Manager, Securities Department, or to such other address as the Custodian may
have designated to the Fund in writing, shall be deemed to have been properly
delivered or given hereunder to the respective addressee.
12. Bindinq Effect:
This Agreement shall be binding on and shall inure to the benefit of the
Fund and the Custodian and their respective successors and assigns, provided
that neither party hereto may assign this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other party.
13. Counterparts:
This Agreement may be executed in. any number of counterparts, each of
which shall be deemed an original. This Agreement shall become effective when
one or more counterparts have been signed and delivered by each of the parties.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in its name and behalf on the day and year first above written.
PIONEER SHORT TERM INCOME TRUST BROWN BROTHERS HARRIMAN & CO.
By ___________________________ Per Pro _______________________
11
<PAGE>
INVESTMENT COMPANY SERVICE AGREEMENT
August 4, 1992
Pioneer Short-Term Income Trust, a Massachusetts business
trust with its principal place of business at 60 State Street, Boston,
Massachusetts 02109 ("Customer") and Pioneering Services corporation, a
Massachusetts corporation ("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of the Customer, which may be established, from time to time, (the "Account"),
with the services described in Exhibits A, B, C, and D (collectively, the
"Exhibits") which are attached hereto and incorporated herein by reference. It
is understood that PSC may subcontract any of such services to one or more firms
designated by PSC, provided that PSC (i) shall be solely responsible for all
compensation payable to any such firm and (ii) shall be liable to Customer for
the acts or omissions of any such firm to the same extent as PSC would be liable
to Customer with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform services
contemplated by this Agreement. If PSC so requests, Customer agrees to confirm
the accuracy of any starting records of Customer's assets and accounts produced
from PSC's computer or held in other recording systems. In the event Customer
does not, prior to the Effective Date, comply fully with any of the foregoing
provisions of this Section 3, the date for commencement of PSC's services
hereunder may be postponed by PSC until such compliance has taken place.
Customer shall, from time to time, while this Agreement is in
effect deliver all such materials and data as may be necessary or desirable to
enable PSC to perform its services hereunder, including without limitation,
those described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, records and reports at such times as are
prescribed for each service in the Exhibits attached hereto. Customer agrees to
examine or to ask any other authorized recipient to examine each such report or
copy promptly and will report or cause to be reported any errors or
discrepancies therein of which customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports
will be retained by PSC for six years from the year of creation, during the
first two of which the same will be in readily accessible form. At the end of
six years, such records and documents, will be turned over to Customer by PSC
unless Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PCS shall at all times adhere to various procedures and
systems consistent with industry standards in order to safeguard the Customer's
checks, records and other data from loss or damage attributable to fire or
theft. PSC shall maintain insurance adequate to protect against the costs of
reconstructing checks, records and other data in the event of such loss and
shall notify the Customer in the event of a material adverse change in such
insurance coverage. In the event of damage or loss occurring to the Customer's
records or data such that PSC is unable to meet the terms of this Agreement, PSC
shall transfer all records and data to a Transfer Agent of Customer's choosing
upon Customer's written authorization to do so.
1
<PAGE>
Without limiting the generality of the foregoing, PSC shall
not be liable or responsible for delays or errors occurring by reason of
circumstances beyond its control including acts of civil, military or banking
authority, national emergencies, labor difficulties, fire, flood or other
catastrophies, acts of God, insurrection, war, riots, failure of transportation,
communication or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by the Customer or by the shareholders of the Account to
PSC, except to the extent disclosures are required by the Agreement, are
required by the Customer's Prospectus and Statement of Additional Information,
or are required by a valid subpoena or warrant issued by a court of competent
jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
the Customer, PSC shall make available, during regular business hours, all
records and other data created and maintained pursuant to this Agreement for
reasonable audit and inspection by the Customer or Customer's agents, including
reasonable visitation by the Customer or Customer's agent, including inspecting
PSC's operation facilities. PSC shall not be liable for injury to or responsible
in any way for the safety of any individual visiting PSC's facilities under the
authority of this section. The Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing the Customer while on PSC's
premises. Confidential information shall include (1) any information of whatever
nature regarding PSC's operations, security procedures, and data processing
capabilities, (2) financial information regarding PSC, its affiliates, or
subsidiaries, and (3) any information of whatever kind or description regarding
any customer of PSC, its affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
the Customer's legal counsel determines in its sole discretion that the
rendering of advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant
to proper instructions from Customer, PSC shall be entitled to rely upon any
certificate, letter or other instrument or telephone call reasonably believed by
PSC to be genuine and to have been properly made or signed by an officer or
other authorized agent of Customer, and shall be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by it
hereunder a certificate signed by an officer of Customer or any other person
authorized by Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement,
Customer agrees to indemnify and hold PSC, its employees, agents and nominees
harmless from any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action
upon information, instructions or requests given or made to PSC by the Customer
with respect to the Account.
Notwithstanding the above, whenever the Customer may be asked
to indemnify or hold PSC harmless, the customer shall be advised of all
pertinent facts arising from the situation in question. Additionally, PSC will
use reasonable care to identify and notify the Customer promptly concerning any
situation which presents, actually or potentially, a claim for indemnification
against the Customer. The Customer shall have the option to defend PSC against
any claim for which PSC is entitled to indemnification from the Customer under
the terms hereof, and in the event the Customer so elects, it will notify PSC
and, thereupon, the Customer shall take over complete defense of the claim and
PSC shall sustain no further legal or other expenses in such a situation for
which indemnification shall be sought or entitled. PSC may in no event confess
any claim or make any compromise in any case in which the Customer will be asked
to indemnify PSC except with the Customer's prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $21.95 per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
2
<PAGE>
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days prior written notice to the other.
After the date of termination, for so long as PSC in fact
continues to perform any one or more of the services contemplated by this
Agreement or any exhibit hereto, the provisions of this Agreement, including
without limitation the provisions of Section 8 dealing with indemnification,
shall where applicable continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Declaration of Trust of Customer, and
of any amendments thereto, certified by the proper official
of the State where the Declaration of Trust is filed.
B. Two (2) copies of the following documents, currently
certified by the Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's
Board of Trustees covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of
Customers to instruct PSC hereunder (if
different from other officers of
Customer previously specified by
Customer as to other Customer accounts
being serviced by PSC).
C. List of all officers of Customer together with specimen
signatures of those officers who are authorized to sign
share certificates and to instruct PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization
by and binding effect of this Agreement on Customer, the
applicability of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the
approval by such public authorities as may be prerequisite
to lawful sale and deliver in the various states.
F. Amendments to, and changes in, any of the foregoing
forthwith upon such amendments and changes being available,
but in no case later than the effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and
agree that all liabilities arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, including without limitation,
liabilities arising in connection with any agreement of the Customer or its
Trustees set forth herein to indemnify any party to this Agreement or any other
person, shall be satisfied out of the assets of the Account first and then of
Customer and that no Trustee, officer or holder of shares of beneficial interest
of the Customer shall be personally liable for any of the foregoing liabilities.
The Customer's Declaration of Trust, as amended from time to time, is on file in
the Office of the Secretary of State of The Commonwealth of Massachusetts. Such
Declaration of Trust describes in detail the respective responsibilities and
limitations on liability of the Trustees, officers, and holders of shares of
beneficial interest of the Customer.
14. MISCELLANEOUS. In connection with the operation of this Agreement
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
3
<PAGE>
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Customer and PSC have caused this
Agreement to be executed in their respective names by their respective officers
thereunto duly authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
__________________________ By:___________________________
Clerk President
PIONEER SHORT-TERM INCOME TRUST
_________________________ By:___________________________
Secretary President
4
<PAGE>
March 29, 1995
Pioneer Short-Term Income Trust
60 State Street
Boston, Massachusetts 02109
Re: Post-Effective Amendment No. 3 to Registration
Statement Under the Securities Act of 1933
------------------------------------------
Ladies and Gentlemen:
As counsel to Pioneer Short-Term Income Trust (the "Trust"), we have
reviewed the above-referenced Post-Effective Amendment to the Trust's
Registration Statement for filing with the Securities and Exchange Commission.
We hereby represent, pursuant to Rule 485(e) under the Securities Act of 1933,
as amended, that said Post-Effective Amendment does not in our view contain
disclosure that would make it ineligible to become effective pursuant to
paragraph (b) of said Rule 485.
We understand that the Trust is currently in the process of registering or
qualifying its shares in various states. We hereby consent to your filing this
letter with the securities administrators for such states and with the
Securities and Exchange Commission as part of or together with the Trust's
Registration Statement on Form N-1A. Except as provided in this paragraph, this
letter may not be relied upon by, or filed with, any other parties or for any
other purpose.
Very truly yours,
Hale and Dorr
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated January 6, 1995 (and to all references to our firm) included in or made a
part of the Pioneer Short-Term Income Trust Post-Effective Amendment No. 3 to
Registration Statement File No. 33-47613 and Amendment No. 4 to Registration
Statement File No. 811-6657.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
March 27, 1995
[Pioneer Logo]
Pioneer
Short-Term
Income
Trust
Annual Report
November 30, 1994
<PAGE>
Pioneer Short-Term Income Trust
Dear Shareowners,
This annual report to shareowners of Pioneer Short-Term Income Trust details
the Fund's achievements for its third fiscal year. While the overall bond
market experienced declining prices due to the uncertain pace of economic
growth and rising interest rates, your Fund delivered a positive total return
and a competitive stream of income for the year ended November 30, 1994.
How Your Fund Performed
For the 12-month period ended November 30, 1994, we are pleased to report the
following for Pioneer Short-Term Income Trust:
*Class A shares-The Fund paid daily dividends totaling $0.213 per share
during the fiscal year. The Fund's 30-day SEC yield was 6.05% as of November
30, 1994. This yield is based on a standard formula prescribed by the
Securities and Exchange Commission.(1) Net asset value stood at $3.75 per
share, versus $3.95 one year ago, in part reflecting the payment of
distributions. The Fund's one-year total return was 0.32% based on net asset
value and assuming the reinvestment of distributions. Since its inception on
August 10, 1992, the Fund has generated an average annual total return of
3.16%. These figures outpaced the average short-term bond fund (as tracked by
Lipper Analytical Services, an independent mutual fund research firm), which
recorded no gain or loss for the year and a gain of 2.97% since the Fund's
inception.
*Class B shares-The Fund paid shareowners a total of $0.13 per share in
dividends since it was introduced April 4, 1994. As of November 30, 1994, the
Fund's 30-day SEC yield was 5.42%. This yield is based on a standard formula
prescribed by the Securities and Exchange Commission, and was calculated by
annualizing the most recent dividend payment.(1) Net asset value stood at
$3.75 per share, versus $3.89 on April 4, in part reflecting the payment of
distributions. The Fund's total return was -0.24%, assuming shares were
held throughout the period and distributions were reinvested.
For additional performance information, please turn to page 4.
The Bond Market in Review
Bond prices remained fairly stable during the early months of your Fund's
fiscal year, through January 1994. This stability was due in part to the
historically low interest rates recorded over this time. Such low rates,
however, became unsustainable, particularly as the economy began to show
signs of strength. In fact, strong economic data for the final quarter of
1993 led to fears of inflation, prompting the Federal Reserve Board (the Fed)
to raise short-term interest rates in February 1994. The Fed increased the
federal funds rate (the rate member banks charge one another for overnight
loans) from 3% to 3.25%. Since then, the Fed has made five additional
increases -- pushing the federal funds rate to a three-year high of 5.5%.
While the Fed's intention was to quell inflationary fears, the ongoing
uncertainty about the true pace of economic growth unsettled the bond market
throughout the remainder of the year.
Other events contributed to bond market volatility, among them rising
commodities prices, a declining U.S. dollar and heavy selling of speculative
securities by jittery investors. The impact on different types of bonds
varied; for example, short-term securities generally fared better than their
longer-term counterparts since the former tend to be less sensitive to
interest rate swings. As the range of yields offered by these different
securities narrowed over the course of the year, shorter-term securities
became more attractive investment choices. The accompanying chart shows the
increase in short- term yields on representative Treasury securities versus
longer-term securities over the Fund's fiscal year.
(1)The Fund is currently waiving its management fee, otherwise returns would
have been lower and the SEC yield for Class A shares and Class B shares would
have been 5.68% and 5.09%, respectively.
<PAGE>
Treasury Yields: November 30, 1993 Versus November 30, 1994
[Tabular Representation of Bar Graph]
<TABLE>
<CAPTION>
MATURITY
3 Month 6 Month 1 Year 2 Year 3 Year 5 Year 10 Year 30 Year
<S> <C> <C> <C> <C> <C> <C> <C> <C>
11/30/93 3.2% 3.4% 3.6% 4.2% 4.5% 5.1% 5.8% 6.3%
11/30/94 5.7% 6.2% 6.9% 7.4% 7.6% 7.8% 7.9% 8.0%
</TABLE>
Working to Pursue Income,
Preserve Principal in Difficult Environment
Your management, recognizing that short-term interest rates would likely turn
up after their long downward stretch, lowered the Fund's average maturity to
well under two years early in October 1993. We maintained this defensive
positioning throughout the Fund's fiscal year; the portfolio's average life
was 1.66 years as of November 30, 1994. This strategy was successful. While
most bonds -- regardless of maturity and quality -- fell in price in the
rising interest rate environment, short-term securities such as those in your
Fund's portfolio tended to maintain greater price stability than
intermediate- and long-maturity bonds.
Portfolio Maturity
(as of November 30, 1994)
[Tabular Representation of Pie-Chart]
1-3 years 3-5 years Less than 1 year
38% 21% 41%
We continue to invest in high-quality securities, with an emphasis on the
highest-rated quality, AAA. Over the past year, we lowered the Fund's
weighting in corporate bonds, in anticipation of an eventual economic
slowdown. We think the Fed will ultimately succeed in slowing the economy,
making short-term corporate securities of limited benefit to the Fund,
particularly as we move into late 1995 and early 1996. Instead, we are
concentrating on government and agency securities. To that end, we are
looking to re-establish a position in collateralized mortgage obligations
(CMOs) issued by the Federal National Mortgage Association and Federal Home
Loan Mortgage Corporation. Prices of these securities were hit hard over the
past year as interest rates moved up, creating some good values. We believe
the worst is over for the CMO market and, with prices now at discount levels,
we can select issues that should enhance the Fund's share price and income
stream. Of course, in making our selections, we will choose only those CMOs
with well-defined agency collateral and equally well-defined maturity that
fits within your Fund's five-year maximum maturity range.
Portfolio Quality
(as of November 30, 1994)
[Tabular Representation of Pie-Chart]
A AAA BBB Commercial Paper Treasury/Agency
5% 4% 5% 18% 68%
<PAGE>
We are currently holding a fairly high position in cash and cash equivalents
-- 18% of the portfolio as of November 30, 1994. We expect to use much of
this cash to acquire securities in December, a time when many investors
unload securities -- often at bargain prices -- as a way of "housecleaning"
for 1995. More specifically, we plan to buy high-quality bonds in the three-
to five-year sector -- an area discounted over the past year. We think these
securities should augment the Fund's income stream and share price, and we
plan to take a greater position in this maturity range as current holdings in
the portfolio mature.
Looking Ahead
The past year was trying for fixed-income investors. Not only did the economy
gain strength and interest rates increase, but emotions and negative
perceptions exacerbated an already delicate situation. Nonetheless, your Fund
managed to emerge from this market environment with a positive total return
for the past 12 months, while adhering to its high-quality focus.
Given the continued strength of the economy, we cannot rule out additional
interest rate increases by the Fed over the near term. We think the Fed's
active stance will ultimately slow economic growth and lessen inflationary
fears. In the meantime, we believe the Fund's high-quality portfolio is
well-positioned for any further rise in interest rates, just as we anticipate
that the Fund will ultimately benefit -- both in terms of income and net
asset value -- from the acquisition of three- to five-year securities. We
will continue to pursue the Fund's objective of competitive current income
and relative share price stability, as we maintain the conservative
investment strategy that has brought your Fund positive results over the past
three fiscal years.
The following pages show audited portfolio holdings and financial statements
as of November 30, 1994. If you have any questions about your investment in
Pioneer Short-Term Income Trust, please contact your financial adviser, or
call Pioneer at 1-800-225-6292.
Respectfully submitted,
[Signature of John F. Cogan, Jr.]
John F. Cogan, Jr.
Chairman and President,
Pioneer Short-Term Income Trust
January 12, 1995
<PAGE>
Growth of a $10,000 Investment*
This chart shows the growth of a $10,000 investment made in Pioneer
Short-Term Income Trust (Class A) at public offering price, compared to the
growth of the Merrill Lynch 1-3 Year Government Bond Index.+
PIONEER SHORT-TERM INCOME TRUST (CLASS A)
Average Annual Total Returns
(as of November 30, 1994)
Life of
Fund
1 Year (8/10/92)
Net Asset Value 0.32% 3.16%
Public Offering Price* -2.16% 2.06%
[Tabular Representation of Line-Graph]
<TABLE>
<CAPTION>
8/92+ 11/92 2/93 5/93 8/93 11/93 2/94 5/94 8/94 11/94
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Pioneer Short-Term Income Trust
Class A 9,750 9,857 10,015 10,254 10,412 10,475 10,539 10,517 10,570 10,508
Merrill Lynch 1-3 Year
Government Bond Index 10,000 10,018 10,306 10,372 10,564 10,622 10,661 10,585 10,745 10,697
</TABLE>
* Reflects deduction of the maximum 2.5% sales charge at the beginning of the
period.
+ Index comparisons begin August 31, 1992.
The Merrill Lynch 1-3 Year Government Bond Index is an unmanaged, composite
index of debt obligations of the U.S. Treasury and U.S. government agencies
(excluding mortgage-backed securities). All issues have a maturity of at
least one year and no more than three years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
Past performance does not guarantee future results. Return and principal will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
Growth of a $10,000 Investment**
This chart shows the growth of a $10,000 investment made in Pioneer
Short-Term Income Trust (Class B), compared to the growth of the Merrill
Lynch 1-3 Year Government Bond Index.+
PIONEER SHORT-TERM INCOME TRUST (CLASS B)
Average Annual Total Returns
(as of November 30, 1994)
Life of
Fund
(4/4/94)
Return if Not Redeemed -0.24%
Return if Redeemed** -2.17%
[Tabular Representation of Line-Graph]
<TABLE>
<CAPTION>
4/30/94+ 5/31/94 6/30/94 7/31/94 8/31/94 9/30/94 10/31/94 11/30/94
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Pioneer Short-Term Income Trust
Class A 10,000 9,987 9,999 10,037 10,027 10,022 10,017 9,783
Merrill Lynch 1-3 Year
Government Bond Index 10,000 10,014 10,043 10,130 10,165 10,142 10,165 10,120
</TABLE>
** Reflects deduction of the maximum 2.0% Contingent Deferred Sales Charge at
the end of the period.
+ Index comparisons begin April 30, 1994.
The Merrill Lynch 1-3 Year Government Bond Index is an unmanaged, composite
index of debt obligations of the U.S. Treasury and U.S. government agencies
(excluding mortgage-backed securities). All issues have a maturity of at
least one year and no more than three years. Index returns are calculated
monthly, assume reinvestment of dividends and, unlike Fund returns, do not
reflect any fees, expenses or sales charges. You cannot invest directly in
the Index.
Past performance does not guarantee future results. Return and principal will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
Pioneer Short-Term Income Trust
Schedule of Investments
November 30, 1994
<TABLE>
<CAPTION>
Principal Market
Amount Value
<S> <C> <C>
INVESTMENT IN SECURITIES--83%
U.S. Government and Agency Obligations--68.2%
$ 500,000 Federal Home Loan Bank, 6.62%, 1997 $486,685
500,000 Federal Home Loan Bank, 6.78%, 1999 475,590
500,000 Federal Home Loan Bank, 7.55%, 1997 497,750
500,000 Federal Home Loan Bank, Medium Term Note, 7.23%, 1999 491,000
1,000,000 Federal Home Loan Bank, Step Up Note, 4.6%, 1999 913,640
500,000 Federal Home Loan Bank, Step Up Note, 6.25%, 1997 493,500
500,000 Federal Home Loan Bank, Step Up Note, 6.5%, 1997 493,500
500,000 Federal Home Loan Bank, Step Up Note, 6.875%, 1999 485,625
1,000,000 Federal Home Loan Bank, Variable Rate Note, 5.2%, 1995 998,500
47,848 Federal Home Loan Mortgage Corp., REMIC Series 1395A, 6.0%, 2015 47,652
860,997 Federal Home Loan Mortgage Corp., REMIC Series 1579PN, 6.45%, 2022 792,513
542,605 Federal Home Loan Mortgage Corp., REMIC Series 1564J, 6.5%, 2008 490,515
600,000 Federal Home Loan Mortgage Corp., REMIC Series 1348PG, 6.5%, 2015 564,000
286,778 Federal Home Loan Mortgage Corp., REMIC Series 1039G, 6.5%, 2019 280,414
859,312 Federal Home Loan Mortgage Corp., REMIC Series 1482LA, 6.5%, 2023 732,374
467,320 Federal Home Loan Mortgage Corp., REMIC Series 1590K, 6.5%, 2023 448,538
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1209G, 6.75%, 2004 978,960
700,000 Federal Home Loan Mortgage Corp., REMIC Series 1178G, 6.75%, 2006 664,720
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1434G, 6.75%, 2019 460,495
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1319E, 7.0%, 2004 490,895
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1025F, 7.0%, 2005 977,040
309,493 Federal Home Loan Mortgage Corp., REMIC Series 1164F, 7.0%, 2005 304,449
255,773 Federal Home Loan Mortgage Corp., REMIC Series 1072F, 7.0%, 2005 254,154
735,784 Federal Home Loan Mortgage Corp., REMIC Series 1457E, 7.0%, 2007 693,970
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1278F, 7.0%, 2020 976,610
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1310E, 7.35%, 2016 985,370
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1243H, 7.5%, 2004 970,080
1,000,000 Federal Home Loan Mortgage Corp., REMIC Series 1262F, 7.5%, 2015 978,570
500,000 Federal Home Loan Mortgage Corp., REMIC Series 1255DC, 7.5%, 2017 495,370
1,100,000 Federal Home Loan Mortgage Corp., REMIC Series 186D, 8.0%, 2019 1,089,418
500,000 Federal National Mortgage Association, Step Up Note, 4.8%, 1998 467,495
250,000 Federal National Mortgage Association, Medium Term Note, 6.74%, 1997 244,482
500,000 Federal National Mortgage Association, REMIC Series 1993-127C, 5.25%, 2012 472,750
500,000 Federal National Mortgage Association, REMIC Series 1992-200E, 6.25%, 2017 463,720
500,000 Federal National Mortgage Association, REMIC Series 1993-23PJ, 6.7%, 2019 457,110
546,000 Federal National Mortgage Association, REMIC Series 1993-12EB, 6.75%, 2000 515,468
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
S&P
Principal Rating Market
Amount (unaudited) Value
<S> <C> <C> <C>
$1,000,000 Federal National Mortgage Association, REMIC Series 1992-109E, 7.0%, 2004 $ 965,710
555,000 Federal National Mortgage Association, REMIC Series 1992-16G, 7.0%, 2017 532,955
1,000,000 Federal National Mortgage Association, REMIC Series 1192-131E, 7.0%, 2017 979,000
1,000,000 Federal National Mortgage Association, REMIC Series 1992-79G, 7.0%, 2018 951,070
370,284 Federal National Mortgage Association, REMIC Series 1992-64M, 7.0%, 2022 313,589
500,000 Federal National Mortgage Association, REMIC Series 1992-84G, 7.5%, 2014 488,100
750,000 Federal Farm Credit Bank, 8.3%, 1995 752,092
500,000 Student Loan Marketing Association, Deb., 7.79%, 1997 498,150
800,000 Private Export Funding, 5.75%, 1998 754,000
750,000 Tennessee Valley Authority, 6.98%, 1998 727,500
1,235,000 U.S. Treasury Notes, 4.625%, 1995 1,217,735
2,300,000 U.S. Treasury Notes, 7.5%, 1996 2,311,799
20,000 U.S. Treasury Notes, 7.625%, 1994 20,029
4,875,000 U.S. Treasury Notes, 7.75%, 1995 4,893,476
5,360,000 U.S. Treasury Notes, 8.5%, 1995 5,414,994
Total (Cost $44,126,006) $42,453,121
Industrials--.8%
500,000 AAA Pfizer Inc., Notes, 6.5%, 1997 $491,250
Total (Cost $529,600) $491,250
Financials--11.5%
1,000,000 A Ford Motor Credit Co., Global Notes, 6.25%, 1998 $943,750
250,000 BBB+ Discover Credit Corp., Medium Term Note, 7.77%, 1997 249,063
700,000 AAA General Electric Company, 7.875%, 1996 706,125
350,000 BBB+ General Motors Acceptance Corp., Deb., 7.4%, 1997 343,438
500,000 BBB+ General Motors Acceptance Corp., Deb., 7.9%, 1997 496,250
250,000 BBB+ General Motors Acceptance Corp., Deb., 8.0%, 1996 250,000
500,000 BBB+ General Motors Acceptance Corp., Deb., 8.25%, 1996 501,875
460,000 A ITT Financial Corp., Sr. Notes, 7.0%, 1997 453,100
500,000 A+ International Lease Finance Corp., Deb., 5.75%, 1999 457,500
100,000 A+ International Lease Finance Corp., Deb., 7.9%, 1996 100,375
500,000 AAA Sears Master Trust, 7.0%, 2004 489,050
1,000,000 BBB+ Sears Medium Term Note, 8.0%, 1996 1,007,000
200,000 AAA Sears Receivables Financing Corp., Series 1991-D, 7.75%, 1996 200,120
1,000,000 AA Xerox Corp. Medium Term Note, 7.13%, 1999 962,500
Total (Cost $7,454,480) $7,160,146
The accompanying notes are an integral part of these financial statements.
<PAGE>
Banks--2.5%
$ 500,000 A Bankamerica Corp., Sr. Notes, 6.0%, 1997 $ 476,875
550,000 AAA Chase Credit Card Trust, Series 1992-1A, 7.4%, 2000 542,960
41,667 AAA Chase Credit Card Trust, Series 1990-A, 8.55%, 1997 41,550
250,000 A Nationsbank Corp., Sr. Notes, 5.375%, 1995 246,250
250,000 A Nationsbank Corp., Sr. Notes, 6.625%, 1998 241,564
Total (Cost $1,602,975) $ 1,549,199
TOTAL INVESTMENT IN SECURITIES (Total Cost of Securities $53,713,061) $51,653,716
Repurchase Agreement--17.5%
10,900,000 Agreement with Citibank, dated 11/30/94, bearing 5.68%, to be repurchased at
$10,900,000 plus accrued interest on 12/01/94, collateralized by $12,045,000
US Treasury Note, bearing 5.125% due 12/31/98 $10,901,720
ALL OTHER ASSETS, LESS LIABILITIES--(0.5)% $ (285,453)
NET ASSETS--100% $62,269,983
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Balance Sheet
November 30, 1994
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at market value (identified cost and cost for federal income tax purposes
$53,713,061; see Schedule of Investments and Notes 1, 2 and 3) $51,653,716
Repurchase Agreement, at approximate market value (see Schedule of Investments and Note 1) 10,901,720
Cash 61,673
Receivables--
Interest 598,836
Trust shares sold 135,877
Due from Pioneering Management Corporation (Note 4) 16,903
Total assets $63,368,725
Liabilities:
Payables--
Investment securities purchased $ 498,475
Trust shares repurchased 460,835
Dividends 76,743
Accrued expenses (Notes 4, 5 and 6) 62,689
Total liabilities $ 1,098,742
Net Assets:
Paid-in capital $66,075,595
Accumulated undistributed net investment income 256,973
Accumulated net realized loss on investments (Note 2) (2,003,240)
Net unrealized loss on investments (Note 2) (2,059,345)
Total net assets $62,269,983
Net Asset Value Per Share:
Class A--(based on $59,087,521/15,736,555 shares of beneficial interest outstanding-- unlimited
number of shares authorized) $3.75
Class B--(based on $3,182,462/847,573 shares of beneficial interest outstanding-- unlimited number of
shares authorized) $3.75
Maximum Offering Price:
Class A $3.85
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statement of Operations
For the Year Ended November 30, 1994
<TABLE>
<CAPTION>
<S> <C>
Investment Income (Note 1):
Interest income $ 4,544,683
Expenses:
Management fees (Note 4) $ 337,731
Distribution fees (Note 6)
Class A 167,207
Class B 6,632
Transfer fees (Note 5)
Class A 63,689
Class B 955
Registration fees 49,005
Professional fees 57,553
Accounting 79,666
Custodian fees 18,915
Printing 8,140
Fees and expenses of nonaffiliated trustees 6,390
Miscellaneous 19,180
Total expenses $ 815,063
Less management fees waived by Pioneering Management Corporation
(Note 4) 235,347
Net expenses $ 579,716
Net investment income $ 3,964,967
Realized and Unrealized Loss on Investments:
Net realized loss on investments $(1,803,756)
Net increase in unrealized loss on investments (1,932,913)
Net loss on investments $(3,736,669)
Net increase in net assets resulting from operations $ 228,298
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Statements of Changes in Net Assets
For the Years Ended November 30, 1994 and 1993
<TABLE>
<CAPTION>
November 30, November 30,
1994 1993
<S> <C> <C>
From Operations:
Net investment income $ 3,964,967 $ 1,815,032
Net realized loss on investments . . (1,803,756) (181,671)
Increase in net unrealized loss on investments . . (1,932,913) (14,359)
Net increase in net assets resulting from operations . $ 228,298 $ 1,619,002
Distributions to Shareholders:
Net investment income
Class A ($0.21 and $0.24 per share, respectively) $ (3,671,419) $ (1,824,743)
Class B ($0.13 and $0.00 per share, respectively) (36,575) ---
Decrease in net assets resulting from distributions to
shareholders $ (3,707,994) $ (1,824,743)
From Trust Share Transactions:
Net proceeds from sale of shares $ 55,646,719 $ 56,110,857
Net asset value of shares issued to shareholders in reinvestment of
dividends 2,593,227 1,221,567
Cost of shares repurchased (49,972,576) (15,232,545)
Increase in net assets resulting from trust share transactions $ 8,267,370 $ 42,099,879
Net increase in net assets $ 4,787,674 $ 41,894,138
Net Assets:
Beginning of year 57,482,309 15,588,171
End of year (including accumulated undistributed net investment
income of $256,973 and $0, respectively) $ 62,269,983 $ 57,482,309
</TABLE>
<TABLE>
<CAPTION>
November 30, 1994 November 30, 1993
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
CLASS A
Shares sold 13,039,685 $ 50,866,270 14,126,615 $ 56,110,857
Shares issued to shareholders in reinvestment of distributions 707,412 2,563,580 307,518 1,221,567
Less shares repurchased (12,550,437) (48,392,130) (3,836,608) (15,232,545)
Net increase 1,196,660 $ 5,037,720 10,597,525 $ 42,099,879
CLASS B*
Shares sold 1,254,765 $ 4,780,449
Shares issued to shareholders in reinvestment of distributions 7,815 29,647
Less shares repurchased (415,007) (1,580,446)
Net increase 847,573 $ 3,229,650
*Class B shares were first publicly offered on April 4, 1994.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Highlights--Selected Data for a Share Outstanding
For the Periods Presented
<TABLE>
<CAPTION>
August 10
For the Year Ended to
November 30, November 30,
1994+ 1993 1992
<S> <C> <C> <C>
CLASS A
Net asset value, beginning of period $ 3.95 $ 3.95 $ 4.00
Income from investment operations:
Net investment income $ 0.22 $ 0.24 $ 0.08
Net realized and unrealized loss on investments (0.21) 0.00 (0.05)
Total income from investment operations $ 0.01 $ 0.24 $ 0.03
Distributions to shareholders from:
Net investment income $(0.21) $(0.24) $ (0.08)
Net decrease in net asset value $(0.20) $ 0.00 $ (0.05)
Net asset value, end of period $ 3.75 $ 3.95 $ 3.95
Total return* 0.32% 6.28% 0.79%
Ratio of net operating expenses to average net assets 0.85% 0.66% 0.50%**
Ratio of net investment income to average net assets 5.89% 5.80% 5.93%**
Portfolio turnover rate 49.09% 83.25% 146.45%**
Net assets, end of period (in thousands) $59,088 $57,482 $15,588
Ratios assuming no waiver of management fees or assumption
of expenses by PMC:
Net operating expenses 1.20% 1.33% 3.40%**
Net investment income 5.54% 5.13% 3.03%**
</TABLE>
+ Based upon average shares outstanding and average net assets for the period
presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Financial Highlights--Selected Data for a Share Outstanding
For the Period Presented
<TABLE>
<CAPTION>
April 4
to
November 30, 1994+
<S> <C>
CLASS B ***
Net asset value, beginning of period $ 3.89
Income from investment operations:
Net investment income $ 0.15
Net realized and unrealized loss on investments (0.16)
Total loss from investment operations $(0.01)
Distributions to shareholders from:
Net investment income $(0.13)
Net decrease in net asset value. $(0.14)
Net asset value, end of period $ 3.75
Total return*. (0.24%)
Ratio of net operating expenses to average net assets 1.41%**
Ratio of net investment income to average net assets 6.05%**
Portfolio turnover rate 49.09%
Net assets, end of period (in thousands) $3,182
Ratios assuming no waiver of management fees or assumption
of expenses by PMC:
Net operating expenses. 1.82%**
Net investment income 5.64%**
</TABLE>
+ Based upon average shares outstanding and average net assets for the period
presented.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
** Annualized.
*** Class B shares were first publicly offered on April 4, 1994.
The accompanying notes are an integral part of these financial statements.
<PAGE>
Pioneer Short-Term Income Trust
Notes to Financial Statements
November 30, 1994
1. Pioneer Short-Term Income Trust (the Trust) is a Massachusetts business
trust, registered under the Investment Company Act of 1940 as a diversified,
open-end management company.
The Board of Trustees authorized the issuance of two classes of the Trust,
designated as Class A and Class B shares. Class B shares were publicly
offered on April 4, 1994. Shares issued and outstanding prior to April 4,
1994 were designated as Class A shares. The shares of each class represent an
interest in the same portfolio of investments of the Trust and have equal
voting, redemption, dividend and liquidation rights, except that each class
of shares can bear different transfer agent and distribution fees and have
exclusive voting rights with respect to the distribution plans that have been
adopted by holders of Class A and Class B shares, respectively.
The following is a summary of significant accounting policies consistently
followed by the Trust, which are in conformity with those generally accepted
in the investment company industry.
A. Investment Securities--Security transactions are recorded on the date the
securities are purchased or sold. Investments in securities are valued based
on valuations furnished by an independent pricing service which utilizes a
matrix system. This matrix system reflects such factors as security prices,
yields, maturities and ratings, and is supplemented by dealer and exchange
quotations and fair market value information from other sources. Principal
amounts of mortgage-backed securities are adjusted for monthly paydowns.
Premium and discount related to certain mortgage-backed securities are
amortized or accreted in direct proportion to the underlying monthly
paydowns. Temporary cash investments are valued at cost plus accrued
interest, which approximates market value. Interest income is recorded on the
accrual basis.
Gains and losses from sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Trust's practice first to select for sale those securities that have
the highest cost and also qualify for long-term capital gain or loss
treatment for tax purposes.
B. Federal Income Taxes--It is the policy of the Trust to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its net investment income and net realized
capital gains, if any, to its shareholders. Therefore, no federal income tax
provisions are required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with income tax rules. Therefore, the
source of a portfolio's distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or
net realized gain on investment transactions, or from capital, depending on
the type of book/tax differences that may exist.
C. Trust Shares--The Trust records sales and repurchases of its trust shares
on the trade date. Net losses, if any, as a result of cancellations, are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter
for the Trust and wholly owned subsidiary of The Pioneer Group, Inc. (PGI).
PFD earned $49,173 in underwriting commissions on the sale of trust shares
during the year ended November 30, 1994. Shareholders begin earning dividends
on the first business day following receipt of payment for purchased shares.
Shares continue to earn dividends up to and including the date of redemption.
Dividends are declared daily and are normally paid on the last business day
of each month. Monthly distributions may also include a portion of any net
short-term capital gains realized by the Trust. Net long-term capital gains,
if any, will be distributed annually in December. Dividends paid by the Trust
with respect to each class of shares are calculated in the same manner, at
the same time and on the same day and are in the same amount,
<PAGE>
except that Class A and Class B shares can bear different transfer agent and
distribution fees.
D. Class Allocations--Distribution expenses are calculated based on the
average daily net asset value attributable to Class A and Class B shares of
the Trust, respectively. Shareholders of Class A and Class B share all
expenses and fees paid to the service organization, Pioneering Services
Corporation (PSC), for their services, which are allocated based on the
number of accounts in each class and the ratable allocation of related out of
pocket expenses (See Note 5). Income, common expenses and realized and
unrealized gains (losses) are calculated at the Trust level and allocated
daily to each class of shares based on the respective percentage of adjusted
net assets at the beginning of the day.
E. Repurchase Agreements--The Trust may enter into repurchase agreements. At
the time the Trust enters into a repurchase agreement, the value of the
underlying security (collateral), including accrued interest, will be equal
to or exceed the value of the repurchase agreement, and in the case of
repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in safekeeping
in the customer-only account of the Trust's custodian, or at a Federal
Reserve Bank. If the seller defaults and the value of the collateral
declines, or if bankruptcy proceedings commence with respect to the seller of
the security, realization of the collateral by the Trust may be delayed or
limited.
F. Reclassifications--Certain reclassifications have
been made to the 1993 balances to conform with the 1994
presentation.
2. At November 30, 1994, the total cost of securities, the net realized loss
and the net unrealized loss for federal income tax purposes were identical to
those on a financial reporting basis. Aggregate gross unrealized loss on
securities in which there was an excess of tax cost over market value was
$2,059,345.
At November 30, 1994, the Trust had a net capital loss carryforward of
$2,003,240 which will expire between 2000 and 2002 if not utilized.
3. During the year ended November 30, 1994, the cost of purchases and
proceeds from sales of investments (including principal paydowns on
mortgage-backed securities), other than temporary cash investments, were as
follows:
<TABLE>
<CAPTION>
Purchases Sales
<S> <C> <C>
Long-term U.S. Government $83,205,978 $90,009,466
Other Long-term Securities 9,293,947 5,158,086
</TABLE>
4. Pioneering Management Corporation (PMC) is the Trust's investment adviser
and a wholly owned subsidiary of PGI. Management fees are calculated at the
annual rate of 0.50% of the Trust's average daily net assets up to $100
million, 0.45% of the next $200 million and 0.40% on assets over $300
million. Effective December 1, 1993, PMC has agreed not to impose a portion
of its management fee and to make other arrangements, if necessary, to absorb
certain other expenses of the Trust to the extent necessary to limit Class A
expenses to 0.85% of the average daily net assets attributable to Class A
shares; the portion of the Trust-wide expenses attributable to Class B shares
will be reduced only to the extent such expenses are reduced for Class A
shares. This agreement is voluntary and temporary and may be revised or
terminated by PMC at any time.
<PAGE>
Prior to December 1, 1993, PMC had waived its management fees and assumed
other operating expenses of the Trust to the extent necessary to limit
expenses of the Trust according to the following schedule:
<TABLE>
<CAPTION>
Expenses Limited by PMC
as a Percentage of Average
Average Daily Net Assets Daily Assets
<S> <C>
Up to $20 million 0.50%
Up to $25 million 0.55%
Up to $30 million 0.60%
Up to $35 million 0.65%
Up to $40 million 0.70%
Over $40 million 0.75%
</TABLE>
PMC furnishes investment advice, provides office facilities, and pays
executive salaries and certain other operating expenses under the management
agreement. No officer of the Trust receives any compensation directly from
the Trust. All officers of the Trust are directors and/or officers of PMC
and/or PFD. In addition, certain other services and costs, including
accounting, regulatory reporting and insurance premiums, are paid by the
Trust under the management agreement. Included in Accrued expenses is $3,572
in accounting fees payable to PMC at November 30, 1994.
5. Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the
Trust, at negotiated rates. Included in Accrued expenses is $4,464 in
transfer fees payable to PSC at November 30, 1994.
6. The Trust has adopted a Plan of Distribution for both Class A shares
("Class A Plan") and Class B shares ("Class B Plan") in accordance with Rule
12b-1 under the Investment Company Act of 1940, pursuant to which certain
distribution and service fees are paid to PFD.
Pursuant to the Class A Plan, the Trust may reimburse PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares.
Reimbursement for such expenditures, if any, may not exceed 0.25% of the
Trust's average annual net assets attributable to Class A shares. The Class B
Plan provides that the Trust may pay a distribution fee at an annual rate of
0.75% of the Trust's average daily net assets attributable to Class B shares
and may pay PFD a service fee at the annual rate of 0.25% of the Trust's
average daily net assets attributable to Class B shares. Included in Accrued
expenses is $25,609 in distribution fees payable to PFD at November 30, 1994.
Class B shares that are redeemed within three years of purchase are subject
to a contingent deferred sales charge ("CDSC") at declining rates beginning
at 2.0% of the lesser of the current market value at the time of redemption
or the original purchase cost of the shares being redeemed. Proceeds from the
CDSC are paid to PFD. For the period ending November 30, 1994, CDSC in the
amount of $597 was paid to PFD.
<PAGE>
Trustees' Fees, Principal Shareholders and Share Ownership of
Trustees and Officers (Unaudited)
The aggregate direct remuneration paid by the Trust to nonaffiliated trustees
and officers during the year ended November 30, 1994 was approximately
$4,546, plus expenses incurred in attending trustees meetings of
approximately $2,070. Fees of trustees who are affiliated with or "interested
persons" of Pioneering Management Corporation and Pioneer Funds Distributor,
Inc., investment adviser and principal underwriter, respectively, of the
Trust ($1,000 in 1994) are reimbursed to the Trust by Pioneering Management
Corporation in accordance with the management contract with the Trust. At
November 30, 1994, the trustees and officers of the Trust owned beneficially
50,025 shares of the Trust (approximately 0.3% of the outstanding shares).
The Pioneer Group, Inc. is a publicly held corporation of which Mr. Cogan
owned approximately 15% of the outstanding shares of capital stock at
November 30, 1994.
<PAGE>
Pioneer Short-Term Income Trust
Tax Treatment of Distributions
Made During the Year Ended November 30, 1994
During the year ended November 30, 1994, Pioneer Short-Term Income Trust paid
the following distributions:
<TABLE>
<CAPTION>
Distributions Per Share
From Net Investment Distributions Per Share
Income From Net Investment Income
Payment Date Class A Class B*
<S> <C> <C>
12/31/93 $.0180 $ --
1/31/94 .0180 --
2/28/94 .0180 --
3/31/94 .0180 --
4/30/94 .0180 .0150
5/31/94 .0160 .0148
6/30/94 .0160 .0148
7/31/94 .0160 .0148
8/31/94 .0170 .0160
9/30/94 .0180 .0180
10/31/94 .0190 .0180
11/30/94 .0210 .0190
TOTAL $.2130 $.1304
</TABLE>
For purposes of the dividend exclusion, none of the distributions per share
qualify for the exclusion.
* Class B shares were first publicly offered on April 4, 1994.
<PAGE>
Report of Independent Public Accountants
To the Shareholders and the Board of Trustees of Pioneer Short-Term Income
Trust:
We have audited the accompanying balance sheet of PIONEER SHORT-TERM INCOME
TRUST (a Massachusetts business trust), including the schedule of
investments, as of November 30, 1994, and the related statement of operations
for the year then ended, statements of changes in net assets for the years
ended November 30, 1994 and 1993, and financial highlights for the periods
presented. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1994, by correspondence with the
custodian. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
PIONEER SHORT-TERM INCOME TRUST as of November 30, 1994, and the results of
its operations, the changes in its net assets and the financial highlights
for the periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 6, 1995
<PAGE>
PIONEER SHORT-TERM INCOME TRUST
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR.
Chairman and President
DAVID D. TRIPPLE
Executive Vice President
RICHARD A. SCHLANGER
Vice President
WILLIAM H. KEOUGH
Treasurer
JOSEPH P. BARRI
Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT
CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS
DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS
HARRIMAN & CO.
INDEPENDENT PUBLIC
ACCOUNTANTS
ARTHUR ANDERSEN LLP
TRUSTEES
JOHN F. COGAN, JR.
RICHARD H. EGDAHL, M.D.
MARGARET B.W. GRAHAM
JOHN W. KENDRICK
MARGUERITE A. PIRET
DAVID D. TRIPPLE
STEPHEN K. WEST
JOHN WINTHROP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER
SERVICES AND
TRANSFER AGENT
PIONEERING SERVICES
CORPORATION
60 State Street
Boston, Massachusetts
02109
Please call Pioneer for information on...
Existing accounts, new accounts, prospectuses,
applications and service forms ............................... 1-800-225-6292
Fund yields and prices ....................................... 1-800-225-4321
Toll-free fax ................................................ 1-800-225-4240
Retirement plans ............................................. 1-800-622-0176
Telecommunications Device for the
Deaf (TDD) ................................................... 1-800-225-1997
When distributed to persons who are not shareholders of the Trust, this
report must be accompanied by an official prospectus, which discusses the
objectives, policies and other information concerning the Trust.
0195-2215
(c)Pioneer Funds Distributor, Inc.
STOCK PURCHASE AGREEMENT
This Agreement is made this ___ day of June, 1990 between The Pioneer
Group, Inc., a Delaware corporation ("PGI") and Pioneer Short-Term Income Trust,
a Massachusetts business trust (the "Trust").
WHEREAS, the Trust wishes to sell and PGI wishes to purchase _____ shares
of beneficial interest in the Trust for a purchase price of $_______________ per
share (the "Shares"); and
WHEREAS, PGI is purchasing the Shares for the purpose of providing the
initial capitalization of the Trust;
NOW, THEREFORE, the parties hereto agree as follows:
111 Simultaneously with the execution of this Agreement, PGI is delivering
to the Trust a check in the amount of $__________ in payment for the Shares.
121 PGI agrees that it is purchasing the Shares for investment and has no
present intention of redeeming or reselling the Shares.
Executed as of the date first set forth above.
THE PIONEER GROUP, INC.
By:
PIONEER SHORT-TERM INCOME TRUST
By:
DISTRIBUTION PLAN
PIONEER SHORT-TERM INCOME TRUST
DISTRIBUTION PLAN, dated as of August 4, 1992 of PIONEER SHORT-TERM
INCOME TRUST, a Massachusetts business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute its shares of beneficial
interest (the "Shares") of the securities portfolio of each series of Pioneer
which the Trustees may establish from time to time (the "Portfolio") in
accordance with Rule 12b-1 promulgated by the Securities and Exchange Commission
under the 1940 Act ("Rule 12b-1"), and desires to adopt this Distribution Plan
(the "Plan") as a Plan of Distribution pursuant to such rule;
WHEREAS, the Trust desires to engage Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), to provide certain distribution services for
the Trust in connection with the Plan;
WHEREAS, the Trust desires to enter into an underwriting agreement with
PFD, whereby PFD will provide facilities and personnel and render services to
the Trust in connection with the offering and distribution of Shares (the
"Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Shares in connection with the offering of
Shares, (b) PFD may compensate any Dealer that sells Shares in the manner and at
the rate or rates to be set forth in an agreement between PFD and such Dealer,
and (c) PFD may make such payments to the Dealers for distribution services out
of the fee paid to PFD hereunder, its profits or any other source available to
it; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Plan, has evaluated such information as it
deemed necessary to an informed determination whether this Plan should be
adopted and implemented and has considered such pertinent factors as it deemed
necessary to form the basis for a decision to use assets of the Trust for such
purposes, and has determined that there is a reasonable likelihood that the
adoption and implementation of this Plan will benefit the Trust and its
shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Plan for the Trust as a plan for distribution in accordance with Rule 12b-1, on
the following terms and conditions:
The Trust may expend pursuant to this Plan amounts not to
exceed .25% of 1% of the average daily net assets of each Portfolio per annum.
Subject to the limit in paragraph 1, the Trust shall reimburse
PFD for amounts expended by PFD to finance any activity which is primarily
intended to result in the sale of shares of the Trust or the provision of
services to shareholders of the Trust, including but not limited to commissions
or other payments to Dealers and salaries and other expenses of PFD relating to
selling or servicing efforts, provided, that the Board of Trustees of the Trust
shall approve categories of expenses for which reimbursement shall be made
pursuant to this paragraph 2 and such reimbursement shall be paid ten (10) days
after the end of the month or quarter, as the case may be, in which such
expenses are incurred. The Trust acknowledges that PFD will charge a sales load
in connection with sales of such shares and that PFD will reallow to Dealers all
or a portion of such sales load, as described in the Trust's Prospectus from
time to time. Nothing contained herein is intended to have any effect whatsoever
on PFD's ability to charge any such sales load or to reallow all or any portion
thereof to Dealers.
The Trust understands that agreements between PFD and Dealers
may provide for payment of fees to Dealers in connection with the sale of Shares
and the provision of services to shareholders of the Trust. Nothing in this Plan
shall be construed as requiring the Trust to make any payment to any Dealer or
1
<PAGE>
to have any obligations to any Dealer in connection with services as a dealer of
the Shares. PFD shall agree and undertake that any agreement entered into
between PFD and any Dealer shall provide that such Dealer shall look solely to
PFD for compensation for its services thereunder and that in no event shall such
Dealer seek any payment from the Trust.
Nothing herein contained shall be deemed to require the Trust
to take any action contrary to its Declaration of Trust or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.
This Plan shall become effective upon approval by a vote of
the Board of Trustees and a vote of a majority of the Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Plan or in any agreement related to the Plan
(the "Qualified Trustees"), such votes to be cast in person at a meeting called
for the purpose of voting on this Plan.
This Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Plan shall expire on
July 31, 1993.
This Plan may be amended at any time by the Board of Trustees,
provided that this Plan may not be amended to increase materially the limitation
on the annual percentage of average net assets which may be expended hereunder
without the approval of holders of a "majority of the outstanding voting
securities" of the Trust and may not be materially amended in any case without a
vote of a majority of both the Trustees and the Qualified Trustees. This plan
may be terminated at any time by a vote of a majority of the Qualified Trustees
or by a vote of the holders of a "majority of the outstanding voting securities"
of the Trust.
In the event of termination or expiration of the Plan, the
Trust may nevertheless, within twelve months of such termination or expiration
reimburse any expense which it incurs prior to such termination or expiration,
provided that payments by the Trust during such twelve-month period shall not
exceed .25% or 1% of the Trust's average net daily assets during such period and
provided further that such payments are specifically approved by the Board of
Trustees, including a majority of the Qualified Trustees.
The Trust and PFD shall provide the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Plan and the purposes for which such
expenditures were made.
While this Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
For the purposes of this Plan, the terms "interested persons,"
"majority of the outstanding voting securities" and "specifically approved at
least annually" are used as defined in the 1940 Act.
The Trust shall preserve copies of this Plan, and each
agreement related hereto and each report referred to in paragraph 11 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
This Plan shall be construed in accordance with the laws of
the Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
If any provision of this Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
2
<PAGE>
CLASS B DISTRIBUTION PLAN
PIONEER SHORT-TERM INCOME TRUST
CLASS B DISTRIBUTION PLAN, dated as of April 4, 1994, of PIONEER
SHORT-TERM INCOME TRUST, a Massachusetts business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class B Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B distribution plan (the "Class B Plan") as a plan
of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Fund's Class B Shares in connection with the Class B Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) PFD may compensate any Dealer that sells Class B
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class B
shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class B shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Trust and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class B Plan for the Trust as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:
11a The Trust is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Trust's Class B shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.
12a The amount of compensation paid during any one
year for distribution services shall be .75% of the average
daily net assets of the Trust attributable to such year.
13a Distribution services and expenses for which PFD
may be compensated pursuant to this Plan include, without
limitation: compensation to and expenses (including allocable
overhead, travel and telephone expenses) of (i) Dealers,
brokers and other dealers who are members of the National
Association of Securities Dealers, Inc. ("NASD") or their
1
<PAGE>
officers, sales representatives and employees, (ii) PFD and
any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their
officers, sales representatives and employees, who engage in
or support distribution of the Trust's Class B shares;
printing of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of
sales literature and advertising materials.
14a The amount of compensation paid for personal and
account maintenance services and expenses shall be .25% of the
average daily net assets of the Trust attributable to such
year. As partial consideration for personal services and/or
account maintenance services provided by PFD to the Class B
shares, PFD shall be entitled to be paid any fees payable
under this clause (d) with respect to Class B shares for which
no dealer of record exists, where less than all consideration
has been paid to a dealer of record or where qualification
standards have not been met.
15a Personal and account maintenance services for
which PFD or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of PFD or any of its
affiliates, banks, other brokers and dealers who are members
of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance
to, shareholders regarding their ownership of Class B shares
or their accounts or who provide similar services not
otherwise provided by or on behalf of the Trust.
16a PFD may impose certain deferred sales charges in
connection with the repurchase of Class B shares by the Trust
and PFD may retain (or receive from the Trust as the case may
be) all such deferred sales charges.
17a Appropriate adjustments to payments made pursuant
to clauses (b) and (d) of this paragraph 1 shall be made
whenever necessary to ensure that no payment is made by the
Trust in excess of the applicable maximum cap imposed on asset
based, front-end and deferred sales charges by subsection (d)
of Section 26 of Article III of the Rules of Fair Practice of
the NASD.
The Trust understands that agreements between PFD and Dealers
may provide for payment of fees to Dealers in connection with the sale of Class
B Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
Nothing herein contained shall be deemed to require the Trust
to take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
This Class B Plan shall become effective upon approval by a
vote of the Board of Trustees and a vote of a majority of the Trustees who are
not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class B Plan or in any agreements
related to the Class B Plan (the "Qualified Trustees"), such votes to be cast in
person at a meeting called for the purpose of voting on this Class B Plan.
This Class B Plan will remain in effect indefinitely, provided
that such continuance is "specifically approved at least annually" by a vote of
both a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class B Plan shall
expire on April 30, 1995.
This Class B Plan may be amended at any time by the Board of
Trustees, provided that this Class B Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
2
<PAGE>
may be expended hereunder without the approval of holders of a "majority of the
outstanding Class B voting securities" of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class B Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class B of the Trust.
The Trust and PFD shall provide to the Trust's Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended under this Class B Plan and the purposes for
which such expenditures were made.
While this Class B Plan is in effect, the selection and
nomination of Qualified Trustees shall be committed to the discretion of the
Trustees who are not "interested persons" of the Trust.
For the purposes of this Class B Plan, the terms "interested
persons," "majority of the outstanding voting securities" and "specifically
approved at least annually" are used as defined in the 1940 Act.
The Trust shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
This Class B Plan shall be construed in accordance with the
laws of The Commonwealth of Massachusetts and the applicable provisions of the
1940 Act.
If any provision of this Class B Plan shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of the
Class B Plan shall not be affected thereby.
3
<PAGE>
Exhibit 16.1
Description of Average Annual Total Return
When a Pioneer fund has been inexistence for less than one year, in
order to avoid misleading projections, the fund presents total return for the
period without annualizing. The formula is as follows:
T = ERV/p - 1, where:
T = Total return, not annualized
ERV = Ending redeemable value of a hypothetical
$1,000 payment made at maximum sales load
(2.50%) at the beginning of the period,
assuming reinvestment of all distributions.
P = Hypothetical $1,000 initial payment
Total Return for the Period from August 10,
1992 through December 31, 1992 for Pioneer Short-Term
Income Trust
T = $991.49/$1,000 - 1
T = -0.85%
Exhibit 16.2
PIONEER SHORT TERM INCOME TRUST
S.E.C. YIELD CALCULATION FOR THE 30-DAY PERIOD ENDED 11/30/92
Standardized Yield Formula: 2((((a-b)/(cd))+1)-1) 6
a-b 6
Yield Calculation: 2[(----- +1)-1]
c*d
a-b = total net income during period $62,896.55
c = average daily number of shares during period 3,385,426.190
d = offering price per shaer on last day of period $4.05
Standardized Yield as of 06/30/92: 5.57%
62,896.55
Yield = 2x[(----------------- +1)-1]6
13,710,976.07
= 2x[(1.0045873138)-1]
= 2x[(1.027841472)-1]
= 5.57%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000887228
<NAME> Pioneer Short-Term Income Trust
<SERIES>
<NUMBER> 000
<NAME> none
<MULTIPLIER> 1
<CURRENCY> U. S .Dollars
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> NOV-30-1994
<PERIOD-START> DEC-01-1993
<PERIOD-END> NOV-30-1994
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 53,713,061
<INVESTMENTS-AT-VALUE> 51,653,716
<RECEIVABLES> 751,616
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 10,963,393
<TOTAL-ASSETS> 63,368,725
<PAYABLE-FOR-SECURITIES> 498,475
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 600,267
<TOTAL-LIABILITIES> 1,098,742
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 66,075,595
<SHARES-COMMON-STOCK> 16,584,128
<SHARES-COMMON-PRIOR> 14,539,895
<ACCUMULATED-NII-CURRENT> 256,973
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2,003,240)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,059,345)
<NET-ASSETS> 62,269,983
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 4,544,683
<OTHER-INCOME> 0
<EXPENSES-NET> 579,716
<NET-INVESTMENT-INCOME> 3,964,967
<REALIZED-GAINS-CURRENT> (1,803,756)
<APPREC-INCREASE-CURRENT> (1,932,913)
<NET-CHANGE-FROM-OPS> 228,298
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 3,707,994
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,294,450
<NUMBER-OF-SHARES-REDEEMED> 12,965,444
<SHARES-REINVESTED> 715,227
<NET-CHANGE-IN-ASSETS> 4,787,674
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (199,484)
<OVERDISTRIB-NII-PRIOR> 9,711
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 337,731
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 815,063
<AVERAGE-NET-ASSETS> 66,926,532
<PER-SHARE-NAV-BEGIN> 3.950
<PER-SHARE-NII> 0.220
<PER-SHARE-GAIN-APPREC> (0.210)
<PER-SHARE-DIVIDEND> (0.210)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 3.750
<EXPENSE-RATIO> 0.850
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
POWER OF ATTORNEY
We, the undersigned officers and trustees of Pioneer Short-Term Income
Trust, a Massachusetts business trust, do hereby severally constitute and
appoint John F. Cogan, Jr. and Joseph P. Barri, and each of them acting singly,
to be our true, sufficient and lawful attorneys, with full power to each of
them, and each of them acting singly, to sign for each of us, in the name of
each of us and in the capacities indicated below, any and all amendments to the
Registration Statement on Form N-1A to be filed by Pioneer Short-Term Income
Trust under the Investment Company Act of 1940, as amended, and under the
Securities Act of 1933, as amended, with respect to the offering of its shares
of beneficial interest, no par value, and any and all other documents and papers
relating thereto, and generally to do all such things in the name of each of us
and on behalf of each of us in the capacities indicated to enable Pioneer
Short-Term Income Trust to comply with the Investment Company Act of 1940, as
amended, and the Securities Act of 1933, as amended, and all requirements of the
Securities and Exchange Commission thereunder, hereby ratifying and confirming
the signature of each of us as it may be signed by said attorneys or each of
them to any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, we have hereunder set our hands on the dates set
opposite our respective signatures.
Dated: June 16, 1992 /s/David D. Tripple
David D. Tripple, Trustee and Executive Vice
President
/s/William H. Keough
William H. Keough, Treasurer and Chief Financial
Officer
/s/Margaret B.W. Graham
Margaret B.W. Graham, Trustee
/s/Franklin R. Johnson
Franklin R. Johnson, Trustee
/s/John W. Kendrick
John W. Kendrick, Trustee
/s/Marguerite A. Piret
Marguerite A. Piret, Trustee
/s/John Winthrop
John Winthrop, Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee and officer of Pioneer Short-Term Income
Trust, a Massachusetts business trust, do hereby constitute and appoint Joseph
P. Barri, and acting singly, to be my true, sufficient and lawful attorney, with
full power, and acting singly, to sign for me, in my name and in the capacities
indicated below, any and all amendments to the Registration Statement on Form
N-1A to be filed by Pioneer Short-Term Income Trust under the Investment Company
Act of 1940, as amended, and under the Securities Act of 1933, as amended, with
respect to the offering of its shares of beneficial interest, no par value, and
any and all other documents and papers relating thereto, and generally to do all
such things in my name and on behalf of me in the capacities indicated to enable
Pioneer Short-Term Income Trust to comply with the Investment Company Act of
1940, as amended, and the Securities Act of 1933, as amended, and all
requirements of the Securities and Exchange Commission thereunder, hereby
ratifying and confirming my signature as it may be signed by said attorney to
any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on the date set
opposite my signature.
Dated: June 16, 1992 /s/John F. Cogan, Jr.
John F. Cogan, Jr., President, Chief Executive
Officer and Trustee
POWER OF ATTORNEY
We, the undersigned trustees of Pioneer Money Market Trust, Pioneer
Bond Fund, Pioneer U.S. Government Trust, Pioneer Fund, Pioneer II, Pioneer
Three, Pioneer Europe Fund, Pioneer Growth Trust, Pioneer Municipal Bond Fund
and Pioneer Short-Term Income Trust (collectively, the "Funds"), all
Massachusetts business trusts, do hereby severally constitute and appoint John
F. Cogan, Jr., and Joseph P. Barri, and each of them acting singly, to be our
true, sufficient and lawful attorneys, with full power to each of them, and each
of them acting singly, to sign for each of us, in the name of each of us and in
the capacities indicated below, any and all amendments to the Registration
Statements on Forms N-1A to be filed by the Funds under the Investment Company
Act of 1940, as amended, and under the Securities Act of 1933, as amended, with
respect to the offering of the Funds' shares of beneficial interest, no par
value, and any and all other documents and papers relating thereto, and
generally to do all such things in the name of each of us and on behalf of each
of us in the capacities indicated to enable the Funds to comply with the
Investment Company Act of 1940, as amended, and the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratify and confirming the signature of each of us as it may
be signed by said attorneys or each of them to any and all amendments to said
Registration Statements.
IN WITNESS WHEREOF, we have hereunder set our hands on the dates set
opposite our respective signatures.
/s/ RICHARD H. EGDAHL
Dated: 2/5/93
Richard H. Egdahl, M.D.
Trustee
/s/ MARGARET B. W. GRAHAM
Dated: 2/5/93
Margaret B. W. Graham
Trustee
POWER OF ATTORNEY
I, the undersigned trustee of Pioneer Bond Fund, Pioneer Europe Fund,
Pioneer Fund, Pioneer Growth Trust, Pioneer International Growth Fund, Pioneer
Money Market Trust, Pioneer Municipal Bond Fund, Pioneer Short-Term Income
Trust, Pioneer Tax-Free State Series Trust, Pioneer II, Pioneer Three and
Pioneer U.S. Government Trust (collectively, the "Funds"), all Massachusetts
business trusts, do hereby constitute and appoint John F. Cogan, Jr., Joseph P.
Barri and William H. Keough, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacity indicated
below, any and all amendments to the Registration Statements on Forms N-1A to be
filed by the Funds under the Investment Company Act of 1940, as amended, and
under the Securities Act of 1933, as amended, with respect to the offering of
the Funds' shares of beneficial interest, no par value, and any and all other
documents and papers relating thereto, and generally to do all such things in my
name and on my behalf in the capacity indicated to enable the Funds to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statements.
IN WITNESS WHEREOF, I have hereunder set my hand on the date set
opposite my signature.
/s/ STEPHEN K. WEST
Dated: 9/24/93
Stephen K. West
Trustee
