As Filed with the Securities and Exchange Commission on January , 1996
File No. 33-54306 and File No. 811-7336
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
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REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X__/
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Pre-Effective Amendment No. /____/
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Post-Effective Amendment No. 4 /_X__/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ____
ACT OF 1940 /_X__/
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Amendment No. 5 /_X__/
(Check appropriate box or boxes)
PIONEER TAX-FREE STATE SERIES 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, 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
_XX_ on January 26, 1996 pursuant to paragraph (b), or
____ 60 days after filing pursuant to paragraph (a)(1), or
____ On (date) pursuant to paragraph (a)(1), of Rule 485.
The Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24f-2 under the Investment Company
Act of 1940. On November 15, 1995, the Registrant filed a Rule 24f-2 Notice for
its fiscal year ending September 30, 1995.
Page 1 of 1 page.
Exhibit Index is on Page __.
<PAGE>
PIONEER TAX-FREE STATE SERIES TRUST
Cross-Reference Sheet Showing Location in Prospectus and
Statement of Additional Information of
Information Required by Items of the Registration Form
Form N-1A Item Number and Caption Location
Part A
1. Cover Page............................ Cover Page
2. Synopsis.............................. Expense Information
3. Condensed Financial Information....... Financial Highlights
4. General Description of Registrant..... The Trust; Three Investment
Programs; Management of the
Trust; Information About
Shares
5. Management of the Fund................ Management of the Trust
6. Capital Stock and Other Securities.... Three Investment Programs;
Information About Shares
7. Purchase of Securities Being Offered.. Information About Shares;
Distribution Plan;
Shareholder Services
8. Redemption or Repurchase.............. Information About Shares;
Shareholder Services
9. Pending Legal Proceedings............. Not Applicable
Part B
10. Cover Page............................ Cover Page
11. Table of Contents..................... Cover Page
12. General Information and History....... Cover Page; Certain
Liabilities
13. Investment Objectives and Policies.... Investment Objectives,
Policies and Restrictions
<PAGE>
14. Management of the Fund................ Management of the Trust;
Investment Adviser
15. Control Persons and Principal
Holders of Securities................. Management of the Trust
16. Investment Advisory and Other
Services.............................. Management of the Trust;
Investment Adviser;
Underwriting Agreement and
Distribution Plan;
Shareholder
Servicing/Transfer Agent;
Custodian; Independent
Public Accountant
17. Brokerage Allocation and Other
Practices............................. Portfolio Transactions
18. Capital Stock and Other Securities.... Description of Shares;
Certain Liabilities
19. Purchase, Redemption and Pricing of
Securities Being Offered.............. Letter of Intention;
Systematic Withdrawal Plan;
Determination of Net Asset
Value
20. Tax Status............................ Tax Status
21. Underwriters.......................... Principal Underwriter;
Underwriting Agreement and
Distribution Plan
22. Calculation of Performance Data....... Investment Results
23. Financial Statements.................. Financial Statements
Part C
Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.
<PAGE>
Pioneer California Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Prospectus
January 26, 1996
Pioneer California Double Tax-Free Fund, Pioneer New York Triple Tax-Free
Fund and Pioneer Massachusetts Double Tax-Free Fund (the "Funds") are members
of the Pioneer family of mutual funds. The investment objective of each Fund
is to provide as high a level of current income exempt from federal income
taxes and from the personal income taxes of its respective state, and, if
applicable, city, as is consistent with prudent investment risk. Each Fund
invests only in investment grade securities.
Pioneer California Double Tax-Free Fund. A non- diversified portfolio
consisting primarily of municipal obligations issued by or on behalf of the
State of California and its political subdivisions, agencies and
instrumentalities and other obligations that pay interest which is exempt
from federal and California state personal income taxes.
Pioneer New York Triple Tax-Free Fund. A non-diversified portfolio
consisting primarily of municipal obligations issued by or on behalf of the
State of New York and its political subdivisions, agencies and
instrumentalities and other obligations that pay interest which is exempt
from federal, New York State and New York City personal income taxes.
Pioneer Massachusetts Double Tax-Free Fund. A non- diversified portfolio
consisting primarily of municipal obligations issued by or on behalf of the
Commonwealth of Massachusetts and its political subdivisions, agencies and
instrumentalities and other obligations that pay interest which is exempt
from federal and Commonwealth of Massachusetts personal income taxes.
Each Fund's return and share price fluctuates and the value of your
account upon redemption may be more or less than your purchase price. Shares
in the Funds 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
information about the Funds that you should know before investing. Please
read and keep it for your future reference.
More information about the Funds is included in Part B, the Statement of
Additional Information, also dated January 26, 1996, which is incorporated
into this Prospectus by reference. You may obtain a copy of the Statement of
Additional Information free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Funds at 60 State Street, Boston,
Massachusetts 02109. Shares of the Funds are available only where they may
legally be sold.
TABLE OF CONTENTS PAGE
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I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 2
III. THE TRUST 4
IV. THREE INVESTMENT PROGRAMS 4
Investment Objectives and Policies 4
Quality and Maturity of Investments 4
Other Eligible Investments 4
"When Issued" Securities 5
Puts, Demand Features and Standby Commitments 5
Fluctuations in Net Asset Value and Income 5
Portfolio Transactions and Turnover 5
Special Risk Considerations 5
V. MANAGEMENT OF THE TRUST 6
VI. DISTRIBUTION PLAN 7
VII. INFORMATION ABOUT SHARES 7
How to Purchase Shares 7
Net Asset Value and Pricing of Orders 9
Dividends, Distributions and Taxation 9
Redemptions and Repurchases 11
Redemption of Small Accounts 12
Description of Shares and Voting Rights 12
VIII. SHAREHOLDER SERVICES 12
Account and Confirmation Statements 12
Additional Investments 13
Automatic Investment Plans 13
Financial Reports and Tax Information 13
Distribution Options 13
Directed Dividends 13
Direct Deposit 13
Exchange Privilege 13
Telephone Transactions and Related Liabilities 14
FactFone|(SM) 14
Systematic Withdrawal Plans 14
Reinstatement Privilege 14
IX. INVESTMENT RESULTS 14
X. APPENDIX--Taxable Equivalent Yields 16
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses
that you, as a shareholder, will bear directly or indirectly when you invest
in the Funds. The information in the table below is an estimate based on
actual operating expenses for the fiscal year ended September 30, 1995
expressed as a percentage of the average net assets of each Fund.
Pioneer Pioneer Pioneer
California New York Massachusetts
Double Triple Double
Tax-Free Tax-Free Tax-Free
Fund Fund Fund
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Shareowner Transaction Expenses:
Maximum Initial Sales Charge on
Purchases (as a percentage of
offering price)(1) 3.50% 3.50% 3.50%
Maximum Sales Charge on
Reinvestment of Dividends None None None
Maximum Deferred Sales Charge
(as a percentage of original
purchase price or redemption
proceeds, as applicable)(1) None None None
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses (As a Percentage of Average Net Assets):
Management Fee (after
fee reduction)(3) 0.00% 0.00% 0.00%
12b-1 Fees 0.15% 0.15% 0.15%
Other Expenses (including
accounting and transfer agent
fees, custodian fees and
printing expenses) (after fee
reduction)(3) 0.35% 0.35% 0.35%
----------- --------- --------------
Total Operating Expenses (after
fee reduction)(3) 0.50% 0.50% 0.50%
=========== ========= ==============
(1) Purchases of $1,000,000 or more and purchases by participants in a Group
Plan (as described under "How to Purchase Shares") are not subject to an
initial sales charge. A contingent deferred sales charge of 0.50% may,
however, be charged on redemptions by such accounts of shares held less
than one year, as further described under "Redemptions and Repurchases."
(2) Separate fees (currently $10 and $20) apply to domestic or international
bank wire transfers, respectively, of redemption proceeds.
(3) Effective February 1, 1994, the Funds' investment adviser, Pioneering
Management Corporation ("PMC"), voluntarily agreed not to impose a
portion of its management fees and to limit or otherwise absorb other
operating expenses except taxes and interest on borrowed money, if any,
in accordance with the following schedule:
Expense limit as a percent
Net Assets of average daily net assets
--------------------- ---------------------------
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%
This agreement is voluntary and temporary and may be revised or terminated
at any time by PMC. The purpose of this policy is to enhance each Fund's
dividend yield during the period when, because of their smaller size, fixed
expenses have a more significant impact on yield.
Annual Operating Expenses Absent Fee Reduction
(As a Percentage of Average Net Assets)
Management Fee 0.60% 0.60% 0.60%
Other Expenses 2.35% 2.35% 2.35%
Total Operating Expenses 2.95% 2.95% 2.95%
Example:
You would pay the following fees and expenses on a $1,000 investment,
assuming a 5% annual return with or without redemption at the end of each
time period:
Pioneer Pioneer Pioneer
California New York Massachusetts
Double Triple Double
Tax-Free Tax-Free Tax-Free
Fund Fund Fund
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One Year $40 $40 $40
Three Years $50 $50 $50
Five Years $62 $62 $62
Ten Years $96 $96 $96
The example above assumes reinvestment of all dividends and distributions
and that the percentage amounts listed under "Annual Operating Expenses"
remain the same each year.
The example is designed for information purposes only, and should not be
considered a representation of past or future expenses or return. Actual Fund
expenses and returns 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 Funds, including information regarding the basis upon which
fees and expenses are reduced or reallocated, see "Management of the Trust,"
"Distribution Plan" and "How To Purchase Shares" in this Prospectus and
"Management of the Trust" and "Underwriting Agreement and Distribution Plan"
in the Statement of Additional Information. The Fund's payment of a Rule
12b-1 fee may result in long-term shareholders 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 sales charge is reduced on purchases of specified amounts and
the value of shares owned in other Pioneer mutual funds is taken into account
in determining the applicable sales charge. See "How to Purchase Shares." No
sales charge is applied to exchanges of shares of the Funds for shares of
other publicly available mutual funds in the Pioneer complex. See "Exchange
Privilege."
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements which
have been audited by Arthur Andersen LLP, independent public accountants, in
connection with their examination of each Fund's financial statements. Arthur
Andersen LLP's report on each Fund's financial statement as of September 30,
1995 appears in the Fund's Annual Report incorporated by reference in the
Fund's Statement of Additional Information. The Annual Report includes more
information about each Fund's performance and is available free of charge by
calling Shareholder Services at 1-800-225-6292.
2
<PAGE>
Pioneer California Double Tax-Free Fund
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
February 19, 1993
Year Year (Commencement of
Ended Ended Operations) to
September 30, 1995 September 30, 1994 September 30, 1993
--------------------- ------------------ ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.22 $ 11.65 $ 11.24
------------------- ------------------- ----------------
Increase (decrease) from investment
operations:
Net investment income $ 0.55 $ 0.59 $ 0.38
Net realized and unrealized gain (loss) on
investments 0.59 (1.43) 0.41
------------------- ------------------- ----------------
Total increase (decrease) from investment
operations $ 1.14 $ (0.84) $ 0.79
Distributions to shareholders from:
Net investment income (0.55) (0.59) (0.38)
------------------- ------------------- ----------------
Net increase (decrease) in net asset value $ 0.59 $ (1.43) $ 0.41
------------------- ------------------- ----------------
Net asset value, end of period $ 10.81 $ 10.22 $ 11.65
=================== =================== ================
Total return* 11.50% (7.45%) 7.14%**
Ratio of net operating expenses to average
net assets .50% 0.36% 0.00%**
Ratio of net investment income to average net
assets 5.27% 5.31% 5.37%**
Portfolio turnover rate 24.30% 10.82% 0.00%
Net assets, end of period $7,655,452 $6,188,795 $4,022,596
Ratios assuming no reduction of fees or
expenses:
Net operating expenses 2.31% 2.69% 4.15%**
Net investment income 3.46% 2.98% 1.22%**
</TABLE>
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Pioneer New York Triple Tax-Free Fund
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
February 19, 1993
Year Year (Commencement of
Ended Ended Operations) to
September 30, 1995 September 30, 1994 September 30, 1993
--------------------- ------------------ ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.39 $ 11.57 $ 11.18
------------------- ------------------- ----------------
Increase (decrease) from investment
operations:
Net investment income $ 0.54 $ 0.57 $ 0.37
Net realized and unrealized (loss) gain on
investments 0.57 (1.18) 0.39
------------------- ------------------- ----------------
Total increase (decrease) from investment
operations $ 1.11 $ (0.61) $ 0.76
Distributions to shareholders from:
Net investment income (0.54) (0.57) (0.37)
------------------- ------------------- ----------------
Net increase (decrease) in net asset value $ 0.57 $ (1.18) $ 0.39
------------------- ------------------- ----------------
Net asset value, end of period $ 10.96 $ 10.39 $ 11.57
=================== =================== ================
Total return* 11.04% (5.45%) 6.91%**
Ratio of net operating expenses to average
net assets .50% 0.36% 0.00%**
Ratio of net investment income to average net
assets 5.13% 5.15% 5.19%**
Portfolio turnover rate 18.26% 1.96% 0.00%
Net assets, end of period $5,336,773 $4,164,246 $3,019,279
Ratios assuming no reduction of fees or
expenses:
Net operating expenses 2.80% 3.51% 5.05%**
Net investment income 2.83% 2.00% 0.14%**
</TABLE>
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Pioneer Massachusetts Double Tax-Free Fund
Selected Data for a Share Outstanding for the Periods Presented
<TABLE>
<CAPTION>
February 19, 1993
Year Year (Commencement of
Ended Ended Operations) to
September 30, 1995 September 30, 1994 September 30, 1993
--------------------- ------------------ ------------------
<S> <C> <C> <C>
Net asset value, beginning of period $ 10.29 $ 11.58 $ 11.12
------------------- ------------------- ----------------
Increase (decrease) from investment
operations:
Net investment income $ 0.55 $ 0.58 $ 0.37
Net unrealized (loss) gain on investments 0.69 (1.29) 0.46
------------------- ------------------- ----------------
Total increase (decrease) from investment
operations $ 1.24 $ (0.71) $ 0.83
Distribution to shareholders from:
Net investment income (0.55) (0.58) (0.37)
------------------- ------------------- ----------------
Net increase (decrease) in net asset value $ 0.69 $ (1.29) $ 0.46
------------------- ------------------- ----------------
Net asset value, end of period $ 10.98 $ 10.29 $ 11.58
=================== =================== ================
Total return* 12.36% (6.33%) 7.58%**
Ratio of net operating expenses to average
net assets 0.50% 0.35% 0.00%**
Ratio of net investment income to average net
assets 5.15% 5.23% 5.22%**
Portfolio turnover rate 16.58% 2.65% 0.00%
Net assets, end of period $4,583,023 $3,773,911 $3,176,176
Ratios assuming no reduction of fees or
expenses:
Net operating expenses 2.95% 3.45% 4.89%**
Net investment income 2.70% 2.13% 0.33%**
</TABLE>
- ----------
* Assumes initial investment at net asset value at the beginning of the
period, reinvestment of all dividends and distributions, the complete
redemption of the investment at net asset value at the end of each period,
and no sales charges. Total return would be reduced if sales charges were
taken into account.
** Annualized.
3
<PAGE>
III. THE TRUST
Pioneer California Double Tax-Free Fund, Pioneer New York Triple Tax-Free
Fund and Pioneer Massachusetts Double Tax- Free Fund are series of Pioneer
Tax-Free State Series Trust (the "Trust"), an open-end, management investment
company (commonly referred to as a mutual fund) organized as a Massachusetts
business trust on November 6, 1992. The Trust has authorized an unlimited
number of shares, which are currently organized into these three series, and
continuously offers its shares to the public. Under normal conditions, it
must redeem shares upon the demand of any shareholder.
IV. THREE INVESTMENT PROGRAMS
Investment Objectives and Policies
The investment objective of each Fund is to provide as high a level of
current income exempt from federal income taxes and from the personal income
taxes of its respective state, and, if applicable, city, as is consistent
with prudent investment risk.
As a matter of fundamental policy, under normal circumstances each Fund
invests at least 80% of its net assets in securities the interest income on
which is exempt from federal and its respective state's personal income taxes
and, if applicable, city income taxes. These securities include municipal
bonds and notes and other debt instruments issued by or on behalf of the
Fund's respective state and such state's political subdivisions, agencies and
instrumentalities, including variable and floating rate obligations, and
similar obligations issued by the governments of Puerto Rico, Guam and the
United States ("U.S.") Virgin Islands. The remainder of each Fund's assets
may be invested in Other Eligible Investments as described below. Securities
whose interest income is an item of tax preference under the federal
alternative minimum tax will not be considered exempt from federal income tax
for purposes of the 80% policy set forth above; however, the Funds do not
currently intend to invest any of their assets in such securities.
Municipal bonds include general obligation bonds and revenue bonds.
General obligation bonds are backed by the taxing power of the issuing
municipality and are considered the safest type of bonds. Revenue bonds are
backed by the revenues of a project or facility such as the tolls from a toll
bridge. Municipal notes include bond anticipation notes, tax anticipation
notes, revenue anticipation notes, and construction loan notes. Bond, tax and
revenue anticipation notes are short-term obligations that will be retired
with the proceeds of an anticipated bond issue, tax revenue or facility
revenue, respectively. Construction loan notes are short-term obligations
that will be retired with the proceeds of long-term mortgage financing. In
acquiring municipal obligations, the Funds will rely upon an opinion of
counsel of the issuer to the effect that interest on the obligation is
excluded from gross income for federal income tax purposes, and, if
applicable, exempt from personal income taxes of the applicable state and its
political subdivisions.
Each Fund may invest in variable rate and floating rate obligations the
interest on which may fluctuate based on changes in market rates. The
interest rates payable on variable rate obligations are adjusted at
designated intervals. The interest rates payable on floating rate obligations
are adjusted whenever there is a change in the market rate of interest on
which the interest payable is based. The value of floating and variable rate
obligations generally is more stable than that of fixed rate obligations in
response to changes in interest rate levels. Each Fund may consider the
maturity of a variable or floating rate municipal obligation to be shorter
than its ultimate maturity if the Fund has the right to demand prepayment of
its principal at specified intervals prior to the security's ultimate
maturity. Each Fund may purchase certificates of participation, a type of
floating or variable rate obligation, which are interests in a pool of
municipal obligations held by a bank.
Quality and Maturity of Investments
Each of the Funds invests only in investment grade securities, which are
securities rated at the time of purchase within the top four grades by one or
more of the major rating services (i.e. "Baa" or higher by Moody's Investor
Services ("Moody's"), or "BBB" or higher by Standard & Poor's Ratings Group
("S&P")) or, if not rated, judged to be of comparable quality by the Funds'
investment adviser. Each Fund may invest up to 25% of its assets in unrated
securities and securities rated in the fourth highest grade. Obligations in
the lowest investment grade (Baa and BBB) have speculative characteristics,
and changes in economic conditions and other factors are more likely to lead
to a weakened capacity to pay principal and interest on these obligations
than is the case for higher rated obligations. If an obligation purchased by
a Fund is subsequently downgraded below investment grade the Fund may retain
such obligation until the adviser considers it prudent to dispose of it.
However, at no time may any Fund have more than 5% of its net assets invested
in securities rated below investment grade. Some securities owned by a Fund
may be insured by or backed by a letter of credit issued by a third party in
which case credit ratings and the ability to pay interest and repay principal
may depend on the third party's ability to meet its obligations. For a
description of Moody's and S&P's ratings of municipal bonds see Appendix B to
the Funds' Statement of Additional Information.
The Funds have no restrictions on portfolio maturity but the dollar
weighted average maturity of each Fund's portfolio is expected to be between
15 and 25 years.
Other Eligible Investments
Under normal circumstances, each Fund may invest up to 20% of its net
assets in Other Eligible Investments. Other Eligible Investments consist of
(a) investment grade debt securities the interest on which is exempt from
federal income taxes, but not personal income taxes of a Fund's respective
state and, if applicable, city; (b) corporate commercial paper and other
short-term commercial obligations rated Prime-1 or MIG-1 by Moody's or A-1 or
AAA by S&P; (c) obligations of banks (including certificates of deposit,
banker's acceptances and repurchase agreements) with $1 billion or more of
assets; (d) obligations issued or guaranteed by the U.S. Government.
The Funds intend to minimize the distribution of taxable income to
shareholders, and investment in securities the
4
<PAGE>
interest on which is subject to federal income tax or the personal income
taxes of a Fund's respective state and, if applicable, city will generally be
made only to meet short term liquidity needs. If a Fund cannot find suitable
federal and state tax exempt securities for investment, investments will
generally be made in securities the interest on which is exempt from federal
income taxes but not the income taxes of the Fund's respective state and, if
applicable, city. However, a portion of the dividends distributed to
shareholders may be subject to state, or federal and state, income taxes. As
a temporary defensive measure during times of adverse market conditions, each
Fund may invest up to 50% of its assets in the Other Eligible Investments
described above.
"When Issued" Securities
The Funds may purchase municipal securities on a "when issued" basis,
which means it may be 60 days or more before the securities are delivered and
paid for. The price and yield of the securities so purchased are generally
fixed on the date of purchase commitment. However, the market value of the
securities may fluctuate prior to delivery, and upon delivery the securities
may be worth more or less than the Fund agreed to pay for them. Purchases of
securities on a "when issued" basis may involve more risk than other types of
purchases. The Funds will maintain in segregated accounts sufficient assets
to cover their purchase obligations so long as such obligations continue.
Puts, Demand Features and Standby Commitments
In order to enhance the liquidity, stability or quality of a municipal
obligation, each Fund may acquire the right to sell the security to another
party for a guaranteed price and term. These rights may be referred to as
puts, demand features or standby commitments.
Fluctuations in Net Asset Value and Income
The net asset values of the shares of the series of an open-end investment
company such as the Trust, which invests primarily in fixed-income tax-exempt
securities, will fluctuate as the general levels of interest rates fluctuate.
When interest rates rise, the net asset value of a Fund invested at lower
yields can be expected to decline. Furthermore, the tax-exempt income
provided by a Fund will fluctuate over time. For a description of how to
compare yields on municipal bonds and taxable securities, see "Taxable
Equivalent Yields" in the Appendix.
Portfolio Transactions and Turnover
The Funds will be fully managed by purchasing and selling securities, as
well as holding selected securities to maturity. In purchasing and selling
portfolio securities, each Fund seeks to take advantage of market
developments, yield disparities and variations in the creditworthiness of
issuers.
While it is not possible to predict accurately the rate of turnover of
each Fund's portfolio on an annual basis, it is anticipated that the rate
will not exceed 85%. A portfolio turnover of 85% would occur if 85% of the
securities in the portfolio were changed once in a twelve-month period.
Computation of portfolio turnover excludes transactions in U.S. Treasury
obligations and securities having a maturity of one year or less from
purchase date.
The investment objective of each Fund is fundamental and may not be
changed by the Board of Trustees without shareholder approval. Because all of
the Funds' investments are subject to fluctuations in yields and value due to
changes in earnings, economic conditions and other factors, there can be no
assurance that any Fund's investment objective will be achieved.
The Statement of Additional Information includes a discussion of other
investment policies and a listing of specific investment restrictions which
govern each Fund's investment policies. The specific investment restrictions
identified in the Statement of Additional Information as fundamental may not
be changed without shareholder approval. If a percentage restriction or a
rating restriction on investments or utilization of assets is adhered to at
the time an investment is made or assets are so utilized, except in the case
of borrowings, a later change in percentage resulting from changes in the
value of a Fund's securities or from a change in the rating of a portfolio
security will not be considered a violation of policy.
Special Risk Considerations
Because each of the Funds is non-diversified and will concentrate
investments in securities issued by specific states (California, New York and
Massachusetts) and their political subdivisions and instrumentalities, each
Fund is more susceptible to economic and other factors adversely affecting
these issuers than funds which are diversified or otherwise do not
concentrate in specific states. As a result, the value of each Fund's shares
may fluctuate more widely than the value of shares of a portfolio investing
in securities relating to a number of different states. The ability of state,
county, or local governments to meet their obligations will depend primarily
on the availability of tax and other revenues to those governments and on
their fiscal conditions generally. The amounts of tax and other revenues
available to governmental issuers of tax-exempt securities may be affected
from time to time by economic, political, and demographic conditions within
the particular state. In addition, constitutional or statutory restrictions
may limit a government's power to raise revenues or increase taxes. The
availability of federal, state, and local aid to issuers of tax-exempt
securities may also affect their ability to meet their obligations. Payments
of principal and interest on limited obligation securities will depend on the
economic condition of the facility or specific revenue source from whose
revenues the payments will be made, which in turn could be affected by
economic, political, and demographic conditions in the particular state. Any
reduction in the actual or perceived ability of an issuer of tax-exempt
securities to meet its obligations (including a reduction in the rating of
its outstanding securities) would likely affect adversely the market value
and marketability of its obligations and could affect adversely the values of
other tax- exempt securities as well.
In addition, none of these Funds is a diversified fund (except to the
extent that diversification is required for federal income tax purposes). For
these tax purposes, with respect to 50% of the value of its total assets,
none of these Funds invests more than 5% of the value of its total assets in
securities of a single issuer (except U.S. Government securities or
5
<PAGE>
securities of other regulated investment companies), nor, with respect to the
other 50% of the value of its total assets, does it invest more than 25% of
the value of its total assets in the securities of a single issuer (except
U.S. Government securities or securities of other regulated investment
companies). Because they may invest a larger percentage of their assets in
the securities of fewer issuers than do diversified funds, the Funds may be
exposed to greater risk because an adverse change in the condition of one or
a small number of issuers would have a greater impact on them.
Each of the Funds may also invest in obligations of U.S. possessions and
territories, such as those of the governments of Puerto Rico, the U.S. Virgin
Islands and Guam, to the extent that interest payments on these obligations
are exempt from personal income taxes of their respective state or city.
Under normal circumstances, however, no Fund will invest more than 35% of its
total assets in obligations of such possessions and territories in the
aggregate, or more than 5% of its net assets in the obligations of each of
the U.S. Virgin Islands and Guam. In particular, the Funds may be adversely
affected by local political and economic conditions and developments within
Puerto Rico adversely affecting the issuers of such obligations. The essence
of Puerto Rico's credit quality is the stability it derives from its
economic, political and social ties to the United States, which mitigate the
relatively weak underlying credit fundamentals. Puerto Rico receives
significant economic benefits from Section 936 of the Internal Revenue Code
of 1986, as amended (the "Code") which confers significant tax credits upon
U.S. corporations doing business in Puerto Rico. The U.S. is its primary
trading partner. The U.S. has provided further economic incentives through
the Caribbean Basin Initiative, which is designed to further U.S. economic
and political interests in the region.
Because of perceived abuses by certain corporations and the resultant
revenue loss of the federal government, Section 936 has been continually
under attack in the U.S. Congress. Should Puerto Rico achieve statehood,
Section 936 would be repealed or cease to apply. The effects of a repeal of
Section 936 as a result of statehood or otherwise would include: higher
unemployment, reduction in Puerto Rico's Gross Domestic Product and a decline
in investment by U.S. companies in Puerto Rico. As a result of the North
American Free Trade Agreement, the higher cost of labor in Puerto Rico
relative to other countries in the region, such as Mexico, provides a
disincentive to U.S. companies considering locating operations in Puerto
Rico.
Each Fund may also invest 25% or more of the value of its total assets in
municipal obligations in its respective state which obligations are related
in such a way that an economic, business or political development or change
affecting one municipal obligation would also affect the other municipal
obligations. For example, a Fund may so invest in municipal obligations the
interest on which is paid solely from revenues of similar projects such as
hospitals, electric utility systems, multi-family housing, nursing homes or
life care facilities. This fact makes the Funds more susceptible to adverse
factors affecting one or more of these projects than a fund that does not
concentrate its investments to this degree.
V. MANAGEMENT OF THE TRUST
The Trust's Board of Trustees has overall responsibility for management
and supervision of the Funds. 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 Pioneering Management
Corporation ("PMC" or the "Manager") 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 background of each Trustee and
executive officer of the Trust.
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 Delaware corporation. Pioneer Funds Distributor, Inc. ("PFD"), an
indirect wholly owned subsidiary of PGI, is the principal underwriter of
shares of the Funds.
Each fixed income portfolio managed by PMC, including these Funds, 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 Funds, are
under the general supervision of Mr. Sherman Russ, Senior Vice President of
PMC. Mr. Russ joined PMC in 1983.
Day-to-day management of the Trust has been the responsibility of Ms.
Kathleen McClaskey, Vice President of the Trust and PMC. Ms. McClaskey joined
Pioneer in 1986 and has been primarily responsible for the Trust since its
inception. In certain instances where Ms. McClaskey is unavailable, primary
responsibility for the day-to-day management of the Trust may be temporarily
assumed by Mr. Mark Winter. Mr. Winter joined PMC in 1993 and is primarily
responsible for Pioneer Tax-Free Income Fund.
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 each Fund in the Trust, subject to the right of
the Trustees to disapprove any such purchase or sale. PMC pays all the
ordinary operating 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
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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 of the Trust and the shares of each of its Funds 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 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 fund; (m) bookkeeping and appraisal
charges; and (n) distribution fees in accordance with Rule 12b-1. Each Fund
also pays all brokerage commissions in connection with its portfolio
transactions.
Orders for each Fund'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 the Fund or other Pioneer mutual funds. 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 0.60% per annum of each
Fund's average daily net assets. The fee is normally computed daily and paid
monthly. PMC has agreed temporarily not to impose any management fee and to
limit each Fund's expenses. See "Expense Information," above.
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.
VI. DISTRIBUTION PLAN
The Trust has adopted a Plan of Distribution (the "Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act pursuant to which certain
distribution fees of each Fund are paid to PFD.
Pursuant to the Distribution Plan, each Fund shall reimburse PFD for its
actual expenditures to finance any activity primarily intended to result in
the sale of Fund shares or to provide services to Fund shareholders, provided
the categories of expenses for which reimbursement is made are approved by
the Trust's Board of Trustees. As of the date of this Prospectus, the Board
of Trustees has approved the following categories of expenses for the Funds:
(i) a service fee (sometimes referred to as a "trail commission") to be paid
to qualified broker-dealers in an amount not to exceed 0.25% per annum of a
Fund's average daily net assets; (ii) reimbursement to PFD or PMC for its
expenditures for broker-dealer commissions and employee compensation on
certain sales of a Fund's shares with no initial sales charge (see "How to
Purchase Shares"); and (iii) reimbursement to PFD for expenses incurred in
providing services to shareholders and supporting broker-dealers and other
organizations (such as banks and trust companies) in their efforts to provide
such services. Banks are currently prohibited under the Glass-Steagall Act
from providing certain underwriting or distribution services. If a bank was
prohibited from acting in any capacity or providing any of the described
services, management would consider what action, if any, would be
appropriate.
Total expenses under the Distribution Plan may not exceed 0.25% of average
daily net assets. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by a Fund in a given year. The Distribution
Plan may not be amended to increase materially the annual percentage
limitation of average net assets which may be spent for the services
described therein without approval of the shareholders of the Fund affected
thereby.
The Distribution Plan does not provide for the carryover of reimbursable
expenses beyond 12 months from the time they are incurred. The limited
carryover provision in the Plan may result in an expense invoiced to a Fund
in one fiscal year being paid in the subsequent fiscal year and thus being
treated for purposes of calculating the maximum expenditures of the Fund as
having been incurred in the subsequent fiscal year. In the event of
termination or non-continuance of the Distribution Plan, a Fund may
nevertheless, within 12 months of such termination or non-continuance
reimburse any expense which it incurs prior to such termination or non-
continuance, provided that payments by the Fund during such 12-month period
shall not exceed 0.25% of the Fund's average daily net assets during such
period.
VII. INFORMATION ABOUT SHARES
How to Purchase Shares
You may purchase shares of any of the Funds in the trust from any
securities broker-dealer which has a sales agreement with PFD. If you do not
have a securities broker-dealer, please call 1-800-225-6292. Shares will be
purchased at the public offering price, that is, the net asset value per
share plus any applicable sales charge, next computed after receipt of a
purchase order, except as set forth below.
The minimum initial investment is $1,000, except for accounts being
established to utilize monthly bank drafts, government allotments and other
similar automatic investment plans. The minimum investment for such plans, as
well as all other subsequent additions to an account, is $50. No sales charge
or minimum investment requirements apply to the reinvestment of dividends or
capital gains distributions.
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless you indicated otherwise on your Account
Application or by writing to Pioneering Services Corporation ("PSC"). The
telephone purchase option may be used to purchase additional shares for an
existing mutual fund account; it may not be used to establish a new account.
Proper account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. Call
PSC for more information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank
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account of record by completing the appropriate section of your Account
Application or an Account Options Form. PSC will electronically debit the
amount of each purchase from this predesignated bank account. Telephone
purchases may not be made for 30 days after the establishment of your bank of
record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's acceptance of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
The public offering price is the net asset value per share next computed
after receipt of a purchase order, plus a sales charge as follows:
Sales Charge as a % of Dealer
----------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- --------------------------------- ---------- ----------- ------------
Less than $50,000 3.50% 3.62% 3.00%
$50,000 but less than $100,000 3.00 3.09 2.50
$100,000 but less than $500,000 2.50 2.56 2.00
$500,000 but less than $1 million 2.00 2.04 1.75
$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 investments by certain group plans with 100 or
more participants or at least $500,000 in plan assets ("Group Plans"), but
for such investments a contingent deferred sales charge ("CDSC") of 0.50% is
imposed in the event of certain redemption transactions within one year of
purchase. See "Redemptions and Repurchases" below. PFD may, in its
discretion, pay a commission to broker-dealers who initiate and are
responsible for such purchases as follows: 0.50% on sales of $1 million to $5
million; and 0.10% on the excess over $5 million. These commissions shall not
be payable if the purchaser is affiliated with the broker-dealer or if the
purchase represents the reinvestment of a redemption made during the previous
twelve calendar months. See also "Redemptions and Repurchases." In connection
with PGI's acquisition of Mutual of Omaha Fund Management Company and
contingent upon the achievement of certain sales objectives, PFD may pay to
Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any sales
commission on sales of the Funds' shares through such dealer. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSC's and dealer compensation arrangements in
accordance with local laws and business practices.
The schedule of sales charges above is applicable to purchases of shares
of a Fund by (i) an individual, (ii) an individual, his or her spouse and
children under the age of 21 and (iii) a trustee or other fiduciary of a
trust, estate or fiduciary account or related trusts or accounts.
The sales charge applicable to a current purchase of shares of a Fund by a
person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at current offering price) of shares of any
of the Pioneer mutual funds previously purchased and then owned, provided PFD
is notified by such person or his or her broker- dealer each time a purchase
is made which would so qualify. For purposes of the preceding sentence,
Pioneer mutual funds include all mutual funds for which PFD serves as
principal underwriter. For example, a person investing $5,000 in a Fund who
currently owns shares of the Pioneer mutual funds with a value of $100,000
would pay a sales charge of 2.5% of the offering price on the new investment.
Sales charges may also be reduced through an agreement to purchase a
specified quantity of shares over a designated 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 on
the back of the Account Application as well as in the Statement of Additional
Information. Investors who are clients of a broker-dealer with a current
sales agreement with PFD may purchase shares of a Fund at net asset value,
without a sales charge, to the extent that the purchase price is paid out of
the proceeds from one or more redemptions by the investor of shares of
certain other mutual funds. In order for a purchase to qualify for this
privilege, the investor must document to the broker-dealer that the
redemption occurred within 60 days immediately preceding the purchase of
shares of a Fund; that the client paid a sales charge on the original
purchase of the shares redeemed; and that the mutual fund whose shares were
redeemed also offers net asset value purchases to redeeming shareholders of
any of the Pioneer mutual funds. Further details may be obtained from PFD.
Shares of a Fund may be sold at a reduced or eliminated sales charge to
certain Group Plans under which a sponsoring organization makes
recommendations to permit group solicitation of, or otherwise facilitates
purchases by, its employees, members or participants. Information about such
arrangements is available from PFD.
Shares of a Fund may also be sold at net asset value per share without a
sales charge to: (a) current or former Trustees and officers of the Trust and
partners and employees of its legal counsel; (b) current or former directors,
officers, employees or sales representatives of PGI, its subsidiaries; (c)
current or former directors, officers, employees or sales representatives of
any subadviser or predecessor investment adviser to any investment company of
which PMC serves as investment adviser, and the subsidiaries or affiliates of
such persons; (d) current or former officers, partners, employees or
registered representatives of broker-dealers which have entered into sales
agreements with PFD; (e) members of the immediate families of any of the
persons listed above; (f) any trust, custodian, pension, profit-sharing or
other benefit plan of the persons listed above; (g) insurance company
separate accounts; (h) certain "wrap accounts" for the benefit of clients of
investment advisers adhering to standards established by PFD; (i) other funds
and accounts for which PMC or any of its affiliates serves as investment
adviser or manager; and (j) certain unit investment trusts. Shares so
purchased are purchased for investment purposes and may not be resold except
through redemption or repurchase by or on behalf of the Fund. The
availability of this privilege is conditioned on the receipt by PFD of
written notification of eligibility. Shares of a Fund may also be sold at net
asset value with-
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out a sales charge in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies.
Net Asset Value and Pricing of Orders
Shares of each Fund are sold at the public offering price, which is the
net asset value per share, plus the applicable sales charge. The net asset
value per share is determined by dividing the value of the assets allocable
to a Fund, less liabilities, by the number of shares outstanding. The net
asset value is computed once daily, on each day the New York Stock Exchange
(the "Exchange") is open, as of the close of regular trading hours of the
Exchange.
An order for shares received by a broker-dealer prior to the close of
regular trading of the Exchange (currently 4:00 p.m. Eastern Time) is
confirmed at the offering price determined at the close of the Exchange on
the day the order is received, provided the order is received by PFD prior to
PFD's close of business (normally 5:30 p.m. Eastern Time). It is the
responsibility of broker-dealers to transmit orders promptly so that they
will be received by PFD prior to its close of business. An order received by
a broker-dealer following the close of regular trading of the Exchange will
be confirmed at the offering price as of the close of regular trading of the
Exchange on the next trading day.
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 a Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
Inasmuch as the market for municipal obligations is a dealer market with
no central trading location or continuous quotation system, it is not
feasible to obtain the last transaction prices for most municipal obligations
in each of the Fund's portfolios, and such obligations, including those
purchased on a when-issued basis, will normally be valued on the basis of
valuations furnished by a pricing service. The pricing service uses
information with respect to transactions in bonds, quotations from bond
dealers, market transactions in comparable securities, various relationships
between securities, and yield to maturity in determining value. Taxable
obligations for which price quotations are readily available normally will be
valued at the mean between the latest available bid and asked prices. Other
assets are valued at fair value using methods determined in good faith by the
Trustees.
Dividends, Distributions and Taxation
Federal Taxation
Each Fund has elected to be treated, has qualified and intends to qualify
each year as a separate "regulated investment company" under the Code so that
it will not pay federal income taxes on income and capital gains distributed
to shareholders at least annually. Because each of the Funds intends to
distribute all or substantially all of its taxable (if any) and tax-exempt
net investment income and net realized capital gains to shareholders in a
timely manner, it is not expected that the Funds will be required to pay any
federal income taxes.
The Code permits tax-exempt interest received by a Fund that qualifies as
a regulated investment company to flow through as tax-exempt "exempt-interest
dividends" to the Fund's shareholders, provided that at least 50% of the
value of the total assets of the Fund at the close of each quarter of its
taxable year consists of tax-exempt obligations. The Funds do not presently
plan to invest in any "private activity bonds" subject to the federal
alternative minimum tax for individuals. All tax exempt distributions may
result in or increase a corporate shareholder's liability for the federal
alternative minimum tax.
Interest on indebtedness incurred by a shareholder to purchase or carry
shares of a Fund will not be deductible for federal income tax purposes to
the extent the Fund's income dividends consist of exempt interest dividends.
The Funds may not be an appropriate investment for persons who are
"substantial users" of facilities financed by industrial revenue or private
activity bonds or persons related to substantial users. Shareholders
receiving social security or certain railroad retirement benefits may be
subject to federal income tax on a portion of such benefits as a result of
receiving investment income, including exempt-interest dividends and other
distributions paid by the Funds.
Under the Code, a Fund will be subject to a non-deductible 4% federal
excise tax on a portion of its undistributed ordinary income (if any) and net
capital gains if it fails to meet certain distribution requirements with
respect to each calendar year. Each Fund intends to make distributions in a
timely manner and, accordingly, does not expect to be subject to the excise
tax.
Each business day each Fund declares a dividend consisting of
substantially all of its net investment income. Shareholders begin earning
dividends on the first business day following receipt of payment for
purchased shares. Shares continue to earn dividends up to and including the
date of redemption. Dividends are normally paid on the last business day of
the month or shortly thereafter. A Fund's net investment income consists of
the interest income it earns, less expenses. In computing interest income, a
Fund amortizes premium or accrues discount on long-term debt securities only
to the extent required for federal income tax purposes. Distributions from
net long-term and short term capital gains, if any, will be made at least
annually.
While the Funds seek to maximize the percentage of income distributed
which is not subject to federal income taxes, it is possible that under
certain circumstances (see "Three Investment Programs") a small portion of
the income dividends paid by the Funds will be subject to federal income tax.
Dividends from a Fund's taxable net investment income, if any, recognized
market discount income, and net short-term capital gains are taxable as
ordinary income, and dividends from a Fund's net long-term capital gains are
taxable as long-term capital gains. A portion of a Fund's distributions may
also be subject to state and local income taxes (see "State Taxation,"
below). The federal income tax status of all distributions will be reported
to shareholders annually, and shareholders are required to report all
distributions, including tax-exempt distributions, on their federal income
tax returns.
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For federal income tax purposes, all dividends are treated as described above
whether a shareholder takes them in cash or reinvests them in additional
shares of a Fund.
Taxable dividends and other taxable distributions and the proceeds of
redemptions (including exchanges) and repurchases of Fund shares paid to
individuals and other non-exempt payees may be subject to 31% backup
withholding of federal income tax if the Fund is not provided with the
shareholder's correct taxpayer identification number and certification that
the number is correct and the shareholder is not subject to such backup
withholding or if the Fund receives notice from the IRS or a broker that such
withholding applies. Please refer to the Account Application for additional
information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents, or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income taxes.
State Taxation
Summaries of tax considerations for state income tax purposes for each of
the Funds are set forth below. A more detailed discussion of state and local
tax matters is included in the Statement of Additional Information. These
discussions are only summaries of generally applicable state tax laws, and
shareholders should consult their own tax advisers regarding the application
of state, local and other applicable tax laws in their particular situations.
Pioneer California Double Tax-Free Fund. The Trust has obtained an opinion
of Orrick, Herrington & Sutcliffe, special tax counsel to Pioneer California
Double Tax-Free Fund, substantially to the effect that individual
shareholders of Pioneer California Double Tax-Free Fund who are subject to
California personal income taxation will not be required to include in their
California gross income that portion of their federally tax-exempt dividends
which the Fund clearly and properly identifies as excludable for California
purposes, provided that at least 50 percent of the value of the Fund's total
assets at the close of each quarter of the Fund's taxable year consists of
obligations the interest on which is exempt from California personal income
tax pursuant to federal or California law. Other distributions representing
income or gains realized by the Fund will generally be subject to California
personal income tax at the rates applicable to ordinary income. Corporate
shareholders of the Fund which are subject to the California franchise tax
generally will be required to include all distributions of exempt-interest
dividends, capital gains and other taxable income, if any, as income subject
to such tax.
Pioneer New York Triple Tax-Free Fund. The Trust has obtained an opinion
of Orrick, Herrington & Sutcliffe, special tax counsel to Pioneer New York
Triple Tax-Free Fund, substantially to the effect that individual
shareholders of Pioneer New York Triple Tax-Free Fund who are subject to New
York State or New York City personal income taxation will not be subject to
New York State or City personal income taxes (including the minimum taxes
contained therein) on distributions received from the Fund to the extent such
distributions are exempt-interest dividends attributable to interest on tax-
exempt obligations of the State of New York or a political subdivision
thereof or derived from interest on obligations of possessions of the United
States (including Puerto Rico, Guam and the U.S. Virgin Islands). Other
distributions representing income or gains realized by the Fund will
generally be subject to New York State or New York City personal income tax
at the rates applicable to ordinary income. Corporate shareholders of the
Fund that are subject to the New York State corporation franchise tax or the
New York City general corporation tax generally will be required to include
all distributions of exempt- interest dividends, capital gains and other
taxable income, if any, as income subject to such taxes.
Pioneer Massachusetts Double Tax-Free Fund. The Trust has obtained an
opinion of Hale and Dorr, counsel to the Trust, substantially to the effect
that, provided that Pioneer Massachusetts Double Tax-Free Fund qualifies as a
regulated investment company and complies with certain notice requirements,
shareholders of Pioneer Massachusetts Double Tax-Free Fund that are
individuals, estates or trusts and are subject to the Massachusetts income
tax will be treated in the following manner for Massachusetts income tax
purposes: Distributions that qualify as "exempt-interest dividends" under the
Code and are attributable to interest received by the Fund on federally
tax-exempt obligations issued by Massachusetts or a political subdivision
thereof or a possession of the United States (including Puerto Rico, Guam and
the U.S. Virgin Islands) and distributions of the Fund attributable to
interest received by the Fund on direct obligations of the U.S. Government
will not be subject to the Massachusetts income tax; distributions properly
designated by the Fund as capital gain dividends under the Code and
attributable to gain realized by the Fund on the sale of certain obligations
issued pursuant to Massachusetts statutes that specifically exempt such gain
from Massachusetts taxation will not be subject to the Massachusetts income
tax; distributions properly designated by the Fund as capital gain dividends
under the Code other than those described above will be treated as long-term
capital gain for Massachusetts income tax purposes, regardless of the length
of time Fund shares have been held; and distributions, other than those
described above, that are included in federal gross income under the Code
will be included in income subject to the Massachusetts income tax.
Additionally, in determining the Massachusetts excise tax on shareholders
that are corporations subject to Massachusetts taxation, distributions from
the Fund that are included in federal gross income under the Code or that are
excluded from federal gross income by virtue of Section 103(a) of the Code
will be included in a corporate shareholder's net income, and in the case of
intangible property corporations, shares of the Fund will be included in net
worth.
Beginning in 1996, long-term capital gains will generally be taxed in
Massachusetts on a sliding scale at rates ranging from 5% to 0%, with the
applicable tax rate declining as the tax holding period of the asset
(beginning on the later of January 1, 1995 or the date of actual acquisition)
increases from more than one year to more than six years. It is not clear
what Massachusetts tax rate will be applicable to capital gain dividends for
taxable years beginning after 1995.
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Redemptions and Repurchases
Redemption by Mail. As a shareholder, you have the right to offer your
shares for redemption by delivering to PSC a written request for redemption,
signed by all registered owners, in proper form and, if applicable, your
share certificates properly endorsed and in good order for transfer.
Redemptions will be made in cash at the net asset value per share next
determined following receipt by PSC of all necessary documents subject in
certain cases to the contingent deferred sales charge described below.
Good order means that there are no outstanding claims or requests to hold
redemptions on the account, any certificates must be endorsed by the record
owner(s) exactly as the shares are registered and the signature(s) must be
guaranteed by any of the following eligible guarantor institutions: (i) all
brokers, dealers, municipal securities dealers and/or brokers, who are
members of a clearing agency or whose net capital exceeds $100,000; (ii) all
banks; (iii) all credit unions; (iv) all savings associations, including all
savings and loan associations; (v) all national securities exchanges,
registered securities associations, and all clearing agencies; and (vi) all
trust companies. In addition, in some cases (involving fiduciary or corporate
transactions), good order may require the furnishing of additional documents.
Signature guarantees are not necessary for redemption requests of $50,000
or less, provided that the request is in good order, the record holder
executes the redemption request, payment is directed to the record holder at
the record address, and the address was not changed during the previous 30
days. You cannot provide a signature guarantee by facsimile ("fax"). Payment
of redemptions normally will be made within seven days after receipt of the
appropriate documents. The Trust reserves the right to withhold payment until
checks received in payment of shares purchased have cleared, which may take
up to 15 calendar days from the purchase date. For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-(800)-225-6292.
Redemption by Telephone or Fax. Your account is automatically authorized
to have the telephone redemption privilege unless you indicated otherwise on
your Account Application or by writing to PSC. Proper account identification
will be required for each telephone redemption. The telephone redemption
option is not available to retirement plan accounts. A maximum of $50,000 may
be redeemed by telephone or fax and the proceeds may be received by check or
by bank wire or electronic funds transfer. To receive the proceeds by check:
the check must be made payable exactly as the account is registered and the
check must be sent to the address of record which must not have changed in
the last 30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the 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 redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Additional Conditions of Redemption. For the convenience of shareholders,
the Trust has authorized PFD to act as its agent in the repurchase of shares
of the Funds. Offers to sell shares to a Fund may be communicated to PFD by
wire or telephone by broker-dealers for their customers. Each Fund
repurchases shares offered to it at the net asset value per share determined
as of the close of regular trading on the Exchange on the day the offer for
repurchase is received in good order by the broker-dealer if the offer is
received by PFD before the close of business on that day.
A broker-dealer which receives an offer for repurchase is responsible for
the prompt transmittal of such offer to PFD. Payment of the repurchase
proceeds will be made in cash to the broker-dealer placing the order. Except
for certain large accounts subject to a CDSC (as described below) neither the
Fund nor PFD charges any fee or commission upon such repurchase which is then
settled as an ordinary transaction with the broker-dealer (which may charge
the shareholder for this service) delivering the shares repurchased. Payment
will be made within seven days after your order is received in good order by
PSC of valid instructions, including validly endorsed certificates, if
appropriate, in good order as described above.
The net asset value per share received upon redemption or repurchase may
be more or less than the cost of shares to an investor, depending upon the
market value of the portfolio at the time of redemption or repurchase.
Redemptions and repurchases are taxable transactions.
Redemptions and repurchases 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 a Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund to
fairly determine the value of the net assets of its portfolio; or the SEC, by
order, so permits.
Purchases of $1,000,000 or more, and purchases by participants in a Group
Plan which have not been subject to a sales charge, may be subject to a CDSC
upon redemption or repurchase. A CDSC is payable to PFD on these investments
in the event of a share redemption within twelve 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. In determining whether a CDSC is payable, and,
if so, the amount of the charge, it is assumed that shares purchased with
reinvested dividend and capital gain distributions and then such other shares
which are held the longest will be the first redeemed. Shares subject to the
CDSC which are exchanged into another Pioneer mutual fund will continue to be
subject to the CDSC until the original twelve-month period expires.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on any
shares subject to a CDSC may be
11
<PAGE>
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 Fund at the time the
withdrawal plan is established).
The CDSC on any shares subject to a CDSC may be waived or reduced 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 contingent deferred sales charge in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Redemption of Small Accounts
If a shareholder holds shares of a Fund in an account with a net asset
value of less than $500 due to redemptions or exchanges, the Fund may redeem
the shares held in this account at net asset value if the shareholder has not
increased the net asset value of the shares in the account to at least $500
within six months of written notice by the Fund to the shareholder of the
Fund's intention to redeem the shares.
Description of Shares and Voting Rights
Under the Trust's Declaration of Trust, the Trustees are authorized to
issue an unlimited number of shares of beneficial interest. The Trustees of
the Trust are responsible for the overall management and supervision of its
affairs.
The shares of the Trust are currently divided into three series. Each
share represents an equal proportionate interest in a Fund with each other
share. Generally, shares of each Fund will vote as a single series on
matters, such as the election and removal of Trustees and the ratification of
the selection of independent public accountants, that affect all Funds in
substantially the same manner. As to matters affecting each Fund (e.g.,
changes in a Fund's investment restrictions or investment advisory
agreement), shares of each Fund will vote as a separate series. Shares have
no preemptive, subscription or conversion rights and are freely transferable.
Shareholders are entitled to one vote for each share held and may vote in the
election and removal of Trustees and on other matters submitted to
shareholders. Each fractional share shall be entitled to a proportionate
fractional vote. Shares are fully paid and, except as set forth in the
Statement of Additional Information, non-assessable.
The Trust does not currently intend to hold annual meetings, although
special meetings may be held for the purpose of voting on certain matters.
The record holders of 10% of the Trust's outstanding shares may cause the
Trust to call a special meeting of shareholders to consider the removal of
one or more Trustees. As of December 29, 1995, PFD owned 34.05% of the
outstanding shares of Pioneer New York Triple Tax-Free Fund and 47.92% of the
outstanding shares of Pioneer Massachusetts Double Tax-Free Fund. See
"Management of the Trust" in the Statement of Additional Information. The
Trust reserves the right, without approval of shareholders, to create and
issue additional series of shares in addition to the three Funds currently
available.
Each Fund currently has only one class of shares, entitled Shares of
Beneficial Interest. Shares of the Funds may also be divided into additional
classes subject to such terms as the Trustees may establish without further
shareholder action.
Under Massachusetts law, there is a remote possibility that shareholders
of a business trust could, under certain circumstances, be held personally
liable as partners for the obligations of such trust. The Declaration of
Trust contains provisions intended to limit such liability and to provide
indemnification out of Trust property of any shareholder charged or held
personally liable for obligations or liabilities of the Trust solely by
reason of being or having been a shareholder of a Fund and not because of
such shareholder's acts or omissions or for some other reason. Thus, the risk
of a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the Trust itself would be unable to meet
its obligations.
In the interest of economy and convenience, the Funds do not issue
certificates representing Fund shares unless requested. Instead, the transfer
agent maintains a record of each shareholder's ownership. Certificates for
fractional shares will not be issued. Although there is currently no fee for
the issuance of certificates, the Trust reserves the right to charge such a
fee.
VIII. 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
Fund Division of the Custodian is 40 Water Street, Boston, Massachusetts
02109. The fees of PSC and the Custodian are paid by each Fund.
Account and Confirmation Statements
PSC maintains an account for each shareholder and all transactions of the
shareholder are recorded in this account. Confirmation statements showing the
details of transactions are sent to shareholders quarterly for dividend
reinvestment and Automatic Investment Plan transactions and more frequently
for other types of transactions. The Pioneer Combined Account Statement,
mailed quarterly, is available to all shareholders who have more than one
Pioneer mutual fund account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with a Fund
and might not be able to utilize some
12
<PAGE>
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,
systematic withdrawal plan, Letters of Intention, Rights of Accumulation,
telephone purchases, exchanges and redemptions, and newsletters.
Additional Investments
You may add to your account by sending a check ($50 minimum) to PSC;
please indicate your account number clearly. The designated portion of a
confirmation statement may be used as a remittance slip to make additional
investments. Additions to a shareholder's account, whether by check or
through an Investomatic Plan, are invested in full and fractional shares of
the applicable Fund 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
payroll deduction, government/military allotments or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized electronic funds transfer or
draft drawn on a checking account. Pioneer Investomatic Plan investments are
voluntary, and you may discontinue the plan without penalty upon 30 days'
written notice to PSC. PSC acts as agent for the purchasers, the
broker-dealer and PFD in maintaining these plans.
Financial Reports and Tax Information
Shareholders will receive financial reports at least semiannually. Annual
reports will be audited by the Trust's independent public accountants. In
January of each year, each Fund will mail to shareholders 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 each Fund in which you maintain an
investment, 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 distributions
in cash. These two options are not available, however, for an account with a
net asset value of less than $500. Changes in the distribution option may be
made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer
mutual fund account invested in a second Pioneer mutual fund account. The
value of this second account must be at least $1,000 ($500 for Pioneer Fund
or Pioneer II). Invested dividends may be in any amount. There are no fees or
charges for this service.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan
("SWP"), 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.
Exchange Privilege
You may exchange your shares of any Fund in the Trust at net asset value,
without a sales charge, for shares of other Pioneer mutual funds which do not
offer different classes of shares or for the Class A shares of those Pioneer
mutual funds that offer more than one class of shares. There are currently no
sales charges or fees on exchanges.
Exchanges must be at least $1,000. In order to allow purchase transactions
to clear you can not exchange shares purchased by check within 15 days. A new
Pioneer mutual fund account opened through an exchange must have a
registration identical to that on the original account.
PSC will process exchanges only after receiving an exchange request in
proper form. The exchange privilege is available only in those states where
the Pioneer mutual funds can be legally sold.
Written Exchanges. If the exchange request is in writing, it must be
signed by all record owner(s) exactly as the shares are registered. If
your original account includes an Investomatic or SWP and you open a new
account by exchange, you should specify whether the plans should continue
in your new account or remain with your original account. Written
exchanges may be sent by mail or fax.
Telephone Exchanges. Your account is automatically authorized to have
the telephone exchange privilege unless you indicated otherwise on your
Account Application or by writing to PSC. Proper account identification
will be required. Telephone exchanges may not exceed $500,000 per account
per day, and all telephone exchange requests will be recorded. Each
telephone exchange request, whether by voice or by FactFone(SM), will be
recorded. You are strongly urged to consult with your financial
representative prior to requesting a telephone exchange. See "Telephone
Transactions and Related Liabilities."
If an exchange request is received by PSC before 4:00 p.m. Eastern Time
(or before the time that the New York Stock Exchange closes for regular
trading on that day, if different), the exchange will be effective on that
day if the requirements above have been met. If the exchange request is
received after this time, the exchange will be effective on the following
business day.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For federal and (generally) state income tax purposes,
an exchange represents a sale of the shares exchanged and a purchase of
shares in another fund. Therefore, an exchange could result in a gain or loss
on the shares sold, depending on the tax basis of these shares and the timing
of the transaction, and special tax rules may apply. For the protection of
each Fund's performance and shareholders, the Funds and PFD reserve
13
<PAGE>
the right to refuse any exchange request or restrict, at any time without
notice, the number and/or frequency of exchanges to prevent abuses of the
exchange privilege. Such abuses may arise from frequent trading in response
to short- term market fluctuations, a pattern of trading by an individual or
group that appears to be an attempt to "time the market," or any other
exchange request which, in the view of management, will have a detrimental
effect on the Fund's portfolio management strategy or operations. In
addition, the Funds and PFD reserve the right to charge a fee for exchanges
or to modify, limit, suspend or discontinue the exchange privilege with
notice to shareholders as required by law.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicated otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
See "Net Asset Value and Pricing of Orders" for more information. For
personal assistance, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m.
Eastern Time on weekdays. Computer- assisted transactions may be available to
shareholders who have pre-recorded certain bank information (see
"FactFone(SM)"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. To confirm that
each transaction instruction received by telephone is genuine, the Fund will
record each telephone transaction, require the caller to provide the personal
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 Fund may be liable for any loss due to unauthorized or
fraudulent instructions. The Fund may implement other procedures from time to
time. In all other cases, neither the Fund, PSC or PFD will be responsible
for the authenticity of instructions received by telephone, therefore, you
bear the risk of loss for unauthorized or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM)
allows you to obtain current information on your Pioneer mutual fund accounts
and to inquire about the price and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFone(SM) to make computer-assisted
telephone purchases, exchanges and redemptions from your Pioneer mutual fund
accounts if you have activated your PIN. Telephone purchases and redemptions
require the establishment of a bank account of record. You are strongly urged
to consult with your financial representative prior to requesting any
telephone transaction. Shareholders whose accounts are registered in the name
of a broker-dealer or other third party may not be able to use FactFone(SM).
See "How to Purchase Shares," "Exchange Privilege," "Redemptions and
Repurchases" and "Telephone Transactions and Related Liabilities." Call PSC
for assistance.
Telecommunications Device for the Deaf (TDD). If you have a hearing
disability and you own TDD keyboard equipment, you can call our TDD number
toll-free at 1-800-225- 1997, weekdays from 8:30 a.m. to 5:30 p.m. Eastern
Time, to contact our telephone representatives with questions about your
account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000, you may establish a
SWP providing for fixed payments at regular intervals. Periodic checks of $50
or more will be sent to you monthly or quarterly, and your periodic
redemptions of shares may be taxable transactions. You may also direct that
withdrawal checks be paid to another person, although if you make this
designation after you have opened your account, a signature guarantee must
accompany your instructions.
Purchases of shares of a Fund at a time when you have a SWP in effect may
result in the payment of unnecessary sales charges and may therefore be
disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
Reinstatement Privilege
If you redeem all or part of your shares of any Fund in the Trust, you may
reinvest all or part of the redemption proceeds, subject to minimum
investment requirements, without a sales commission in shares of the Fund or
of any other Pioneer mutual fund if you send a written request to PSC not
more than 90 days after your shares were redeemed. Your redemption proceeds
will be reinvested at the next determined net asset value of the shares of
the Fund after receipt of the written request for reinstatement. You may
realize a gain or loss for federal income tax purposes as a result of the
redemption, and special tax rules may apply if a reinvestment occurs. The
90-day reinvestment period may be extended by PFD for periods of up to one
year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
----------
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the 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.
IX. INVESTMENT RESULTS
Each of the Funds may from time to time include yield information in
advertisements or in information furnished generally to existing or proposed
shareholders. Whenever yield information is provided, it includes a
standardized yield calcu-
14
<PAGE>
lation computed by dividing a Fund's net investment income per share during a
base period of 30 days, or one month, by the maximum offering price per share
of the Fund on the last day of such base period. (A Fund's net investment
income per share is determined by dividing the Fund's net investment income
during the base period by the average number of shares of the Fund entitled
to receive dividends during the base period.) A Fund's 30-day yield is then
"annualized" by a computation that assumes that the Fund's net investment
income is earned and reinvested for a six-month period at the same rate as
during the 30-day base period and that the resulting six-month income will be
generated over an additional six months.
Each of the Funds may also from time to time advertise its taxable
equivalent yield. A Fund's taxable equivalent yield is determined by dividing
that portion of the Fund's yield (calculated as described above) that is tax
exempt by one minus the combined federal, state and, if applicable, city tax
rate, adjusted to take into account the deductibility of state and, if
applicable, city taxes on an investor's federal income tax return, and adding
the result to that portion, if any, of the Fund's yield that is not tax
exempt. For a table of sample taxable equivalent yields for each Fund, please
see the Appendix.
Each of the Funds may also include in advertisements and furnish to
existing or prospective shareholders information concerning the average
annual total return on an investment in the Fund for a designated period of
time. Whenever this information is provided, it includes a standardized
calculation of average annual total return computed by determining the
average annual compounded rate of return that would cause a hypothetical
investment (after deduction of the maximum sales charge) made on the first
day of the designated period (assuming all dividends and distributions are
reinvested) to equal the resulting net asset value of such hypothetical
investment on the last day of the designated period. The periods illustrated
would normally include one, five and ten years or such other periods as the
Fund has been in existence. These standard calculations do not reflect the
effect of federal or state taxes.
The computation methods above are prescribed for advertising and other
communications subject to SEC Rule 482. Communications not subject to this
rule may contain a number of different measures of performance, computation
methods and assumptions, including but not limited to: historical total
returns; distribution returns; results of actual or hypothetical investments;
changes in dividends, distributions or share values; or any graphic
illustration of such data. These data may cover any period of a Fund's
existence and may or may not include the impact of sales charges, taxes or
other factors.
Yield and average annual total return quotations of a Fund do not take
into account any required payments for any federal or state income taxes.
Each Fund's investment results will vary from time to time depending on
market conditions, the composition of the Fund's portfolio, and operating
expenses of the Fund. The temporary management fee reduction and expense
limitation arrangement by PMC has the effect of increasing yield and total
return. These factors and possible differences in the methods used in
calculating investment results should be considered when comparing
performance information regarding a Fund to information published for other
investment companies and other investment vehicles. You should also consider
yields and return quotations relative to changes in the value of a Fund's
shares and the risks associated with a Fund's investment objectives and
policies. Sinking fund call provisions and optional redemption features of
portfolio securities may have the effect of reducing the stated average
maturity of a Fund's portfolio, thereby reducing the Fund's yields. At any
time in the future, yields and return quotations may be higher or lower than
past yields or return quotations and there can be no assurance that any
historical yield or return quotation will continue in the future.
The Funds may also include comparative performance information in
advertising or marketing their shares. Such performance information may
include rankings or listings by magazines, newspapers, or independent
statistical or ratings services, such as Lipper Analytical Services, Inc. or
Ibbotson Associates.
For more information about the calculation methods used to compute the
Funds' investment results, see the Statement of Additional Information.
15
<PAGE>
X. APPENDIX--Taxable Equivalent Yields
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
The table below shows the effect of the tax status of bonds on the tax
equivalent yield received by their holders under the regular federal and
California State income tax rates for 1995 (State brackets are subject to
inflation adjustment). It gives the approximate yield a taxable security must
earn at various income brackets to produce after-tax yield equivalent to
those of tax exempt bonds yielding from 5% to 9%. See "Investment Results,"
in the Prospectus for a discussion of how a Fund's taxable equivalent yield
is calculated.
<TABLE>
<CAPTION>
Combined A Federal and California State
Federal tax exempt yield of
and 5% 6% 7% 8% 9%
Single Return Joint Return CA State ------ ------ ------ ------- --------
- -------------------- ------------------- tax is equivalent to a
(Taxable Income*) bracket**/*** fully taxable yield of:
- ---------------------------------------- -------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Up to $23,350 Up to $39,000 20.10% 6.26% 7.51% 8.76% 10.01% 11.26%
$23,351-$56,550 $39,001-$94,250 34.70 7.66 9.19 10.72 12.25 13.78
$56,551-$117,950 N/A 37.90 8.05 9.66 11.27 12.88 14.49
N/A $94,251-$143,600 37.42 7.99 9.59 11.19 12.78 14.38
$117,951-$219,872 $143,601-$256,500 42.40 8.68 10.42 12.15 13.89 15.63
$219,873-$256,500 N/A 43.04 8.78 10.53 12.29 14.04 15.80
N/A $256,501-$439,744 45.64 9.20 11.04 12.88 14.72 16.56
Over $256,500 Over $439,744 46.24 9.30 11.16 13.02 14.88 16.74
</TABLE>
* Net amount subject to federal and California personal income tax after
allowable deductions and exemptions.
** The combined tax rates for the tax brackets shown in the left hand
columns are calculated using the highest California state rate applicable
at the upper portion of these brackets and assume that taxpayers deduct
California state income taxes paid on their federal income tax returns.
An investor with taxable income within these brackets may have a lower
combined tax rate than the combined rate shown and may, therefore, have a
lower tax equivalent yield than those indicated above. Investors who do
not itemize deductions on their federal income tax return may have a
higher combined bracket and a higher taxable equivalent yield than those
indicated above. Yields shown are for illustration purposes only and are
not meant to represent the Fund's actual yield.
*** Effective January 1, 1996, the highest marginal California personal
income tax rate is reduced from 11% to 9.3%. This change in rate remains
subject to possible change by legislative action during 1996. Inflation
adjusted income brackets for California applicable to 1996 are not yet
available.
Note: The Federal Income Tax portion of above-indicated combined income
tax brackets assumes that a single filer is not a "head of household," a
"married individual filing a separate return" or a "surviving spouse" and
does not take into account the effect of a reduction in the deductibility of
Itemized Deductions (including California State Income Taxes) for taxpayers
with Adjusted Gross Income in excess of $114,700 (or, in the case of a
separate return by a married individual, $57,350). The tax brackets also do
not show the effects of phaseout of personal exemptions for single filers
with Adjusted Gross Income in excess of $114,700 and joint filers with
Adjusted Gross Income in excess of $172,050.
Of course, no assurance can be given that Pioneer California Double
Tax-Free Fund will achieve any specific tax exempt yield. While it is
expected that the Fund will invest principally in obligations the interest
from which is exempt from the regular federal income tax and California
personal income taxes, other income received by the Fund may be taxable. The
table does not take into account state or local taxes, if any, payable on
Fund distributions except for California personal income taxes. It should
also be noted that the interest earned on certain "private activity bonds"
issued after August 7, 1986, while exempt from the regular federal income
tax, is treated as a tax preference item which could subject a recipient to
or increase his or her liability for federal alternative minimum tax. Since
the Fund does not presently intend to invest in any bonds that will be
subject to the federal alternative minimum tax, the illustrations assume that
the federal alternative minimum tax is not applicable and do not take into
account any tax credits that may be available.
----------
The information set forth above is as of the date of this Prospectus.
Subsequent tax law changes could result in prospective or retroactive changes
in the tax brackets, tax rates and tax equivalent yields set forth above.
16
<PAGE>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
The table below shows the effect of the tax status of bonds on the tax
equivalent yield received by their holders under the regular federal income
tax and New York State and New York City income tax laws in effect for 1995.
It gives the approximate yield a taxable security must earn at various income
brackets to produce after-tax yield equivalent to those of tax exempt bonds
yielding from 5% to 9%. See "Investment Results," in the Prospectus for a
discussion of how a Fund's taxable equivalent yield is calculated.
<TABLE>
<CAPTION>
Combined A Federal, New York State and New York City
Federal tax exempt yield of
and NY 5% 6% 7% 8% 9%
Single Return Joint Return State/City ------- ------- ------- -------- ---------
- ----------------- ---------------- tax is equivalent to a
(Taxable Income*) bracket** fully taxable yield of:
- ----------------------------------- ---------- --------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Up to $23,350 Up to $39,000 25.19% 6.68% 8.02% 9.36% 10.69% 12.03%
$23,351-$56,550 $39,001-$94,250 36.64 7.89 9.47 11.05 12.63 14.20
$56,551-$117,950 $94,251-$143,600 39.32 8.24 9.89 11.54 13.18 14.83
$117,951-$256,500 $143,601-$256,500 43.71 8.88 10.66 12.44 14.21 15.99
Over $256,500 Over $256,500 46.88 9.41 11.29 13.18 15.06 16.94
</TABLE>
- ----------
* Net amount subject to federal and New York State and New York City
personal income tax after allowable deductions and exemptions.
** The combined tax rates for the lowest federal income tax brackets shown in
the left hand columns are calculated using the highest State rate and New
York City rate applicable at the upper portion of these brackets and
assume that taxpayers deduct New York State and City income taxes paid on
their federal income tax returns. Therefore, an investor with taxable
income below the highest dollar amount in the lowest bracket may have a
lower combined tax rate than the combined rate shown for that bracket and
may, therefore, have a lower tax equivalent yield than those indicated
above. The applicable State and New York City rates are the maximum rate
throughout all other brackets. Investors who do not itemize deductions on
their federal income tax return may have a higher combined bracket and a
higher taxable equivalent yield than those indicated above. Yields shown
are for illustration purposes only and are not meant to represent the
Fund's actual yield.
Note: Of course, no assurance can be given that Pioneer New York Triple
Tax-Free Fund will achieve any specific tax exempt yield. While it is
expected that the Fund will invest principally in obligations the interest
from which is exempt from the regular federal income tax and New York State
and New York City personal income taxes, other income received by the Fund
may be taxable. The table does not take into account state or local taxes, if
any, payable on Fund distributions except for New York State and New York
City personal income taxes. It should also be noted that the interest earned
on certain "private activity bonds" issued after August 7, 1986, while exempt
from the regular federal income tax, is treated as a tax preference item
which could subject a recipient to or increase his liability for Federal
alternative minimum tax.
The above-indicated combined federal and New York State/City income
brackets assumes that a single filer is not a "head of household," a "married
individual filing a separate return" or a "surviving spouse" and do not take
into account the effect of a reduction in the deductibility of Itemized
Deductions (including New York State and City Income Taxes) for taxpayers
with Adjusted Gross Income in excess of $114,700 (or, in the case of a
separate return by a married individual, $57,350), nor do they reflect
phaseout of personal exemptions for single and joint filers with Adjusted
Gross income in excess of $114,700 and $172,050, respectively. Since the Fund
does not presently intend to invest in any bonds that will be subject to the
federal alternative minimum tax, the illustrations assume that the federal
alternative minimum tax is not applicable and do not take into account any
tax credits that may be available.
----------
The information set forth above is as of the date of this Prospectus.
Subsequent tax law changes could result in prospective or retroactive changes
in the tax brackets, tax rates and tax equivalent yields set forth above.
17
<PAGE>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
The table below shows the effect of the tax status of bonds on the tax
equivalent yield received by their holders under the regular federal income
tax rates and Massachusetts income tax rates applicable for 1996 It gives the
approximate yield a taxable security must earn at various income brackets to
produce after-tax yield equivalent to those of tax exempt bonds yielding from
5% to 9%. See "Investment Results," in the Prospectus for a discussion of how
a Fund's taxable equivalent yield is calculated.
<TABLE>
<CAPTION>
Combined A Federal and Massachusetts State
Federal tax exempt yield of
and 5% 6% 7% 8% 9%
Single Return Joint Return MA State ------ ------ ------ ------- --------
- ----------------- ---------------- tax is equivalent to a
(Taxable Income*) bracket** fully taxable yield of:
- ----------------------------------- ---------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Up to $24,000 Up to $40,100 25.20% 6.68% 8.02% 9.36% 10.70% 12.03%
$24,001-$58,150 $40,101-$96,900 36.64 7.89 9.47 11.05 12.63 14.20
$58,151-$121,300 $96,901-$147,700 39.28 8.23 9.88 11.53 13.18 14.82
$121,301-$263,750 $147,701-$263,750 43.68 8.88 10.65 12.43 14.20 15.98
Over $263,750 Over $263,750 46.85 9.41 11.29 13.17 15.05 16.93
</TABLE>
- ----------
* Net amount subject to federal and Massachusetts personal income tax after
allowable deductions and exemptions.
** The combined tax rates include a Massachusetts tax rate of 12% applicable
to taxable bond interest and dividends, and assume that Massachusetts
taxes are itemized deductions for federal income tax purposes. Investors
who do not itemize deductions on their federal income tax return may have
a higher combined bracket and a higher taxable equivalent yield than those
indicated above. Yields shown are for illustration purposes only and are
not meant to represent the Fund's actual yield.
Note: The Federal Income Tax portion of above-indicated combined income
tax brackets assumes that a single filer is not a "head of household", a
"married individual filing a separate return" or a "surviving spouse" and
does not take into account the effect of a reduction in the deductibility of
Itemized Deductions (including Massachusetts State Income Taxes) for
taxpayers with Adjusted Gross Income in excess of $117,950 (or, in the case
of a separate return by a married individual, $58,975). The tax brackets also
do not show the effects of phaseout of personal exemptions for single filers
with Adjusted Gross Income in excess of $117,950 or, in the case of married
persons filing jointly, $176,950.
Of course, no assurance can be given that Pioneer Massachusetts Double
Tax-Free Fund will achieve any specific tax exempt yield. While it is
expected that the Fund will invest principally in obligations the interest
from which is exempt from the regular federal income tax and Massachusetts
personal income taxes, other income received by the Fund may be taxable. The
table does not take into account state or local taxes, if any, payable on
Fund distributions except for Massachusetts personal income taxes. It should
also be noted that the interest earned on certain "private activity bonds"
issued after August 7, 1986, while exempt from the regular federal income
tax, is treated as a tax preference item which could subject the recipient to
or increase his liability under the federal alternative minimum tax. Since
the Fund does not presently intend to invest in any bonds that will be
subject to the federal alternative minimum tax, the illustrations do not
include the effect of any federal alternative minimum tax.
----------
The information set forth above is as of the date of this Prospectus.
Subsequent tax law changes could result in prospective or retroactive changes
in the tax brackets, tax rates and tax equivalent yields set forth above.
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer International Growth Fund
Pioneer Europe Fund
Pioneer Emerging Markets Fund
Pioneer India Fund
Growth Funds
Pioneer Capital Growth Fund
Pioneer Mid-Cap Fund
Pioneer Growth Shares
Pioneer Small Company Fund
Pioneer Gold Shares
Growth and Income Funds
Pioneer Equity-Income Fund
Pioneer Fund
Pioneer II
Pioneer Real Estate Shares
Income Funds
Pioneer Short-Term Income Trust
Pioneer America Income Trust
Pioneer Bond Fund
Pioneer Income Fund
Tax-Free Income Funds
Pioneer Intermediate Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Pioneer New York Triple Tax-Free Fund*
Pioneer Massachusetts Double Tax-Free Fund*
Pioneer California Double Tax-Free Fund*
Money Market Funds
Pioneer U.S. Government Money Fund
Pioneer Cash Reserves Fund
*Not suitable for retirement accounts
19
<PAGE>
Pioneer California Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
KATHLEEN D. McCLASKEY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: (617) 742-7825
SERVICE INFORMATION
If you would like information on the following, please call...
Existing and new accounts, prospectuses,
applications, service forms and
telephone transactions ...................................... 1-800-225-6292
FactFone(SM)
Automated fund yields, automated
prices and account information ............................... 1-800-225-4321
Retirement plans .............................................. 1-800-622-0176
Toll-free fax ................................................. 1-800-225-4240
Telecommunications Device for the Deaf (TDD) .................. 1-800-225-1997
0196-3003
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
PIONEER NEW YORK TRIPLE TAX-FREE FUND
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
January 26, 1996
This Statement of Additional Information ("SAI") (Part B of the
Registration Statement) is not a Prospectus, but should be read in conjunction
with the Prospectus dated January 26, 1996 of Pioneer Tax-Free State Series
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 Fund's financial
statements for the fiscal year ended September 30, 1995 are included in this
Statement of Additional Information.
TABLE OF CONTENTS
Page
1. Investment Objectives, Policies and Restrictions............... B-2
2. Management of the Trust........................................ B-7
3. Investment Adviser............................................. B-12
4. Underwriting Agreement and Distribution Plan................... B-13
5. Shareholder Servicing/Transfer Agent........................... B-15
6. Custodian...................................................... B-16
7. Principal Underwriter.......................................... B-16
8. Independent Public Accountant.................................. B-16
9. Portfolio Transactions......................................... B-16
10. Tax Status..................................................... B-17
11. Description of Shares.......................................... B-24
12. Certain Liabilities............................................ B-24
13. Systematic Withdrawal Plan..................................... B-25
14. Letter of Intention............................................ B-26
15. Determination of Net Asset Value............................... B-26
16. Investment Results............................................. B-27
17. Financial Statements........................................... B-32
Appendix A..................................................... 1A
Appendix B..................................................... 1B
Appendix C..................................................... 1C
Appendix D..................................................... 1D
--------------------
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 OBJECTIVES, POLICIES AND RESTRICTIONS
Investment Objectives and Policies
The Prospectus of the Trust dated January 26, 1996 (the "Prospectus")
identifies the investment objectives of each series of the Trust, Pioneer
California Double Tax-Free Fund, Pioneer New York Triple Tax-Free Fund and
Pioneer Massachusetts Double Tax-Free Fund (individually, "Fund" and
collectively, the "Funds"), and the principal investment policies of the Funds.
Other investment policies and a further description of certain of the policies
described in the Prospectus are set forth below. The following policies and
limitations supplement those discussed in the Prospectus. Appendices A and C
contain a further description of the municipal securities and other investments,
respectively, which comprise the Funds' portfolios. Appendix B sets forth
ratings of municipal bonds by Standard & Poor's Ratings Group ("S&P") and
Moody's Investors Service, Inc. ("Moody's").
When-Issued Securities
As described in the Prospectus under the heading "Three Investment
Programs," the Funds may purchase new issues of tax-exempt securities on a
"when-issued" basis. In order to invest the Funds' assets immediately, while
awaiting delivery of securities purchased on a "when-issued" basis, short-term
obligations that offer same day settlement and earnings will normally be
purchased. Although short-term investments will normally be in tax-exempt
securities, short-term taxable securities may be purchased if suitable
short-term tax-exempt securities are not available. When a commitment to
purchase a security on a "when-issued" basis is made, procedures are established
consistent with the General Statement of Policy of the Securities and Exchange
Commission concerning such purchases. Because that policy currently recommends
that an amount of a Fund's assets equal to the amount of the purchase be held
aside or segregated to be used to pay for the commitment, cash or high-quality
debt securities sufficient to cover any commitments are always expected to be
available. Nonetheless, such purchases may involve more risk than other types of
purchases, as described in the Prospectus.
Floating or Variable Rate Obligations
Each Fund may purchase floating or variable rate obligations. Floating
or variable rate instruments provide for adjustments in the interest rate at
specified intervals (weekly, monthly, semi-annually, etc.). The revised rates
are usually set at the issuer's discretion, in which case the investor normally
enjoys the right to "put" the security back to the issuer or his agent. Rate
revisions may alternatively be determined by formula or in some other
contractual fashion. Floating or variable rate obligations normally provide that
the holder can demand payment of the obligation on short notice at par with
accrued interest and are frequently secured by letters of credit or other credit
support
B-2
<PAGE>
arrangements provided by banks. A Fund would anticipate using these obligations
as cash equivalents pending longer term investment of its funds.
Redemption, Demand and Put Features
Most municipal bonds have a fixed final maturity date. However, it is
commonplace for the issuer to reserve the right to call the bond earlier. Also,
some bonds may have "put" or "demand" features that allow early redemption by
the bondholder. Interest income generated by certain bonds having "put" or
"demand" features may not qualify as tax-exempt interest if a Fund is not
treated as the tax owner of the bond. The Funds intend to take the position that
they own for tax purposes any obligation with put or demand features and
accordingly may be limited in the types of put or demand features they may
obtain. Longer term fixed-rate bonds may give the holder a right to request
redemption at certain times (often annually after the lapse of an intermediate
term). These bonds are more defensive than conventional long-term bonds
(protecting to some degree against a rise in interest rates) while providing
greater opportunity than comparable intermediate term bonds, since a Fund may
retain the bond if interest rates decline. By acquiring these kinds of
obligations a Fund obtains the contractual right to require the issuer of the
security or some other person to purchase the security at an agreed upon price.
Concentration
Each Fund may invest 25% or more of its total assets in municipal
obligations of the same type, including without limitation the following:
general obligations of its respective state and its political subdivisions;
lease rental obligations or certificates of state and local authorities;
obligations of state and local housing finance authorities, municipal utilities
systems or public housing authorities; or industrial development or pollution
control bonds issued for hospitals, electric utilities, steel companies, life
care facilities or other purposes. There could be economic, business or
political developments which might affect all California, New York or
Massachusetts obligations of a similar type.
Each Fund's investment objective and the investment policies described
above and the policies with respect to portfolio management described below may
be changed without shareholder approval.
Portfolio Management
The Funds intend to manage their portfolios fully by buying and selling
securities, as well as holding securities to maturity. In managing their
portfolios each Fund seeks to take advantage of market developments and yield
disparities, which may include use of the following strategies:
B-3
<PAGE>
(1) shortening the average maturity of its portfolio in
anticipation of a rise in interest rates so as to minimize depreciation
of principal;
(2) lengthening the average maturity of its portfolio in
anticipation of a decline in interest rates so as to maximize
tax-exempt yield;
(3) selling one type of debt security (e.g., revenue bonds)
and buying another (e.g., general obligation bonds) when disparities
arise in the relative values of each; and
(4) changing from one debt security to an essentially similar
debt security when their respective yields appear distorted due to
market factors.
Each Fund engages in portfolio trading if it believes a transaction net
of costs (including custodian charges) will help in achieving its investment
objective.
Investment Restrictions
Each Fund has adopted certain additional investment restrictions which
may not be changed without the affirmative vote of the holders of a majority of
such Fund's outstanding voting securities. Under these restrictions, a Fund 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, and repurchase agreements entered into in accordance with a Fund's
investment policy, and the pledge, mortgage or hypothecation of a Fund'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 a Fund's
total assets (including the amount borrowed) taken at market value. No Fund will
use leverage to attempt to increase income. A Fund will not purchase securities
while outstanding borrowings exceed 5% of a Fund's total assets.
(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 a Fund'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, a Fund may be deemed to be an
underwriter for purposes of the Securities Act of 1933.
B-4
<PAGE>
(5) Purchase or sell real estate, or any interest therein, including
real estate mortgage loans, except that a Fund may invest in securities of
corporate or governmental entities secured by real estate or marketable
interests therein or securities issued by companies (other than real estate
limited partnerships) that invest in real estate or interests therein.
(6) Make loans, except that a Fund may lend portfolio securities in
accordance with the Fund's investment policies. The Funds do not, for this
purpose, consider the purchase of repurchase agreements, bank certificates of
deposit, a portion of an issue of publicly distributed bonds, bank loan
participation agreements, bankers' acceptances, debentures or other securities,
whether or not the purchase is made upon the original issuance of the
securities, to be the making of a loan.
(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
commitments, securities index put or call warrants and repurchase agreements
entered into in accordance with a Fund's investment policies.
No Fund has any intention of investing its assets in the current fiscal
year in 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 commitments, or securities index put
or call warrants.
In addition, as a matter of nonfundamental investment policy and in
connection with the offering of its shares in various states, each Fund has
agreed not to:
(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, a Fund 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 a Fund may
obtain such short-term credits as may be necessary for the clearance of
purchases and sales of securities.
B-5
<PAGE>
(c) Purchase a security if, as a result, (i) more than 10% of a Fund'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 a Fund,
or (iii) more than 5% of a Fund's assets would be invested in any one such
closed-end investment company. No Fund will 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 a Fund in all such
issuers to exceed 5% of the value of the total assets of the Fund.
(e) Invest for the purpose of exercising control over or management of
any company.
(f) Purchase warrants of any issuer, if, as a result of such purchases,
more than 2% of the value of a Fund's total assets would be invested in 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 total assets of the Fund 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 a Fund 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 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) Purchase any security, including any repurchase agreement maturing
in more than seven days, which is illiquid, if more than 15% of the net assets
of a Fund, taken at market value, would be invested in such securities. These
restrictions may not be changed without the approval of the regulatory agencies
in such states.
For the purposes of the Fund's investment restrictions, the issuer of a
tax-exempt security is deemed to be the entity (public or private) ultimately
responsible for the payment of the principal of, and interest on, the security.
B-6
<PAGE>
Percentage Restrictions
If a percentage restriction on investment or utilization of assets set
forth above (other than with respect to borrowing) is adhered to at the time an
investment is made or assets are so utilized, a later change in percentage
resulting from changes in the value of a Fund's portfolio securities will not be
considered a violation of a policy.
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.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of Pioneering Management Corporation
("PMC") and Pioneer Funds Distributor, Inc. ("PFD"); Director of Pioneering
Services Corporation ("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma (a Russian corporation); President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp. ("PIC"), Pioneer Metals and
Technology, Inc. ("PMT"), Pioneer International Corp. ("PIntl"), Pioneer First
Russia, Inc. ("First Russia") and Pioneer Omega, Inc. ("Omega"); Chairman of the
Board and Director of Pioneer Goldfields Limited ("PGL") and Teberebie
Goldfields Limited; Chairman of the Supervisory Board of Pioneer Fonds
Marketing, GmbH ("Pioneer GmbH"); Member of the Supervisory Board of Pioneer
First Polish Trust Fund Joint Stock Company ("PFPT"); Chairman, President and
Trustee of all of the Pioneer mutual funds and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., Trustee, DOB: December 1926
Boston University Health Policy Institute, 53 Bay State Rd., Boston, MA 02115
Professor of Management, Boston University School of Management;
Professor of Public Health, Boston University School of Public Health; Professor
of Surgery, Boston University School of Medicine; Director, Boston University
Health Policy Institute and Boston University Medical Center; Executive Vice
President and Vice Chairman of the Board, University Hospital; Academic Vice
President for Health Affairs, Boston University; Director, Essex Investment
Management Company, Inc. (investment
B-7
<PAGE>
adviser), Health Payment Review, Inc. (health care containment software firm),
Mediplex Group, Inc. (nursing care facilities firm), Peer Review Analysis, Inc.
(health care facilities firm) and Springer-Verlag New York, Inc. (publisher);
Honorary Trustee, Franciscan Children's Hospital and Trustee of all of the
Pioneer mutual funds.
MARGARET B.W. GRAHAM, Trustee, DOB: May 1947
The Keep, P.O. Box 110, Little Deer Isle, ME 04650
Founding Director, Winthrop Group, Inc. (consulting firm) since 1982;
Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to
1994; Professor of Operations Management and Management of Technology, Boston
University School of Management ("BUSM"), from 1989 to 1993 and Trustee of all
of the Pioneer mutual funds, except Pioneer Variable Contracts Trust.
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1994
Executive Vice President and a Director of PGI; President, Chief
Investment Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl,
First Russia, Omega and Pioneer SBIC Corporation, Executive Vice President and
Trustee of all of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus
Funds (mutual funds) and Trustee of all of the Pioneer mutual funds.
B-8
<PAGE>
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm);
Director of NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government
Reserves and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer
mutual funds, except Pioneer Variable Contracts Trust.
KATHLEEN D. MCCLASKEY, Vice President, DOB: January 1952
Vice President of PMC and Pioneer Intermediate Tax-Free Fund.
WILLIAM H. KEOGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and
PCC; Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund) and
Secretary of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994, Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC; and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
Each of the above, with the exception of Kathleen D. McClaskey, is also
an officer and/or Trustee or Director of the Pioneer mutual funds listed below.
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.
B-9
<PAGE>
As of the date of this SAI, all of the outstanding capital stock of
PFD, PMC and PSC is owned directly or indirectly by PGI, a publicly-owned
Delaware corporation. PMC, the Fund's investment adviser, serves as the
investment adviser for the Pioneer mutual funds listed below and manages the
investments of certain institutional accounts.
The table below lists all the Pioneer mutual funds currently offered to
the public and the investment adviser and principal underwriter for each fund.
Investment Principal
Fund Name Adviser Underwriter
Pioneer International Growth Fund PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Mid-Cap Fund PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Small Company Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Short-Term Income Trust PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer Interest Shares, Inc. PMC Note 1
Pioneer Variable Contracts Trust PMC Note 2
Note 1 This fund is a closed-end fund.
Note 2 This is a series of eight separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
B-10
<PAGE>
To the knowledge of the Trust, no officer or Trustee of the Trust owned 5% or
more of the issued and outstanding shares of PGI on December 31, 1995, except
Mr. Cogan who then owned approximately 15% of such shares. At December 31, 1995,
the Trustees and officers of the Funds owned, in the aggregate, less than 1% of
the outstanding shares of each of the Funds. At December 31, 1995, the following
persons owned 5% or more of the outstanding shares of the Funds: (i) Pioneer
California Double Tax-Free Fund, PIC, 60 State Street, Boston, MA
02109-1803--7.93%; Wallace Linville Trust, 28766 Glen Oaks Drive, Sun City,
California 92586-2843--16.76%; and Merrill Lynch Pierce Fenner & Smith Inc.,
4800 Deer Lake Drive East 3rd F1, Jacksonville, Florida 32246-6484--5.71%; (ii)
New York Triple Tax-Free Fund, PFD, 60 State Street, Boston, MA
02109-1803--34.05%; and (iii) Massachusetts Double Tax-Free Fund, PFD, 60 State
Street, Boston, MA 02109-1803--47.92% and Arthur David Rev Trust, 14 First
Street, Salisbury, MA 01952-2515--9.88%. PFD and PIC are organized under the
laws of Massachusetts and are deemed to be controlling persons of any Fund of
which they own more than 25% of the shares outstanding. As such, the exercise by
PFD or PIC of their voting rights may diminish the voting power of other
shareholders.
Compensation of Officers and Trustees. The Trust pays no salaries or
compensation to any of its officers. Commencing on October 1, 1996, each series
of the Trust will pay an annual trustees' fee to each Trustee who is not
affiliated with PMC, PFD or PSC consisting of two components: (a) a base fee of
$500 and (b) a variable fee, calculated on the basis of the average net assets
of each series, estimated to be approximately $5 for 1996. In addition, each
series of the Trust will pay a per meeting fee of $120 to each Trustee who is
not affiliated with PMC, PFD or PSC. The Trust also will pay an annual committee
participation fee to Trustees who serve as members of committees established to
act on behalf of one or more of the Pioneer mutual funds. Committee fees will be
allocated to the Trust on the basis of the Trust's average net assets. Each
Trustee who is a member of the Audit Committee for the Pioneer mutual funds will
receive an annual fee equal to 10% of the aggregate annual trustees' fee, except
the Committee Chair who will receive an annual trustees' fee equal to 20% of the
aggregate annual trustees' fee. The Audit Committee fees for each member and the
Committee Chair for 1996 are expected to be approximately $6,000 and $12,000,
respectively. Members of the Pricing Committee for the Pioneer mutual funds, as
well as any other committee which renders material functional services to the
Board of Trustees for the Pioneer mutual funds, will receive an annual fee equal
to 5% of the annual trustees' fee, except the Committee Chair who will receive
an annual trustees' fee equal to 10% of the annual trustees' fee. The Pricing
Committee fees for each member and the Committee Chair for 1996 are expected to
be approximately $3,000 and $6,000, respectively. Any such fees paid to
affiliates or interested persons of PMC, PFD or PSC are reimbursed to the Trust
under its Management Contract.
B-11
<PAGE>
For the fiscal year ended September 30, 1995, the Trust paid an annual
trustees' fee of $500 to each Trustee who was not affiliated with PMC, PFD or
PSC as well as an annual fee of $200 to each of the Trustees who was a member of
the Trust's Audit Committee, except for the Chairman of such Committee, who
received an annual fee of $250. The Trust also paid an annual trustees' fee of
$500 plus expenses to each Trustee affiliated with PMC, PFD or PSC. Any such
fees and expenses paid to affiliates or interested persons of PMC, PFD or PSC
were reimbursed to the Trust under its Management Contract.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Trust:
Pension or
Retirement Total
Benefits Compensation
Aggregate Accrued as from the Trust and
Compensation Part of the all other Pioneer
Name of Trustee from the Trust* Trust's Expenses Mutual Funds**
John F. Cogan, Jr. $500.00 $0 $11,000.00
Richard H. Egdahl, M.D. $622.00 $0 $63,315.00
Margaret B.W. Graham $622.00 $0 $62,398.00
John W. Kendrick $622.00 $0 $62,398.00
Marguerite A. Piret $869.50 $0 $76,704.00
David D. Tripple $500.00 $0 $11,000.00
Stephen K. West $814.00 $0 $68,180.00
John Winthrop $822.00 $0 $71,199.00
-------
Total $5,371.50 $0 $426,194.00
========= == ===========
* As of Trust's fiscal year end.
** As of December 31, 1995 (calendar year end for all Pioneer Funds). As of
such date there were 33 separate series in the Pioneer Family of Funds.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Trust to hold annual meetings of shareholders. As a result,
shareholders may not consider the election of Trustees or the appointment of
independent accountants each year. Shareholders may remove a Trustee by the
affirmative vote of at least two-thirds of the Trust's outstanding shares and
the Trustees must promptly call a meeting for such purpose when requested to do
so in writing by the record holders of not less than 10% of the outstanding
shares of the Trust. Shareholders may, under certain circumstances, communicate
with other shareholders
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<PAGE>
in connection with requesting a special meeting of shareholders. The Board of
Trustees, however, will call a special meeting for the purpose of electing
Trustees if, at any time, less than a majority of Trustees holding office at the
time were elected by shareholders.
3. INVESTMENT ADVISER
The Trust has contracted with PMC, 60 State Street, Boston,
Massachusetts, to act as its investment adviser. The term of the Management
Contract is one year, but it is renewable annually after such date by the vote
of a majority of the Board of Trustees of the 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 contract terminates if assigned and may be terminated
without penalty by either party by vote of its Board of Directors or Trustees or
a majority of its outstanding voting securities and the giving of sixty days'
written notice.
As compensation for its management services and expenses incurred, PMC
is entitled to a management fee at the rate of 0.60% per annum of the Funds'
average daily net assets. The fee is normally computed daily and paid monthly.
PMC has voluntarily agreed not to impose any of its management fee and to make
other arrangements, if necessary, to limit certain other expenses of the Trust
to the extent required to limit each Fund's total expenses to the levels set
forth in the Funds' prospectus under "Expense Information". This agreement is
voluntary and temporary and may be revised or terminated at any time.
PMC has also agreed that if in any fiscal year the aggregate expenses
of the Funds exceed the expense limitation established by any state having
jurisdiction over the Funds, PMC will reduce its management fee to the extent
required by state law. The most restrictive state expense limit currently
applicable to the Funds provides that a Fund's expenses in any fiscal year may
not exceed 2.5% of the first $30 million of average daily net assets, 2.0% of
the next $70 million of such assets and 1.5% of such assets in excess of $100
million.
During the fiscal years ended September 30, 1995, September 30, 1994,
and the fiscal period from February 19, 1993 (date of inception) to September
30, 1993, PMC did not receive any compensation from the Funds because of PMC's
voluntary agreement to limit each Fund's expenses. Absent such an agreement, PMC
would have received for the periods noted management fees as follows: California
Double Tax-Free Fund, $40,877, $33,251 and $10,800; Massachusetts Double
Tax-Free Fund, $24,024, $21,874 and $8,685; and New York Triple Tax-Free Fund,
$28,039, $22,193 and $8,364.
B-13
<PAGE>
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLAN
The Trust is a party to an Underwriting Agreement with PFD. See
"Principal Underwriter" below. The Trustees who are not, and were not at the
time they voted, interested persons of the Trust, as defined in the 1940 Act,
approved the Underwriting Agreement. The Underwriting Agreement will continue
from year to year if annually approved by the Trustees in conjunction with the
continuance of the Rule 12b-1 distribution plan (the "Distribution Plan"). The
Underwriting Agreement provides that PFD will bear expenses for the distribution
of the Funds' shares, except for the expenses incurred by PFD for which it is
reimbursed by the Funds under the Distribution Plan.
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 Funds. PFD also pays certain expenses in connection with the
distribution of the Funds' 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. Each Fund
bears the cost of registering its shares under federal and state 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. During the fiscal year ending September 30, 1995, net
underwriting commissions retained by PFD and commissions reallowed to dealers
were approximately:
Retained Reallowed
Pioneer California Double Tax-Free Fund $5,877 $28,955
Pioneer New York Triple Tax-Free Fund $2,926 $15,727
Pioneer Massachusetts Double Tax-Free Fund $2,289 $11,639
The Trust has adopted a Distribution Plan pursuant to Rule 12b-1
promulgated by the Securities and Exchange Commission under the 1940 Act
pursuant to which a Fund may reimburse PFD for its expenditures in financing any
activity primarily intended to result in the sale of Fund shares. Certain
categories of such expenditures have been approved by the Board of Trustees and
are set forth in the Prospectus under the caption "Distribution Plan." The
expenses of each Fund pursuant to the Distribution Plan are accrued on a fiscal
year basis and may not exceed the annual rate of .25 of 1% of a Fund's average
annual net assets. The Distribution Plan does not provide for the carryover of
reimbursable expenses beyond twelve months from the time they are incurred. In
accordance with the terms of the Distribution Plan, the manager of the Trust
provides to the Trust for review by the Trustees a quarterly
B-14
<PAGE>
written report of the amounts expended under the Distribution Plan and the
purpose for which such expenditures were made. PFD has agreed to act as the
servicing agent of the Trust with respect to the Distribution Plan.
No interested person of the Trust, nor any Trustee of the Trust who is
not an interested person of the Trust, has any direct or indirect financial
interest in the operation of the Distribution Plan except to the extent that PFD
and certain of its employees may be deemed to have such an interest as a result
of receiving a portion of the amounts expended under the Distribution Plan by
each of the Funds and except to the extent certain officers may have an interest
in PFD's ultimate parent, PGI.
The Distribution Plan was adopted by a majority vote of the Board of
Trustees, including all of the Trustees who are not, and were not at the time
they voted, interested persons of the Trust, as defined in the 1940 Act (none of
whom had or have any direct or indirect financial interest in the operation of
the Distribution Plan), cast in person at a meeting called for the purpose of
voting on the Distribution Plan and approved by the Trust's sole initial
shareholder. In approving the Distribution Plan, the Trustees identified and
considered a number of potential benefits which the Distribution Plan may
provide. The Board of Trustees believes that there is a reasonable likelihood
that the Distribution Plan will benefit each Fund and their current and future
shareholders. Under its terms, the Distribution Plan remains in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The Distribution Plan may not be amended to
increase materially the annual percentage limitation of average net assets which
may be spent for the services described therein without approval of the
shareholders of the Fund affected thereby, and any amendments to the
Distribution Plan must also be approved by the Trustees in the manner described
above. The Distribution 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 that have no direct or indirect financial interest in
the operations of the Distribution Plan, or by a vote of a majority of the
outstanding voting securities of the Trust (as defined in the 1940 Act). The
Distribution Plan will automatically terminate in the event of its assignment
(as defined in the 1940 Act). In the Trustees' quarterly review of the
Distribution Plan, they will consider its continued appropriateness and the
level of compensation it provides. During the period from October 1, 1994 to
September 30, 1995, the Funds paid distribution fees to PFD as follows:
California Double Tax-Free Fund, $10,141; New York Triple Tax-Free Fund, $1,234;
and Massachusetts Double Tax-Free Fund, $1,082. Distribution fees were paid in
reimbursement of expenses related to servicing of shareholder accounts and to
compensating dealers and sales personnel.
B-15
<PAGE>
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 the 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 services
shareholder accounts, and its duties include: (i) processing sales, redemptions
and exchanges of shares of the Funds; (ii) distributing dividends and capital
gains associated with the Funds portfolio accounts; and (iii) maintaining
account records and responding to shareholder inquiries.
PSC receives an annual fee of $30.00 per 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 of the Trust (including
a majority of the Trustees who are not parties to the contract with PSC or
interested persons of any such parties) to be comparable to fees for such
services being paid by other investment companies.
6. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts
02109, (the "Custodian") is the custodian of the Trust's assets. The Custodian's
responsibilities include safekeeping and controlling each Fund's cash and
securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Funds' investments. The Custodian does not
determine the investment policies of the Funds or decide which securities the
Funds will buy or sell. The Funds 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.
8. INDEPENDENT PUBLIC ACCOUNTANT
Arthur Andersen LLP, One International Place, Boston, Massachusetts
02110 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.
B-16
<PAGE>
9. PORTFOLIO TRANSACTIONS
Decisions relating to the purchase and sale of securities for the
Funds, the allocation of portfolio transactions and, where applicable, the
negotiation of commission rates are made by officers of PMC.
The primary consideration in placing portfolio security transactions is
execution at the most favorable prices. PMC has complete freedom as to the
markets in and broker-dealers through which it seeks this result. Municipal
Obligations and other debt securities are traded principally in the
over-the-counter market on a net basis through dealers acting for their own
account and not as brokers. The cost of securities purchased from underwriters
includes an underwriter's commission or concession, and the prices at which
securities are purchased and sold from and to dealers include a dealer's mark-up
or mark-down. PMC attempts to negotiate with underwriters to decrease the
commission or concession for the benefit of the Funds. PMC normally seeks to
deal directly with the primary market makers unless, in its opinion, better
prices are available elsewhere.
Subject to the requirement of seeking execution at the best available
price, securities may, as authorized by PMC's management agreement, be bought
from or sold to dealers who furnish research services to the Funds and/or other
investment companies managed by PMC, or who sell shares of the Funds. 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 Funds.
10. TAX STATUS
Each Fund is treated as a separate entity for tax and accounting
purposes. It is each Fund's policy to meet the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), for qualification as
a regulated investment company. These requirements relate to the sources of its
income, diversification of its assets and distribution of its income to
shareholders. If a Fund meets all such requirements and distributes to its
shareholders, in accordance with the Code's timing requirements, all investment
company taxable income and net capital gain, if any, which it receives, the Fund
will be relieved
B-17
<PAGE>
of the necessity of paying federal income tax. The Funds are not liable for
Massachusetts corporate excise or franchise taxes and, provided that a Fund
qualifies as a regulated investment company for federal income tax purposes, the
Fund will also not be required to pay any Massachusetts income tax.
In accordance with its investment objectives, each Fund invests its
assets in a manner which will provide as large a portion of tax-exempt income as
is consistent with the protection of shareholders' capital. Since the protection
of capital is an important aspect of each Fund's investment objectives, each
Fund may from time to time invest a portion of its portfolio in short-term
obligations and may acquire obligations or engage in transactions generating
income which is not tax-exempt, e.g., purchase securities at a market discount,
purchase non-municipal securities, purchase certain stripped tax-exempt
obligations or their coupons, sell or lend portfolio securities, enter into
repurchase agreements, or dispose of rights to when-issued securities prior to
issuance.
The Code permits tax-exempt interest received by a Fund to flow through
as tax-exempt "exempt-interest dividends" to the Fund's shareholders, provided
that such Fund qualifies as a regulated investment company and at least 50% of
the value of the Fund's total assets at the close of each quarter of its taxable
year consists of tax-exempt obligations i.e., obligations described in Section
103(a) of the Code. That part of a Fund's net investment income which is
attributable to interest from tax-exempt obligations and which is distributed to
shareholders will be designated by the Fund as an "exempt-interest dividend"
under the Code and will be excluded from the shareholders' gross income for
regular federal income tax purposes. The percentage of income designated as
tax-exempt is applied uniformly to all distributions made during each fiscal
year and may differ from the actual tax-exempt percentage for any particular
month. That portion of net investment income distributions not designated as
tax-exempt and any distributions of the excess of net short-term capital gain
over net long-term capital loss are taxable to shareholders as ordinary income,
and any distributions of the excess of net long-term capital gain over net
short-term capital loss (after taking into account any capital loss carryovers)
are taxable to shareholders as long-term capital gains regardless of the
shareholder's holding period for the shares. Dividends declared by the Funds in
October, November or December as of a record date in such a month and paid the
following January will be treated for federal income tax purposes as received by
shareholders on December 31 of the calendar year in which they are declared.
Because none of the Funds' income will arise from dividends, no part of
the distributions to their corporate shareholders will qualify for the
dividends-received deduction for corporations.
B-18
<PAGE>
Redemptions, including exchanges, are taxable transactions. If the
shares redeemed (or surrendered in an exchange) have been held for less than 91
days, the sales charge paid on the acquisition of such shares is not included in
their federal tax basis for the purposes of determining gain or loss if a
reinvestment in the Fund or exchange into a different Fund occurs, in either
case to the extent a sales charge that would otherwise apply to acquisition of
the newly-acquired shares is reduced or eliminated pursuant to the reinvestment
or exchange privilege. Instead, the portion of the sales charge so disregarded
is carried over and included in the federal tax basis of the newly-acquired
shares. In addition, if a redemption results in a loss and an investment is made
in the same Fund within a period of 61 days beginning 30 days before and ending
30 days after the redemption (including by the reinvestment of distributions),
the loss may be disallowed for federal income tax purposes under the "wash sale"
rules. In such a case, the disallowed amount would be included in the federal
tax basis of the newly-acquired shares.
Any loss on the sale or exchange of shares on which an exempt-interest
dividend was paid that have a tax holding period, at the time of sale, of six
months or less, is disallowed to the extent of the amount of such dividend. Any
loss realized and not disallowed on the sale or exchange 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 distributions of long-term capital gains with respect to
such shares.
Interest on indebtedness incurred (directly or indirectly) by
shareholders to purchase or carry shares of a Fund will not be deductible for
federal income tax purposes to the extent it is deemed to relate to
exempt-interest dividends received from that Fund.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price may be attributable to realized or unrealized appreciation in the
Fund's portfolio. Consequently, subsequent distributions on such shares from
such appreciation 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.
For Federal income tax purposes, each Fund is permitted to carry
forward a net capital loss in any year to offset its capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
capital gains are offset by such losses, they would not result in Federal income
tax liability to the Fund and are not expected to be distributed as such to
shareholders. As of September 30, 1995, the Funds had the following net loss
carryforwards: Pioneer California Double
B-19
<PAGE>
Tax-Free Fund, $109,121, which will expire between 2002 and 2003; Pioneer New
York Triple Tax-Free Fund, $61,226, which will expire between 2002 and 2003; and
Pioneer Massachusetts Double Tax-Free Fund, $55,763, which will expire between
2002 and 2003.
Federal law requires that the Funds withhold (as "backup withholding")
31% of reportable payments, including taxable income dividends, capital gain
dividends and the proceeds of redemptions, repurchases or exchanges, 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.
A Fund may nevertheless be required to withhold if it receives notice from the
IRS or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income. Backup withholding may be inapplicable for any year in which a Fund
reasonably estimates that at least 95% of its dividends paid with respect to
such year are exempt-interest dividends.
The description above relates only to U.S. federal income tax
consequences for shareholders who are U.S. persons, i.e., U.S. citizens or
residents, or U.S. corporations, partnerships, trusts or estates and who are
subject to U.S. federal income tax. The description does not address special tax
rules applicable to certain classes of investors, such as insurance companies
and financial institutions.
Investors other than U.S. persons may be subject to different U.S. tax
treatment, including a possible 30% U.S. nonresident alien withholding tax (or
U.S. nonresident alien withholding tax at a lower treaty rate) on any amounts
treated as ordinary dividends from a Fund and, unless an effective IRS Form W-8
or authorized substitute is on file, to 31% backup withholding on certain other
payments from the Fund.
The exemption of exempt-interest dividends for federal income tax
purposes does not necessarily result in exemption under the tax laws of any
state or local taxing authority, which vary with respect to the taxation of such
dividend income. Some states will exempt from tax that portion of the
exempt-interest dividend which represents interest received by a Fund on that
state's securities, as described below with respect to California, New York and
Massachusetts.
California State and Local Tax Matters. The following discussion
assumes that Pioneer California Double Tax-Free Fund will be qualified as a
regulated investment company under subchapter M of the Code and will be
qualified thereunder to pay exempt-interest dividends.
B-20
<PAGE>
In the opinion of Orrick, Herrington & Sutcliffe, special California
tax counsel for Pioneer California Double Tax-Free Fund, provided that the Fund
meets the 50% test described in the prospectus, shareholders of the Fund that
are individuals, estates or trusts and are subject to California personal income
taxation will not be required to include in their California gross income that
portion of their dividends which the Fund clearly and properly identifies as
directly attributable to interest earned on obligations, the interest on which
is exempt from California personal income tax.
Distributions to individual shareholders derived from interest on state
or municipal obligations issued by governmental authorities in states other than
California, short-term capital gains and other taxable income will be taxed as
dividends for purposes of California personal income taxation. The Fund's
long-term capital gains for federal income tax purposes will be taxed as
long-term capital gains to shareholders of the Fund that are individuals,
estates or trusts for purposes of California personal income taxation. Gain or
loss, if any, resulting from an exchange or redemption of shares will be
recognized in the year of the exchange or redemption. Present California law
taxes both long-term and short-term capital gains at the rates applicable to
ordinary income. Interest on indebtedness incurred or continued by a shareholder
in connection with the purchase of shares of a Fund will not be deductible for
California personal income tax purposes. California has an alternative minimum
tax similar to the federal alternative minimum tax described above. However, the
California alternative minimum tax does not include interest from private
activity bonds as an item of tax preference.
Generally, corporate shareholders of the Fund subject to the California
franchise tax will be required to include any gain on an exchange or redemption
of shares and all distributions of exempt interest, capital gains and other
taxable income, if any, as income subject to such tax.
The Fund will not be subject to California franchise or corporate
income tax on interest income or net capital gain distributed to the
shareholders.
Shares of the Fund will be exempt from local property taxes in
California.
The foregoing is a general, abbreviated summary of certain of the
provisions of the California Revenue and Taxation Code presently in effect as it
directly governs the taxation of shareholders of the Fund. These provisions are
subject to change by legislative or administrative action, and any such change
may be retroactive with respect to Fund transactions. Shareholders are advised
to consult with their own tax advisers for more detailed information concerning
California tax matters.
B-21
<PAGE>
New York State and Local Tax Matters. The following discussion assumes
that Pioneer New York Triple Tax-Free Fund will be qualified as a regulated
investment company under subchapter M of the Code and will be qualified
thereunder to pay exempt-interest dividends.
In the opinion of Orrick, Herrington & Sutcliffe, special New York tax
counsel for Pioneer New York Triple Tax-Free Fund, shareholders of the Fund that
are individuals, estates or trusts taxable under subchapter J of the Code and
that are subject to New York State or New York City taxation will not be subject
to New York State or City personal income taxes (including the minimum taxes
contained therein) on distributions received from the Fund to the extent such
distributions are exempt-interest dividends attributable to interest on
tax-exempt obligations of the State of New York or a political subdivision
thereof or derived from interest on obligations of possessions of the United
States (including Puerto Rico, Guam and the U.S. Virgin Islands). Such
shareholders will be able to treat dividends from the Fund which are "capital
gain dividends" as long-term capital gains for purposes of New York State or
City personal income taxes. Gain or loss, if any, resulting from a sale,
exchange or redemption of shares will be recognized in the year of the sale,
exchange or redemption. New York State and City personal income taxes are
currently imposed on both long-term and short-term capital gains at the same
rates that apply to ordinary income. Dividends which are not treated as
exempt-interest dividends or as capital gain dividends for purposes of the New
York State or City personal income taxes will be taxable to such shareholders as
ordinary income and will be includable in the income of such shareholders
subject to New York State or City minimum taxes.
Interest on indebtedness incurred or continued by shareholders to
purchase or carry shares of the Fund will not be deductible for New York State
or City personal income tax purposes.
Shareholders of the Fund that are subject to the New York State
corporation franchise tax or the New York City general corporation tax will be
required to include exempt-interest dividends paid by the Fund in their "entire
net income" for purposes of such taxes and will be required to include their
shares of the Fund in their investment capital for purposes of such taxes.
Interest income or net capital gain of the Fund which is distributed to
the shareholders will generally not be taxable to the Fund for purposes of the
New York State corporation franchise tax or the New York City general
corporation tax.
The foregoing is a general, abbreviated summary of certain of the
provisions of the New York State Tax Law and the tax laws of New York City
presently in effect as they directly govern the taxation of shareholders of the
Fund. These provisions are subject to change by legislative or administrative
action, and any
B-22
<PAGE>
such change may be retroactive with respect to Fund transactions. Shareholders
are advised to consult with their own tax advisers for more detailed information
concerning New York State and New York City tax matters.
Massachusetts State and Local Tax Matters. The following discussion
assumes that Pioneer Massachusetts Double Tax-Free Fund will be qualified as a
regulated investment company under subchapter M of the Code and will be
qualified thereunder to pay exempt-interest dividends.
In the opinion of Hale and Dorr, counsel to Pioneer Massachusetts
Double Tax-Free Fund, under Massachusetts law, provided that Pioneer
Massachusetts Double Tax-Free Fund complies with certain notice requirements,
shareholders of Pioneer Massachusetts Double Tax-Free Fund that are individuals,
estates or trusts and are subject to the Massachusetts income tax will be
treated in the following manner for Massachusetts income tax purposes:
Distributions that qualify as "exempt-interest dividends" under the Code and are
attributable to interest received by the Fund on federally tax-exempt
obligations issued by Massachusetts or a political subdivision thereof or a
possession of the United States (including Puerto Rico, Guam and the U.S. Virgin
Islands) and distributions of the Fund attributable to interest received by the
Fund on direct obligations of the U.S. Government will not be subject to the
Massachusetts income tax; distributions properly designated by the Fund as
capital gain dividends under the Code and attributable to gain realized by the
Fund on the sale of certain obligations issued pursuant to Massachusetts
statutes that specifically exempt such gain from Massachusetts taxation will not
be subject to the Massachusetts income tax; distributions properly designated by
the Fund as capital gain dividends under the Code other than those described
above will be treated as long-term capital gain for Massachusetts income tax
purposes, regardless of the length of time Fund shares have been held; and
distributions, other than those described above, that are included in federal
gross income under the Code will be included in income subject to the
Massachusetts income tax. Additionally, in determining the Massachusetts excise
tax on shareholders that are corporations subject to Massachusetts taxation,
distributions from the Fund that are included in federal gross income under the
Code or that are excluded from federal gross income by virtue of Section 103(a)
of the Code will be included in a corporate shareholder's net income, and in the
case of intangible property corporations, shares of the Fund will be included in
net worth.
Massachusetts legislation enacted on December 9, 1994 (the "Act")
substantially changed the Massachusetts income tax treatment of capital gains
realized by persons subject to Massachusetts income taxation, effective for
taxable years beginning on or after January 1, 1996. Under the Act, long-term
capital gains from the sale of a capital asset are generally taxed on a sliding
scale at rates ranging from 5% to 0%, with the applicable tax rate declining as
the tax holding period of the asset (beginning on the
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later of January 1, 1995 or the date of actual acquisition) increases from more
than one year to more than six years. Massachusetts resident individuals, as
well as estates or personal trusts subject to Massachusetts income taxation, are
subject to this new tax structure with respect to redemptions, exchanges or
other dispositions of their shares of Pioneer Massachusetts Double Tax-Free Fund
in their taxable years beginning after 1995, assuming that they hold their
shares of Pioneer Massachusetts Double Tax-Free Fund as capital assets for
purposes of the Act. The Act does not address the Massachusetts tax treatment of
dividends paid by Pioneer Massachusetts Double Tax-Free Fund that are designated
and treated as long-term capital gains for federal income tax purposes, and it
is accordingly not clear what tax rate will apply to such dividends for
Massachusetts tax purposes for taxable years beginning after 1995.
Shareholders should consult their own tax advisers with respect to the
state, local and foreign tax consequences of investing in the Fund.
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
beneficial interest and to divide or combine the shares into a greater or lesser
number of shares without thereby changing the proportionate beneficial interest
in a Fund. The shares of the Trust are divided into three series. Each share
represents an equal proportionate interest in a Fund with each other share. The
Trust reserves the right to create and issue additional series of shares, in
which case, the shares of each series would participate equally in the earnings,
dividends and assets of the particular series, and would be entitled to vote
separately to approve investment advisory agreements or changes in investment
restrictions, but shareholders of all series would vote together in the election
and selection of Trustees and accountants. Shares of each series vote as a
single series on matters that affect all of the series in substantially the same
manner. As to matters affecting a single series, shares of such series will vote
separately.
In the unlikely event of liquidation of the Trust, each Fund's
shareholders are entitled to share pro rata, subject to the rights of creditors,
the proceeds of the sale of the assets held in the respective portfolio to which
the shares of the Fund relate minus the liabilities of the Trust attributable to
the respective series. The Trust currently has only one class of shares of each
series, but may establish other classes in the future upon such terms as the
Trustees may establish.
Shareholders are entitled to one vote for each share held and may vote
in the election of Trustees and on other matters submitted to meetings of
shareholders. Although Trustees are not
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elected annually by the shareholders, shareholders have under certain
circumstances the right to remove one or more Trustees. No material amendment
may be made to the Trust's Declaration of Trust without the affirmative vote of
a majority of its shares. Shares have no pre-emptive or conversion rights.
Shares are fully paid and non-assessable, 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 November 6, 1992, a copy of which is on file
with the office of the Secretary of The Commonwealth of Massachusetts.
Theoretically, shareholders of a Massachusetts business trust may, under certain
circumstances, be held personally liable for the obligations of the trust.
However, the Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Trust and requires 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 of any shareholders held
personally liable for any obligations 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 a Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability
would be limited to circumstances in which the 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. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a
convenient method of receiving fixed payments at regular intervals from shares
of a Fund deposited by the applicant under this
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Plan. The applicant must deposit or purchase for deposit with PSC shares of a
Fund having a total value of not less than $10,000. Periodic checks of $50 or
more will be sent to the applicant, or any person designated by him, monthly or
quarterly.
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. To the extent that such redemptions
for periodic withdrawals exceed dividend income reinvested in the SWP account,
such redemptions will reduce and may ultimately exhaust the number of shares
deposited in the SWP account. In addition, the amounts received by a shareholder
cannot be considered as an actual yield or income on his or her investment
because part of such payments may be a return of his or her capital. Withdrawals
are taxable transactions.
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.
14. LETTER OF INTENTION
Purchases of $100,000 or over (excluding any reinvestments of dividends
and capital gains distributions) made within a 13-month period pursuant to a
Letter of Intention provided to PFD will qualify for a reduced sales charge.
Such reduced sales charge will be the charge that would be applicable to the
purchase of all shares purchased during such 13-month period pursuant to a
Letter of Intention had such shares been purchased all at once. For example, a
person who signs a Letter of Intention providing for a total investment in a
Fund's shares of $100,000 over a 13-month period would be charged at the 2.50%
sales charge rate with respect to all purchases during that period. Should the
amount actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all shares of record held in a Fund and other Pioneer Funds except
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 shares to be
purchased under the Letter of Intention.
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The Letter of Intention authorizes PSC to escrow shares having a
purchase price equal to 5% of the stated investment in the Letter of Intention.
A Letter of Intention is not a binding obligation upon the investor to purchase,
or the Fund to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention set forth in detail in the Account
Application carefully before signing.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each Fund is determined as of the
close of regular trading on the New York Stock Exchange (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 SAI, 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. The net asset value per share of each Fund is
also determined on any other day in which the level of trading in its portfolio
is sufficiently high so that the current net asset value per share might be
materially affected by changes in the value of its portfolio securities. On any
day in which no purchase orders for the shares of a Fund become effective and no
shares are tendered for redemption, the net asset value per share is not
determined.
The net asset value per share of a Fund is computed by taking the
amount of the value of all of its assets, less its liabilities, and dividing it
by the number of outstanding shares. The Board of Trustees has directed that the
fair market value of the Funds' assets should be determined as follows.
Ordinarily, investments in debt securities are valued on the basis of
information furnished by a pricing service which utilizes primarily a matrix
system (which reflects such factors as security prices, yields, maturities and
ratings), supplemented by dealer and exchange quotations, to recommend
valuations for normal institutional-sized trading units of debt securities. In
addition, the Board has instructed advisory personnel not to rely exclusively on
this pricing service if the fair market value of certain securities may be more
accurately determined on the basis of information available from other sources.
Temporary cash investments are valued at amortized cost, which approximates
market value.
16. INVESTMENT RESULTS
Each Fund's yield quotations and average annual total return quotations
as they may appear in the Prospectus, this SAI or in advertising are calculated
by standard methods prescribed by the Securities and Exchange Commission.
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Standardized Yield Quotations
A Fund's yield is computed by dividing the Fund's net investment income
per share during a base period of 30 days, or one month, by the maximum offering
price per share of the Fund on the last day of such base period in accordance
with the following formula:
YIELD = 2[ (a-b +1 ) 6 -1]
cd
Where: a = interest earned during the period
b = net expenses accrued for the period
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends
d = the maximum offering price per share on the last day
of the period
For purposes of calculating interest earned on debt obligations as provided in
item "a" above:
(i) The yield to maturity of each obligation held by a Fund is
computed based on the market value of the obligation (including actual accrued
interest, if any) at the close of business each day during the 30-day base
period, or, with respect to obligations purchased during the month, the purchase
price (plus actual accrued interest, if any) on the settlement date, and with
respect to obligations sold during the month, the sale price (plus actual
accrued interest, if any) between the trade and settlement dates;
(ii) The yield to maturity of each obligation is then divided by 360
and the resulting quotient is multiplied by the market value of the obligation
(including actual accrued interest, if any) to determine the interest income on
the obligation for each day. The yield to maturity calculation has been made on
each obligation during the 30 day base period;
(iii) Interest earned on all debt obligations during the 30-day or one
month period is then totaled;
(iv) The maturity of an obligation with a call provision(s) is the next
call date on which the obligation reasonably may be expected to be called or, if
none, the maturity date;
(v) Obligations with sinking fund call provisions may be regarded as
maturing as to that portion to be retired on each sinking fund call date or
during a twelve-month period; and
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(vi) In the case of a tax-exempt obligation issued without original
issue discount and having a current market discount, the coupon rate of interest
of the obligation is used in lieu of yield to maturity to determine interest
income earned on the obligation. In the case of a tax-exempt obligation with
original issue discount where the discount based on the current market value of
the obligation exceeds the then remaining portion of original issue discount
(i.e. market discount), the yield to maturity used to determine interest income
earned on the obligation is the imputed rate based on the original issue
discount calculation. In the case of a tax-exempt obligation with original issue
discount where the discount based on the current market value of the obligation
is less than the then remaining portion of the original issue discount (market
premium), the yield to maturity used to determine interest income earned on the
obligation is based on the market value of the obligation.
The Funds' yields for the 30-day period ending September 30, 1995 were
as follows:
Pioneer California Double Tax-Free Fund 4.97%
Pioneer New York Triple Tax-Free Fund 4.68%
Pioneer Massachusetts Double Tax-Free Fund 4.80%
During this period, PMC temporarily agreed to reduce its management fee and made
other arrangements to limit certain other expenses of the Funds. Had PMC not
done so the yields for the same period would have been:
Pioneer California Double Tax-Free Fund 3.19%
Pioneer New York Triple Tax-Free Fund 2.28%
Pioneer Massachusetts Double Tax-Free Fund 2.52%
Taxable Equivalent Yield
The Funds may also from time to time advertise their taxable equivalent
yield which is determined by dividing that portion of a Fund's yield (calculated
as described above) that is tax exempt by one minus the combined federal, state
and, if applicable, city tax rates, adjusted to take into account the
deductibility of state and, if applicable, city income taxes on an investor's
federal tax returns and adding the product to that portion, if any, of the
Fund's yield that is not tax exempt.
The Funds' taxable equivalent yields for the 30-day period ending
September 30, 1995 were:
Pioneer California Double Tax-Free Fund
(assuming a combined federal and California
State personal income tax rate of 46.24%): 9.24%
Pioneer New York Triple Tax-Free Fund
(assuming a combined federal and New York
State personal income tax rate of 44.19%): 8.39%
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(assuming a combined federal, New York State
and New York City personal income tax rate
of 46.88%): 8.81%
Pioneer Massachusetts Double Tax-Free Fund
(assuming a combined federal and Massachusetts
State personal income tax rate of 46.85%): 9.03%
Had PMC not agreed temporarily to reduce its management fee and make other
arrangements to limit certain other expenses of the Funds, the yields on which
these taxable equivalent yields are computed, and thus the taxable equivalent
yields themselves, would have been:
Pioneer California Double Tax-Free Fund
(assuming a combined federal and California
State personal income tax rate of 46.24%): 5.94%
Pioneer New York Triple Tax-Free Fund
(assuming a combined federal and New York
State personal income tax rate of 44.19%): 4.09%
(assuming a combined federal, New York State
and New York City personal income tax rate
of 46.88%): 4.24%
Pioneer Massachusetts Double Tax-Free Fund
(assuming a combined federal and Massachusetts
State personal income tax rate of 46.85%): 4.75%
See "Investment Results-Standardized Yield Quotations," above.
For a description of how to compare yields on municipal bonds and
taxable securities and of certain other assumptions made in computing taxable
equivalent yields, see the Taxable Equivalent Formula set forth in the Appendix
to the Funds' prospectus.
Standardized Average Annual Total Return Quotations
Average annual total return quotations are computed by finding the
average annual compounded rates of return that would cause a hypothetical
investment made on the first day of a designated period to equal the ending
redeemable value of such hypothetical investment on the last day of the
designated period in accordance with the following formula:
P(1+T) n = ERV
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Where: P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
The computation above assumes that all dividends and distributions made by a
Fund are reinvested at net asset value during the designated period. The average
annual total return quotation is determined to the nearest 1/100 of 1%.
Other Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in
reports to shareholders, the past performance of each of the Funds may be
illustrated and/or compared with that of other mutual funds with similar
investment objectives, and to other relevant indices. For example, a Fund may
compare its yield and total return to the Shearson Lehman Hutton Municipal Bond
Index, or other comparable indices or investment vehicles. In addition, the
performance of a Fund may be compared to alternative investment or savings
vehicles (such as individual securities, bank deposits, or certificates of
deposit) and/or indices or indicators of economic activity, e.g., inflation,
interest rates, or the Consumer Price Index, performance rankings and listings
reported in newspapers or national business and financial publications, such as
Barron's, Business Week, Consumer Digest, Consumer Reports, Financial World,
Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, Wall Street Journal and Worth may also be cited (if the Fund is
listed in any such publication) or used for comparison, as well as performance
listings and rankings from various other sources including Bloomberg Financial
Systems, CDA/Wiesenberger Investment Companies Service, Donoghue's Mutual Fund
Almanac, Johnson's Charts, Investment Company Data, Inc., Kanon Bloch Carre &
Company, Lipper Analytical Services, Inc., Micropal, Inc., Schabacker Investment
Management and Towers Data Systems.
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 the shareholders of the Funds.
One of the primary methods used to measure a Fund's performance is
"total return." "Total return" will normally represent the percentage change in
value of an account, or of a hypothetical investment in a Fund, over any period
up to the lifetime of the Fund. Unless otherwise indicated, total return
calculations will
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assume the deduction of the maximum sales charge of 3.50% and 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 calculations that do not reflect the reduction of sales charges
will be higher than those that do reflect such charges.
Each Fund's total returns for the one year and life-of-fund periods
ending September 30, 1995 are as follows:
Since Inception on
One Year February 9, 1993
Pioneer California Double
Tax-Free Fund 7.61% 2.50%
Pioneer New York Triple
Tax-Free Fund 7.12% 3.08%
Pioneer Massachusetts Double
Tax-Free Fund 8.46% 3.45%
During these periods, PMC temporarily agreed to reduce its management
fee and made other arrangements to limit certain other expenses of the Funds.
Had PMC not done so, the total returns for the period would have been lower.
Total return percentages for periods longer than one year will usually
be accompanied by total return percentages for each year within the period
and/or by the average annual compounded total return for the period. The income
and capital components of a given return may be separated and portrayed in a
variety of ways in order to illustrate their relative significance. Performance
may also be portrayed in terms of cash or investment values, without
percentages. Past performance cannot guarantee any particular future result.
Other data that may be advertised or published about the Fund include
the average portfolio quality, the average portfolio maturity, and the average
portfolio duration.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts are
taken into consideration. For any account fees that vary with the size of the
account, the account fee used for purposes of the above computation is assumed
to be the fee that would be charged to the Fund's mean account size.
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Automated Information Line (FactFoneSM)
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
(degree) net asset value prices for all Pioneer mutual funds;
(degree) annualized 30-day yields on Pioneer's fixed-income funds;
(degree) annualized 7-day yields and 7-day effective (compound) yields
for Pioneer's money market funds ; and
(degree) dividends and capital gains distributions on all Pioneer
mutual funds.
Yields are calculated in accordance with Securities and Exchange
Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"),
shareholders may access their account balance and last three transactions and
may order a duplicate statement.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all 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 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.
17. FINANCIAL STATEMENTS
The Funds' financial statements for the fiscal year ended September 30,
1995 attached hereto have been included in reliance upon the report of Arthur
Andersen LLP, independent public accountants, as experts in accounting and
auditing. The Funds' 1995 Annual Report to shareholders is incorporated by
reference into this Statement of Additional Information.
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APPENDIX A
Description of Municipal Securities
Municipal Bonds
Municipal Bonds include debt obligations issued to obtain funds for
various public purposes, including the construction of a wide range of public
facilities such as bridges, highways, housing, mass transportation, schools,
streets and water and sewer works. Other public purposes for which Municipal
Bonds may be issued include refunding outstanding obligations, obtaining funds
for general operating expenses, and obtaining funds to loan to other public
institutions.
The two principal classifications of Municipal Bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment for
principal and interest. The payment of such bonds may be dependent upon an
appropriation by the issuer's legislative body. The characteristics and
enforcement of general obligation bonds vary according to the law applicable to
the particular issuer. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise or other specific revenue source. There are, of
course, variations in the security of Municipal Bonds, both within a particular
classification and between classifications, depending on numerous factors.
The yields on Municipal Bonds are dependent on a variety of factors,
including general money market conditions, supply and demand and general
conditions of the Municipal Bond market, size of a particular offering, the
maturity of the obligation and rating of the issue. The ratings of Moody's
Investor Service, Inc. and Standard & Poor's corporation represent their
opinions as to the quality of various Municipal Bonds. It should be emphasized,
however, that ratings are not absolute standards of quality. Consequently,
Municipal Bonds with the same maturity, coupon and rating may have different
yields while Bonds of the same maturity and coupon with different ratings may
have the same yield.
Municipal (Tax-Exempt) Notes
Municipal (Tax-Exempt) Notes generally are used to provide for
short-term capital needs and generally have maturities of one year or less.
These Notes include:
1. Project Notes. Project Notes are backed by an agreement between a
local issuing agency and the Federal Department of Housing and Urban Development
("HUD") and carry a United States Government guarantee. These notes provide
financing for a wide range
-1A-
<PAGE>
of financial assistance programs for housing, redevelopment, and related needs
(such as low-income housing programs and urban renewal programs.) Although they
are the primary obligations of the local public housing agencies or local urban
renewal agencies, the HUD agreement provides for the additional security of the
full faith and credit of the United States Government. Payment by the United
States pursuant to its full faith and credit obligation does not impair the
tax-exempt character of the income from Project Notes.
2. Tax Anticipation Notes. Tax Anticipation Notes are issued to finance
working capital needs of municipalities. Generally, they are issued in
anticipation of various tax revenues, such as income, sales, use and business
taxes, and are specifically payable from these particular future tax revenues.
3. Revenue Anticipation Notes. Revenue Anticipation Notes are issued in
expectation of receipt of specific types of revenue, other than taxes, such as
federal revenues available under Federal Revenue Sharing Programs.
4. Bond Anticipation Notes. Bond Anticipation Notes are issued to
provide interim financing until long-term bond financing can be arranged. In
most cases, the long-term bonds then provide the funds for the repayment of the
Notes.
5. Construction Loan Notes. Construction Loan Notes are sold to provide
construction financing. Permanent financing, the proceeds of which are applied
to the payment of Construction Loan Notes, is sometimes provided by a commitment
by the Government National Mortgage Association to purchase the loan,
accompanied by a commitment by the Federal Housing Administration to insure
mortgage advances thereunder. In other instances, permanent financing is
provided by the commitments of banks to purchase the loan.
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APPENDIX B
Description of Municipal Bond Ratings1
Moody's Investors Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are produced by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such 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 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.
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1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this SAI for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
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Standards & Poor's Ratings Group3
AAA: Bonds rated AAA are highest grade obligations. This rating
indicates an extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity
to pay principal and interest is very strong, and in the majority of instances
they differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest,
although they are more susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
3 Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.
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APPENDIX C
Description of Certain Other Investments
U.S. Government Obligations - are issued by the Treasury and include
bills, certificates of indebtedness, notes, and bonds. Agencies and
instrumentalities of the U.S. Government are established under the authority of
an act of Congress and include, but are not limited to, the Government National
Mortgage Association, the Tennessee Valley Authority, the Bank for cooperatives,
the Farmers Home Administration, Federal Home Loan Banks, Federal Intermediate
Credit Banks, Federal Land Banks, and the Federal National Mortgage Association.
Certificates of Deposit - are certificates issued against funds
deposited in a commercial bank, are for a definite period of time, earn a
specified rate of return, and are normally negotiable.
Bankers' Acceptances - are short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.
Repurchase Agreements - are agreements by which a person purchases a
security and simultaneously commits to resell that security to the seller (a
member bank of the Federal Reserve System or recognized securities dealer) at an
agreed upon price on an agreed upon date within a number of days (usually not
more than seven) from the date of purchase. The resale price reflects the
purchase price plus an agreed upon market rate of interest which is unrelated to
the coupon rate or maturity of the purchased security. A repurchase agreement
involves the obligation of the seller to pay the agreed upon price, which
obligation is in effect secured by the value of the underlying security, usually
U.S. Government or Government agency issues. Under the Investment Company Act of
1940, repurchase agreements are considered to be loans by the Fund. The Fund's
risk is limited to the ability of the seller to pay the agreed upon amount on
the delivery date. In the opinion of the Fund's adviser this risk is not
material; if the seller defaults, the underlying security constitutes collateral
for the seller's obligation to pay although the Fund may incur certain costs in
liquidating this collateral and in certain cases may not be permitted to
liquidate this collateral. The fixed income research department of PMC maintains
an approved list of repurchase agreement sellers meeting the Funds'
creditworthiness standards and the Trust's Board of Trustees reviews this list
periodically.
-1C-
<PAGE>
Pioneer CA Double Tax-Free Fund
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
2/19/93 $10,000 $11.65 3.50% 858.369 $11.24 $9,650
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/93 $9,923 $0 $478 $10,401
12/31/94 $8,404 $0 $894 $9,298
12/31/95 $9,691 $0 $1,587 $11,278
<PAGE>
Pioneer Mass. Double Tax-Free Fund
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
2/19/93 $10,000 $11.52 3.50% 868.056 $11.12 $9,650
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/93 $10,026 $0 $471 $10,497
12/31/94 $8,681 $0 $905 $9,586
12/31/95 $9,870 $0 $1,582 $11,452
<PAGE>
Pioneer N.Y. Triple Tax-Free Fund
<TABLE>
<CAPTION>
Date Initial Investment Offering Price Sales Charge Shares Purchased Net Asset Value Initial Net Asset
Included Per Share Value
<S> <C> <C> <C> <C> <C> <C>
2/19/93 $10,000 $11.59 3.50% 862.813 $11.18 $9,650
</TABLE>
Dividends and Capital Gains Reinvested
Value of Shares
Date From Investment From Cap. Gains From Dividends Total Value
Reinvested Reinvested
12/31/93 $9,957 $0 $469 $10,426
12/31/94 $8,654 $0 $888 $9,542
12/31/95 $9,750 $0 $1,546 $11,296
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The following securities indices are well-known, unmanaged measures of market
performance. Advertisements and sales literature for the Fund may refer to these
indices or may present comparisons between the performance of the Fund and one
or more of the indices. Other indices may be used, if appropriate. The indices
are not available for direct investment. The data presented is not meant to be
indicative of the performance of the Fund, reflects past performance and does
not guarantee future results.
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
U.S. SMALL STOCK INDEX
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
U.S. INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks in
the S&P 500 Index according to price-to-book ratios. The Growth Index contains
stocks with higher price-to-book ratios, and the Value Index contains stocks
with lower price-to-book ratios. Both indexes are market capitalization
weighted.
LONG-TERM U.S. GOVERNMENT BONDS
The total returns on long-term government bonds from 1977 to 1991 are
constructed with data from The Wall Street Journal. Over 1926-1976, data are
obtained from the Government bond file at the Center for Research in Security
Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a
one-bond portfolio with a term of approximately 20 years and a reasonably
current coupon was used, and whose returns did not reflect potential tax
benefits, impaired negotiability, or special redemption or call privileges.
Where callable bonds had to be used, the term of the bond was assumed to be a
simple average of the maturity and first call dates
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
minus the current date. The bond was "held" for the calendar year and returns
were computed. Total returns for 1977-1991 are calculated as the change in the
flat price or and-interest price.
INTERMEDIATE-TERM U.S. GOVERNMENT BONDS
Total returns of the intermediate-term government bonds for 1977-1991 are
calculated from The Wall Street Journal prices, using the change in flat price.
Returns from 1934-1986 are obtained from the CRSP Government Bond File.
Each year, one-bond portfolios are formed, the bond chosen is the shortest
noncallable bond with a maturity not less than 5 years, and this bond is "held"
for the calendar year. Monthly returns are computed. (Bonds with impaired
negotiability or special redemption privileges are omitted, as are partially or
fully tax-exempt bonds starting with 1943.) From 1934-1942, almost all bonds
with maturities near 5 years were partially or full tax-exempt and were selected
using the rules described above. Personal tax rates were generally low in that
period, so that yields on tax-exempt bonds were similar to yields on taxable
bonds. From 1926-1933, there are few bonds suitable for construction of a series
with a 5-year maturity. For this period, five year bond yield estimates are
used.
MSCI
Morgan Stanley Capital International Indices, developed by the Capital
International S.A., are based on share prices of some 1470 companies listed on
the stock exchanges around the world.
Countries in the MSCI EAFE Portfolio are:
Australia; Austria; Belgium; Denmark; Finland; France; Germany; Hong Kong;
Italy; Japan; Netherlands; N. Zealand; Norway; Singapore/Malaysia; Spain;
Sweden; Switzerland; United Kingdom.
6 MONTH CDs
Data sources include the Federal Reserve Bulletin and The Wall Street Journal.
LONG-TERM U.S. CORPORATE BONDS
For 1969-1991, corporate bond total returns are represented by the Salomon
Brothers Long-Term High-Grade Corporate Bond Index. Since most large corporate
bond transactions take place over the counter, a major dealer is the natural
source of these data. The index includes nearly all Aaa- and Aa-rated bonds. If
a bond is downgraded during a particular month, its return for the month is
included in the index before removing the bond from future portfolios.
Over 1926-1968 the total returns were calculated by summing the capital
appreciation returns and the income returns. For the period 1946-1968, Ibbotson
and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers'
monthly yield data with a methodology similar to that used by Salomon for
1969-1991. Capital appreciation returns were calculated from yields assuming (at
the beginning of each monthly holding period) a 20-year maturity, a bond price
equal to par, and a coupon equal to the beginning-of-period yield. For the
period 1926-1945, the Standard and Poor's monthly High-Grade Corporate Composite
yield data were used, assuming a 4 percent coupon and a 20-year maturity. The
conventional present-value formula for bond price for the beginning and
end-of-month prices was used. (This formula is presented in Ross, Stephen A.,
and Randolph W. Westerfield, Corporate Finance, Times
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income
return was assumed to be one-twelfth the coupon.
U.S. (30 DAY) TREASURY BILLS
For the U.S. Treasury bill index, data from The Wall Street Journal are used for
1977-1991; the CRSP U.S. Government Bond File is the source until 1976. Each
month a one-bill portfolio containing the shortest-term bill having not less
than one month to maturity is constructed. (The bill's original term to maturity
is not relevant.) To measure holding period returns for the one-bill portfolio,
the bill is priced as of the last trading day of the previous month-end and as
of the last trading day of the current month.
NAREIT-EQUITY INDEX
All of the data is based upon the last closing price of the month for all
tax-qualified REITs listed on the NYSE, AMSE and the NASDAQ. The data is
market-value-weighted. Prior to 1987 REITs were added to the index the January
following their listing. Since 1987 Newly formed or listed REITs are added to
the total shares outstanding figure in the month that the shares are issued.
Only common shares issued by the REIT are included in the index. The total
return calculation is based upon the weighing at the beginning of the period.
Only those REITs listed for the entire period are used in the total return
calculation. Dividends are included in the month based upon their payment date.
There is no smoothing of income. Liquidating dividends, whether full or partial,
are treated as income.
RUSSELL 2000 SMALL STOCK INDEX
Index of the 2,000 smallest stocks in the Russell 3000 Index (TM); the smallest
company has a market capitalization of approximately $13 million.
The Russell 30000 is comprised of the 3,000 largest US companies as determined
by market capitalization representing approximately 98% of the US equity market.
The largest company in the index has a market capitalization of $67 billion. The
Russell Indexes (TM) are reconstituted annually as of June 1st, based on May 31
market capitalization rankings.
WILSHIRE REAL ESTATE SECURITIES INDEX
The Wilshire Real Estate Securities Index is a market capitalization-weighted
index which measures the performance of more than 85 securities.
The index contains performance data on five major categories of property;
office, retail, industrial, apartment and miscellaneous. Additionally, the Index
has real estate portfolio encumbered by 16% third party mortgages. The companies
in the WRESEC are 79% equity and hybrid REIT's and 21% real estate operating
companies. The capitalization is 47% NYSE, 33% AMEX and 20% OTC."
STANDARD & POOR'S MIDCAP 400 INDEX
The Standard and Poor's MidCap 400 Index is a market-value-weighted index. The
performance data for the MidCap 400 Index were calculated by taking the stocks
presently in the MidCap 400 Index and tracking them backwards in time as long as
there were prices reported. No attempt was made to determine what stocks "might
have been" in the MidCap 400 Index five or ten years ago had it existed.
Dividends are reinvested on a monthly basis prior to June 30, 1991, and are
reinvested daily thereafter.
<PAGE>
COMPARATIVE PERFORMANCE
INDEX DESCRIPTIONS
The S&P MidCap 400 Index and the S&P 500 together represent approximately 85% of
the total market capitalization of stocks traded in the United States.
BANK SAVINGS ACCOUNT
Data sources include the U.S. League of Savings Institutions Sourcebook; average
annual yield on savings deposits in FSLIC [FDIC] insured savings institutions
for the years 1963-1987 and The Wall Street Journal for the years 1988-1994.
Source: Ibbotson Associates
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S&P 500 Dow U.S. Small S&P/ S&P/
Jones Stock U.S. BARRA BARRA
Industrials Index Inflation Growth Value
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
Dec 1995 37.43 36.84 34.46 2.74 38.13 36.99
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1925 N/A N/A N/A N/A N/A N/A
Dec 1926 7.77 5.38 N/A N/A 7.37 3.27
Dec 1927 8.93 4.52 N/A N/A 7.44 3.12
Dec 1928 0.1 0.92 N/A N/A 2.84 3.56
Dec 1929 3.42 6.01 N/A N/A 3.27 4.75
Dec 1930 4.66 6.72 N/A N/A 7.98 2.41
Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07
Dec 1932 16.84 8.81 N/A N/A 10.82 0.96
Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30
Dec 1934 10.03 9.00 N/A N/A 13.84 0.16
Dec 1935 4.98 7.01 N/A N/A 9.61 0.17
Dec 1936 7.52 3.06 N/A N/A 6.74 0.18
Dec 1937 0.23 1.56 N/A N/A 2.75 0.31
Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02
Dec 1939 5.94 4.52 N/A N/A 3.97 0.02
Dec 1940 6.09 2.96 N/A N/A 3.39 0.00
Dec 1941 0.93 0.50 N/A N/A 2.73 0.06
Dec 1942 3.22 1.94 N/A N/A 2.60 0.27
Dec 1943 2.08 2.81 N/A N/A 2.83 0.35
Dec 1944 2.81 1.80 N/A N/A 4.73 0.33
Dec 1945 10.73 2.22 N/A N/A 4.08 0.33
Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35
Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50
Dec 1948 3.40 1.85 N/A N/A 4.14 0.81
Dec 1949 6.45 2.32 N/A N/A 3.31 1.10
Dec 1950 0.06 0.70 N/A N/A 2.12 1.20
Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49
Dec 1952 1.16 1.63 N/A N/A 3.52 1.66
Dec 1953 3.64 3.23 N/A N/A 3.41 1.82
Dec 1954 7.19 2.68 N/A N/A 5.39 0.86
Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57
Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46
Dec 1957 7.46 7.84 N/A N/A 8.71 3.14
Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54
Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95
Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
Dec 1961 0.97 1.85 N/A N/A 4.82 2.13
Dec 1962 6.89 5.56 N/A N/A 7.95 2.73
Dec 1963 1.21 1.64 N/A N/A 2.19 3.12
Dec 1964 3.51 4.04 N/A 4.18 4.77 3.54
Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
Intermediate MSCI Long-
Long-Term -Term U.S. EAFE 6 Term U.S. U.S.
U.S. Gov't Government - Net of MONTH Corporate (30 Day)
Bonds Bonds Taxes CDs Bonds T- Bill
Dec 1966 3.65 4.69 N/A 5.75 0.20 4.76
Dec 1967 -9.18 1.01 N/A 5.48 -4.95 4.21
Dec 1968 -0.26 4.54 N/A 6.44 2.57 5.21
Dec 1969 -5.07 -0.74 N/A 8.71 -8.09 6.58
Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52
Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39
Dec 1972 5.69 5.16 36.35 5.38 7.26 3.84
Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93
Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00
Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80
Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08
Dec 1977 -0.69 1.41 18.06 6.12 1.71 5.12
Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18
Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38
Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24
Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71
Dec 1982 40.36 29.1 -1.86 12.18 42.56 10.54
Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80
Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85
Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72
Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16
Dec 1987 -2.71 2.90 24.63 6.58 -0.27 5.47
Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35
Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37
Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81
Dec 1991 19.3 15.46 12.13 4.95 19.89 5.60
Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51
Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90
Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90
Dec 1995 31.67 16.8 11.21 5.21 26.39 5.60
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Dec 1925 N/A N/A N/A N/A N/A
Dec 1926 N/A N/A N/A N/A N/A
Dec 1927 N/A N/A N/A N/A N/A
Dec 1928 N/A N/A N/A N/A N/A
Dec 1929 N/A N/A N/A N/A N/A
Dec 1930 N/A N/A N/A N/A 5.30
Dec 1931 N/A N/A N/A N/A 5.10
Dec 1932 N/A N/A N/A N/A 4.10
Dec 1933 N/A N/A N/A N/A 3.40
Dec 1934 N/A N/A N/A N/A 3.50
Dec 1935 N/A N/A N/A N/A 3.10
Dec 1936 N/A N/A N/A N/A 3.20
Dec 1937 N/A N/A N/A N/A 3.50
Dec 1938 N/A N/A N/A N/A 3.50
Dec 1939 N/A N/A N/A N/A 3.40
Dec 1940 N/A N/A N/A N/A 3.30
Dec 1941 N/A N/A N/A N/A 3.10
Dec 1942 N/A N/A N/A N/A 3.00
Dec 1943 N/A N/A N/A N/A 2.90
Dec 1944 N/A N/A N/A N/A 2.80
Dec 1945 N/A N/A N/A N/A 2.50
Dec 1946 N/A N/A N/A N/A 2.20
Dec 1947 N/A N/A N/A N/A 2.30
Dec 1948 N/A N/A N/A N/A 2.30
Dec 1949 N/A N/A N/A N/A 2.40
Dec 1950 N/A N/A N/A N/A 2.50
Dec 1951 N/A N/A N/A N/A 2.60
Dec 1952 N/A N/A N/A N/A 2.70
Dec 1953 N/A N/A N/A N/A 2.80
Dec 1954 N/A N/A N/A N/A 2.90
Dec 1955 N/A N/A N/A N/A 2.90
Dec 1956 N/A N/A N/A N/A 3.00
Dec 1957 N/A N/A N/A N/A 3.30
Dec 1958 N/A N/A N/A N/A 3.38
Dec 1959 N/A N/A N/A N/A 3.53
Dec 1960 N/A N/A N/A N/A 3.86
Dec 1961 N/A N/A N/A N/A 3.90
Dec 1962 N/A N/A N/A N/A 4.08
Dec 1963 N/A N/A N/A N/A 4.17
Dec 1964 N/A N/A N/A N/A 4.19
Dec 1965 N/A N/A N/A N/A 4.23
Dec 1966 N/A N/A N/A N/A 4.45
Dec 1967 N/A N/A N/A N/A 4.67
Dec 1968 N/A N/A N/A N/A 4.68
Dec 1969 N/A N/A N/A N/A 4.80
<PAGE>
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT
S & P Bank
NAREIT - Russell Wilshire Midcap Savings
Equity 2000 Real Estate 400 Account
Bank Savings Account
Dec 1970 N/A N/A N/A N/A 5.14
Dec 1971 N/A N/A N/A N/A 5.30
Dec 1972 8.01 N/A N/A N/A 5.37
Dec 1973 -15.52 N/A N/A N/A 5.51
Dec 1974 -21.40 N/A N/A N/A 5.96
Dec 1975 19.30 N/A N/A N/A 6.21
Dec 1976 47.59 N/A N/A N/A 6.23
Dec 1977 22.42 N/A N/A N/A 6.39
Dec 1978 10.34 N/A 13.04 N/A 6.56
Dec 1979 35.86 43.09 70.81 N/A 7.29
Dec 1980 24.37 38.58 22.08 N/A 8.78
Dec 1981 6.00 2.03 7.18 N/A 10.71
Dec 1982 21.60 24.95 24.47 22.68 11.19
Dec 1983 30.64 29.13 27.61 26.10 9.71
Dec 1984 20.93 -7.30 20.64 1.18 9.92
Dec 1985 19.10 31.05 22.20 35.58 9.02
Dec 1986 19.16 5.68 20.30 16.21 7.84
Dec 1987 -3.64 -8.77 -7.86 -2.03 6.92
Dec 1988 13.49 24.89 24.18 20.87 7.20
Dec 1989 8.84 16.24 2.37 35.54 7.91
Dec 1990 -15.35 -19.51 -33.46 -5.12 7.80
Dec 1991 35.7 46.05 20.03 50.1 4.61
Dec 1992 14.59 18.41 7.36 11.91 2.89
Dec 1993 19.65 18.91 15.24 13.96 2.73
Dec 1994 3.17 -1.82 1.64 -3.57 4.96
Dec 1995 15.27 28.44 13.65 30.94 5.24
Source: Ibbotson Associates
<PAGE>
APPENDIX D
Other Pioneer Information
The Pioneer group of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest, most respected and
successful money managers in the United States.
As of December 31, 1995, PMC employed a professional investment staff
of 44, with a combined average of 15 years' experience in the financial services
industry.
At December 31, 1995, there were 378 non-retirement accounts and 0
retirement accounts in the Trust. Total assets for all Pioneer Funds at December
31, 1995 were $12,764,708,124 representing 637,060 non-retirement accounts and
345,309 retirement accounts.
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<PAGE>
Pioneer Tax-Free State Series Trust
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) The financial statements of the Registrant are incorporated by
reference from the 1995 Annual Report to Shareholders which is
incorporated by reference into Part B, the Statement of
Additional Information. The 1995 Annual Report to Shareholders is
attached hereto as Exhibit 12.
1. Declaration of Trust.*
1.1 Certificate of Amendment.*
2. By-Laws.*
3. None.
4. None.
5. Management Contract between the Registrant and Pioneering
Management Corporation.*
6.1. Underwriting Agreement between the Registrant and Pioneer
Funds Distributor, Inc.*
6.2. Form of Dealer Sales Agreement.*
7. None.
8. Custodian Agreements between Brown Brothers Harriman & Co.
and the Pioneer California Double Tax-Free Fund, Pioneer New
York Triple Tax-Free Fund and Pioneer Massachusetts Double
Tax-Free Fund.*
9. Investment Company Service Agreement between the Registrant
and Pioneering Services Corporation.*
10.1 Opinion and Consent of Counsel (Hale and Dorr).*
10.2 Consent of Counsel (Orrick, Herrington & Sutcliffe).*
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<PAGE>
10.3 Consent of Counsel (Hale and Dorr).*
11. Consent of Authur Andersen LLP.*
12. 1995 Annual Report.*
13. Share Purchase Agreement.*
14. None.
15. Distribution Plan.*
16. None
17. Financial Data Schedule.*
18. None.
19. Powers of Attorney.*
- --------------
* Filed electronically herewith.
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 Funds
Distributor, Inc. ("PFD"), Pioneer Capital Corporation ("PCC"), 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, Pioneer Fonds Marketing GmbH
("GmbH"), a German 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"). Pioneer Fund, Pioneer II,
Pioneer Three, Pioneer America Income Trust, Pioneer Bond Fund, Pioneer
Intermediate Tax-Free Fund, Pioneer Growth Trust, Pioneer Europe Fund, Pioneer
International Growth Fund, Pioneer Short-Term Income Trust, Pioneer Money Market
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, Pioneer
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<PAGE>
Emerging Markets Fund, Pioneer Real Estate Shares and Pioneer Small Company Fund
(each of the foregoing, a Delaware business trust) are all parties to management
contracts 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 mutual funds; 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 Member of Supervisory Board of First
Polish and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities
At December 31, 1995 there were approximately 164, 129 and 85 holders
of the shares of beneficial interest of Pioneer California Double Tax-Free Fund,
Pioneer New York Triple Tax-Free Fund and Pioneer Massachusetts Double Tax-Free
Fund, respectively.
Item 27. Indemnification.
Except for the Declaration of Trust dated November 6, 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 Amended
and Restated 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.
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), may be available to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its
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<PAGE>
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
All of the information required by this item is set forth in the Form
ADV, as amended, of 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 6, Business Background, of each Schedule D.
Item 29. Principal Underwriter.
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Name and
Principal Business Positions and Offices Positions and Offices
Address* with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President and Trustee
Steven M. Graziano Senior Vice President None
Stephen W. Long Senior Vice President None
John C. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Rice Vice President None
Gail A. Smyth Vice President None
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<PAGE>
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Steven R. Berke Assistant Vice None
President
Mary Sue Hoban Assistant Vice None
President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
* The principal business address of each is 60 State Street, Boston,
Massachusetts 02109.
(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 not a party to any management-related service
contract, except as described in the Prospectus and Statement of Additional
Information.
Item 32. Undertaking.
The Registrant hereby undertakes to deliver or cause to be delivered
with the Prospectus, to each person to whom the Prospectus is sent or given, a
copy of the Registrant's report to shareholders furnished pursuant to and
meeting the requirements of Rule 30d-1 from which the specified information is
incorporated by reference, unless such person currently holds securities of the
Registrant and otherwise has received a copy of such report, in which case the
Registrant shall state in the Prospectus that it will furnish, without charge, a
copy of such report on request, and the name, address and telephone number of
the person to whom such a request should be directed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment No. 4 to its
Registration Statement (the "Amendment") pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Boston and
Commonwealth of Massachusetts, on the 23rd day of January, 1996.
PIONEER TAX-FREE STATE SERIES TRUST
By:/s/John F. Cogan, Jr.
John F. Cogan, Jr.
President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment has been signed below by the following persons in the capacities and
on the dates indicated:
Title and Signature Date
Principal Executive Officer: )
)
)
/s/John F. Cogan, Jr. )
- ------------------------------------
John F. Cogan, Jr., President* )
)
)
Principal Financial and )
Accounting Officer: )
)
)
/s/William H. Keough )
- ------------------------------------
William H. Keough, Treasurer* )
)
)
Trustee: )
)
/s/John F. Cogan, Jr. )
- ------------------------------------
John F. Cogan, Jr.* )
)
)
Trustee: )
)
/s/Richard H. Egdahl, M.D. )
- ------------------------------------
Richard H. Egdahl, M.D.* )
)
<PAGE>
)
Trustee: )
)
/s/Margaret B. W. Graham )
- ------------------------------------
Margaret B. W. Graham* )
)
)
Trustee: )
)
/s/John W. Kendrick )
- ------------------------------------
John W. Kendrick* )
)
)
Trustee: )
)
/s/Marguerite A. Piret )
- ------------------------------------
Marguerite A. Piret* )
)
)
Trustee: )
)
/s/David D. Tripple )
- ------------------------------------
David D. Tripple* )
)
)
Trustee: )
)
/s/Steven K. West )
- ------------------------------------
Steven K. West* )
)
)
Trustee: )
)
/s/John Winthrop )
- ------------------------------------
John Winthrop* )
)
)
*By:/s/Joseph P. Barri January 23, 1996
- ------------------------------------
Joseph P. Barri
Attorney-in-fact
<PAGE>
Exhibit Index
Exhibit Page
Number Document Title Number
1. Declaration of Trust.
1.1 Certificate of Amendment.
2. By-Laws.
5. Management Contract between the Registrant and Pioneering Management
Corporation.
6.1. Underwriting Agreement between the Registrant and Pioneer Funds
Distributor, Inc.
6.2. Form of Dealer Sales Agreement.
8. Custodian Agreements between Brown Brothers Harriman & Co. and the Pioneer
California Double Tax-Free Fund, Pioneer New York Triple Tax-Free Fund and
Pioneer Massachusetts Double Tax-Free Fund.
9. Investment Company Service Agreement between the Registrant and Pioneering
Services Corporation.
10.1 Opinion and Consent of Counsel (Hale and Dorr).
10.2 Consent of Counsel (Orrick, Herrington & Sutcliffe).
10.3 Consent of Counsel (Hale and Dorr).
11. Consent of Arthur Andersen LLP.
12. 1995 Annual Report to Shareholders.
13. Share Purchase Agreement.
15. Distribution Plan.
17. Financial Data Schedule.
19. Powers of Attorney.
EXHIBIT 1
DECLARATION OF TRUST
OF
PIONEER TAX-FREE STATE SERIES TRUST
60 State Street
Boston, Massachusetts 02109
DECLARATION OF TRUST made this 6th day of November, 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
Tax-Free State Series 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
amended from time to time. -------
(c) "Class" means any division of shares within a Series, which Class
is or has been established within such Series in accordance with the provisions
of Article V.
(d) The terms "Commission" and "Interested Person" have the meanings
given them in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series of Shares, the term
"vote of a majority of the Shares outstanding and entitled to vote" shall have
the same meaning as is assigned to the term "vote of a majority of the
outstanding voting securities" in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of
<PAGE>
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.
(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.
(1) 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.
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<PAGE>
(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 Tax-Free State Series 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.
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
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<PAGE>
and 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, securities indices, currency and other financial assets,
futures contracts and options on futures contracts of all descriptions and to
engage in all types of hedging and risk-management transactions.
-4-
<PAGE>
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money and in this connection issue notes or other
evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
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 sales of Shares.
(i) To adopt on behalf of the Trust or any Series thereof an
alternative purchase plan providing for the issuance of multiple Classes of
Shares (as authorized herein at Section 5.11), such Shares being differentiated
on the basis of purchase method and allocation of distribution expenses.
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or arising out of or connected with the aforesaid business or
purposes, objects or powers.
-5-
<PAGE>
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust or any Series of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine, provided that the interest of the Trust therein is
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property and the Property of each Series of the Trust shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VI and VII and Section 5.11 hereof, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of The Commonwealth of Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have 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.
-6-
<PAGE>
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 of the Trust.
Section 2.8. Manner of Acting; By-laws. Except as otherwise provided
herein or in the By-laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of a majority of the
entire number of Trustees then in office. The Trustees may adopt By-laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-laws to the extent such power is not
reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shallobe 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
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<PAGE>
they consider appropriate, and appoint from their own number, and terminate, any
one or more committees which may exercise some or all of the power and authority
of the Trustees as the Trustees may determine; (d) purchase, and pay for out of
Trust Property or Trust Property of the appropriate Series of the Trust,
insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers, administrators, distributors, selected dealers or
independent contractors of the Trust against all claims arising by reason of
holding any such position or by reason of any action taken or omitted by any
such Person in such capacity, whether or not constituting negligence, or whether
or not the Trust would have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, share purchase, and other
retirement, incentive and benefit plans for any Trustees, officers, employees
and agents of the Trust; (f) to the extent permitted by law, indemnify any
person with whom the Trust or any Series thereof has dealings, including the
Investment Adviser, Administrator, Distributor, Transfer Agent and selected
dealers, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust or any Series thereof and the method by which its or
their accounts shall be kept; 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,
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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 shall call a Shareholders' meeting for
the election of Trustees. Except for the foregoing circumstances, the Trustees
shall continue to hold office and may appoint successor Trustees.
Section 2.14. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
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) for 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 (or any
successor provisions) shall be applicable to the same extent as if the Trust
were subject to the provisions of that Section). Upon the resignation or removal
of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute and
deliver such documents as the remaining Trustees shall require for the purpose
of memorializing the conveyance to the Trust or the remaining Trustees of any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
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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 non- exclusive
distribution contract or contracts providing for the sale of the Shares to net
the Trust or the applicable Series of the Trust not less than the amount
provided for in Section 7.1 of Article VII hereof, whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either
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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,
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
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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 subcustodians, 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 subcustodian, 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
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made, or that any such organization, or any parent or affiliate
thereof, is a Shareholder of or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have
been or may hereafter be made also has any one or more of such
contracts with one or more other partnerships, corporations, trusts,
associations or other organizations, or has other business or
interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Section 3.8. Compliance with 1940 Act. Any contract entered into
pursuant to Sections 3.1 or 3.2 shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendment thereof or
other applicable Act of Congress hereafter enacted), as modified by any
applicable order or orders of the Commission, with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, except to the extent arising from
bad faith, willful misfeasance, gross negligence or reckless disregard of his
duties with respect to such Person; and all such Persons shall look solely to
the Trust Property, or to the Property of one or more specific Series of the
Trust if the claim arises from the conduct of such Trustee, officer, employee or
agent with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
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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:
(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
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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) by a vote of a majority of the Shares outstanding and
entitled to vote (excluding Shares owned of record or
beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled shall continue as to a
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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:
(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
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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.
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, $.01
par value per share. 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
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of any Series shall represent an equal proportionate Share in the assets of that
Series with each other Share in that Series. Subject to the provisions of
Section 5.11 hereof, the Trustees may also authorize the creation of additional
Series of Shares (the proceeds of which may be invested in separate,
independently managed portfolios) and additional Classes of Shares within any
Series. All Shares issued hereunder including, without limitation, Shares issued
in connection with a dividend in Shares or a split in Shares, shall be fully
paid and nonassessable by the Trust.
Section 5.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
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
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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.
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
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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.l3; (ii) with
respect to any investment advisory contract entered into pursuant to Section
3.2; (iii) with respect to termination of the Trust or a Series or Class thereof
as provided in Section 8.2; (iv) with respect to any amendment of this
Declaration to the extent and as provided in Section 8.3; (v) with respect to
any merger, consolidation or sale of assets as provided in Section 8.4; (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 8.5; (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Trust or a Series thereof or the Shareholders of either; (viii)
with respect to any plan adopted pursuant to Rule 12b-1 (or any successor rule)
under the 1940 Act, and related matters, to the extent required under the 1940
Act; and (ix) with respect to such additional matters relating to the Trust as
may be required by this Declaration, the 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
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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.
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 (101) 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 three Series designated as: "Pioneer California
Double Tax-Free Fund," "Pioneer Massachusetts Double Tax-Free Fund" and "Pioneer
New York Triple Tax-Free Fund," respectively (the "Existing Series").
(b) Without limiting the authority of the Trustees set forth in Section
5.1 to establish and designate any further Classes, it is hereby confirmed that
each Series of the Trust's Shares consist of a single Class.
(c) The Shares of the existing Series and each Class thereof herein
established and designated and any Shares of any further Series and Classes that
may from time to time be established and designated by the Trustees shall be
established and designated, and the variations in the relative rights and
preferences as between the different Series shall be fixed and determined, by
the Trustees (unless the Trustees otherwise determine with respect to further
Series or Classes at the time of establishing and designating the same);
provided, that all Shares shall be identical except that there may be variations
so fixed and determined between different Series or Classes thereof as to
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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
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.
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(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.
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(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;
provided, however, that (l) as to any matter with respect to which a
separate vote of any Series or Class is required by the 1940 Act or is
required by attributes applicable to any Series or Class or is required
by any Rule 12b-1 plan, such requirements as to a separate vote by that
Series or Class shall apply; (2) to the extent that a matter referred
to in clause (l) above affects more than one Class or Series and the
interests of each such Class or Series in the matter are identical,
then, subject to clause (3) below, the Shares of all such affected
Classes or Series shall vote as a single Class; (3) as to any matter
which does not affect the interests of a Particular Series or Class,
only the holders of Shares of the one or more affected Series or
Classes shall be entitled to vote; and (4) the provisions of the
following sentence shall apply. On any matter that pertains to any
particular Class of a particular Series or to any Class expenses with
respect to any Series which matter may be submitted to a vote of
Shareholders, only Shares of the affected Class or that Series, as the
case may be, shall be entitled to vote except that: (x) to the extent
said matter affects Shares of another Class or Series, such other
Shares shall also be entitled to vote, and in such cases Shares of the
affected Class, as the case may be, of such Series shall be voted in
the aggregate together with such other Shares; and (y) to the extent
that said matter does not affect Shares of a particular Class of such
Series, said Shares shall not be entitled to vote (except where
otherwise required by law or permitted by the Trustees acting in their
sole discretion) even though the matter is submitted to a vote of the
Shareholders of any other Class or Series.
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(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 requirements 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 further Series
or Classes of Shares shall be effective upon the execution by a
majority of the then Trustees of an instrument setting forth such
establishment and designation and the relative rights and preferences
of such Series or Classes, or as otherwise provided in such instrument.
At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated, the Trustees may
by an instrument executed by a majority of their number abolish that
Series or Class and the establishment and designation thereof. Each
instrument referred to in this section shall have the status of an
amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust. Every Shareholder, by
virtue of having become a Shareholder, shall be held to have expressly assented
and agreed to the terms hereof and to have become a party hereto.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust. The
Trust may require any Shareholder to pay a sales charge to the Trust, the
underwriter, or any other person designated by the Trustees upon redemption or
repurchase of Shares in such amount and upon such conditions as shall be
determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trustees may determine) at such office or
agency as may be
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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 of Shares of the
Trust or any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940 Act
or other applicable laws, as may be specified from time to time in the Trust's
then effective Prospectus, subject to the provisions of Section 6.4 hereof.
Notwithstanding the foregoing, the Trustees may withhold from such redemption
proceeds any amount arising (i) from a liability of the redeeming Shareholder to
the Trust or (ii) in connection with any Federal or state tax withholding
requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of
the determination of net asset value with respect to Shares of the Trust or of
any Series or Class thereof, the rights of Shareholders (including those who
shall have applied for redemption pursuant to Section 6.1 hereof but who shall
not yet have received payment) to have Shares redeemed and paid for by the Trust
or a Series or Class thereof shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any Share certificates
on deposit. The redemption price of Shares for which redemption applications
have not been revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such suspension,
and payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
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Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of one or
more Series or Class thereof held by any Shareholder if the value of such Shares
held by such Shareholder is less than the minimum amount established from time
to time by the Trustees.
Section 6.7. Redemption of Shares in Order to Qualify as Regulated
Investment Company; Disclosure of Holding. (a) If the Trustees shall at any time
and in good faith, be of the opinion that direct or indirect ownership of Shares
or other securities of the Trust has or may become concentrated in any Person to
an extent which would disqualify the Trust or any Series of the Trust as a
regulated investment company under the Internal Revenue Code of 1986, then the
Trustees shall have the power by lot or other means deemed equitable by them (i)
to call for redemption by any such Person a number, or principal amount of
Shares or other securities of the Trust or any Series of the Trust sufficient to
maintain or bring the direct or indirect ownership of Shares or other securities
of the Trust or any Series of the Trust into conformity with the requirements
for such qualification and (ii) to refuse to transfer or issue Shares or other
securities of the Trust or any Series of the Trust to any Person whose
acquisition of the Shares or other securities of the Trust or any Series of the
Trust in question would result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in Section 6.1.
(b) The holders of Shares or other securities of the Trust or any
Series of the Trust shall upon demand disclose to the Trustees in writing such
information with respect to direct and indirect ownership of Shares or other
securities of the Trust or any Series of the Trust as the Trustees deem
necessary to comply with the provisions of the Internal Revenue Code of 1986, as
amended, or to comply with the requirements of any other taxing authority.
Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce
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the number of outstanding Shares of the Trust or 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 clauses (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which 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
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under the direction of the Trustees. From the total value of said assets, there
shall be deducted all indebtedness, interest, taxes, payable or accrued,
including estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, net income determined and declared as a
distribution and all other items in the nature of liabilities which shall be
deemed appropriate, as incurred by or allocated to the Trust or any Series or
Class of the Trust. The resulting amount which shall represent the total net
assets of the Trust or Series or Class thereof shall be divided by the number of
Shares of the Trust or Series or Class thereof outstanding at the time and the
quotient so obtained shall be deemed to be the net asset value of the Shares of
the Trust or Series or Class thereof. The net asset value of the Shares shall be
determined at least once on each business day, as of the close of regular
trading on the New York Stock Exchange or as of such other time or times as the
Trustees shall determine. The power and duty to make the daily calculations may
be delegated by the Trustees to the Investment Adviser, the Administrator, the
Custodian, the Transfer Agent or such other Person as the Trustees by resolution
may determine. The Trustees may suspend the daily determination of net asset
value to the extent permitted by the 1940 Act. It shall not be a violation of
any provision of this Declaration of Trust if Shares are sold, redeemed or
repurchased by the Trust at a price other than one based on net asset value if
the net asset value is affected by one or more errors inadvertently made in the
pricing of portfolio securities or in accruing income, expenses or liabilities.
Section 7.2. Distributions to Shareholders. (a) The Trustees shall from
time to time distribute ratably among the Shareholders of the Trust or of a
Series or Class thereof such proportion of the net profits, surplus (including
paid-in surplus), capital, or assets of the Trust or such Series held by the
Trustees as they may deem proper. Such distributions may be made in cash or
property (including without limitation any type of obligations of the Trust or
Series or Class or any assets thereof), and the Trustees may distribute ratably
among the Shareholders of the Trust or Series or Class thereof additional Shares
of the Trust or Series or Class thereof issuable hereunder in such manner, at
such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of the Trust or Series or Class
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Series or Class thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may in their discretion determine
that, solely for the purposes of such distributions, Outstanding Shares shall
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
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declared as of a day on which Boston banks are not open for business, as
described in the then effective Prospectus. The Trustees may always retain from
the net profits such amount as they may deem necessary to pay the debts or
expenses of the Trust or a Series or Class thereof or to meet obligations of the
Trust or a Series or Class thereof, or as they may deem desirable to use in the
conduct of 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 of the Trust.
(b) Inasmuch as the computation of net income and gains for Federal
income tax purposes may vary from the computation thereof on the books, the
above provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Trust or a Series or Class thereof to avoid or reduce liability for
taxes.
Section 7.3. Determination of Net Income; 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
on which such market is open or as of such other time or times as the Trustees
shall determine, and, except as provided herein, all the net income of any
Series or Class of the Trust, as so determined, may be declared as a dividend on
the Outstanding Shares of such Series or Class. The Trustees shall have the
authority at any time and for any reason to reduce the number of Shares of any
Series or Class by reducing the number of Shares of such Series or Class by
reducing the number of full and fractional shares outstanding in any such Series
or Class. Without limiting the generality of the foregoing, if, for any reason,
the net income of any Series or
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Class of the Trust determined at any time is a negative amount or for any other
reason, the Trustees shall have the power with respect to such Series or Class
(i) to offset each Shareholder's pro rata share of such negative amount from the
accrued dividend account of such Shareholder, or (ii) to reduce the number of
Outstanding Shares of such Series or Class by reducing the number of Shares in
the account of such Shareholder by that number of full and fractional Shares
which represents the amount of such excess negative net income, or (iii) to
cause to be recorded on the books of the Trust an asset account in the amount of
such negative net income, which account may be reduced by such amount; provided,
that the same shall thereupon become the property of the Trust with respect to
such Series or Class and shall not be paid to any Shareholder, and provided,
further, that dividends shall not be declared upon the Outstanding Shares of
such Series or Class on or after the day such negative net income is
experienced, until such asset account is reduced to zero. The Trustees shall
have full discretion to determine whether any cash or property received shall be
treated as income or as principal and whether any item of expense shall be
charged to the income or the principal account, and their determination made in
good faith shall be conclusive upon the Shareholders. In the case of stock
dividends received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value thereof
shall be treated as income, the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
of the foregoing provisions of this Article VII but subject to Section 5.11
hereof, the Trustees may prescribe, in their absolute discretion, such other
bases and times for determining the per Share net asset value of the Shares of
the Trust or a Series or Class thereof or net income of the Trust or a Series or
Class thereof, or the declaration and payment of dividends and distributions as
they may deem necessary or desirable. Without limiting the generality of the
foregoing, the Trustees may establish several Series or Classes of Shares in
accordance with Section 5.11, and declare dividends thereon in accordance with
Section 5.11(d)(iv).
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII.
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Section 8.2. Termination of the Trust or a Series or a Class. The Trust
or any Series or Class thereof may be terminated by (i) the affirmative vote of
the holders of not less than two- thirds of the Shares outstanding and entitled
to vote at any meeting of Shareholders of the Trust or the appropriate Series or
Class thereof (ii) by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of the Shares of the Trust or the
appropriate Series or Class thereof; provided, however, that if such termination
is recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares of the Trust or the appropriate Series or Class thereof
outstanding and entitled to vote shall be sufficient authorization for such
termination, or (iii) notice to Shareholders by means of an instrument in
writing signed by a majority of the Trustees, stating that a majority of the
Trustees has determined that the continuation of the Trust or a Series or Class
thereof is not in the best interest of such Series or Class, the Trust or their
respective shareholders as a result of factors or events adversely affecting the
ability of such Series or a Class or the Trust to conduct its business and
operations in an economically viable manner. Such factors and events may include
(but are not limited to) the inability of a Series or Class or the Trust to
maintain its assets at 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:
(i) The Trust, Series or Class shall carry on no business
except for the purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the
Trust, Series or Class and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust, Series or
Class shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust, Series or Class, collect its
assets sell, convey, assign, exchange, transfer or otherwise dispose of
all or any part of the remaining Trust Property or Trust Property
allocated or belonging to such Series or Class to one or more persons
at public or private sale for consideration which may consist in whole
or in part of cash, securities or other property of any kind, discharge
or pay its liabilities, and do all other acts appropriate to liquidate
its business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property or Trust Property allocated or belonging to such Series or
Class that requires
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Shareholder approval in accordance with Section 8.4 hereof shall receive the
approval so required; and
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property or the remaining
property of the terminated Series or Class, in cash or in kind or
partly each, among the Shareholders of the Trust or the Series or Class
according to their respective rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the records of the Trust and file with the Office of the
Secretary of the Commonwealth of Massachusetts an instrument in writing setting
forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties with respect to the Trust or
the terminated Series or Class, and the rights and interests of all Shareholders
of the Trust or the terminated Series or Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended
by a vote of the holders of a majority of the Shares outstanding and entitled to
vote or by any instrument in writing, without a meeting, signed by a majority of
the Trustees and consented to by the holders of a majority of the Shares
outstanding and entitled to vote.
(b) The Trustees may amend this Declaration without the vote or consent
of Shareholders if they deem it necessary to conform this Declaration to the
requirements of applicable Federal or state laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code of 1986, as amended, or if requested or required to do so by any
Federal agency or by a state Blue Sky commissioner or similar official, but the
Trustees shall not be liable for failing so to do. The Trustees may also amend
this Declaration without the vote or consent of Shareholders if they deem it
necessary or desirable to change the name of the Trust or Series or to make any
other changes in the Declaration which do not adversely affect the rights of
Shareholders hereunder. Finally, the Trustees may amend this Declaration without
the vote or consent of Shareholders (i) to add to their duties or obligations or
surrender any rights or powers granted to them herein; (ii) to cure any
ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Declaration which will
not be inconsistent with the provisions
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<PAGE>
of this Declaration; and (iii) to eliminate or modify any provision of this
Declaration which (a) incorporates, memorializes or sets forth an existing
requirement imposed by or under any Federal or state statute or any rule,
regulation or interpretation thereof or thereunder or (b) any rule, regulation,
interpretation or guideline of any federal or state agency, now or hereafter in
effect, including without limitation, requirements set forth in the 1940 Act and
the rules and regulations thereunder (and interpretations thereof), to the
extent any change in applicable law liberalizes, eliminates or modifies any such
requirements, but the Trustees shall not be liable for failure to do so.
(c) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares of the Trust or Series or Class thereof by
reducing the amount payable thereon upon liquidation of the Trust or Series or
Class thereof or by diminishing or eliminating any voting rights pertaining
thereto, except with the vote or consent of the holders of two-thirds of the
Shares of the Trust or such-Series or Class outstanding and entitled to vote.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees and agents of the Trust or to permit assessments
upon Shareholders.
(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge or consolidate with any other corporation, association
trust or other organization or may sell, lease or exchange all or substantially
all of the Trust Property or Trust Property allocated or belonging to such
Series, including its good will, upon such terms 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,
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<PAGE>
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 and
Series thereof including financial statements which shall be certified at least
annually 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
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filed or recorded in such other places as the Trustees deem appropriate. Each
amendment so filed shall be accompanied by a certificate signed and acknowledged
by a Trustee stating that such action was duly taken in a manner provided
herein, and unless such amendment or such certificate sets forth some later time
for the effectiveness of such amendment, such amendment shall be effective upon
its execution. A restated Declaration, integrating into a single instrument all
of the provisions of the Declaration which are then in effect and operative, may
be executed from time to time by a majority of the Trustees and filed with the
Secretary of The Commonwealth of Massachusetts. A restated Declaration shall,
upon execution, be conclusive evidence of all amendments contained therein and
may thereafter be referred to in lieu of the original Declaration and the
various amendments thereto.
Section 10.2. Governing Law. This Declaration is executed by the
Trustees and delivered in The Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties hereto and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying as to (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the tact 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 legal counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986, as amended, or with other applicable laws and
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<PAGE>
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
day of November, 1992.
--------------------------------
John F. Cogan, Jr.,
as Trustee and not individually
975 Memorial Drive, #802
Cambridge, Massachusetts 02138
--------------------------------
David D. Tripple,
as Trustee and not individually
6 Woodbine Road
Belmont, Massachusetts 02178
CERTIFICATE OF AMENDMENT
TO THE
DECLARATION OF TRUST
OF
PIONEER TAX-FREE STATE SERIES TRUST
60 State Street
Boston, Massachusetts 02109
Pioneer Tax-Free State Series Trust, a Massachusetts business trust,
having its principal office at 60 State Street, Boston, Massachusetts 02109 (the
"Trust"), hereby certifies to the Secretary of State of the Commonwealth of
Massachusetts that:
FIRST: Pursuant to a vote duly adopted on November 9, 1992 by all the
Trustees of the Trust in accordance with the provisions of the Declaration of
Trust and By-Laws of the Trust, the number of trustees of the Trust was
increased from two to eight.
SECOND: Pursuant to a vote duly adopted on November 9, 1992 by all the
Trustees of the Trust in accordance with the provisions of the Declaration of
Trust and By-Laws of the Trust, the following individuals were elected as
Trustees of the Trust, to fill the six additional seats previously created and
to serve until the election and qualification of their successors, or their
earlier resignation, removal or death:
Richard H. Egdahl, M.D.
Margaret B.W. Graham
Franklin R. Johnson
John W. Kendrick
Marguerite A. Piret
John Winthrop
IN WITNESS WHEREOF, the undersigned has executed this instrument this
1st day of December, 1992.
PIONEER TAX-FREE STATE SERIES TRUST
/s/Joseph P. Barri
Joseph P. Barri, Secretary
<PAGE>
ADDRESSES OF TRUSTEES
OF PIONEER TAX-FREE STATE SERIES TRUST
NAME ADDRESS
1. John F. Cogan, Jr. 975 Memorial Drive #802
Cambridge, MA 02138
2. Richard E. Egdahl, M.D. Health Policy Institute
53 Bay State Road
Boston, MA 02215
3. Margaret B.W. Graham 776 Garland Drive
Palo Alto, CA 94303
4. Franklin R. Johnson 100 Keyes Road, Apt. 216
Concord, MA 01742
5. John W. Kendrick 6363 Waterway Drive
Falls Church, VA 22044
6. Marguerite A. Piret 162 Washington Street
Belmont, MA 02178
7. David D. Tripple 6 Woodbine Road
Belmont, MA 02178
8. John Winthrop 52 Kind Street
Charleston, SC 29401
Exhibit A
BY-LAWS
of
PIONEER TAX-FREE STATE SERIES 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.
<PAGE>
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.
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.
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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 prepared, 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.
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<PAGE>
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 prepared, 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 lest 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 person requesting said
meeting to be called may designate, but any meeting may adjourn to any other
place.
SECTION 5. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 6. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by a majority of the Trustees and
filed with the records of the Trustees' meetings, or by telephone consent
provided a quorum of Trustees to 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.
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<PAGE>
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 e 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).
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<PAGE>
(b) The Custodian(s) will receive and receipt for any moneys due to the
Trust and deposit the same in its own banking department and in such
other banking institutions, if any, as the Custodian(s) and the
Trustees may approve. The Custodian(s) shall have the sole power to
draw upon any such account.
(c) The Custodian(s) shall release and deliver securities owned by the
Trust in the following cases only:
(1) Upon the sale of such securities for the account of the Trust and
receipt of payment therefor;
(2) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that in any such case, the cash is to be delivered to the
Custodian(s);
(3) To the issuer thereof or its agent for transfer into the name of
the Trust, the Custodian(s) or a nominee of either, or for
exchange for a different number of bonds or certificates
representing the same aggregate face amount or number of units;
provided that in any such case the new securities are to be
delivered to the Custodian(s));
(4) To the broker selling the same for examination, in accord with
the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities or pursuant to
provisions to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian(s);
(6) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(7) To any pledge by way of pledge or hypothecation to secure any
loan; and
(8) For deposit in a system for the central handling of securities.
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<PAGE>
(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.
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<PAGE>
Such contract shall also provide that, pending appointment of a
successor custodian or a vote of the shareholders specifying some other
disposition of the funds and property, the Custodian(s) shall not deliver funds
and property of the Trust to the Trust, but it may deliver them to a bank or
trust company doing business in Boston, Massachusetts of its own selection
having aggregate capital, surplus and undivided profits, as shown by its last
published report, of not less than $2,000,000 as the property of the Trust to be
held under terms similar to those on which they were held by the retiring
custodian.
Any sub-custodian employed by the Custodian(s) pursuant to
authorization to do so granted by the Trust pursuant to 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 TAX-FREE STATE SERIES 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 September in each calendar year.
SECTION 3. Reports to Shareholders. The Trustees shall at least semi-annually
submit to the shareholders a written financial report of the transactions of the
Trust including financial statements which shall at least annually be certified
by independent public accountants.
SECTION 4. Voting of Securities. Except as the Trustees may otherwise designate,
the President or Treasurer may waive notice of, and act as, or appoint any
person or persons to act as, proxy or attorney-in-fact for the Trust (with or
without power of substitution) at, any meeting of stockholders or shareholders
of any corporation or other organization, the securities of which may be held by
the Trust.
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<PAGE>
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 October , 1992, and known as "Pioneer Tax-Free State Series 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 19th day of February, 1993 between Pioneer
Tax-Free State Series Trust, a Massachusetts business trust (the "Trust"), and
Pioneering Management Corporation, a Delaware corporation, (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open end, diversified,
management investment company under the Investment Company act of 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 Trust's Board of Trustees and officers in the
management of the securities portfolio of each time (individually, a "Portfolio"
and collectively, the "Portfolios").
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust 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 for a Portfolio;
b. make any purchase that would violate any fundamental policy or
restriction with respect to a Portfolio in the 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 for the account of
a Portfolio 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 Trust;
<PAGE>
c. all transactions will be made at the best price and execution
available.
3. The Manager, at its own expense, shall furnish to the Trust 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 Trust with respect to the Portfolios, and shall arrange, if desired
by the Trust, for members of the Manager's organization to serve as officers or
agents of the Trust.
The Manager shall pay directly or reimburse the Trust for: (i)
the compensation (if any) of the Trustees who are affiliated with, or interested
persons of, the Manager and all officers of the Trust as such; and (ii) all
expenses not hereinafter specifically assumed by the Trust where such expenses
are incurred by the Manager or by the Trust in connection with the management of
the investment and reinvestment of the assets of the Portfolios, and management
of the affairs and assets of the Trust with respect to the Portfolios.
The Trust shall assume and shall pay: (i) charges and expenses
for determining from time to time the value of the Trust'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 Trust with respect to
the Portfolios; (iv) brokers' commissions, and issue and transfer taxes,
chargeable to the Trust in connection with securities transactions to which the
Trust 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
Trust with respect to the Portfolios to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state or blue
sky securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Trust with respect to the Portfolios; (ix)
distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by
the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Trust who are not affiliated
-2-
<PAGE>
with or interested persons of the Manager, the Trust (other than as Trustees),
The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.; (xi) taxes and other
governmental charges, if any; (xii) interest on borrowed money, if any; and
(xiii) bookkeeping and appraisal charges.
4. The Trust shall pay to the Manager, as compensation for the
Manager's services hereunder, .60% per annum of each Portfolio's average daily
net assets. The management fee payable hereunder shall be computed daily and
paid monthly.
5. Either party hereto may, without penalty, terminate this Agreement
by vote of its Board of Directors or its Board of Trustees, as the case may be,
or by vote of a majority of its outstanding voting securities and the giving of
60 days' written notice to the party.
6. This Agreement shall terminate on June 30 of any year, beginning on
June 30, 1994, in which its terms and renewal shall not have been approved by a
majority vote of the Trustees of the Trust voting in person, including a
majority of its Trustees who are not parties to this Agreement or interested
persons (as the term "interested persons" is defined in the 1940 Act) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval.
7. Except as provided in Section 6 hereof, this Agreement shall
continue in full force and effect until terminated by one of the parties hereto
as provided in Section 5 hereof.
8. This Agreement shall automatically terminated in the event of its
assignment. For purposes of this Agreement, the terms "assignment" shall have
the meaning given it by Section 2(a)(4) of the 1940 Act.
9. This Agreement shall become effective as of the date of execution
hereof.
10. 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 account.
11. Nothing in this Agreement shall be deemed to relieve or deprive the
Board of Trustees of the Trust of its responsibility for and control of the
Trust.
12. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, and
-3-
<PAGE>
of any and every nature whatsoever, including without limitation, liabilities
arising in connection with the agreement, if any, of the Trust 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 Portfolio affected thereby first and
then of the Trust and that no Trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the foregoing
liabilities. The Trust's Declaration of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of The Commonwealth of
Massachusetts. Such Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of shares of beneficial interest.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER TAX-FREE STATE SERIES
TRUST
/s/Joseph P. Barri By:/s/John F. Cogan, Jr.
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Joseph P. Barri By:/s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary Executive Vice President
Exhibit 6.1
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 19th day of February, 1993 by
and between Pioneer Tax-Free State Series 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 a 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.
<PAGE>
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 shall terminate on June 30, 1994 if its terms and
renewal have not been approved by a majority vote of the Trustees of Pioneer
voting in person, including a majority of its Trustees who are not "interested
persons" of the Trust and who have no direct or indirect financial interest in
the operation of the Underwriting Agreement (the "Qualified Trustees"), at a
meeting of Trustees called for the purpose of voting on such approval. This
Agreement may also be terminated at any time, without payment of any penalty, by
Pioneer on 60 days' written notice to the Underwriter, or by the Underwriter
upon similar notice to Pioneer. This Agreement may also be terminated by a party
upon five (5) days' written notice to the other party in the event that the
Commission has issued an order or obtained an injunction or other court order
suspending effectiveness of the Registration Statement covering these shares of
Pioneer. Finally, this Agreement may also be terminated by Pioneer upon five (5)
days' written notice to the Underwriter provided either of the following events
has occurred: (i) the NASD has expelled the Underwriter or suspended its
membership in that organization; or (ii) the qualification, registration,
license or right of the Underwriter to sell shares in a particular state has
been suspended or cancelled in a state in which sales of the shares of Pioneer
during the most recent 12 month period exceeded 10% of all shares of Pioneer
sold by the Underwriter during such period.
-2-
<PAGE>
5. 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.
6. 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.
7. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
8. 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 TAX-FREE STATE SERIES TRUST
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary President
-3-
<PAGE>
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
By:
Joseph P. Barri Robert L. Butler
Clerk President
-4-
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SALES AGREEMENT
Gentlemen:
Pioneer Funds Distributor, Inc. (PFD), acts as principal underwriter, as
defined in the Investment Company Act of 1940, for the registered investment
companies (the "Funds") listed on Appendix A attached (as amended from time to
time by PFD.) Acting as a principal, PFD offers to sell shares of the Funds
subject to the conditions set forth in this agreement and subsequent amendments
thereto.
1. Shares purchased from PFD for sale to the public shall be offered and
sold at the price or prices, and on the terms and conditions, set forth in the
currently effective prospectus of the Funds, as amended or supplemented from
time to time (the "Prospectus" or "Prospectuses"). In the sale of such shares to
the public you shall act as dealer for your own account or as agent for your
customer and in no transaction shall you have any authority to act or hold
yourself out as agent for PFD, any of the Funds, the Funds' Custodians, the
Funds' Transfer agent, or any other party, and nothing in this agreement shall
constitute you a partner, employee or agent of ours or give you any authority to
act for PFD. Neither PFD nor the funds shall be liable for any of your acts or
obligations as a broker-dealer under this agreement. Nothing herein shall be
construed to prohibit your acting as agent for one or both customers in the sale
of shares by one customer to another and charging such customer(s) a reasonable
commission.
2. Shares purchased from PFD for sale to the public shall be purchased
only to cover orders previously received by you from your customers. Shares
purchased for your own bona fide investment shall not be reoffered or sold
except to the applicable Fund or to PFD. PFD also agrees to purchase shares only
for investment or to cover orders received.
3. If you purchase shares from your customers, you agree to pay such
customers not less than the redemption price in effect on the date of purchase,
as defined in the prospectus of the applicable Fund. Sales of shares at prices
reflecting a discount, concession, commission or other reallowance shall be made
only to registered broker-dealers which are members of the National Association
of Securities Dealers Inc. (NASD) and who also have entered into sales
agreements with PFD.
4. Only unconditional orders for a designated number of shares or dollar
amount of investment shall be accepted. Procedures relating to handling orders
shall be conveyed to you from time to time. All orders are subject to acceptance
or rejection by PFD in our sole discretion.
5. If any shares sold to or through you under the terms of this agreement
are repurchased by PFD or by the issuer or are tendered for redemption within
seven business days after the date of our confirmation of the original purchase
by you, we both agree to pay to the Fund all commissions on such shares.
6. Sales by you to the public shall earn a commission computed as a
percentage of the applicable offering price and which varies with the size and
nature of each such purchase. The terms and conditions affecting the applicable
offering prices on shares sold with a front-end sales charge , including
features such as combined purchase, rights of accumulation, Letters of Intention
and net asset value purchases, are described in the prospectuses. The schedules
of commissions generally payable with respect to sales of the Funds are outlined
on Appendix A to this agreement. Commission checks for less than $1 will not be
issued.
PFD may, from time to time, offer additional commissions or bonuses on
sales by you or your representatives without otherwise revising this agreement.
Any such additional commissions or bonuses shall take effect in accordance with
the terms and conditions contained in written notification to you.
7. Remittance of the net amount due for shares purchased from PFD shall
be made payable to Pioneering Services Corporation (PSC) Agent for the
Underwriter, in New York or Boston funds, within three days of our confirmation
of sale to you, or within such shorter time as specified by the rules of the
NASD or of a registered clearing agent through which the transaction is settled.
Payments made to PSC should be sent to Post Office Box 9014, Boston, MA 02205
(or wired to an account designated by PSC), along with your transfer
instructions on the appropriate copy of our confirmation of sale to you. If such
payment is not received by PSC, we reserve the right to liquidate the shares
purchased for your account and risk. Promptly upon receipt of payment, shares
sold to you shall be deposited by PSC to an account on the books of the Fund(s)
in accordance with your instructions. Certificates will not be issued unless
specifically requested and we reserve the right to levy a charge for issuance of
certificates.
8. You represent that you are and, at the time of purchasing any shares
of the Funds, will be registered as a broker-dealer with the US. Securities and
Exchange Commission (SEC) or are exempt from such registration; if required to
be registered as a broker-dealer you are a member in good standing of the NASD;
you are qualified to act as a broker-dealer in the states or jurisdictions in
which you intend to offer shares of the Funds; you will abide by all applicable
federal and state statutes and the rules of the NASD; and when making sales to
citizens or residents of foreign countries, that you will abide by all
applicable laws and regulations of that country. Expulsion or suspension from
the NASD or revocation or suspension of SEC registration shall act as an
immediate cancellation of this agreement.
9. No person is authorized to make any representations concerning shares
of any of the Funds except those contained in the then current Prospectus or
Statement of Additional Information for such Fund. In purchasing shares from PFD
you shall rely solely on the representations contained in such Prospectuses and
Statements of Additional Information.
10. Additional copies of the current prospectuses, Statements of
Additional Information (SAI), and other literature will be supplied in
reasonable quantities upon request.
<PAGE>
11. We reserve the right in our discretion to suspend sales or withdraw
the offering of shares of any Fund entirely. Either party hereto has the right
to cancel this agreement upon five days' written notice to the other party. We
reserve the right to amend this agreement at any time and you agree that an
order to purchase shares of any one of the Funds placed by you after notice of
such amendment has been sent to you shall constitute your agreement to any such
amendment.
12. All written communications to PFD should be sent to the above address.
All written communications to you will be sent to your address listed below.
13. This agreement shall become effective upon receipt by us of your
acceptance hereof and supersedes any prior agreement between us with respect to
the sales of Shares of any of the Funds.
14. This agreement shall be construed in accordance with the laws of
Massachusetts. The parties hereby agree that all disputes between us of whatever
subject matter, whether existing on the date hereof or arising hereafter, shall
be submitted to arbitration in accordance with the then current Code of
Arbitration Procedure of the NASD, the Uniform Arbitration Act or similar rules.
Arbitration shall take place in the city of Boston, Massachusetts. Any decision
that shall be made in such arbitration shall be final and binding and shall have
the same force and effect as a judgment made in a court of competent
jurisdiction.
15. You appoint the transfer agent for each Fund as your agent to execute
the purchase transactions of Shares of such Fund in accordance with the terms
and provisions of any account, program, plan or service established or used by
your customers and to confirm each purchase to your customers on your behalf,
except as modified in writing by the transfer agent, and you guarantee to us and
the Fund the legal capacity of your customers so purchasing such Shares and any
other person in whose name the Shares are to be registered.
PIONEER FUNDS DISTRIBUTOR, INC.
Date: ,
By:__________________________________
William A. Misata
Vice President
The undersigned hereby accepts the offer set forth in above letter.
By:__________________________________________________
Title:________________________________________________
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
APPENDIX A
CLASS A
Schedule 1
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Fund Pioneer Three Pioneer Equity-Income Fund
Pioneer II Pioneer Gold Shares Pioneer Growth Shares
Pioneer International Growth Fund Pioneer Europe Fund Pioneer Real Estate Shares
Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund
Pioneer India Fund
Sales Charge
as % of Public Broker/Dealer
Offering Price Commission
Purchase Amount
Less than $ 50,000.......... 5.75 5.00%
$ 50,000 - 99,999.......... 4.50 4.00
100,000 - 249,999.......... 3.50 3.00
250,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 2
Pioneer Bond Fund Pioneer America Income Trust Pioneer Tax-Free Income Fund
Pioneer Income Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $100,000.......... 4.50 4.00%
$100,000 - 249,999.......... 3.50 3.00
250,000 - 499,000......... 2.50 2.00
500,000 - 999,999......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 3
Pioneer Massachusetts Double Pioneer New York Triple Pioneer California Double
Tax-Free Fund Tax-Free Fund Tax-Free Fund
Pioneer Intermediate Tax-Free Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 3.50 3.00%
$ 50,000 - 99,999......... 3.00 2.50
100,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 4
Pioneer Short-Term Income Trust
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 2.50 2.00%
$ 50,000 - 99,999......... 2.00 1.75
100,000 - 249,999.......... 1.50 1.25
250,000 - 999,999.......... 1.00 1.00
1,000,000 or more .......... none a) see below
a) Purchases of $1 million or more, and certain group plans, are not subject to
an initial sales charge. PFD may pay a commission to broker-dealers who initiate
and are responsible for such purchases at the following rate: for funds listed
on schedules 3 and 4 above, .50 of 1% on purchases of $1 million to $5 million
and .10 of 1% on the excess over $5 million. For funds listed on shedules 1 and
2, the rate is as follows: 1% on the first $5 million invested, .50 of 1% on the
next $45 million and .25 of 1% on the excess over 50 million. A one-year prepaid
service fee is included in this commission. These commissions shall not be
payable if the purchaser is affiliated with the broker-dealer or if the purchase
represents the reinvestment of a redemption made during the previous 12 calendar
months. A contingent deferred sales charge will be payable on these investments
in the event of share redemption within 12 months following the share purchase,
at the rate of 1% on funds in schedules 1 and 2 ; and .50 of 1% on funds in
schedules 3 and 4, of the lesser of the value of the shares redeemed (exclusive
of reinvested dividend and capital gain distributions) or the total cost of such
shares. For additional information about the broker-dealer commission and
contingent deferred sales charge applicable to these transactions, refer to the
Fund's prospectus.
</TABLE>
PLEASE RETAIN THIS COPY
<PAGE>
Schedule 5
<TABLE>
<CAPTION>
<S> <C> <C>
Pioneer Cash Reserves Fund Pioneer U.S. Pioneer Tax-Free Money Fund
Government Money Fund
No Load
CLASS B
Schedule 1 Schedule 2 Schedule 3
---------- ---------- --------
<S> <C> <C>
Pioneer Equity Income Fund Pioneer Intermediate Tax-Free Pioneer Short-Term Income Trust
Pioneer Bond Fund Fund
Pioneer Capital Growth Fund
Pioneer Europe Fund
Pioneer Gold Share
Pioneer America Income Trust
Pioneer Emerging Markets Fund
Pioneer India Fund
Pioneer Cash Reserves Fund
Pioneer Growth Shares
Pioneer Income Fund
Pioneer Tax-Free Income Fund
Pioneer Small Company Fund
Broker/Dealer
Commission 4.00% 3.00% 2.00%
- ----------
Year Since
Purchase CDSC% CDSC% CDSC%
First 4.0 3.0 2.0
Second 4.0 3.0 2.0
Third 3.0 2.0 1.0
Fourth 3.0 1.0 none
Fifth 2.0 none none
Sixth 1.0 none To A Class
Seventh none To A Class
Eigth none
Ninth To A Class
b) Dealer Commission includes a first year service fee equal to 0.25% of the
amount invested in all Class B shares.
</TABLE>
<PAGE>
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
You have entered into a Sales Agreement with Pioneer Funds Distributor, Inc.
("PFD") with respect to the Pioneer mutual funds for which PFD serves as
principal underwriter ("the Funds").
This agreement incorporates and supplements that agreement. In consideration of
your sales of shares of the Funds, for providing services to shareholders of the
Funds and of the Pioneer money market funds and assisting PFD and its affiliates
in providing such services, we are authorized to pay you certain service fees as
specified herein. Receipt by you of any such service fees is subject to the
terms and conditions contained in the Funds' prospectuses and/or specified
below, as may be amended from time to time.
1. You agree to cooperate as requested with programs that the Funds, PFD or
their affiliates provide to enhance shareholder service.
2. You agree to take an active role in providing such shareholder services as
processing purchase and redemption transactions and, where applicable, exchanges
and account transfers; establishing and maintaining shareholder accounts;
providing certain information and assistance with respect to the Funds;
responding to shareholder inquiries or advising us of such inquiries where
appropriate.
3., You agree to assign an active registered representative to each shareholder
account on your and our records and to reassign accounts when registered
representatives leave your firm. You also agree, with respect to accounts which
are held in nominee or "street" name, to provide such documentation and
verification that active representatives are assigned to all such accounts as
PFD may require from time to time.
4. You agree to pay to the registered representatives assigned to shareholder
accounts a share of any service fees paid to you pursuant to this agreement. You
also agree to instruct your representatives to regularly contact shareholders
whose accounts are assigned to them.
5. You acknowledge that service fee payments are subject to terms and conditions
set forth herein and in the Funds' prospectuses, Statements of Additional
Information and Plans of Distribution and that this agreement may be terminated
by either party at any time by written notice to the other. Any order to
purchase or sell shares received by PFD from you subsequent to the date of our
notification to you of an amendment of the Agreement shall be deemed to be your
acceptance of such an amendment.
6. You acknowledge that your continued participation in this agreement is
subject to your providing a level of support to PFD's marketing and shareholder
retention efforts that is deemed acceptable by PFD. Factors which may be
considered by PFD in this respect include, but are not limited to, the level of
shareholder redemptions, the level of assistance in disseminating shareholder
communications, reasonable access to your offices and/or representatives by PFD
wholesalers or other employees and whether your compensation system or
"preferential list" unduly discriminates against the sale of shares of the
Funds.
7. Service fees will generally be paid quarterly, at the rates and under the
conditions specified on schedule A hereto.
8. All communications to PFD should be sent to the above address. Any notice to
you shall be duly given if mailed or telegraphed to the address specified by you
below. This agreement, in conjunction with the Sales Agreement, describes the
complete understanding of the parties. This agreement shall be construed under
the laws of the Commonwealth of Massachusetts.
Accepted: Execute this Agreement in duplicate
and return one of the duplicate
originals to us.
By:________________________________
By: _________________________________
Title:_____________________________ William A. Misata
Vice President
RETAIN ONE COPY AND RETURN THE OTHER
<PAGE>
SUPPLEMENTAL SALES AND SERVICE AGREEMENT
WITH PIONEER FUNDS DISTRIBUTOR, INC.
SCHEDULE A
1. Except as specified in Section 4 below, service fees on the
aggregate net asset value of each account assigned to you in Pioneer Fund,
Pioneer II, and Pioneer Three will be paid at the rate of:
a. 0.15% annually on shares acquired prior to August 19, 1991.
b. 0.25% annually on shares acquired on or after August 19,
1991.
2. Except as specified in Section 4 below, service fees on the
aggregate net asset value of each account assigned to you in:
Pioneer America Income Trust Pioneer International Growth Fund
Pioneer Bond Fund Pioneer Growth Shares
Pioneer Intermediate-Free Fund Pioneer Real Estate Shares
Pioneer Europe Fund Pioneer Income Fund Pioneer
Capital Growth Fund Pioneer Tax-Free Income Fund
Pioneer Equity-Income Fund Pioneer Short-Term Income Trust
Pioneer Gold Shares Pioneer India Fund
Pioneer Emerging Markets Fund Pioneer Small Company Fund*
will be paid at the rate of:
a. 0.15% annually if the shares are acquired on or after August
19, 1991, as a result of an exchange from Pioneer Fund,
Pioneer II, or Pioneer Three of shares owned prior to August
19, 1991.
b. 0.25% annually on all other shares.
3. Except as specified in Section 4 below, service fees will be paid at
an annual rate of 0.15% of the aggregate net asset value of each account
assigned to you in:
Pioneer Cash Reserves Fund
Pioneer US. Government Money Fund
Pioneer Tax-Free Money Fund
Pioneer California Double Tax-Free Fund
Pioneer Massachusetts Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
4. Exceptions -- Service fees will not be paid on accounts representing:
a. Purchases by you or your affiliates, employees or
representatives.
b Shares which were purchased at net asset value, except for
sales of the money market funds or sales on which you are
paid a commission and which are subject to the contingent
deferred sales charge described in the funds' prospectuses.
c. "House" accounts or any other accounts not assigned to an
active registered representative(s).
d. Accounts established in Pioneer Bond Fund prior to January
1, 1986.
e. Service fees of less than $50 per calendar quarter will not
be paid.
f. Pioneer reserves the right to reduce the service fee paid on
individual accounts of more than $10 million.
g. First year services fees on shares subject to a CDSC are at
the rate of 0.25% and are prepaid as part of the initial
sales commission.
5. Service fees on shares sold with a front-end sales charge normally
begin to be earned as soon as the transaction settles, unless specified
otherwise in the fund prospectus. Since the commission on shares sold with a
CDSC includes a prepaid one year service fee , periodic service fees on such
shares are paid beginning one year following the transaction.
* Service fees begin accruing January 1, 1996
Exhibit 8
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER CALIFORNIA DOUBLE TAX FREE FUND
<PAGE>
TABLE OF CONTENTS
l. Employment of Custodian............................................ 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian.............................................. l
A. Safekeeping................................................ 2
B. Manner of Holding Securities............................... 2
C. Registered Name; Nominee................................... 2
D. Purchases.................................................. 2
E. Exchanges.................................................. 4
F. Sales of Securities........................................ 4
G. Depositary Receipts........................................ 5
H. Exercise of Rights; Tender Offers.......................... 6
I. Stock Dividends, Rights, Etc............................... 6
J. Options.................................................... 6
K. Borrowings................................................. 7
L. Demand Deposit Bank Accounts............................... 7
M. Interest Bearing Call or Time Deposits..................... 8
N. Foreign Exchange Transactions
and Futures Contracts..................................... 9
O. Stock Loans................................................ 10
P. Collections................................................ 10
Q. Dividends, Distributions and Redemptions................... 11
R. Proxies, Notices, Etc...................................... 12
S. Nondiscretionary Details................................... 12
T. Bills...................................................... 13
U. Deposit of Fund Assets in Securities Systems............... 13
V. Other Transfers............................................ 15
W. Investment Limitations..................................... 16
X. Restricted Securities...................................... 16
Y. Proper Instructions........................................ 18
Z. Segregated Account......................................... 19
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians................... 20
4. Assistance by the Custodian as to Certain Matters............. 24
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent........................ 24
A. Records.............................................. 24
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B. Accounts............................................. 25
C. Access to Records.................................... 25
D. Disbursements........................................ 25
6. Standard of Care and Related Matters.......................... 25
A. Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc.......................... 25
B. Liability of the Custodian with
Respect to Use of Securities System................. 27
C. Liability of the Custodian with
Respect to Subcustodians............................ 27
D. Standard of Care; Liability;
Indemnification..................................... 28
E. Reimbursement of Advances............................ 30
F. Security for Obligations to Custodian................ 30
G. Appointment of Agents................................ 30
H. Powers of Attorney................................... 31
7. Compensation of the Custodian................................. 31
8. Termination; Successor Custodian.............................. 31
9. Amendment..................................................... 32
10. Governing Law................................................. 33
11. Notices ..................................................... 33
12. Binding Effect................................................ 33
13. Counterparts.................................................. 33
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CUSTODIAN AGREEMENT
AGREEMENT made this _____ day of ______________, 1993 between PIONEER
CALIFORNIA DOUBLE TAX FREE FUND (the "Fund") and Brown Brothers Harriman & Co.
(the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
l. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
appointed pursuant to the
<PAGE>
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
(l) 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 Y on Page 18, 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 (l) by the Custodian, or (2) by a clearing
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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
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rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (l) 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
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Custodian with a clearing corporation of a national securities exchange of which
the Custodian is a member, or (3) by credit to the account of the Custodian or
an Agent of the Custodian with a Securities System; provided, however, that (i)
in the case of delivery of physical certificates or instruments representing
securities, the Custodian may make delivery to the broker buying the securities,
against receipt therefor, for examination in accordance with "street delivery"
custom, provided that the payment therefor is to be made to the Custodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Custodian, and (ii) in the case of securities referred to in
clause (iii) of the last sentence of Section 2D, the Custodian may make
settlement, including with respect to the form of payment, in accordance with
generally accepted trade practice relating to such securities or the terms of
the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged
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<PAGE>
receipt of instructions to issue with respect to such securities ADRs in the
name of the Custodian, or a nominee of the Custodian, for delivery to the
Custodian in Boston, Massachusetts, or at such other place as the Custodian may
from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
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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
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<PAGE>
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
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<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
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<PAGE>
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.
O. 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
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<PAGE>
of the collateral, if any, for such borrowing, provided that for stock loans
secured by cash collateral the Custodian's instructions to the Securities System
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
P. Collections - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; provided, that the payment is to be made in such form and manner
and at such time, which may be after delivery by the Custodian of the instrument
representing the security, as is in accordance with the terms of the instrument
representing the security, or such proper instructions as the Custodian may
receive, or governmental regulations, the rules of Securities Systems or other
U.S. securities depositories and clearing agencies or, with respect to
securities referred to in clause (iii) of the last sentence of Section 2D, in
accordance with generally accepted trade practice; (ii) to execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with respect to securities
of the Fund or in connection
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<PAGE>
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.
a. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
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<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, (l) 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.
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<PAGE>
T. Bills - Upon receipt of proper instructions, to pay or cause to be
paid, insofar as funds are available for the purpose, bills, statements, or
other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The Custodian may
deposit and/or maintain securities owned by the Fund in (i) The Depository Trust
Company, (ii) any book-entry system as provided in Subpart O 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 O, 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:
l) 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
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<PAGE>
are represented in an account ("Account") of the Custodian or such Agent in the
Securities System which shall not include any assets of the Custodian or Agent
other than assets held as a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
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transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
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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,
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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
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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 responsibilities 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.
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Proper instructions may include communications effected directly
between electro-mechanical 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.
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
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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 (l) 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
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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,
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<PAGE>
if practical, to an approved Subcustodian. Under such circumstances Custodian
will collect income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this
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<PAGE>
Section 3. At the election of the Fund, it shall have the right to enforce, to
the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written
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<PAGE>
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 Fund's
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 31a-1 and 31a-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
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<PAGE>
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
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<PAGE>
other instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of (i) counsel regularly retained by the Custodian in
respect of custodian matters, (ii) counsel for the Fund, or (iii) such other
counsel as the Fund and the Custodian may agree upon, with respect to all
matters, and the
-27-
<PAGE>
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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
restrictions, exchange controls, taxes, levies or other charges affecting the
Fund's property; or acts of war, terrorism, insurrection or revolution; or any
other act or event beyond the Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize
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<PAGE>
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.
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<PAGE>
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
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<PAGE>
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
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<PAGE>
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
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 CALIFORNIA DOUBLE BROWN BROTHERS HARRIMAN & CO.
TAX FREE FUND
By:________________________ per pro ______________________
-35-
<PAGE>
THE PIONEER GROUP OF FUNDS
APPENDIX A
CENTRAL
COUNTRY SUBCUSTODIAN DEPOSITORY
AUSTRALIA NATIONAL AUSTRALIA BANK LTD AGMT 5/1/85 AUSTRACLEAR
AUSTRIA CREDITANSTALT BANKVEREIN AGMT 12/18/89 KONTROLLBANK
BELGIUM JPMORGAN BRUSSELS AGMT 2/25/86 CIK
DENMARK DEN DANSKE BANK/PROVINSBANKEN AGMT 1/1/89 VP
FINLAND UNION BANK OF FINLAND AGMT 2/27/89 NONE
FRANCE JPMB/MORGAN PARIS AGMT 2/25/86 SICOVAM
GERMANY JPMB/MORGAN FRANKFURT GMBH AGMT 4/1/88 KASSENVEREIN
HONG KONG CHASE MANHATTAN BANK, HONG KONG AGMT 6/4/79 NONE
CMB HONG KONG AGMT AMENDMENT 9/17/90
ITALY JPMB/BANCA COMMERCIALE ITALIANIA AMGT 6/17/86 MONTE TITOLI
JAPAN CITIBANK N A, TOKYO AGMT 7/16/81* NONE
KOREA CITIBANK N A, SEOUL AGMT 7/16/81* KSSC
MALAYSIA HONG KONG & SHANGHAI BANKING CORP, KUALA LUMPUR NONE
HSBC REGIONAL AGMT 4/19/91
MEXICO CITIBANK N A , MEXICO CITY AGMT 7/16/81* INDEVAL
NETHERLANDS AMRO BANK AGMT 12/19/88 NECIGEF
NORWAY JPMB/DEN NORSKE CRDITBANK AGMT DTD 6/2/87 VPS
PHILIPPINES CITIBANK N A, MANILA AGMT DTD 7/16/81* NONE
PORTUGAL JPMB/BANCO ESPIRITO SANTO E COMMERCIAL NONE
DE LISBOA AGMT 12/31/90
<PAGE>
SINGAPORE CHASE MANHATTAN BANK SINGAPORE AGMT 6/9/80 CDP
CHASE SINGAPORE AGMT AMENDMENT DTD 9/17/90
SPAIN JPMB/BANCO SANTANDER AGMT 2/27/86 NONE
SWEDEN SKANDINAVISKA ENSKILDA BANKEN AGMT 2/20/89 VPC
SWITZERLAND JPMB/MORGAN ZURICH AGMT 2/25/86 SEGA
TAIWAN CITIBANK N A, TAIPEI AGMT 7/16/81* TSCD
THAILAND HONG KONG & SHANGHAI BANKING CORP, SINGAPORE NONE
FOR BANGKOK - HSBC REGIONAL AGMT 4/19/91
TRANSNATIONAL BROWN BROTHERS HARRIMAN & CO EUROCLEAR
CEDEL
UNITED KINGDOM JPMB/MORGAN LONDON AGMT 2/25/86 TALISMAN
CMO,CGO
* CITIBANK N A AGREEMENT AMENDMENT DATED 8/31/90
I HEREBY CERTIFY THAT AT ITS MEETINGS ON JANUARY 14, 1992 THE BOARD APPROVED THE
COUNTRIES, SUBCUSTODIANS, AGREEMENTS, AND CENTRAL DEPOSITORIES LISTED ON THIS
APPENDIX.
- ------------------------- -------------------------
(SIGNATURE) (DATE)
- -------------------------
(TITLE)
<PAGE>
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER NEW YORK TRIPLE TAX FREE FUND
<PAGE>
TABLE OF CONTENTS
1. Employment of Custodian 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian 1
A. Safekeeping 2
B. Manner of Holding Securities 2
C. Registered Name; Nominee 2
D. Purchases 2
E. Exchanges 4
F. Sales of Securities 4
G. Depositary Receipts 5
H. Exercise of Rights; Tender Offers 6
I. Stock Dividends, Rights, Etc. 6
J. Options 6
K. Borrowings 7
L. Demand Deposit Bank Accounts 7
M. Interest Bearing Call or Time Deposits 8
N. Foreign Exchange Transactions
and Futures Contracts 9
O. Stock Loans 10
P. Collections 10
Q. Dividends, Distributions and Redemptions 11
R. Proxies, Notices, Etc. 12
S. Nondiscretionary Details 12
T. Bills 13
U. Deposit of Fund Assets in Securities Systems 13
V. Other Transfers 15
W. Investment Limitations 16
X. Restricted Securities 16
Y. Proper Instructions 18
Z. Segregated Account 19
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians 20
4. Assistance by the Custodian as to Certain Matters 24
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent 24
A. Records 24
B. Accounts 25
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<PAGE>
C. Access to Records 25
D. Disbursements 25
6. Standard of Care and Related Matters 25
A. Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc. 25
B. Liability of the Custodian with
Respect to Use of Securities System 27
C. Liability of the Custodian with
Respect to Subcustodians 27
D. Standard of Care; Liability;
Indemnification 28
E. Reimbursement of Advances 30
F. Security for Obligations to Custodian 30
G. Appointment of Agents 30
H. Powers of Attorney 31
7. Compensation of the Custodian 31
8. Termination; Successor Custodian 31
9. Amendment 32
10. Governing Law 33
11. Notices 33
12. Binding Effect 33
13. Counterparts 33
-ii-
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this _____ day of ______________, 1993 between PIONEER
NEW YORK TRIPLE TAX FREE FUND (the "Fund") and Brown Brothers Harriman & Co.
(the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
<PAGE>
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 Y on Page 18, 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
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<PAGE>
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
-3-
<PAGE>
to foreign currency exchange rates, derivatives and similar securities, the
Custodian may make payment for such securities prior to delivery thereof in
accordance with such generally accepted trade practice or the terms of the
instrument representing such security.
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (1) in cash, by a certified check, bank cashier's
check, bank credit, or bank wire transfer, or (2) by credit to the account of
-4-
<PAGE>
the Custodian with a clearing corporation of a national securities exchange of
which the Custodian is a member, or (3) by credit to the account of the
Custodian or an Agent of the Custodian with a Securities System; provided,
however, that (i) in the case of delivery of physical certificates or
instruments representing securities, the Custodian may make delivery to the
broker buying the securities, against receipt therefor, for examination in
accordance with "street delivery" custom, provided that the payment therefor is
to be made to the Custodian (which payment may be made by a broker's check) or
that such securities are to be returned to the Custodian, and (ii) in the case
of securities referred to in clause (iii) of the last sentence of Section 2D,
the Custodian may make settlement, including with respect to the form of
payment, in accordance with generally accepted trade practice relating to such
securities or the terms of the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged
-5-
<PAGE>
receipt of instructions to issue with respect to such
securities ADRs in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other place as
the Custodian may from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
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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
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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
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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
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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.
O. 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
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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
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with receipt of income or other payments with respect to securities of the Fund
or in connection with transfer of securities, and (iii) pursuant to proper
instructions to take such other actions with respect to collection or receipt of
funds or transfer of securities which involve an investment decision.
a. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
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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.
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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 O 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 O, 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:
l) 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
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<PAGE>
are represented in an account ("Account") of the Custodian or such Agent in the
Securities System which shall not include any assets of the Custodian or Agent
other than assets held as a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice or notice and shall furnish to the Fund copies of daily
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transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered and the name of the person or persons to whom
delivery is to be made.
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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,
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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
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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 responsibilities 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.
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Proper instructions may include communications effected directly
between electro-mechanical 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.
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
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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
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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,
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if practical, to an approved Subcustodian. Under such circumstances Custodian
will collect income and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this
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Section 3. At the election of the Fund, it shall have the right to enforce, to
the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written
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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 Fund's
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 31a-1 and 31a-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
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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
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other instrument believed by it to be genuine and signed by the proper party or
parties.
The Secretary or Assistant Secretary of the Fund shall certify to the
Custodian the names, signatures and scope of authority of all persons authorized
to give proper instructions or any other such notice, request, direction,
instruction, certificate or instrument on behalf of the Fund, the names and
signatures of the officers of the Fund, the name and address of the Shareholder
Servicing Agent, and any resolutions, votes, instructions or directions of the
Fund's Board of Directors or Trustees or shareholders. Such certificate may be
accepted and relied upon by the Custodian as conclusive evidence of the facts
set forth therein and may be considered in full force and effect until receipt
of a similar certificate to the contrary.
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of (i) counsel regularly retained by the Custodian in
respect of custodian matters, (ii) counsel for the Fund, or (iii) such other
counsel as the Fund and the Custodian may agree upon, with respect to all
matters, and the
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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
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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
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<PAGE>
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
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<PAGE>
restrictions, exchange controls, taxes, levies or other charges affecting the
Fund's property; or acts of war, terrorism, insurrection or revolution; or any
other act or event beyond the Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this Agreement (collectively a
"Liability"), except such as may arise from its or such nominee's breach of the
relevant standard of conduct set forth in this Agreement, then in such event any
property at any time held for the account of the Fund by the Custodian or a
Subcustodian shall be security for such Advance or Liability and if the Fund
shall fail to repay or indemnify the Custodian promptly, the Custodian shall be
entitled to utilize
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<PAGE>
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.
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<PAGE>
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other actions necessary or desirable in order to substitute the successor
custodian for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
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<PAGE>
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
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<PAGE>
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
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 NEW YORK TRIPLE BROWN BROTHERS HARRIMAN & CO.
TAX FREE FUND
By:_________________________ per pro:_______________________
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<PAGE>
THE PIONEER GROUP OF FUNDS
APPENDIX A
CENTRAL
COUNTRY SUBCUSTODIAN DEPOSITORY
AUSTRALIA NATIONAL AUSTRALIA BANK LTD AGMT 5/1/85 AUSTRACLEAR
AUSTRIA CREDITANSTALT BANKVEREIN AGMT 12/18/89 KONTROLLBANK
BELGIUM JPMORGAN BRUSSELS AGMT 2/25/86 CIK
DENMARK DEN DANSKE BANK/PROVINSBANKEN AGMT 1/1/89 VP
FINLAND UNION BANK OF FINLAND AGMT 2/27/89 NONE
FRANCE JPMB/MORGAN PARIS AGMT 2/25/86 SICOVAM
GERMANY JPMB/MORGAN FRANKFURT GMBH AGMT 4/1/88 KASSENVEREIN
HONG KONG CHASE MANHATTAN BANK, HONG KONG AGMT 6/4/79 NONE
CMB HONG KONG AGMT AMENDMENT 9/17/90
ITALY JPMB/BANCA COMMERCIALE ITALIANIA AMGT 6/17/86 MONTE TITOLI
JAPAN CITIBANK N A, TOKYO AGMT 7/16/81* NONE
KOREA CITIBANK N A, SEOUL AGMT 7/16/81* KSSC
MALAYSIA HONG KONG & SHANGHAI BANKING CORP, KUALA LUMPUR NONE
HSBC REGIONAL AGMT 4/19/91
MEXICO CITIBANK N A , MEXICO CITY AGMT 7/16/81* INDEVAL
NETHERLANDS AMRO BANK AGMT 12/19/88 NECIGEF
NORWAY JPMB/DEN NORSKE CRDITBANK AGMT DTD 6/2/87 VPS
PHILIPPINES CITIBANK N A, MANILA AGMT DTD 7/16/81* NONE
PORTUGAL JPMB/BANCO ESPIRITO SANTO E COMMERCIAL NONE
DE LISBOA AGMT 12/31/90
<PAGE>
SINGAPORE CHASE MANHATTAN BANK SINGAPORE AGMT 6/9/80 CDP
CHASE SINGAPORE AGMT AMENDMENT DTD 9/17/90
SPAIN JPMB/BANCO SANTANDER AGMT 2/27/86 NONE
SWEDEN SKANDINAVISKA ENSKILDA BANKEN AGMT 2/20/89 VPC
SWITZERLAND JPMB/MORGAN ZURICH AGMT 2/25/86 SEGA
TAIWAN CITIBANK N A, TAIPEI AGMT 7/16/81* TSCD
THAILAND HONG KONG & SHANGHAI BANKING CORP, SINGAPORE NONE
FOR BANGKOK - HSBC REGIONAL AGMT 4/19/91
TRANSNATIONAL BROWN BROTHERS HARRIMAN & CO EUROCLEAR
CEDEL
UNITED KINGDOM JPMB/MORGAN LONDON AGMT 2/25/86 TALISMAN
CMO,CGO
* CITIBANK N A AGREEMENT AMENDMENT DATED 8/31/90
I HEREBY CERTIFY THAT AT ITS MEETINGS ON JANUARY 14, 1992 THE BOARD APPROVED THE
COUNTRIES, SUBCUSTODIANS, AGREEMENTS, AND CENTRAL DEPOSITORIES LISTED ON THIS
APPENDIX.
- ------------------------- -------------------------
(SIGNATURE) (DATE)
- -------------------------
(TITLE)
<PAGE>
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER MASSACHUSETTS DOUBLE TAX FREE FUND
<PAGE>
TABLE OF CONTENTS
l. Employment of Custodian............................................ 1
2. Powers and Duties of the Custodian
with respect to Property of the Fund
held by the Custodian.............................................. l
A. Safekeeping................................................ 2
B. Manner of Holding Securities............................... 2
C. Registered Name; Nominee................................... 2
D. Purchases.................................................. 2
E. Exchanges.................................................. 4
F. Sales of Securities........................................ 4
G. Depositary Receipts........................................ 5
H. Exercise of Rights; Tender Offers.......................... 6
I. Stock Dividends, Rights, Etc............................... 6
J. Options.................................................... 6
K. Borrowings................................................. 7
L. Demand Deposit Bank Accounts............................... 7
M. Interest Bearing Call or Time Deposits..................... 8
N. Foreign Exchange Transactions
and Futures Contracts..................................... 9
O. Stock Loans................................................ 10
P. Collections................................................ 10
Q. Dividends, Distributions and Redemptions................... 11
R. Proxies, Notices, Etc...................................... 12
S. Nondiscretionary Details................................... 12
T. Bills...................................................... 13
U. Deposit of Fund Assets in Securities Systems............... 13
V. Other Transfers............................................ 15
W. Investment Limitations..................................... 16
X. Restricted Securities...................................... 16
Y. Proper Instructions........................................ 18
Z. Segregated Account......................................... 19
3. Powers and Duties of the Custodian with
Respect to the Appointment of Subcustodians................... 20
4. Assistance by the Custodian as to Certain Matters............. 24
5. Powers and Duties of the Custodian with
Respect to its Role as Financial Agent........................ 24
A. Records.............................................. 24
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<PAGE>
B. Accounts............................................. 25
C. Access to Records.................................... 25
D. Disbursements........................................ 25
6. Standard of Care and Related Matters.......................... 25
A. Liability of the Custodian with
Respect to Proper Instructions;
Evidence of Authority; Etc.......................... 25
B. Liability of the Custodian with
Respect to Use of Securities System................. 27
C. Liability of the Custodian with
Respect to Subcustodians............................ 27
D. Standard of Care; Liability;
Indemnification..................................... 28
E. Reimbursement of Advances............................ 30
F. Security for Obligations to Custodian................ 30
G. Appointment of Agents................................ 30
H. Powers of Attorney................................... 31
7. Compensation of the Custodian................................. 31
8. Termination; Successor Custodian.............................. 31
9. Amendment..................................................... 32
10. Governing Law................................................. 33
11. Notices ..................................................... 33
12. Binding Effect................................................ 33
13. Counterparts.................................................. 33
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<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this _____ day of ______________, 1993 between PIONEER
MASSACHUSETTS DOUBLE TAX FREE FUND (the "Fund") and Brown Brothers Harriman &
Co. (the "Custodian");
WITNESSETH: That in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
l. Employment of Custodian: The Fund hereby employs and appoints the
Custodian as a custodian for the term and subject to the provisions of this
Agreement. The Custodian shall not be under any duty or obligation to require
the Fund to deliver to it any securities or funds owned by the Fund and shall
have no responsibility or liability for or on account of securities or funds not
so delivered. The Fund will deposit with the Custodian copies of the Declaration
of Trust or Certificate of Incorporation and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceedings of the Fund as may be necessary for or convenient to the Custodian
in the performance of its duties.
2. Powers and Duties of the Custodian with respect to Property of the
Fund held by the Custodian: Except for securities and funds held by any
Subcustodians or held by the Custodian through a non-U.S. securities depository
appointed pursuant to the
<PAGE>
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
(l) 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 Y on Page 18, 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 (l) by the Custodian, or (2) by a clearing
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<PAGE>
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
-3-
<PAGE>
rates, derivatives and similar securities, the Custodian may make payment for
such securities prior to delivery thereof in accordance with such generally
accepted trade practice or the terms of the instrument representing such
security.
E. Exchanges - Upon receipt of proper instructions, to exchange
securities held by it for the account of the Fund for other securities in
connection with any reorganization, recapitalization, split-up of shares, change
of par value, conversion or other event relating to the securities or the issuer
of such securities and to deposit any such securities in accordance with the
terms of any reorganization or protective plan. Without proper instructions, the
Custodian may surrender securities in temporary form for definitive securities,
may surrender securities for transfer into a name or nominee name as permitted
in Section 2C, and may surrender securities for a different number of
certificates or instruments representing the same number of shares or same
principal amount of indebtedness, provided the securities to be issued are to be
delivered to the Custodian.
F. Sales of Securities - Upon receipt of proper instructions, to make
delivery of securities which have been sold for the account of the Fund, but
only against payment therefor (l) 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
-4-
<PAGE>
Custodian with a clearing corporation of a national securities exchange of which
the Custodian is a member, or (3) by credit to the account of the Custodian or
an Agent of the Custodian with a Securities System; provided, however, that (i)
in the case of delivery of physical certificates or instruments representing
securities, the Custodian may make delivery to the broker buying the securities,
against receipt therefor, for examination in accordance with "street delivery"
custom, provided that the payment therefor is to be made to the Custodian (which
payment may be made by a broker's check) or that such securities are to be
returned to the Custodian, and (ii) in the case of securities referred to in
clause (iii) of the last sentence of Section 2D, the Custodian may make
settlement, including with respect to the form of payment, in accordance with
generally accepted trade practice relating to such securities or the terms of
the instrument representing said security.
G. Depositary Receipts - Upon receipt of proper instructions, to
instruct a Subcustodian or an Agent to surrender securities to the depositary
used by an issuer of American Depositary Receipts or International Depositary
Receipts (hereinafter collectively referred to as "ADRs") for such securities
against a written receipt therefor adequately describing such securities and
written evidence satisfactory to the Subcustodian or Agent that the depositary
has acknowledged
-5-
<PAGE>
receipt of instructions to issue with respect to such securities ADRs in the
name of the Custodian, or a nominee of the Custodian, for delivery to the
Custodian in Boston, Massachusetts, or at such other place as the Custodian may
from time to time designate.
Upon receipt of proper instructions, to surrender ADRs to the issuer
thereof against a written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the Custodian that the issuer
of the ADRs has acknowledged receipt of instructions to cause its depositary to
deliver the securities underlying such ADRs to a Subcustodian or an Agent.
H. Exercise of Rights; Tender Offers - Upon timely receipt of proper
instructions, to deliver to the issuer or trustee thereof, or to the agent of
either, warrants, puts, calls, rights or similar securities for the purpose of
being exercised or sold, provided that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian, and, upon receipt
of proper instructions, to deposit securities upon invitations for tenders of
securities, provided that the consideration is to be paid or delivered or the
tendered securities are to be returned to the Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all stock
dividends, rights and other items of like nature; and to deal with the same
pursuant to proper instructions relative thereto.
-6-
<PAGE>
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
-7-
<PAGE>
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
-8-
<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
-9-
<PAGE>
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.
O. 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
-10-
<PAGE>
of the collateral, if any, for such borrowing, provided that for stock loans
secured by cash collateral the Custodian's instructions to the Securities System
require that the Securities System may deliver the securities to the borrower
thereof only upon receipt of the collateral for such borrowing.
P. Collections - To collect, receive and deposit in said account or
accounts all income, payments of principal and other payments with respect to
the securities held hereunder, and in connection therewith to deliver the
certificates or other instruments representing the securities to the issuer
thereof or its agent when securities are called, redeemed, retired or otherwise
become payable; provided, that the payment is to be made in such form and manner
and at such time, which may be after delivery by the Custodian of the instrument
representing the security, as is in accordance with the terms of the instrument
representing the security, or such proper instructions as the Custodian may
receive, or governmental regulations, the rules of Securities Systems or other
U.S. securities depositories and clearing agencies or, with respect to
securities referred to in clause (iii) of the last sentence of Section 2D, in
accordance with generally accepted trade practice; (ii) to execute ownership and
other certificates and affidavits for all federal and state tax purposes in
connection with receipt of income or other payments with respect to securities
of the Fund or in connection
-11-
<PAGE>
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.
a. Dividends, Distributions and Redemptions - Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Fund's
shareholder servicing agent or agent with comparable duties (the "Shareholder
Servicing Agent") (given by such person or persons and in such manner on behalf
of the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities to the Shareholder Servicing Agent
or otherwise apply funds or securities, insofar as available, for the payment of
dividends or other distributions to Fund shareholders. Upon receipt of proper
instructions from the Fund, or upon receipt of instructions from the Shareholder
Servicing Agent (given by such person or persons and in such manner on behalf of
the Shareholder Servicing Agent as the Fund shall have authorized), the
Custodian shall release funds or securities, insofar as available, to the
Shareholder Servicing Agent or as such Agent shall otherwise instruct for
payment to Fund shareholders who have delivered to such Agent a request for
repurchase or redemption of their shares of capital stock of the Fund.
-12-
<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, (l) 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.
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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 O 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 O, 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:
l) 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
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<PAGE>
are represented in an account ("Account") of the Custodian or such Agent in the
Securities System which shall not include any assets of the Custodian or Agent
other than assets held as a fiduciary, custodian, or otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the Securities System that such
securities have been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such payment and transfer for the
account of the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account, and (ii) the
making of an entry on the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from the Securities
System of transfers of securities for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian or an Agent as referred to
above, and be provided to the Fund at its request. The Custodian shall furnish
the Fund confirmation of each transfer to or from the account of the Fund in the
form of a written advice
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<PAGE>
or notice and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the Securities System for the account of
the Fund on the next business day;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian or any Agent as referred to above on the Securities System's
accounting system, internal accounting control and procedures for safeguarding
securities deposited in the Securities System; and the Custodian and such Agents
shall send to the Fund such reports on their own systems of internal accounting
control as the Fund may reasonably request from time to time.
5) At the written request of the Fund, the Custodian will terminate the
use of any such Securities System on behalf of the Fund as promptly as
practicable.
V. Other Transfers - Upon receipt of proper instructions, to deliver
securities, funds and other property of the Fund to a Subcustodian or another
custodian of the Fund; and, upon receipt of proper instructions, to make such
other disposition of securities, funds or other property of the Fund in a manner
other than or for purposes other than as enumerated elsewhere in this Agreement,
provided that the instructions relating to such disposition shall include a
statement of the purpose for which the delivery is to be made, the amount of
securities to be delivered
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<PAGE>
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
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<PAGE>
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.
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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
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<PAGE>
will deliver to the Custodian a similar authorization from any investment
manager or adviser or person or entity with similar responsibilities 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 electro-mechanical 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.
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
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<PAGE>
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 (l) 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
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<PAGE>
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
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<PAGE>
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
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<PAGE>
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
The Custodian will not amend any subcustodian agreement or agree to
change or permit any changes thereunder except upon the prior written approval
of the Fund.
The Custodian may, at any time in its discretion upon notification to
the Fund, terminate any Subcustodian of the Fund in accordance with the
termination provisions under the applicable Subcustodian Agreement, and at the
written request of the Fund, the Custodian will terminate any Subcustodian in
accordance with the termination provisions under the applicable Subcustodian
Agreement.
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be
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<PAGE>
made upon approval of the successor subcustodian by the Fund's Board of
Directors or Trustees in accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the Fund's
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
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<PAGE>
Rules 31a-1 and 31a-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).
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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
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<PAGE>
title thereto received by it or delivered by it pursuant to this Agreement.
The Custodian shall be entitled, at the expense of the Fund, to receive
and act upon advice of (i) counsel regularly retained by the Custodian in
respect of custodian matters, (ii) counsel for the Fund, or (iii) such other
counsel as the Fund and the Custodian may agree upon, with respect to all
matters, and the Custodian shall be without liability for any action reasonably
taken or omitted pursuant to such advice.
B. Liability of the Custodian with Respect to Use of Securities System
- - With respect to the portfolio securities, cash and other property of the Fund
held by a Securities System, the Custodian shall be liable to the Fund only for
any loss or damage to the Fund resulting from use of the Securities System if
caused by any negligence, misfeasance or misconduct of the Custodian or any of
its agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it may have
against the Securities System. At the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the Custodian may have
as a consequence of any such loss or damage to the Fund if and to the extent
that the Fund has not been made whole for any such loss or damage.
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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)
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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
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exercised reasonable care maintaining such property or in connection with the
transaction involving such property. A "Sovereign Risk" shall mean
nationalization, expropriation, devaluation, revaluation, confiscation, seizure,
cancellation, destruction or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or enforcement by any
such governmental authority of currency restrictions, exchange controls, taxes,
levies or other charges affecting the Fund's property; or acts of war,
terrorism, insurrection or revolution; or any other act or event beyond the
Custodian's control.
E. Reimbursement of Advances - The Custodian shall be entitled to
receive reimbursement from the Fund on demand, in the manner provided in Section
7, for its cash disbursements, expenses and charges (including the fees and
expenses of any Subcustodian or any Agent) in connection with this Agreement,
but excluding salaries and usual overhead expenses.
F. Security for Obligations to Custodian - If the Fund shall require
the Custodian to advance cash or securities for any purpose for the benefit of
the Fund, including in connection with foreign exchange contracts or options
(collectively, an "Advance"), or if the Custodian or any nominee thereof shall
incur or be assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this
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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.
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7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6D, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by it all accrued fees and unreimbursed expenses the payment of
which is contemplated by Sections 6D and 7, upon receipt by the Fund of a
statement setting forth such fees and expenses.
In the event of the appointment of a successor custodian, it is agreed
that the funds and securities owned by the Fund and held by the Custodian or any
Subcustodian shall be delivered to the successor custodian, and the Custodian
agrees to cooperate with the Fund in execution of documents and performance of
other
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actions necessary or desirable in order to substitute the successor custodian
for the Custodian under this Agreement.
9. Amendment: This Agreement constitutes the entire understanding and
agreement of the parties hereto with respect to the subject matter hereof. No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on such provisions
interpretative of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement. No
interpretative or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
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11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
12. Binding Effect: This Agreement shall be binding on and shall inure
to the benefit of the Fund and the Custodian and their respective successors and
assigns, provided that neither party hereto may assign this Agreement or any of
its rights or obligations hereunder without the prior written consent of the
other party.
13. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
each of the parties.
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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 MASSACHUSETTS DOUBLE BROWN BROTHERS HARRIMAN & CO.
TAX FREE FUND
By:________________________ per pro ______________________
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THE PIONEER GROUP OF FUNDS
APPENDIX A
CENTRAL
COUNTRY SUBCUSTODIAN DEPOSITORY
AUSTRALIA NATIONAL AUSTRALIA BANK LTD AGMT 5/1/85 AUSTRACLEAR
AUSTRIA CREDITANSTALT BANKVEREIN AGMT 12/18/89 KONTROLLBANK
BELGIUM JPMORGAN BRUSSELS AGMT 2/25/86 CIK
DENMARK DEN DANSKE BANK/PROVINSBANKEN AGMT 1/1/89 VP
FINLAND UNION BANK OF FINLAND AGMT 2/27/89 NONE
FRANCE JPMB/MORGAN PARIS AGMT 2/25/86 SICOVAM
GERMANY JPMB/MORGAN FRANKFURT GMBH AGMT 4/1/88 KASSENVEREIN
HONG KONG CHASE MANHATTAN BANK, HONG KONG AGMT 6/4/79 NONE
CMB HONG KONG AGMT AMENDMENT 9/17/90
ITALY JPMB/BANCA COMMERCIALE ITALIANIA AMGT 6/17/86 MONTE TITOLI
JAPAN CITIBANK N A, TOKYO AGMT 7/16/81* NONE
KOREA CITIBANK N A, SEOUL AGMT 7/16/81* KSSC
MALAYSIA HONG KONG & SHANGHAI BANKING CORP, KUALA LUMPUR NONE
HSBC REGIONAL AGMT 4/19/91
MEXICO CITIBANK N A , MEXICO CITY AGMT 7/16/81* INDEVAL
NETHERLANDS AMRO BANK AGMT 12/19/88 NECIGEF
NORWAY JPMB/DEN NORSKE CRDITBANK AGMT DTD 6/2/87 VPS
PHILIPPINES CITIBANK N A, MANILA AGMT DTD 7/16/81* NONE
PORTUGAL JPMB/BANCO ESPIRITO SANTO E COMMERCIAL NONE
DE LISBOA AGMT 12/31/90
<PAGE>
SINGAPORE CHASE MANHATTAN BANK SINGAPORE AGMT 6/9/80 CDP
CHASE SINGAPORE AGMT AMENDMENT DTD 9/17/90
SPAIN JPMB/BANCO SANTANDER AGMT 2/27/86 NONE
SWEDEN SKANDINAVISKA ENSKILDA BANKEN AGMT 2/20/89 VPC
SWITZERLAND JPMB/MORGAN ZURICH AGMT 2/25/86 SEGA
TAIWAN CITIBANK N A, TAIPEI AGMT 7/16/81* TSCD
THAILAND HONG KONG & SHANGHAI BANKING CORP, SINGAPORE NONE
FOR BANGKOK - HSBC REGIONAL AGMT 4/19/91
TRANSNATIONAL BROWN BROTHERS HARRIMAN & CO EUROCLEAR
CEDEL
UNITED KINGDOM JPMB/MORGAN LONDON AGMT 2/25/86 TALISMAN
CMO,CGO
* CITIBANK N A AGREEMENT AMENDMENT DATED 8/31/90
I HEREBY CERTIFY THAT AT ITS MEETINGS ON JANUARY 14, 1992 THE BOARD APPROVED THE
COUNTRIES, SUBCUSTODIANS, AGREEMENTS, AND CENTRAL DEPOSITORIES LISTED ON THIS
APPENDIX.
- ------------------------- -------------------------
(SIGNATURE) (DATE)
- -------------------------
(TITLE)
Exhibit 9
INVESTMENT COMPANY SERVICE AGREEMENT
February 19, 1993
Pioneer Tax-Free State Series 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 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")
that 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 the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in effect
deliver all such materials and data as may be necessary or desirable to enable
PSC to perform its services hereunder, including without limitation, those
described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized Auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such
<PAGE>
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 the creation, during the first
two of which the same will be in readily accessible form. At the end of six
years, such records and documents, will be turned over to Customer by PSC unless
Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and systems
consistent with industry standards in order to safeguard Customer's checks,
records and other data from loss or damage attributable to fire or theft. PSC
shall maintain insurance adequate to protect against the costs of reconstructing
checks, records and other data in the event of such loss and shall notify
Customer in the event of a material adverse change in such insurance coverage.
In the event of damage or loss occurring to Customer's records or data such that
PSC is unable to meet the terms of this Agreement, PSC shall transfer all
records and data to a transfer agent of Customer's choosing upon Customer's
written authorization to do so.
Without limiting the generality of the foregoing, PSC shall not be
liable or responsible for delays or errors occurring by reason of circumstances
beyond its control including acts of civil, military or banking authority,
national emergencies, labor difficulties, fire, flood or other catastrophes,
acts of God, insurrection, war, riots, failure of transportation, communication
or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and
-2-
<PAGE>
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
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 Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agent, including inspecting PSC's operation
facilities. PSC shall not be liable for injury to or responsible in any way for
the safety of any individual visiting PSC's facilities under the authority of
this section. Customer will keep confidential and will cause to keep
confidential all confidential information obtained by its employees or agents or
any other individual representing Customer while on PSC's premises. Confidential
information shall include (1) any information of whatever nature regarding PSC's
operations, security procedures, and data processing capabilities, (2) financial
information regarding PSC, its affiliates, or subsidiaries, and (3) any
information of whatever kind or description regarding any customer of PSC, its
affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant to proper
instructions from Customer, PSC shall be entitled to rely upon any certificate,
letter or other instrument or telephone call reasonably believed by PSC to be
genuine and to have been properly made or signed by an officer or other
authorized agent of Customer, and shall be entitled to receive as conclusive
proof of any fact or matter required to be ascertained by it hereunder a
certificate signed by an officer of Customer or any other person authorized by
Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement, Customer
agrees to indemnify and hold PSC, its employees, agents and nominees harmless
from any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every
-3-
<PAGE>
nature and character arising out of or in any way relating to PSC's action or
non-action upon information, instructions or requests given or made to PSC by
Customer with respect to the Account.
Notwithstanding the above, whenever Customer may be asked to indemnify
or hold PSC harmless, Customer shall be advised of all pertinent facts arising
from the situation in question. Additionally, PSC will use reasonable care to
identify and notify Customer promptly concerning any situation which presents,
actually or potentially, a claim for indemnification against Customer. Customer
shall have the option to defend PSC against any claim for which PSC is entitled
to indemnification from Customer under the terms hereof, and in the event
Customer so elects, it will notify PSC and, thereupon, 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 Customer will be asked to indemnify PSC except with 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
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):
-4-
<PAGE>
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
delivery 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
-5-
<PAGE>
connection with any agreement of 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 Customer shall be
personally liable for any of the foregoing liabilities. 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 Customer.
14. MISCELLANEOUS. In connection with the operation of such Agreement,
PSC and Customer may agree 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. Any such
interpretative 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:
Joseph P. Barri William H. Smith, Jr.
Clerk President
ATTEST: PIONEER TAX-FREE STATE SERIES TRUST
By:
Joseph P. Barri John F. Cogan, Jr.
Secretary President
-6-
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
January 28, 1993
Trustees of Pioneer
Tax-Free State Series Trust
60 State Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
We have been informed that Pioneer Tax-Free State Series Trust (the
"Trust") proposes to register under the Securities Act of 1933, as amended (the
"Act"), and to offer and sell from time to time, an indefinite number of shares
of beneficial interest, without par value, of three of its series designated as
Pioneer California Double Tax-Free Fund, Pioneer New York Triple Tax-Free Fund
and Pioneer Massachusetts Double Tax-Free Fund (the "Funds"), which shares shall
be sold at not less than "net asset value," as defined in the Trust's
Declaration of Trust ("Fund Shares"). The Trustees of the Trust have established
the Funds pursuant to Article V, Section 5.1 of the Trust's Declaration of Trust
dated November 6, 1992 and executed and delivered in Boston, Massachusetts on
that day (the "Declaration of Trust").
We have examined the Trust's Declaration of Trust, By-Laws, Written
Actions of the Board of Trustees, and such other documents as we have deemed
necessary or appropriate for the purposes of this opinion, including, but not
limited to, originals, or copies certified or otherwise identified to our
satisfaction, of such documents, trust records and other instruments.
In our examination of such documents, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, the conformity to original
<PAGE>
Trustees of Pioneer
Tax-Free State Series Trust
January 28, 1993
Page 2
documents of all documents submitted to us as certified or photostatic copies
and the authenticity of the originals of such latter documents.
The opinion set forth in paragraph 3 below is qualified in that
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 disclaims shareholder liability for obligations of the
Trust and requires that notice of such disclaimer be given in every note, bond,
contract, instrument, certificate or undertaking made or issued by the Trustees
or by any officer or officers of the Trust. The Declaration of Trust provides
for indemnification against all loss and expense of any shareholder of a series
of Fund Shares held personally liable solely by reason of being or having been a
shareholder of a Fund, such indemnification to be paid solely out of the assets
of such series. Thus, the shareholder's risk is limited to circumstances in
which the assets of the particular series of which he or she is or was a
shareholder would be insufficient to meet the obligations asserted against or
with respect to such assets.
We have not made an independent review of the laws of any state or
jurisdiction other than the laws of The Commonwealth of Massachusetts.
Based on and subject to the foregoing, we are of the opinion that:
1. The Trust is duly organized, validly existing and in good
standing under the laws of The Commonwealth of Massachusetts; and
2. The beneficial interest of the Trust is divided into an
unlimited number of shares of beneficial interest, no par value per share.
3. The Fund Shares will be validly issued, fully paid and
non-assessable by the Funds when issued in accordance with the provisions of the
Declaration of Trust and subject to compliance with the Securities Act of 1933,
the Investment Company Act of 1940 and the applicable state laws regulating the
sale of securities.
We understand that the Trust is currently in the process of registering
or qualifying shares of the Funds in various
<PAGE>
Trustees of Pioneer
Tax-Free State Series Trust
January 28, 1993
Page 3
states. We hereby consent to the filing of a copy of this opinion with the
securities administrators for such states and with the Securities and Exchange
Commission as part of the Trust's Registration Statement on Form N-1A (or an
amendment thereto) covering an indefinite number of Fund Shares. We hereby also
consent to the reference to our firm under the captions "Dividends,
Distributions and Taxation--Pioneer Massachusetts Double Tax-Free Fund" in the
Funds' Prospectus dated January 29, 1993 and "Tax-Status--Massachusetts State
and Local Tax Matters" in the Funds' Statement of Additional Information dated
January 29, 1993. This opinion may not be filed with any other parties or used
for any other purpose.
Very truly yours,
/s/Hale and Dorr
Hale and Dorr
ORRICK, HERRINGTON
& SUTCLIFFE
January 22, 1996
Pioneer Tax-Free State Series Trust
60 State Street
Boston, Massachusetts 02109
Re: Pioneer California Double Tax-Free Fund
Pioneer New York Triple Tax-Free Fund
Ladies and Gentlemen:
We have acted as special California and New York tax counsel for
Pioneer Tax- Free State Series Trust, a Massachusetts business trust (the
"Trust"), on behalf of the Pioneer California Double Tax-Free Fund and Pioneer
New York Triple Tax-Free Fund, series of the Trust, in connection with the
preparation of Post-effective Amendment No. 4 to the Trust's Registration
Statement under the Securities Act of 1933 (File No. 33-54306) and Amendment No.
5 to the Trust's Registration Statement under the Investment Company Act of 1940
(File No. 811-7336) on Form N-1A (as so amended, the "Registration Statement").
We hereby consent to the filing of this letter as an exhibit to such
Registration Statement and to the reference to our firm under the captions
"Dividends, Distributions and Taxation - State Taxation" in the Prospectus and
"Tax-Status - California State and Local Tax Matters" and "Tax Status - New York
State and Local Tax Matters" in the Statement of Additional Information which
are parts of such Registration Statement. In giving such consent, we do not
thereby admit that we are within the category of persons whose consent is
required by Section 7 of the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Very truly yours,
ORRICK, HERRINGTON & SUTCLIFFE
/s/Orrick, Herrington & Sutcliffe
January 23, 1996
Pioneer Tax-Free State Series Trust
60 State Street
Boston, MA 02109
Re: Pioneer Massachusetts Double Tax-Free Fund
Ladies and Gentlemen:
We have acted as counsel for Pioneer Tax-Free State Series Trust, a
Massachusetts business trust (the "Trust"), in connection with the preparation
of Post-Effective Amendment No. 4 to the Trust's Registration Statement under
the Securities Act of 1933 (File No. 33-54306) and Amendment No. 5 to the
Trust's Registration Statement under the Investment Company Act of 1940 (File
No. 811-7336) on Form N-1A (as so amended, the "Registration Statement"). We
hereby consent to the filing of this letter as an exhibit to such Registration
Statement and to the reference to our firm under the captions "Dividends,
Distributions and Taxation -- Pioneer Massachusetts Double Tax-Free Fund" in the
Prospectus, dated January 26, 1996, and "Tax Status -- Massachusetts State and
Local Tax Matters" in the Statement of Additional Information, dated January 26,
1996, which are parts of such Registration Statement. In giving such consent, we
do not thereby admit that we are within the category of persons whose consent is
required by Section 7 of the Securities Act of 1933, as amended, and the rules
and regulations thereunder.
Very truly yours,
/s/ Hale and Dorr
HALE AND DORR
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated October 27, 1995 included in Pioneer Tax-Free State Series Trust's 1995
Annual Report (and to all references to our firm) included in or made a part of
the Pioneer Tax-Free State Series Trust Post-Effective Amendment No. 4 and
Amendment No. 5 to Registration File Nos. 33-54306 and 811-37336, respectively.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
January 24, 1996
PIONEER
MASSACHUSETTS
DOUBLE TAX-FREE
FUND
ANNUAL REPORT
SEPTEMBER 30, 1995
DEAR SHAREOWNER,
Pioneer Massachusetts Double Tax-Free Fund completed its third fiscal year on
September 30, 1995. This report details the favorable environment for municipal
bond investing during the period, and highlights your Fund's impressive results.
In fact, the Fund's total return for the year ended September 30, 1995, was the
highest among all 44 Massachusetts municipal debt funds tracked by Lipper
Analytical Services, an independent mutual fund research firm.1 While we
encourage you to look at the Fund as a long-term investment, we are pleased with
its recent shorter-term results.
HOW YOUR FUND PERFORMED
We report the following for Pioneer Massachusetts Double Tax-Free Fund as of
September 30, 1995:
* A tax-free 30-day yield of 4.80%.2
Your Fund's tax-free yield was equivalent to a taxable yield of 9.03% at the
end of the period, based on the 46.85% maximum combined federal and
Massachusetts personal income tax rate.
* Shareowners received tax-exempt dividends totaling $0.546 per share for the
year.
* Net asset value stood at $10.98 per share, versus $10.29 one year earlier.
* The Fund's total return for the year ended
September 30 was 12.36% based on net asset value, and 8.46% based on public
offering price. Total return represents the change in share price and assumes
reinvestment of all distributions at net asset value.
For additional performance information, turn to
page 3.
BOND PRICES ROSE DURING THE YEAR
Over the past year, the Federal Reserve (the Fed) raised short-term interest
rates twice, on November 15 and February 1, bringing the federal funds rate as
high as 6.0% and triggering periods of falling bond prices. The Fed's decision
to raise rates was based on its fear of too-fast economic growth and inflation.
Investors, also uncertain about these matters, added to the bond market's
turmoil, fueling its poor performance in 1994.
Moving into 1995, however, the Fed's efforts began to have the desired effect;
many economic indicators slowed, and inflation remained low. Even the Fed's rate
hike on February 1 did little to temper the bond market's positive momentum; if
anything, many investors saw the increase as an indication of the Fed's
determination to keep the economy from expanding too quickly. In fact, in
response to ongoing signs of slowing economic growth, the Fed lowered the
federal funds rate to 5.75% on July 6. This action pushed many bond prices to
some of the highest levels of the year. While various events temporarily caused
prices to fall, conditions over the past 12 months were favorable -- and
rewarding -- for bond investors.
Municipal investors in particular benefited over the year, thanks in large part
to the record low supply of securities made available in 1994 and 1995, combined
with the $35 billion of municipal securities retired on July 1. Demand for
short- term municipal bonds increased as the period progressed, while demand for
long- term municipal bonds fell. This shift in demand was spurred by ongoing
discussions of tax reform; because of the uncertainty surrounding the type and
timing of tax reform, investors are demanding higher yields on long-maturity
bonds to offset their heightened risk. As a result, short-maturity issues became
"rich" toward the end of the period, relative to Treasury securities, while long
maturities became "cheap."
HOW PIONEER MANAGED YOUR INVESTMENT
Your Fund's portfolio holdings had an average quality rating of AA on September
30, 1995. This high-quality focus should provide a level of comfort to
conservative investors uncomfortable with bonds rated below investment-grade.
Your Fund's management does not invest in lower-quality securities or
speculative investments. The Fund also avoids issues subject to the alternative
minimum tax (AMT).
PORTFOLIO QUALITY
(as of September 30, 1995)
Cash and Cash Equivalents 2%
A 45%
AA 13%
AAA 40%
1 Ranking does not account for sales charges or fee waivers. Past performance
does not guarantee future results.
2 Based on a standard formula prescribed by the Securities and Exchange
Commission. The Fund's investment manager, Pioneering Management Corporation,
currently is reducing its management fee and certain other expenses, otherwise
the Fund's total return would have been lower and the yield would have been
2.52%.
<PAGE>
Your management reduced the Fund's exposure to long-maturity bonds over the
quarter. Given the ongoing debate about tax reform, and flat taxes in
particular, we think a more conservative position will be most successful in
maintaining the Fund's share price and income stream. By the end of the period,
the Fund's holdings had an average effective life of 13 years, versus 17 years
on September 30, 1994. We reduced the Fund's weighting in bonds with more than
10 years to maturity to 64% of the portfolio, versus 94% one year ago. Instead,
we significantly increased the number of intermediate-term holdings to take
advantage of their greater liquidity and share price stability. We made the
largest increase in the seven-to-10-year range, which totaled 31% of the
portfolio on September 30, versus 4% one year ago.
PORTFOLIO MATURITY
(as of September 30, 1995)
0-7 Years 5%
7-10 Years 31%
10-20 Years 52%
20+ Years 12%
The Fund remains diversified across market sectors within the Commonwealth. We
continue to favor securities that finance essential services, as well as those
with an income stream that is dedicated to the repayment of principal and
interest. Our approach inevitably leads to high-quality investments in revenue
bonds sold to finance schools, roads and water/sewer facilities. As of September
30, 21% of the portfolio was invested in bonds issued by prestigious private
schools and universities. The fiscal well-being of these establishments tends to
come from large endowments and independent financial resources, as well as high
demand, and does not rely on the Commonwealth's economy. At the period's end,
your Fund also had 12% of its portfolio in transportation bonds. Issuers such as
Massachusetts Port Authority, Massachusetts Turnpike Authority and Massachusetts
Bay Transit Authority use tolls and user fees to ensure payment on their issues,
and have a solid track record for repaying their debt.
LOOKING AHEAD
After a slow start to the fiscal year, improving conditions -- low inflation, a
moderately paced economy and favorable interest rates -- have significantly
lifted the bond market. In fact, these conditions have enabled investors to
erase 1994's losses and enjoy rising bond prices. While the past two years
remind us that investing can be volatile, they also illustrate the benefit of
maintaining a longer-term horizon and considering temporary downturns as buying
opportunities.
As we move into your Fund's fourth fiscal year, we will continue to monitor
events affecting the bond market, including changes in interest rates, economic
data and the strength of the U.S. dollar. For the municipal bond market, we will
closely watch political debates about the national deficit, new federal budget
and tax reform. The impact on municipal bonds will depend on a number of
factors, including the rates at which unearned income is taxed, which deductions
are eliminated, the percentage of taxpayers subject to each rate, and whether
additional restrictions are placed on municipal bond issuance. We expect the
national debate to heat up as specific tax-reform proposals are put forth and
opponents formulate responses.
Even with tax reform, your management is confident that municipal bonds will
continue to play a significant role for investors, especially given their recent
value and limited supply. In addition, the Fund's conservative positioning
should be effective in minimizing the effects of interest rate changes and other
external events. We believe our strategy will offer shareowners rewarding
performance and a high level of comfort.
The following pages provide the Fund's audited list of portfolio holdings and
financial statements as of September 30, 1995. If you have any questions about
your investment in Pioneer Massachusetts Double Tax-Free Fund, please contact
your investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer Massachusetts Double Tax-Free Fund
November 10, 1995
2
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer
Massachusetts Double Tax-Free Fund, compared with the growth of the Lehman
Brothers Municipal Bond Index.+
<TABLE>
<CAPTION>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS
(AS OF SEPTEMBER 30, 1995)
NET ASSET VALUE PUBLIC OFFERING PRICE*
<S> <C> <C>
Life-of-Fund
(2/19/93) 4.85% 3.45%
1 YEAR 12.36 8.46
</TABLE>
<TABLE>
<CAPTION>
PIONEER LEHMAN
MASSACHUSETTS BROTHERS
DOUBLE MUNICIPAL
TAX-FREE BOND
FUND INDEX
<S> <C> <C>
2/28/93 9,650 10,000
3/31/93 9,628 9,894
6/30/93 9,993 10,218
9/30/93 10,369 10,564
12/30/93 10,482 10,712
3/30/94 9,698 10,124
6/30/94 9,750 10,238
9/30/94 9,713 10,306
12/30/94 9,572 10,158
3/30/95 10,425 10,876
6/30/95 10,633 11,138
9/30/95 10,913 11,458
+ Index comparisons begin February 28, 1993.
* Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
</TABLE>
The Lehman Brothers Municipal Bond Index is an unmanaged, composite measure
of investment-grade municipal bonds. Index returns assume reinvestment of
dividends, but, unlike Fund returns, do not reflect any fees, expenses or sales
charges. Investors cannot invest directly in the Index.
Past performance does not guarantee future results. Return and principal
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost. A portion of income may be subject to state and local taxes,
although the Fund intends to minimize any taxable income. 3
<PAGE>
SCHEDULE OF INVESTMENTS -- PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND --
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
STANDARD
& POOR'S/
MOODY'S
RATINGS
PRINCIPAL (UNAU-
AMOUNT DITED) VALUE
<S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- 100%+
MASSACHUSETTS -- 86.7%
$100,000 AAA/Aaa Attleboro General Obligation, AMBAC Insured,
5.3%, 2003 $ 103,197
100,000 AAA/Aaa Boston General Obligation, AMBAC Insured,
5.55%, 2008 101,154
120,000 AAA/NR Boston Industrial Development Financing
Authority Revenue, ConnieLee Insured,
5.25%, 2014 112,589
150,000 A/A Boston Water and Sewer Commission Revenue,
5.4%, 2009 146,736
100,000 NR/Aaa Brookline General Obligation, 5.6%, 2012 100,399
150,000 A+/A1 Commonwealth of Massachusetts General
Obligation, 5.2%, 2004 152,946
125,000 NR/Aaa Concord Electric Improvement General
Obligation, 5.0%, 2012 118,061
125,000 AAA/Aaa Dighton & Rehoboth Regional School District
General Obligation, AMBAC Insured, 5.4%,
2009 124,039
150,000 NR/A1 Harwich General Obligation, 5.5%, 2010 147,476
125,000 NR/Aa Hingham General Obligation, 5.1%, 2006 127,110
50,000 A+/A1 Massachusetts Bay Transportation Authority
Revenue, 5.2%, 2003 51,172
100,000 A+/A1 Massachusetts Bay Transportation Authority
Revenue, 6.1%, 2013 104,037
175,000 A+/A1 Massachusetts Convention Center Authority
Revenue, Boston Common Parking Garage,
5.375%, 2013 166,583
100,000 A+/A1 Massachusetts Health and Educational
Facilities Authority Revenue, Boston
College, 5.125%, 2008 97,313
100,000 AA+/Aaa Massachusetts Health and Educational
Facilities Authority Revenue, Massachu-
setts Institute of Technology, 5.0%, 2011 93,367
100,000 AA+/Aaa Massachusetts Health and Educational
Facilities Authority Revenue, Massachu-
setts Institute of Technology, 5.0%, 2023 88,518
100,000 AA-/Aa Massachusetts Health and Educational
Facilities Authority Revenue, Smith
College, 5.625%, 2010 98,660
150,000 NR/A Massachusetts Health and Educational
Facilities Authority Revenue, Wheaton
College, 5.125%, 2009 143,770
100,000 AA/Aa1 Massachusetts Health and Educational
Facilities Authority Revenue, Williams
College, 5.5%, 2017 95,712
100,000 AAA/Aaa Massachusetts Housing Finance Agency
Residential Development, FNMA Collater-
alized, 6.25%, 2014 100,820
125,000 NR/A Massachusetts Industrial Financial Agency
Revenue, Brooks School, 5.95%, 2023 123,812
100,000 A+/A1 Massachusetts Industrial Financial Agency
Revenue, Holy Cross College, 6.375%, 2015 102,591
100,000 AA/Aa1 Massachusetts Industrial Financial Agency
Revenue, Phillips Academy, 5.375%, 2023 92,210
100,000 AAA/Aaa Massachusetts Municipal Wholesale Electric
Company Revenue, AMBAC Insured, 5.1%, 2007 98,257
150,000 AA-/Aa Massachusetts Port Authority Revenue, 6.0%,
2013 152,193
150,000 AA/A1 Massachusetts State Special Obligation
Revenue, 6.0%, 2013 150,556
125,000 A+/A1 Massachusetts Turnpike Authority Revenue,
5.0%, 2013 113,414
125,000 A/A Massachusetts Water Resources Authority
Revenue, 6.25%, 2010 129,367
125,000 AAA/Aaa Monson General Obligation, MBIA Insured, 5.3%,
2006 127,935
100,000 AAA/Aaa North Andover General Obligation, AMBAC
Insured, 5.6%, 2009 100,759
100,000 AAA/Aaa Sandwich General Obligation, AMBAC Insured,
5.2%, 2005 102,520
100,000 AAA/Aaa South Essex Sewer District, General
Obligation, MBIA Insured, 6.5%, 2006 110,809
100,000 AAA/Aaa University of Massachusetts Building
Authority Revenue, MBIA Insured, 5.5%, 2004 104,160
75,000 NR/Aaa Weston General Obligation, 5.8%, 2012 76,048
$3,858,290
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PUERTO RICO -- 13.3%
125,000 A/BAA1 Commonwealth of Puerto Rico General
Obligation, 6.0%, 2022 $ 122,861
200,000 A-/Baa1 Puerto Rico Electric Power Authority Revenue,
5.25%, 2007 197,222
100,000 A/Baa1 Puerto Rico Highway Authority Revenue, 6.0%,
2020 98,093
175,000 A+/A Puerto Rico Telephone Authority Revenue, 5.4%,
2008 175,740
$ 593,916
TOTAL INVESTMENT INTAX-EXEMPT SECURITIES
-- 100% (Total Cost $4,452,579)(a)(b) $4,452,206
+ The concentration of investments in securities by type of obligation/market
sector is as follows:
General Obligation 18.7%
Insured 24.0%
Revenue Bonds:
Transportation Revenue 11.5%
Power Revenue 4.4%
Housing Revenue 2.2%
Education Revenue 20.7%
Electric, Water & Sewer Revenue 6.1%
Sales Tax Revenue 3.3%
Other Revenues 7.6%
Reserves 1.5%
NR Not Rated.
(a) At September 30, 1995, the net unrealized loss on investments based on
cost for federal income tax purposes of $4,452,579 was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $ 55,472
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (55,845)
Net unrealized loss $ (373)
(b) At September 30, 1995, the Fund had a net capital loss carryforward of
$55,763, which will expire between 2002 and 2003 if not utilized. Purchases
and sales of securities (excluding temporary cash investments) for the year
ended September 30, 1995 aggregated $1,195,429 and $648,245, respectively.
</TABLE>
Purchases and sales of securities (excluding temporary cash investments) for the
year ended September 30, 1995 aggregated $1,195,429 and $648,245, respectively.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
BALANCE SHEET -- SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in tax-exempt securities, at value (cost
$4,452,579; see Schedule of Investments and Note 1) $4,452,206
Cash 66,115
Receivables --
Interest 68,459
Trust shares sold 250
Due from Pioneering Management Corporation (Note 2) 23,136
Other 3,189
Total assets $4,613,355
LIABILITIES:
Dividends payable $2,492
Accrued expenses (Notes 2, 3 and 4) 27,840
Total liabilities $30,332
NET ASSETS:
Paid-in capital (Note 1) $4,639,159
Accumulated net realized loss on investments (55,763)
Net unrealized loss on investments (373)
Total net assets (equivalent to $10.98 per share based on
417,218 trust shares outstanding -- unlimited number of
shares authorized) $4,583,023
</TABLE>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest $227,238
EXPENSES:
Management fees (Note 2) $24,024
Distribution fees (Note 4) 1,082
Transfer agent fees (Note 3) 2,380
Registration fees 2,650
Professional fees 15,835
Accounting (Note 2) 43,031
Custodian fees 7,384
Printing 2,810
Fees and expenses of nonaffiliated trustees 4,300
Regulatory reporting 9,255
Miscellaneous 6,102
Total expenses $118,853
Less management fees waived and expenses assumed by
Pioneering Management Corporation
(Note 2) 98,833
Net expenses $20,020
Net Investment income $207,218
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $(48,347)
Change in net unrealized loss on investments 303,884
Net gain on investments $255,537
Net increase in net assets resulting from
operations $462,755
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
FROM OPERATIONS:
Net investment income $207,218 $189,812
Net realized loss on investments (48,347) (7,416)
Change in net unrealized gain (loss) on investments 303,884 (435,876)
Net increase (decrease) in net assets resulting
from operations $462,755 $(253,480)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ($0.55 and $0.58 per
share, respectively) $(207,218) $(189,812)
In excess of net investment income ($0.00 and $0.00
per share, respectively) -- (882)
Decrease in net assets resulting from
distributions to shareholders $(207,218) $(190,694)
FROM TRUST SHARE TRANSACTIONS: SHARES
Net proceeds from sale of shares 54,141 282,933 $586,518 $3,194,734
Net asset value of shares issued
to shareholders in reinvest-
ment of dividends 17,958 15,911 189,671 172,985
Cost of shares repurchased (21,786) (206,237) (222,614) (2,325,810)
Increase in net assets
resulting from trust share
transactions 50,313 92,607 $553,575 $1,041,909
Net increase in net assets $809,112 $597,735
NET ASSETS:
Beginning of year 3,773,911 3,176,176
End of year $4,583,023 $3,773,911
</TABLE>
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993+
<S> <C> <C> <C>
Net asset value, beginning of period $10.29 $11.58 $11.12
Increase (decrease) from investment
operations:
Net investment income $0.55 $0.58 $0.37
Net realized and unrealized gain
(loss) on investments 0.69 (1.29) 0.46
Total increase (decrease) from
investment operations $1.24 $(0.71) $0.83
Distributions to shareholders from:
Net investment income (0.55) (0.58) (0.37)
Net increase (decrease) in net asset value $0.69 $(1.29) $0.46
Net asset value, end of period $10.98 $10.29 $11.58
Total return* 12.36% (6.33)% 7.58%
Ratio of net operating expenses to average
net assets 0.50% 0.35% 0.00%**
Ratio of net investment income to average
net assets 5.15% 5.23% 5.22%**
Portfolio turnover rate 16.58% 2.65% 0.00%
Net assets, end of period $4,583,023 $3,773,911 $3,176,176
Ratios assuming no waiver of fees and
assumption of expenses:
Net operating expenses 2.95% 3.45% 4.89%**
Net investment income 2.70% 2.13% 0.33%**
* 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 Fund commenced operations on February 19, 1993.
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1995
1. Pioneer Massachusetts Double Tax-Free Fund (the Fund), one of three
funds that currently composes Pioneer Tax-Free State Series Trust, is a
Massachusetts business trust registered under the Investment Company Act of 1940
as a non-diversified, open-end management investment company. As of September
30, 1995, The Pioneer Group, Inc. (PGI) was the beneficial owner of
approximately 54% of the outstanding shares of the Fund. The following is a
summary of significant accounting policies consistently followed by the Fund,
which are in conformity with those generally accepted in the investment company
industry.
A. Security Valuation -- Security transactions are recorded on trade date.
Securities are valued based on valuations furnished by an independent pricing
service that 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,
as required. Market discount and premium are accreted or amortized daily on
a straight-line basis. Original issue discount is accreted daily to interest
income on a yield-to-maturity basis. Temporary cash investments are valued at
amortized cost plus accrued interest, which approximates value. Interest income
is recorded on the accrual basis.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first 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 Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income and net realized capital gains, if any,
to its shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund'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 paid-in capital,
depending on the type of book/tax differences that may exist.
C. Trust Shares -- The Fund records sales and repurchases of its trust
shares on trade date. Shares are sold and redeemed on a continuous basis at net
asset value per share. Net losses, if any, as a result of cancellations are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for
the Fund and an indirect subsidiary of PGI. PFD earned $2,289 in underwriting
commissions on the sale of the Fund's trust shares during the year ended
September 30, 1995. The Fund declares as daily dividends substantially all of
its net investment income. All dividends are paid on the last business day of
the month. Short-term capital gain distributions, if any, may be paid with the
daily dividends.
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management
fees are calculated daily at the annual rate of 0.60% of the Fund's average
daily net assets.
PMC has agreed not to impose a portion of its management fees and to assume
other operating expenses for the Fund to the extent necessary to limit the
Fund's expenses to an annual rate of 0.50% of the Fund's average daily net
assets up to $20 million; 0.55% of the next $5 million; 0.60% of the next $5
million; 0.65% of the next $5 million; 0.70% of the next $5 million; and 0.75%
of the excess over $40 million. PMC's agreement is temporary and voluntary and
may be revised or terminated at any time.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in Accrued expenses is $5,555 in accounting fees
payable to PMC at September 30, 1995.
3. Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Fund
at negotiated rates. Included in Accrued expenses is $1,649 in transfer agent
fees payable to PSC at September 30, 1995.
4. The Fund adopted a Plan of Distribution (the Plan) that allows for the
Fund to reimburse PFD for expenditures to finance any activities primarily
intended to result in the sale of trust shares. The Plan provides for
reimbursement of such expenditures in an amount not to exceed 0.25% of the
Fund's average daily net assets. In addition, a service fee of 0.15% of the
Fund's daily net assets is accrued daily and paid quarterly. Included in Accrued
expenses is $2,712 in distribution fees payable to PFD at September 30, 1995.
8
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF
PIONEER MASSACHUSETTS DOUBLE TAX-FREE FUND:
We have audited the accompanying balance sheet of Pioneer Massachusetts Double
Tax-Free Fund (one of the portfolios that composes Pioneer Tax-Free State Series
Trust), including the schedule of investments as of September 30, 1995, and the
related statement of operations, statements of changes in net assets 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
September 30, 1995 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 Massachusetts Double Tax-Free Fund of Pioneer Tax-Free State Series
Trust as of September 30, 1995, the results of its operations, changes in its
net assets and financial highlights for the periods presented, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 27, 1995
9
<PAGE>
TAX TREATMENT OF DISTRIBUTIONS
MADE DURING THE YEAR ENDED SEPTEMBER 30, 1995
During the year ended September 30, 1995, Pioneer Massachusetts Double Tax-Free
Fund paid the following distributions from net investment income:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PAYMENT DATE PER SHARE
<S> <C>
10/31/94 $0.043
11/30/94 0.046
12/30/94 0.049
01/31/95 0.044
02/28/95 0.046
03/31/95 0.049
04/28/95 0.043
05/31/95 0.045
06/30/95 0.047
07/31/95 0.042
08/31/95 0.046
09/29/95 0.046
$0.546
</TABLE>
Of the Fund's total per share distribution for this period, 100% is tax-exempt
and should be reported on Form 1040, line 8b, U.S. Individual Tax Return.
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF
TRUSTEES AND OFFICERS (UNAUDITED)
The aggregate direct remuneration paid on behalf of the Fund to
nonaffiliated trustees and officers during the period ended September 30, 1995
was approximately $1,800 plus expenses incurred in attending trustees meetings
of approximately $2,600. Fees of trustees who are affiliated with or "interested
persons" of Pioneering Management Corporation and Pioneer Funds Distributor,
Inc., investment adviser and principal underwriter, respectively, of the Fund
($167 in 1995) are reimbursed to the Fund by Pioneering Management Corporation
in accordance with the management contract with the Fund. At September 30, 1995,
the trustees and officers of the Fund owned beneficially 2,517 shares of the
Fund (approximately 0.60% of the outstanding shares). The Pioneer Group, Inc.,
the parent company of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., is a publicly held corporation of which Mr. Cogan, Chairman
and President of the Fund, owned approximately 15% of the outstanding shares of
capital stock at September 30, 1995.
10
<PAGE>
PIONEER MASSACHUSETTS
DOUBLE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
KATHLEEN D. McCLASKEY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
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
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
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
shareowners of the Fund, this report must
be accompanied by an official prospectus
that discusses the objectives, policies,
sales charges and other information about
the Fund.
1195-2826
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER
NEW YORK
TRIPLE TAX-FREE
FUND
ANNUAL REPORT
SEPTEMBER 30, 1995
DEAR SHAREOWNER,
Pioneer New York Triple Tax-Free Fund completed its third fiscal year on
September 30, 1995. This report details the favorable environment for municipal
bond investing during the period, and highlights the impressive performance of
your Fund.
HOW YOUR FUND PERFORMED
We are pleased to report the following for Pioneer New York Triple Tax-Free
Fund as of September 30, 1995:
* Your Fund ranked in the top 7% of all New York tax- free income funds for
the year ended September 30, 1995, according to Lipper Analytical Services,
an independent mutual fund research firm.1
* The Fund's total return for the year was 11.04% based on net asset value,
and 7.12% based on public offering price. Total return represents the change
in share price and assumes reinvestment of all distributions at net asset
value.
* Net asset value stood at $10.96 per share, versus $10.39 one year earlier.
* Shareowners received tax-exempt dividends totaling $0.543 per share.
* The Fund's tax-free 30-day yield on September 30 was 4.68%.2
Your Fund's tax-free yield was equivalent to a taxable yield of 8.81% at the
end of the period, based on the 46.88% maximum combined federal, New York State
and New York City personal income tax rate.
For additional performance information, please turn to page 3.
BOND PRICES ROSE DURING THE YEAR
Over the past year, the Federal Reserve (the Fed) raised short-term
interest rates twice, on November 15 and February 1, bringing the federal funds
rate as high as 6% and triggering periods of falling bond prices. The Fed's
decision to raise rates was based on its fear of too-fast economic growth and
inflation. Investors, also uncertain about these matters, added to the bond
market's turmoil, fueling its poor performance in 1994.
Moving into 1995, however, the Fed's efforts began to have the desired
effect; many economic indicators slowed, and inflation remained low. Even the
Fed's rate hike on February 1 did little to temper the positive momentum in the
bond market; if anything, many investors saw the increase as an indication of
the Fed's determination to keep the economy from expanding too quickly. In fact,
in response to ongoing signs of slowing economic growth, the Fed lowered the
federal funds rate to 5.75% on July 6. This action pushed many bond prices to
some of the highest levels of the year. While various events temporarily caused
prices to fall, conditions over the past 12 months were favorable -- and
rewarding -- for bond investors.
Municipal investors in particular benefited over the year, thanks in large
part to the record low supply of securities made available in 1994 and 1995,
combined with the $35 billion of municipal securities retired on July 1. Demand
for short-term municipal bonds increased as the period progressed, while demand
for long-term municipal bonds fell. This shift was spurred by ongoing
discussions of tax reform; because of the uncertainty surrounding the type and
timing of tax reform, investors are demanding higher yields on long-maturity
bonds to offset their heightened risk. As a result, short-maturity issues became
"rich" toward the end of the period, relative to Treasury securities, while long
maturities became "cheap."
HOW PIONEER MANAGED YOUR INVESTMENT
Your Fund's portfolio holdings had an average quality rating of AA on
September 30, 1995. This high-quality focus should provide a level of comfort to
conservative investors uncomfortable with bonds below investment-grade. Your
Fund does not invest in lower-quality securities or speculative investments. The
Fund also avoids issues subject to the alternative minimum tax (AMT).
PORTFOLIO QUALITY
(as of September 30, 1995)
Cash and Cash Equivalents 1%
A 32%
AA 28%
AAA 39%
Your management reduced the Fund's exposure to long-maturity bonds over the
year. Given the ongoing debate about tax reform, and flat taxes in particular,
we
1 The Fund ranked fifth of 79 funds; the ranking was based on total return and
does not account for sales charges or fee waivers. Past performance does not
guarantee future results.
2 Based on a standard formula prescribed by the Securities and Exchange
Commission. The Fund's investment manager, Pioneering Management Corporation,
currently is reducing its management fee and certain other expenses, otherwise
the Fund's total return would have been lower and the yield would have been
2.28%.
<PAGE>
think a more conservative position will be most successful in maintaining the
Fund's share price and income stream. By the end of the period, the Fund's
holdings had an average effective life of just over 11 years, versus 16 years on
September 30, 1994. We reduced the Fund's weighting in bonds with more than 10
years to maturity to 62% of the portfolio, versus 93% one year ago. Instead, we
significantly increased the number of intermediate-term holdings, to take
advantage of their greater liquidity and share price stability. We made the
largest increase in the seven-to-10-year maturity range, which totaled 27% of
the portfolio on September 30, versus 5% one year ago.
PORTFOLIO MATURITY
(as of September 30, 1995)
0-7 Years 11%
7-10 Years 27%
10-20 Years 54%
20+ Years 8 %
The economic recovery in New York has been slow- moving. In addition, New York
City's credit rating was downgraded in July, reflecting ongoing concern about
the City's ability to repay its debt in a timely manner. On a more positive
note, Governor George Pataki's deficit- reduction budget, designed to help the
State's stagnant economy rebuild, has been viewed by many corporations as
positive and conducive to business operations. Whether the budget is effective
in improving the economy over the long term, however, remains to be seen. Your
management will monitor this situation, as well as the progress and
effectiveness of other initiatives set forth by the State's administration.
Your Fund remains well-diversified across many market sectors within New York
State. Over the course of the year, however, we moved away from issues of New
York City, given its economic and credit concerns. To safeguard the Fund from
such credit problems, we kept a significant portion of the portfolio in
high-quality, insured bonds. We continue to favor securities that finance
essential services, as well as those with an income stream that is dedicated to
the repayment of principal and interest. As a result, on September 30 the Fund
held a number of bonds of private educational institutions, as well as providers
of essential services such as roads. The performance of these high-quality
securities tends not to be directly tied to the State's economy, which we think
is most beneficial for your Fund at this point in time.
LOOKING AHEAD
After a slow start to the fiscal year, improving conditions -- low inflation, a
moderately paced economy and favorable interest rates -- have significantly
lifted the bond market. In fact, these conditions have enabled investors to more
than erase 1994's losses. While the past two years remind us that investing can
be volatile, they also illustrate the benefit of maintaining a longer- term
horizon and considering temporary downturns as buying opportunities.
As we move into your Fund's fourth fiscal year, we will continue to monitor
events affecting the bond market, including changes in interest rates, economic
data and the strength of the U.S. dollar. For the municipal bond market, we will
closely watch political debates about the national deficit, new federal budget
and tax reform. The impact on municipal bonds will depend on a number of
factors, including the rates at which investment income is taxed, which
deductions are eliminated, the percentage of taxpayers subject to each rate, and
whether additional restrictions are placed on municipal bond issuance. We expect
the national debate to heat up as specific tax-reform proposals are put forth
and opponents formulate responses.
Even with tax reform, your management is confident that municipal bonds will
continue to play a significant role for investors, especially given their recent
value and limited supply. In addition, the Fund's conservative positioning
should be effective in minimizing the effects of interest rate changes and other
external events. We believe our strategy will offer shareowners rewarding
performance and a high level of comfort.
The following pages provide details about your Fund, as well as its audited list
of portfolio holdings and financial statements as of September 30, 1995. If you
have any questions about your investment in Pioneer New York Triple Tax-Free
Fund, please contact your investment representative, or call Pioneer at
1-800-225-6292.
Respectfully,
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer New York Triple Tax-Free Fund
November 10, 1995
2
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer New York
Triple Tax-Free Fund, compared with the growth of the Lehman Brothers Municipal
Bond Index.+
<TABLE>
<CAPTION>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS
(AS OF SEPTEMBER 30, 1995)
NET ASSET VALUE PUBLIC OFFERING PRICE*
<S> <C> <C>
Life-of-Fund (2/19/93) 4.50% 3.08%
1 Year 11.04 7.12
+ Index comparisons begin February 28, 1993.
* Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
</TABLE>
<TABLE>
<CAPTION>
PIONEER LEHMAN
NEW YORK BROTHERS
TRIPLE TAX-FREE MUNICIPAL
FUND BOND INDEX
<S> <C> <C>
2/28/93 9,650 10,000
3/31/93 9,554 9,894
6/30/93 9,939 10,218
9/30/93 10,297 10,564
12/30/93 10,410 10.712
3/30/94 9,731 10,124
6/30/94 9,738 10,238
9/30/94 9,736 10,306
12/30/94 9,528 10,158
3/30/95 10,327 10,876
6/30/95 10,553 11,138
9/30/95 10,811 11,458
+ Index comparisons begin February 28, 1993.
* Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
</TABLE>
The Lehman Brothers Municipal Bond Index is an unmanaged, composite measure
of investment-grade municipal bonds. The Index's returns assume reinvestment
of dividends, but, unlike the Fund's returns, do not reflect any fees, expenses
or sales charges. Investors cannot invest directly in the Index.
Past performance does not guarantee future results. Return and principal
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost. A portion of income may be subject to state and local taxes,
although the Fund intends to minimize any taxable income.
3
<PAGE>
SCHEDULE OF INVESTMENTS -- PIONEER NEW YORK TRIPLE TAX-FREE FUND --
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
STANDARD
& POOR'S/
MOODY'S
RATINGS
PRINCIPAL (UNAU-
AMOUNT DITED) VALUE
<S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- 100%+
NEW YORK -- 87.0%
$200,000 AAA/AAA Albany General Obligation, AMBAC
Insured, 6.125%, 2009 $ 211,742
100,000 AAA/Aaa Buffalo School General Obligation,
MBIA Insured, 5.05%, 2007 99,057
125,000 AAA/Aaa Buffalo Sewer Authority Revenue,
FGIC Insured, 5.25%, 2008 124,414
100,000 NR/Aa1 Dutchess County General Obligation,
5.25%, 2010 97,020
150,000 AAA/Aaa Fairport Central School District
General Obligation, FGIC Insured,
5.0%, 2006 151,226
100,000 AAA/Aaa Huntington General Obligation, FGIC
Insured, 5.5%, 2013 98,018
100,000 AAA/Aaa Metropolitan Transportation Author-
ity Revenue, FGIC Insured, 5.5%,
2008 102,014
100,000 AAA/Aaa Monroe County General Obligation,
MBIA Insured, 5.5%, 2008 102,203
125,000 A/A Municipal Assistance Corporation For
New York City Revenue, 5.0%, 2008 120,197
100,000 AAA/Aaa Nassau County General Obligation,
FGIC Insured, 6.6%, 2011 110,294
75,000 AAA/Aaa Nassau County Combined Sewer
Districts General Obligation, MBIA
Insured, 5.4%, 2011 73,373
30,000 A-/A New York City Municipal Water Finance
Authority Water And Sewer System
Revenue, 6.375%, Prerefunded,
2002* 33,217
100,000 A-/A New York State General Obligation,
5.3%, 2019 90,777
100,000 A-/A New York State General Obligation,
5.7%, 2006 104,391
100,000 AA/Aa New York State Dormitory Authority
Revenue, Cornell University, 5.1%,
2005 101,244
175,000 AA+/Aaa New York State Dormitory Authority
Revenue, Columbia University, 4.7%,
2007 168,480
100,000 AAA/Aaa New York State Dormitory Authority
Revenue, Fordham University, FGIC
Insured, 5.6%, 2008 102,591
100,000 AAA/Aaa New York State Dormitory Authority
Revenue, N.Y.U., MBIA Insured,
5.50%, 2004 104,947
200,000 A+/A1 New York State Dormitory Authority
Revenue, University of Rochester,
6.0%, 2007 210,674
125,000 AAA/Aaa New York State Environmental
Facilities Corporation Water
Pollution Control Revenue, 5.6%,
2013 121,956
100,000 A/A New York State Local Government
Assistance Corporation Revenue,
6.00%, 2012 100,395
100,000 A/A New York State Local Government
Assistance Corporation Revenue,
6.25%, 2018 100,983
125,000 NR/Aa New York State Mortgage Agency
Revenue, 5.25%, 2015 112,646
125,000 NR/Aa New York State Mortgage Agency
Revenue, 6.5%, 2017 127,978
100,000 AA-/Aa New York State Power Authority
Revenue, 6.25%, 2023 102,250
100,000 AA-/Aa New York State Power Authority
Revenue, 6.5%, 2008 110,229
150,000 A/A1 New York State Thruway Authority
Revenue, 5.75%, 2019 144,043
100,000 AAA/Aaa North Hempstead General Obligation,
AMBAC Insured, 5.5%, 2004 105,059
100,000 NR/Aa Orange County General Obligation,
5.3%, 2007 100,854
150,000 AA/Aa Onondaga County General Obligation,
5.85%, 2011 154,404
50,000 AA-/A1 Port Authority of New York And New
Jersey Revenue, 5.125%, 2012 46,775
100,000 AA-/A1 Port Authority of New York And New
Jersey Revenue, 5.2%, 2019 91,320
100,000 NR/Aa Sands Point General Obligation, 6.4%,
2008 108,417
100,000 NR/Aa Schenectady County, General Obliga-
tion, 5.15%, 2007 99,904
75,000 AAA/Aaa Suffolk County Water Authority
Revenue, AMBAC Insured, 5.25%,
Prerefunded, 2004* 76,619
100,000 AAA/Aaa Syracuse General Obligation, MBIA
Insured, 5.0%, 2008 96,973
100,000 NR/A1 Tarrytown General Obligation, 5.0%,
2009 94,563
200,000 A+/Aa Triborough Bridge And Tunnel
Authority Revenue, 6.0%, 2014 200,492
200,000 NR/A United Nations Development Corpora-
tion Revenue, 6.0%, 2012 200,122
$4,501,861
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
PUERTO RICO -- 13.0%
$100,000 A/BAA1 Commonwealth of Puerto Rico General 98,289
Obligation, 6.0%, 2022
200,000 A-Baa1 Puerto Rico Electric Power Authority 197,222
Revenue, 5.25%, 2007
175,000 A+/A Puerto Rico Telephone Authority 175,740
Revenue, 5.4%, 2008
200,000 AAA/Aaa University of Puerto Rico Revenue, 202,264
MBIA Insured, 4.75%, 2001
$ 673,515
TOTAL INVESTMENT IN TAX-EXEMPT $5,175,376
SECURITIES -- 100% (Total Cost
$5,107,362)(a)(b)
+ The concentration of investments in securities by type of obligation/market
sector is as follows:
General Obligation 16.3%
Escrowed in U.S. Government
Securities 2.1%
Insured 34.1%
Revenue Bonds:
Education Revenue 9.2%
Housing Revenue 4.6%
Pollution Control Revenue 2.3%
Power Revenue 7.9%
Sales Tax Revenue 6.2%
Transportation Revenue 9.3%
Other Revenues 7.2%
Reserves 0.8%
* Prerefunded bonds have been collateralized by U.S. Treasury securities that
are held in escrow and used to pay principal and interest on the tax-exempt
issue and to retire the bonds in full at the earliest refunding date.
NR Not Rated.
(a) At September 30, 1995, the net unrealized gain on investments based on cost
for federal income tax purposes of $5,107,362
was as follows:
Aggregate gross unrealized gain for all
investments in which there is an excess of
value over tax cost $115,168
Aggregate gross unrealized loss for all
investments in which there is an excess of
tax cost over value $ (47,154)
Net unrealized gain $ 68,014
(b) At September 30, 1995, the Fund had a net capital loss carryforward of
$61,226,
Purchases and sales of securities (excluding temporary cash investments)
for the year ended September 30, 1995 aggregated $1,715,728 and $832,428,
respectively.
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
BALANCE SHEET -- SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in tax-exempt securities, at
value (cost $5,107,362; see Schedule of
Investments and Note 1) $5,175,376
Cash 41,956
Receivables --
Interest 88,454
Trust shares sold 37,543
Due from Pioneering Management Corporation
(Note 2) 30,484
Other 2,707
Total assets $5,376,520
LIABILITIES:
Dividends payable $5,397
Accrued expenses (Notes 2, 3 and 4) 34,350
Total liabilities $39,747
NET ASSETS:
Paid-in capital (Note 1) $5,329,985
Accumulated net realized loss on investments (61,226)
Net unrealized gain on investments 68,014
Total net assets (equivalent to $10.96
per share based on 486,907 trust shares
outstanding) $5,336,773
</TABLE>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest $263,987
EXPENSES:
Management fees (Note 2) $28,039
Distribution fees (Note 4) 1,243
Transfer agent fees (Note 3) 2,816
Registration fees 6,880
Professional fees 22,395
Accounting (Note 2) 41,700
Custodian fees 5,635
Printing 4,368
Fees and expenses of nonaffiliated trustees 4,039
Regulatory reporting 8,274
Miscellaneous 5,842
Total expenses $131,231
Less management fees waived and expenses
assumed by Pioneering Management
Corporation (Note 2) 107,866
Net expenses $23,365
Net investment income $240,622
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on investments $(59,336)
Change in net unrealized loss on investments 339,010
Net gain on investments $279,674
Net increase in net assets resulting
from operations $520,296
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
<S> <C> <C>
FROM OPERATIONS:
Net investment income $240,622 $188,795
Net realized loss on investments (59,336) (1,890)
Change in net unrealized gain (loss) on investments 339,010 (392,984)
Net increase (decrease) in net assets resulting from
operations $520,296 $(206,079)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ($0.54 and $0.57 per share,
respectively) $(240,622) $(188,795)
In excess of net investment income ($0.00 and $0.00
per share, respectively) -- (145)
Decrease in net assets resulting from distributions
to shareholders $(240,622) $(188,940)
FROM TRUST SHARE TRANSACTIONS: SHARES
Net proceeds from sale of shares 310,917 156,372 $3,207,788 $1,722,320
Net asset value of shares issued
to shareholders in reinvestment
of dividends 17,263 14,245 182,654 155,363
Cost of shares repurchased (242,023) (30,748) (2,497,589) (337,697)
Increase in net assets resulting
from trust share transactions 86,157 139,869 $892,853 $1,539,986
Net increase in net assets $1,172,527 $1,144,967
NET ASSETS:
Beginning of year 4,164,246 3,019,279
End of year $5,336,773 $4,164,246
</TABLE>
PIONEER NEW YORK TRIPLE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING FOR THE PERIODS PRESENTED
<TABLE>
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1995 1994 1993+
<S> <C> <C> <C>
Net asset value, beginning of
period $10.39 $11.57 $11.18
Increase (decrease) from invest-
ment operations:
Net investment income $0.54 $0.57 $0.37
Net realized and unrealized
gain (loss) on investments 0.57 (1.18) 0.39
Total increase (decrease)
from investment opera-
tions $1.11 $(0.61) $0.76
Distributions to shareholders
from:
Net investment income (0.54) (0.57) (0.37)
Net increase (decrease) in net
asset value $0.57 $(1.18) $0.39
Net asset value, end of period $10.96 $10.39 $11.57
Total return* 11.04% (5.45)% 6.91%
Ratio of net operating expenses
to average net assets 0.50% 0.36% 0.00%**
Ratio of net investment income to
average net assets 5.13% 5.15% 5.19%**
Portfolio turnover rate 18.26% 1.96% 0.00%
Net assets, end of period $5,336,773 $4,164,246 $3,019,279
Ratios assuming no waiver of
management fees and assumption
of expenses:
Net operating expenses 2.80% 3.51% 5.05%**
Net investment income 2.83% 2.00% 0.14%**
* Assumes initial investment at net asset value at the beginning of the 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 Fund commenced operations on February 19, 1993.
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1995
1. Pioneer New York Triple Tax-Free Fund (the Fund), one of three funds
that currently composes Pioneer Tax- Free State Series Trust, is a Massachusetts
business trust registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. As of September 30,
1995, The Pioneer Group, Inc. (PGI) was the beneficial owner of approximately
41% of the outstanding shares of the Fund. The following is a summary of
significant accounting policies consistently followed by the Fund, which are in
conformity with those generally accepted in the investment company industry.
A. Security Valuation -- Security transactions are recorded on trade date.
Securities are valued based on valuations furnished by an independent pricing
service that 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, as
required. Market discount and premium are accreted or amortized daily on a
straight-line basis. Original issue discount is accreted daily to interest
income on a yield-to- maturity basis. Temporary cash investments are valued at
amortized cost plus accrued interest, which approximates value. Interest income
is recorded on the accrual basis.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first 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 Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income and net realized capital gains, if any,
to its shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial
reporting purposes is determined in accordance with federal income tax rules.
Therefore, the source of the Fund'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 paid-in capital,
depending on the type of book/tax differences that may exist.
C. Trust Shares -- The Fund records sales and repurchases of its trust
shares on trade date. Shares are sold and redeemed on a continuous basis at net
asset value per share. Net losses, if any, as a result of cancellations are
absorbed by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for
the Fund and an indirect subsidiary of PGI. PFD earned $2,927 in underwriting
commissions on the sale of the Fund's trust shares during the year ended
September 30, 1995. The Fund declares as daily dividends substantially all of
its net investment income. All dividends are paid on the last business day of
the month. Short-term capital gain distributions, if any, may be paid with the
daily dividends.
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management
fees are calculated daily at the annual rate of 0.60% of the Fund's average
daily net assets.
PMC has agreed not to impose a portion of its management fees and to assume
other operating expenses for the Fund to the extent necessary to limit the
Fund's expenses to an annual rate of 0.50% of the Fund's average daily net
assets up to $20 million; 0.55% of the next $5 million; 0.60% of the next $5
million; 0.65% of the next $5 million; 0.70% of the next $5 million; and 0.75%
of the excess over $40 million. PMC's agreement is temporary and voluntary and
may be revised or terminated at any time.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in Accrued expenses is $4,458 in accounting fees
payable to PMC at September 30, 1995.
3. Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Fund
at negotiated rates. Included in Accrued expenses is $808 in transfer agent
fees payable to PSC at September 30, 1995.
4. The Fund adopted a Plan of Distribution (the Plan) that allows for the
Fund to reimburse PFD for expenditures to finance any activities primarily
intended to result in the sale of trust shares. The Plan provides for
reimbursement of such expenditures in an amount not to exceed 0.25% of the
Fund's average daily net assets. In addition, a service fee of 0.15% of the
Fund's daily net assets is accrued daily and paid quarterly. Included in Accrued
expenses is $1,732 in distribution fees payable to PFD at September 30, 1995.
Report of Independent Public Accountants
8
<PAGE>
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF
PIONEER NEW YORK TRIPLE TAX-FREE FUND:
We have audited the accompanying balance sheet of Pioneer New York Triple
Tax-Free Fund (one of the portfolios that composes Pioneer Tax-Free State Series
Trust), including the schedule of investments as of September 30, 1995, and the
related statement of operations, statements of changes in net assets 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
September 30, 1995 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 New York Triple Tax-Free Fund of Pioneer Tax-Free State Series Trust as
of September 30, 1995, the results of its operations, changes in its net assets
and financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 27, 1995
9
<PAGE>
TAX TREATMENT OF DISTRIBUTIONS
MADE DURING THE YEAR ENDED SEPTEMBER 30, 1995
During the year ended September 30, 1995, Pioneer New York Triple Tax-Free Fund
paid the following distributions from net investment income:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PAYMENT DATE PER SHARE
<S> <C>
10/31/94 $0.042
11/30/94 0.046
12/30/94 0.048
01/31/95 0.042
02/28/95 0.046
03/31/95 0.050
04/28/95 0.042
05/31/95 0.045
06/30/95 0.048
07/31/95 0.042
08/31/95 0.045
09/29/95 0.047
$ 0.543
</TABLE>
Of the Fund's total per share distribution for this period, 100% is
tax-exempt and should be reported on Form 1040, line 8b, U.S. Individual Tax
Return.
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF TRUSTEES AND
OFFICERS (UNAUDITED)
The aggregate direct remuneration paid on behalf of the Fund to
nonaffiliated trustees and officers during the period ended September 30, 1995
was approximately $2,400 plus expenses incurred in attending trustees meetings
of approximately $2,300. Fees of trustees who are affiliated with or "interested
persons" of Pioneering Management Corporation and Pioneer Funds Distributor,
Inc., investment adviser and principal underwriter, respectively, of the Fund
($167 in 1995) are reimbursed to the Fund by Pioneering Management Corporation
in accordance with the management contract with the Fund. The Pioneer Group,
Inc., the parent company of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., is a publicly held corporation of which Mr. Cogan, Chairman
and President of the Fund, owned approximately 15% of the outstanding shares of
capital stock at September 30, 1995.
10
PIONEER NEW YORK
TRIPLE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
KATHLEEN D. McCLASKEY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
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
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
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 shareowners of
the Fund, this report must be accompanied by an official
prospectus that discusses the objectives, policies,
sales charges and other information about the Fund.
1195-2827
(C)Pioneer Funds Distributor, Inc.
PIONEER
CALIFORNIA
DOUBLE TAX-FREE
FUND
ANNUAL REPORT
SEPTEMBER 30, 1995
DEAR SHAREOWNER,
Pioneer California Double Tax-Free Fund completed its third fiscal year on
September 30, 1995. This report details the favorable environment for municipal
bond investing during the period, and highlights the impressive results turned
in by your Fund.
HOW YOUR FUND PERFORMED
We are pleased to report the following for Pioneer California Double Tax-Free
Fund as of September 30, 1995:
* Your Fund ranked in the top 7% of all California tax- free income funds for
the year ended September 30, 1995, according to Lipper Analytical Services,
an independent mutual fund research firm.1
* The Fund's total return for the year ended September 30 was 11.50% based
on net asset value, and 7.61% based on public offering price. Total return
represents the change in share price and assumes reinvestment of all
distributions at net asset value.
* Net asset value stood at $10.81 per share, versus $10.22 one year earlier.
* Shareowners received tax-exempt dividends totaling $0.55 per share.
* The Fund's tax-free 30-day yield on September 30 was 4.97%.2
Your Fund's tax-free yield was equivalent to a taxable yield of 9.24% at the
end of the period, based on the 46.24% maximum combined federal and
California personal income tax rate.
For additional performance information, please turn to page 4.
BOND PRICES ROSE DURING THE YEAR
Over the past year, the Federal Reserve (the Fed) raised short-term
interest rates twice, on November 15 and February 1, bringing the federal funds
rate as high as 6.0% and triggering periods of falling bond prices. The Fed's
decision to raise rates was based on its fear of too-fast economic growth and
inflation. Investors, also uncertain about these matters, added to the bond
market's turmoil, fueling its poor performance in 1994.
Moving into 1995, however, the Fed's efforts began to have the desired effect;
many economic indicators slowed, and inflation remained low. Even the Fed's rate
hike on February 1 did little to temper the positive momentum in the bond
market; if anything, many investors saw the increase as an indication of the
Fed's determination to keep the economy from expanding too quickly. In fact, in
response to ongoing signs of slowing economic growth, the Fed lowered the
federal funds rate to 5.75% on July 6. This action pushed many bond prices to
some of the highest levels of the year. While various events temporarily caused
prices to fall, conditions over the past 12 months were favorable -- and
rewarding -- for bond investors.
Municipal investors in particular benefited over the year, thanks in large part
to the record low supply of securities made available in 1994 and 1995, combined
with the $35 billion of municipal securities retired on July 1. Demand for
short-term municipal bonds increased as the period progressed, while demand for
long-term municipal bonds fell. This shift in demand was spurred by ongoing
discussions of tax reform; because of the uncertainty surrounding the type and
timing of tax reform, investors are demanding higher yields on long- maturity
bonds to offset their heightened risk. As a result, short-maturity issues became
"rich" toward the end of the period, relative to Treasury securities, while long
maturities became "cheap."
HOW PIONEER MANAGED YOUR INVESTMENT
Your Fund's portfolio holdings had an average quality rating of AA on September
30, 1995. This high-quality focus should provide a level of comfort to
conservative investors uneasy with bonds rated below investment-grade. Your Fund
does not invest in lower-quality securities or speculative investments. The Fund
also avoids issues subject to the alternative minimum tax (AMT).
PORTFOLIO QUALITY
(as of September 30, 1995)
Cash and Cash Equivalents 1%
A 22%
AA 43%
AAA 34%
1 The Fund ranked sixth of 92 funds; the ranking was based on total return and
does not account for sales charges or fee waivers. Past performance does not
guarantee future results.
2 Based on a standard formula prescribed by the Securities and Exchange
Commission. The Fund's investment manager, Pioneering Management Corporation,
currently is reducing its management fee and certain other expenses, otherwise
the Fund's total return would have been lower and the yield would have been
3.19%.
Your management reduced the Fund's exposure to long-maturity bonds over the
year. Given the ongoing debate about tax reform, and flat taxes in particular,
we think a more conservative position will be most successful in maintaining the
Fund's share price and income stream. By the end of the period, the Fund's
holdings had an average effective life of 16 years, versus 19 years on September
30, 1994. We reduced the Fund's weighting in bonds with more than 10 years to
maturity to 80% of the portfolio, versus 94% one year ago. Instead, we increased
the number of intermediate-term holdings, specifically, bonds in the
seven-to-10-year maturity range, to take advantage of their greater liquidity
and share price stability. On September 30, 1995, these issues totaled 14% of
the portfolio, versus zero one year ago.
PORTFOLIO MATURITY
(as of September 30, 1995)
0-7 Years 6%
7-10 Years 14%
10-20 Years 49%
20+ Years 31%
The Fund remains diversified across many market sectors within California. Of
course, just as important as what the Fund's portfolio holds is what it does
not. Specifically, your management avoids investments in hospital and lease
bonds, as well as certificates of participation. In our opinion, these issues
put investors at risk since the repayment of principal and interest comes from a
third party, not the issuing municipality. Instead, we favor securities that
finance essential services, as well as those whose performance is not directly
tied to the State's troubled economy. Our approach inevitably leads to
high-quality investments in revenue bonds sold to finance water and sewer and
power facilities. On September 30, your portfolio had 21% of its portfolio in
water and sewer bonds, and another 14% in utility issues.
Orange County's fiscal troubles made some progress as the year progressed. The
County declared bankruptcy on December 6, 1994, after a series of speculative
investments led to significant losses in its investment pool. After a series of
debates and proposals, investors in the pool agreed to a bailout plan whereby
money from other Orange County investments would contribute and pay for the
defunct issues. On September 15, State legislators approved this recovery plan;
Moody's Investors Service (a bond rating agency) responded a few days later to
legislative actions by announcing it would review and re-evaluate the County's
credit standing. We will continue to monitor this situation as it evolves.
Your Fund does not own any direct obligations of Orange County. The portfolio
did contain Orange County Local Transportation Authority Sales Tax Revenue Bonds
and South Coast Water District Revenue Bonds, two securities that had
investments in the pool managed by Orange County. While the County's problems
did not affect the performance of these specific bonds -- they made their
scheduled payments and maintained their high quality ratings -- we nonetheless
took advantage of a market rally to sell them since they were not insured.
LOOKING AHEAD
After a slow start to the fiscal year, improving conditions -- low inflation, a
moderately paced economy and favorable interest rates -- have significantly
lifted the bond market. In fact, these conditions have enabled investors to
erase 1994's losses and to benefit from higher prices. While the past two years
remind us that investing can be volatile, they also illustrate the advantage of
maintaining a longer-term horizon and considering temporary downturns as buying
opportunities.
As we move into your Fund's fourth fiscal year, we will continue to monitor
events affecting the bond market, including changes in interest rates, economic
data and the strength of the U.S. dollar. For the municipal bond market, we will
closely watch political debates about the national deficit, new federal budget
and tax reform. The impact on municipal bonds will depend on a number of
factors, including the rates at which investment income is taxed, which
deductions are eliminated, the percentage of taxpayers subject to each rate, and
whether additional restrictions are placed on municipal bond issuance. We expect
the national debate to heat up as specific tax-reform proposals are put forth
and opponents formulate responses.
2
<PAGE>
Even with tax reform, your management is confident that municipal bonds will
continue to play a significant role for investors, especially given their recent
value and limited supply. In addition, the Fund's conservative positioning
should be effective in minimizing the effects of interest rate changes and other
external events. We believe our strategy will offer share- owners rewarding
performance and a high level of comfort.
The following pages provide the Fund's audited list of portfolio holdings and
financial statements as of September 30, 1995. If you have any questions about
your investment in Pioneer California Double Tax-Free Fund, please contact your
investment representative, or call Pioneer at 1-800-225-6292.
Respectfully,
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President,
Pioneer California Double Tax-Free Fund
November 10, 1995
3
<PAGE>
GROWTH OF A $10,000 INVESTMENT*
This chart shows the growth of a $10,000 investment made in Pioneer California
Double Tax-Free Fund, compared with the growth of the Lehman Brothers Municipal
Bond Index.+
<TABLE>
<CAPTION>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
AVERAGE ANNUAL TOTAL RETURNS
(AS OF SEPTEMBER 30, 1995)
NET ASSET VALUE PUBLIC OFFERING PRICE*
<S> <C> <C>
Life-of-Fund
(2/19/93) 3.91% 2.50%
1 YEAR 11.50 7.61
</TABLE>
<TABLE>
<CAPTION>
PIONEER
CALIFORNIA LEHMAN
DOUBLE BROTHERS
TAX-FREE MUNICIPAL
FUND BOND INDEX
<S> <C> <C>
2/28/93 9,650 10,000
3/31/93 9,625 9,894
6/30/93 9,926 10,218
9/30/93 10,322 10,564
12/30/93 10,386 10,712
3/30/94 9,620 10,124
6/30/94 9,561 10,238
9/30/94 9,554 10,306
12/30/94 9,284 10,158
3/30/95 10,215 10,876
6/30/95 10,394 11,138
9/30/95 10,653 11,458
+ Index comparisons begin February 28, 1993.
* Reflects deduction of the maximum 3.5% sales charge at the beginning of the
period and assumes reinvestment of all distributions at net asset value.
</TABLE>
The Lehman Brothers Municipal Bond Index is an unmanaged, composite measure
of investment-grade municipal bonds. The Index's returns assume reinvestment
of dividends, but, unlike the Fund's returns, do not reflect any fees, expenses
or sales charges. Investors cannot invest directly in the Index.
Past performance does not guarantee future results. Return and principal
fluctuate, and your shares, when redeemed, may be worth more or less than their
original cost. A portion of income may be subject to state and local taxes,
although the Fund intends to minimize any taxable income.
4
<PAGE>
SCHEDULE OF INVESTMENTS -- PIONEER CALIFORNIA DOUBLE TAX-FREE FUND -- SEP-
TEMBER 30, 1995
<TABLE>
<CAPTION>
STANDARD
& POOR'S/
MOODY'S
RATINGS
PRINCIPAL (UNAU-
AMOUNT DITED) VALUE
<S> <C> <C> <C>
TAX-EXEMPT SECURITIES -- 98.7%
CALIFORNIA -- 91.4%
$250,000 AAA/AAA Berkeley Unified School District General
Obligation, FGIC Insured, 5.25%, 2010 $ 238,815
100,000 AA-/Aa Beverly Hills Public Financing Authority
Revenue, 6.0%, 2022 98,679
250,000 AA/NR Beverly Hills Unified School District General
Obligation, 5.75%, 2020 240,138
150,000 AA-/NR Burlingame Elementary School District General
Obligation, 5.5%, 2013 141,224
250,000 AA/Aa California State Department Water Resources,
Central Valley Project Revenue, 6.0% , 2007 264,835
250,000 AA/Aa1 California Educational Facilities Authority
Revenue, Pomona College, 6.0%, 2017 249,975
250,000 AA/Aa California Educational Facilities Authority
Revenue, University of Southern California,
5.8%, 2015 241,118
250,000 AA-/Aa California State Transportation Commission,
San Francisco Bay Toll Bridge Revenue,
4.6%, 2005 238,815
250,000 A/A1 California General Obligation, 6.5%, 2010 270,955
100,000 AA-/A1 East Bay Municipal Utility District Revenue,
6.0%, 2020 98,597
250,000 AA/Aa Los Angeles County Sanitation District
Financing Authority Revenue, 5.375%, 2013 231,640
100,000 AA-/Aa Los Angeles Department of Water and Power
Revenue, 6.0%, 2032 98,171
250,000 AA/Aa1 Los Angeles General Obligation, 5.25%, 2008 241,455
250,000 AAA/Aaa M-S-R Public Power Agency, San Juan Revenue
Project, AMBAC Insured, 6.0%, 2008 262,005
250,000 AA/Aa Metropolitan Water District of Southern
California Revenue, 5.5%, 2019 233,955
250,000 AAA/Aaa North of the River Sanitation District #1
Revenue, AMBAC Insured, 5.25%, 2017 229,720
250,000 AAA/Aaa Northern California Power Agency Revenue,
Hydroelectric Project Number One, MBIA
Insured, 5.5%, 2023 232,857
100,000 AAA/Aaa Northern California Transmission Revenue,
MBIA Insured, 5.5%, 2014 95,406
100,000 NR/A1 Palm Springs Unified School District General
Obligation, 5.3%, 2017 90,404
250,000 AA+/Aa Palo Alto Utility Revenue, 6.2%, 2012 261,697
250,000 AA-/Aa Pasadena Electric Revenue, 5.15%, 2001 258,762
250,000 A-/A Sacramento Municipal Utility District
Electric Revenue, 5.75%, 2022 235,712
250,000 AA+/Aaa San Diego Open Space Park Facilities General
Obligation, 5.75%, 2008 257,017
250,000 A-/A1 San Diego Public Facilities Financing
Authority Sewer Revenue, 5.25%, 2020 222,345
100,000 AA/Aa San Francisco Bay Area Rapid Transit District,
4.5%, 1996 100,522
250,000 AAA/Aaa San Francisco Bay Area Rapid Transit District,
FGIC Insured, 5.25%, 2006 252,432
100,000 AAA/Aaa San Francisco Sewer Revenue, AMBAC Insured,
5.5%, 2015 95,113
250,000 AAA/Aaa San Jose Airport Revenue, FGIC Insured,
5.875%, 2007 263,502
100,000 AAA/Aaa San Luis Obispo Water Revenue, MBIA Insured,
5.5%, 2018 94,192
250,000 AAA/Aaa Santa Barbara County Transportation
Authority, Sales Tax Revenue, FGIC Insured,
5.0%, 2010 231,948
200,000 AA-/Aa Santa Monica-Malibu Unified School District
General Obligation, 5.5%, 2018 188,342
250,000 AAA/Aaa Santa Monica Wastewater Enterprise Revenue,
AMBAC Insured, 5.0%, 2008 240,233
100,000 A+/A South Coast Water District Revenue, 5.875%,
2021 91,179
250,000 A+/Aa Southern California Public Power Authority
Transmission Project Revenue, 5.75%, 2021 239,305
$6,831,065
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
PUERTO RICO -- 7.3%
$300,000 A-/BAA1 Puerto Rico Electric Power Authority Revenue,
5.25%, 2007 $295,833
250,000 A+/A Puerto Rico Telephone Authority Revenue, 5.4%,
2008 251,059
$546,892
TOTAL INVESTMENT IN TAX-EXEMPT SECURITIES
(Total Cost $7,480,161)(a)(b) $7,377,957
TEMPORARY CASH INVESTMENT -- 1.3%
TAX-EXEMPT VARIABLE RATE SECURITY(1)
100,000 California Pollution Control Financing
Authority, Shell Oil Guarantee, 4.30%, 2008 $100,326
TOTAL TEMPORARY CASH INVESTMENT
(Total Cost $100,000) $100,326
TOTAL INVESTMENT IN SECURITIES--100%
(Total Cost $7,580,161)+ $7,478,283
+ The concentration of investments in securities by type of obligation/market
sector is as follows:
General Obligation 15.7%
Insured 26.5%
Revenue Bonds:
Education Revenue 6.6%
Electric, Water & Sewer Revenue 21.4%
Power Revenue 13.8%
Transportation Revenue 7.9%
Other Revenues 6.8%
Reserves 1.3%
NR Not Rated.
(1) Coupon rate shown reflects rate as of September 30, 1995.
(a) At September 30, 1995, the net unrealized loss on investments based on cost
for federal income tax purposes of $7,480,161
was as follows:
Aggregate gross unrealized gain for all investments
in which there is an excess of value over tax cost $ 87,529
Aggregate gross unrealized loss for all investments
in which there is an excess of tax cost over value (189,733)
Net unrealized loss $ (102,204)
(b) At September 30, 1995, the Fund had a net capital loss carryforward of $109,121,
which will expire between 2002 and 2003 if not utilized.
Purchases and sales of securities (excluding temporary cash investments)
for the year ended September 30, 1995 aggregated $2,634,527 and $1,609,818,
respectively.
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
BALANCE SHEET -- SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in tax-exempt securities, at value (including
temporary cash investment of $100,326)
(cost $7,580,161; see Schedule of Investments and Note 1) $7,478,283
Cash 3,259
Receivables --
Interest 118,685
Trust shares sold 68,234
Due from Pioneering Management Corporation (Note 2) 27,508
Other 2,692
Total assets $7,698,661
LIABILITIES:
Dividends payable $10,685
Accrued expenses (Notes 2, 3 and 4) 32,524
Total liabilities $43,209
NET ASSETS:
Paid-in capital (Note 1) $7,866,777
Accumulated net realized loss on investments (109,121)
Net unrealized loss on investments (102,204)
Total net assets (equivalent to $10.81 per share based on
707,874 trust shares outstanding) $7,655,452
</TABLE>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME (NOTE 1):
Interest $394,234
EXPENSES:
Management fees (Note 2) $40,877
Distribution fees (Note 4) 10,141
Transfer agent fees (Note 3) 4,220
Registration fees 7,415
Professional fees 23,855
Accounting (Note 2) 41,975
Custodian fees 7,280
Printing 3,464
Fees and expenses of nonaffiliated trustees 3,832
Regulatory reporting 9,101
Miscellaneous 5,690
Total expenses $157,850
Less management fees waived and expenses assumed by
Pioneering Management Corporation
(Note 2) 123,786
Net expenses $34,064
Net investment income $360,170
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments $(87,587)
Change in net unrealized loss on investments 479,623
Net gain on investments $392,036
Net increase in net assets resulting from
operations $752,206
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
FROM OPERATIONS:
Net investment income $360,170 $292,847
Net realized loss on investments (87,587) (21,534)
Change in net unrealized gain (loss) on investments 479,623 (728,382)
Net increase (decrease) in net assets resulting
from operations $752,206 $(457,069)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ($0.55 and $0.59 per share,
respectively) $(360,170) $(292,847)
In excess of net investment income ($0.00 and $0.00
per share, respectively) -- (450)
Decrease in net assets resulting from distributions
to shareholders $(360,170) $(293,297)
FROM TRUST SHARE TRANSACTIONS
(NOTE 1): SHARES
Net proceeds from sale of shares 224,501 301,171 $2,307,233 $3,349,296
Net asset value of shares issued
to shareholders in reinvest-
ment of dividends 22,116 17,790 230,893 192,405
Cost of shares repurchased (144,061) (58,823) (1,463,505) (625,136)
Increase in net assets
resulting from trust share
transactions 102,556 260,138 $1,074,621 $2,916,565
Net increase in net assets $1,466,657 $2,166,199
NET ASSETS:
Beginning of year 6,188,795 4,022,596
End of year $7,655,452 $6,188,795
</TABLE>
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A SHARE OUTSTANDING
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED PERIOD ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 SEPTEMBER 30, 1993+
<S> <C> <C> <C>
Net asset value, beginning of period $10.22 $11.65 $11.24
Increase (decrease) from investment
operations:
Net investment income $0.55 $0.59 $0.38
Net realized and unrealized gain
(loss) on investments 0.59 (1.43) 0.41
Total increase (decrease) from
investment operations $1.14 $(0.84) $0.79
Distributions to shareholders from:
Net investment income (0.55) (0.59) (0.38)
Net increase (decrease) in net asset
value $0.59 $(1.43) $0.41
Net asset value, end of period $10.81 $10.22 $11.65
Total return* 11.50% (7.45%) 7.14%
Ratio of net operating expenses to
average net assets 0.50% 0.36% 0.00%**
Ratio of net investment income to
average net assets 5.27% 5.31% 5.37%**
Portfolio turnover rate 24.30% 10.82% 0.00%
Net assets, end of period $7,655,452 $6,188,795 $4,022,596
Ratios assuming no waiver of management
fees and assumption of
expenses:
Net operating expenses 2.31% 2.69% 4.15%**
Net investment income 3.46% 2.98% 1.22%**
* 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 Fund commenced operations on February 19, 1993.
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS -- SEPTEMBER 30, 1995
1. Pioneer California Double Tax-Free Fund (the Fund), one of three funds that
currently composes Pioneer Tax-Free State Series Trust, is a Massachusetts
business trust registered under the Investment Company Act of 1940 as a
non-diversified, open-end management investment company. As of September 30,
1995, The Pioneer Group, Inc. (PGI) was the beneficial owner of approximately
19% of the outstanding shares of the Fund. The following is a summary of
significant accounting policies consistently followed by the Fund, which are in
conformity with those generally accepted in the investment company industry.
A. Security Valuation -- Security transactions are recorded on trade date.
Securities are valued based on valuations furnished by an independent pricing
service that 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, as
required. Market discount and premium are accreted or amortized daily on a
straight-line basis. Original issue discount is accreted daily to interest
income on a yield-to- maturity basis. Temporary cash investments are valued at
amortized cost plus accrued interest, which approximates value. Interest income
is recorded on the accrual basis.
Gains and losses on sales of investments are calculated on the "identified
cost" method for both financial reporting and federal income tax purposes. It
is the Fund's practice to first 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 Taxes -- It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute all of its taxable income and net realized capital gains, if any,
to its shareholders. Therefore, no federal income tax provision is required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules. Therefore,
the source of the Fund'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 paid-in capital, depending on
the type of book/tax differences that may exist.
C. Trust Shares -- The Fund records sales and repurchases of its trust shares on
trade date. Shares are sold and redeemed on a continuous basis at net asset
value per share. Net losses, if any, as a result of cancellations are absorbed
by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund
and an indirect subsidiary of PGI. PFD earned $5,877 in underwriting commissions
on the sale of the Fund's trust shares during the year ended September 30, 1995.
The Fund declares as daily dividends substantially all of its net investment
income. All dividends are paid on the last business day of the month. Short-term
capital gain distributions, if any, may be paid with the daily dividends.
2. Pioneering Management Corporation (PMC), the Fund's investment adviser,
manages the Fund's portfolio and is a wholly owned subsidiary of PGI. Management
fees are calculated daily at the annual rate of 0.60% of the Fund's average
daily net assets.
PMC has agreed not to impose a portion of its management fees and to assume
other operating expenses for the Fund to the extent necessary to limit the
Fund's expenses to an annual rate of 0.50% of the Fund's average daily net
assets up
to $20 million; 0.55% of the next $5 million; 0.60% of the next $5 million;
0.65% of the next $5 million; 0.70% of the next $5 million; and 0.75% of the
excess over $40 million. PMC's agreement is temporary and voluntary and may
be revised or terminated at any time.
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, are
paid by the Fund. Included in Accrued expenses is $4,504 in accounting fees
payable to PMC at September 30, 1995.
3. Pioneering Services Corporation (PSC), a wholly owned subsidiary of PGI,
provides substantially all transfer agent and shareholder services to the Fund
at negotiated rates. Included in Accrued expenses is $618 in transfer agent
fees payable to PSC at September 30, 1995.
4. The Fund adopted a Plan of Distribution (the Plan) that allows for the Fund
to reimburse PFD for expenditures to finance any activities primarily intended
to result in the sale of trust shares. The Plan provides for reimbursement of
such expenditures in an amount not to exceed 0.25% of the Fund's average daily
net assets. In addition, a service fee of 0.15% of the Fund's daily net assets
is accrued daily and paid quarterly. Included in Accrued expenses is $4,141 in
distribution fees payable to PFD at September 30, 1995.
9
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF
PIONEER CALIFORNIA DOUBLE TAX-FREE FUND:
We have audited the accompanying balance sheet of Pioneer California Double
Tax-Free Fund (one of the portfolios that composes Pioneer Tax-Free State Series
Trust), including the schedule of investments as of September 30, 1995, and the
related statement of operations, statements of changes in net assets 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
September 30, 1995 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 California Double Tax-Free Fund of Pioneer Tax-Free State Series Trust
as of September 30, 1995, the results of its operations, changes in its net
assets and financial highlights for the periods presented, in conformity with
generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
October 27, 1995
10
<PAGE>
TAX TREATMENT OF DISTRIBUTIONS
MADE DURING THE YEAR ENDED SEPTEMBER 30, 1995
During the year ended September 30, 1995, Pioneer California Double Tax-Free
Fund paid the following distributions from net investment income:
<TABLE>
<CAPTION>
DISTRIBUTIONS
PAYMENT DATE PER SHARE
<S> <C>
10/31/94 $0.043
11/30/94 0.047
12/30/94 0.050
01/31/95 0.043
02/28/95 0.046
03/31/95 0.049
04/28/95 0.043
05/31/95 0.045
06/30/95 0.048
07/31/95 0.043
08/31/95 0.046
09/29/95 0.047
$0.550
</TABLE>
Of the Fund's total per share distribution for this period, 100% is tax-exempt
and should be reported on Form 1040, line 8b, U.S. Individual Tax Return.
TRUSTEES' FEES, PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP OF
TRUSTEES AND OFFICERS (UNAUDITED)
The aggregate direct remuneration paid on behalf of the Fund to nonaffiliated
trustees and officers during the period ended September 30, 1995 was
approximately $2,400 plus expenses incurred in attending trustees meetings of
approximately $2,300. Fees of trustees who are affiliated with or "interested
persons" of Pioneering Management Corporation and Pioneer Funds Distributor,
Inc., investment adviser and principal underwriter, respectively, of the Fund
($167 in 1995) are reimbursed to the Fund by Pioneering Management Corporation
in accordance with the management contract with the Fund. The Pioneer Group,
Inc., the parent company of Pioneering Management Corporation and Pioneer Funds
Distributor, Inc., is a publicly held corporation of which Mr. Cogan, Chairman
and President of the Fund, owned approximately 15% of the outstanding shares of
capital stock at September 30, 1995.
11
<PAGE>
PIONEER CALIFORNIA
DOUBLE TAX-FREE FUND
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
KATHLEEN D. McCLASKEY, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
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
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
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
shareowners of the Fund, this report must
be accompanied by an official prospectus
that discusses the objectives, policies,
sales charges and other information about
the Fund.
1195-2819
(C)Pioneer Funds Distributor, Inc.
SHARE PURCHASE AGREEMENT
This Agreement is made this 28th day of January, 1993 between The
Pioneer Group, Inc., a Delaware corporation ("PGI") and Pioneer Tax-Free State
Series Trust, a Massachusetts business trust (the "Trust") on behalf of its
series, Pioneer California Double Tax-Free Fund, Pioneer New York Triple
Tax-Free Fund and Pioneer Massachusetts Double Tax-Free Fund (the "Series")..
WHEREAS, the Trust wishes to sell and PGI wishes to purchase 10,000
shares of beneficial interest of each Series at a purchase price of $11.00 per
share (the "Shares"); and
WHEREAS, PGI is purchasing the Shares for the purpose of providing the
initial capitalization of each Series of the Trust;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PGI is
delivering to the Trust, on behalf of the Series, a check in the amount of
$330,000 in full payment for the Shares.
2. 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.
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
President
PIONEER TAX-FREE STATE SERIES TRUST
/s/ Joseph P. Barri
Joseph P. Barri
Secretary
DISTRIBUTION PLAN
PIONEER TAX-FREE STATE SERIES TRUST
DISTRIBUTION PLAN, dated as of , 1992 of PIONEER TAX FREE STATE SERIES
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 ruled 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 sell 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
<PAGE>
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 adopt this
Plan for the Trust as a plan of distribution in accordance with Rule 12b-1, on
the following terms and conditions:
1. 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.
2. 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, without limiting the generality of the foregoing, the
initial categories of such expenses shall be (i) a service fee to be paid to
qualified broker-dealers in an amount not to exceed 25/100 of 1% per annum of
each Portfolio's daily net assets; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on certain
sales of the Trust's Shares with no initial sales charge; and (iii)
reimbursement to PFD for expenses incurred providing services to shareholders
and supporting broker-dealers and other organizations, such as banks and trust
companies, in their effort to provide such services (any addition of such
categories shall be subject to the approval of the Qualified Trustees, as
defined below, of the Trust). 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.
3. 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
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.
-2-
<PAGE>
4. 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.
5. 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 not 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.
6. This plan will remain in effect indefinately, provided that such
continuance is "specially 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 , 1993. In
the event of termination or non-continuance of this Plan, each Portfolio has
twelve months to reimburse any expense which it incurs prior to such termination
or non-continuance, provided that payments by such Portfolio during such
twelve-month period shall not exceed 25/100 of 1% of each Portfolio's average
daily net assets during such period.
7. This Plan may be amended at any time by the Board of Trustees,
provided that this Plan may not be amended to increase materially the limitation
on the annual percentage of average net assets which may be expended hereunder
without the approval of holders of a "majority of the outstanding voting
securities" of the Trust and may not be materially amended in any case without a
vote of a majority of both the Trustees and the Qualified Trustees. Any
amendment of this Plan to increase or modify the expense categories initially
designated by the Trustees in paragraph 2 above shall only require approval of a
majority of the Trustees and the Qualified Trustees if such amendment does not
include an increase in the expense limitation set forth in paragraph 1 above.
This plan may be terminated at any time by a vote of a majority of the Qualified
Trustees or by a vote of the holders of a "majority of the outstanding voting
securities" of the Trust.
8. 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
-3-
<PAGE>
the Board of Trustees, including a majority of the Qualified Trustees.
9. 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 plan and the purposes for which such
expenditures were made.
10. 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.
11. For the purpose of this Plan, the term "interested persons"
"majority of the outstanding voting securities" and "specifically approved at
least annually" are used as defined in the 1940 Act.
12. The Trust shall preserve copies of this Plan, and each agreement
related hereto and each report referred to in paragraph 9 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.
13. This Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
14. If any provisions of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
-4-
[ARTICLE] 6
[CIK] 0000893968
[NAME] PIONEER TAX-FREE STATE SERIES. TRUST
[SERIES]
[NUMBER] 03
[NAME] PIONEER MASSACHUSETTS DOUBLE TAX-FREE
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 4452579
[INVESTMENTS-AT-VALUE] 4452206
[RECEIVABLES] 91845
[ASSETS-OTHER] 3189
[OTHER-ITEMS-ASSETS] 66115
[TOTAL-ASSETS] 4613355
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 30332
[TOTAL-LIABILITIES] 30332
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 4639159
[SHARES-COMMON-STOCK] 417218
[SHARES-COMMON-PRIOR] 366905
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (55763)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (373)
[NET-ASSETS] 4583023
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 227238
[OTHER-INCOME] 0
[EXPENSES-NET] (20020)
[NET-INVESTMENT-INCOME] 207218
[REALIZED-GAINS-CURRENT] (48347)
[APPREC-INCREASE-CURRENT] 303884
[NET-CHANGE-FROM-OPS] 462755
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (207218)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 54141
[NUMBER-OF-SHARES-REDEEMED] 21786
[SHARES-REINVESTED] 17958
[NET-CHANGE-IN-ASSETS] 809112
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (7416)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 24024
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 118853
[AVERAGE-NET-ASSETS] 4020067
[PER-SHARE-NAV-BEGIN] 10.29
[PER-SHARE-NII] 0.55
[PER-SHARE-GAIN-APPREC] 0.69
[PER-SHARE-DIVIDEND] 0.55
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.98
[EXPENSE-RATIO] 0.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000893968
[NAME] PIONEER TAX FREE STATE SERIES TRUST
[SERIES]
[NUMBER] 01
[NAME] PIONEER CALIFORNIA DOUBLE TAX FREE FUND
[MULTIPLIER] 1
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 7580161
[INVESTMENTS-AT-VALUE] 7478283
[RECEIVABLES] 214427
[ASSETS-OTHER] 2692
[OTHER-ITEMS-ASSETS] 3259
[TOTAL-ASSETS] 7698661
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 43209
[TOTAL-LIABILITIES] 43209
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 7866777
[SHARES-COMMON-STOCK] 707874
[SHARES-COMMON-PRIOR] 605318
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (109121)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (102204)
[NET-ASSETS] 7655452
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 394234
[OTHER-INCOME] 0
[EXPENSES-NET] (34064)
[NET-INVESTMENT-INCOME] 360170
[REALIZED-GAINS-CURRENT] (87587)
[APPREC-INCREASE-CURRENT] 479623
[NET-CHANGE-FROM-OPS] 752206
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (360170)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 224501
[NUMBER-OF-SHARES-REDEEMED] 144061
[SHARES-REINVESTED] 22116
[NET-CHANGE-IN-ASSETS] 1466657
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (21534)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 40877
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 157850
[AVERAGE-NET-ASSETS] 6839010
[PER-SHARE-NAV-BEGIN] 10.22
[PER-SHARE-NII] 0.55
[PER-SHARE-GAIN-APPREC] 0.59
[PER-SHARE-DIVIDEND] 0.55
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.81
[EXPENSE-RATIO] 0.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000893968
[NAME] PIONEER TAX-FREE STATE SERIES TRUST
[SERIES]
[NUMBER] 02
[NAME] PIONEER NEW YORK TRIPLE TAX FREE
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1995
[PERIOD-END] SEP-30-1995
[INVESTMENTS-AT-COST] 5107362
[INVESTMENTS-AT-VALUE] 5175376
[RECEIVABLES] 156481
[ASSETS-OTHER] 2707
[OTHER-ITEMS-ASSETS] 41956
[TOTAL-ASSETS] 5376520
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 39747
[TOTAL-LIABILITIES] 39747
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 5329985
[SHARES-COMMON-STOCK] 486907
[SHARES-COMMON-PRIOR] 400750
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (61226)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 68014
[NET-ASSETS] 5336773
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 263987
[OTHER-INCOME] 0
[EXPENSES-NET] (23365)
[NET-INVESTMENT-INCOME] 240622
[REALIZED-GAINS-CURRENT] (59336)
[APPREC-INCREASE-CURRENT] 339010
[NET-CHANGE-FROM-OPS] 520296
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (240622)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 310917
[NUMBER-OF-SHARES-REDEEMED] 242023
[SHARES-REINVESTED] 17263
[NET-CHANGE-IN-ASSETS] 1172527
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (1890)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 28039
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 131231
[AVERAGE-NET-ASSETS] 4690811
[PER-SHARE-NAV-BEGIN] 10.39
[PER-SHARE-NII] 0.54
[PER-SHARE-GAIN-APPREC] 0.57
[PER-SHARE-DIVIDEND] 0.54
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 10.96
[EXPENSE-RATIO] 0.50
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
POWER OF ATTORNEY
I, the undersigned trustee and officer of Pioneer Tax-Free State Series
Trust, a Massachusetts business trusts, do hereby constitute and appoint Joseph
P. Barri and David D. Tripple, 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 Statement on Forms N-1A to be
filed by Pioneer Tax-Free State Series 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 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 capacity indicated to enable Pioneer Tax-Free
State Series 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 attorneys or each of them 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: November 6, 1992 /s/John F. Cogan, Jr.
---------------------
John F. Cogan, Jr., President,
Chief Executive Officer and
Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned officer of Pioneer Tax-Free State Series Trust, a
Massachusetts business trusts, do hereby constitute and appoint John F. Cogan,
Jr., Joseph P. Barri and David D. Tripple, 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 Statement on Forms
N-1A to be filed by Pioneer Tax-Free State Series 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 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 capacity indicated to enable
Pioneer Tax-Free State Series 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 attorneys or
each of them 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: November 6, 1992 /s/William H. Keough
--------------------
William H. Keough, Treasurer
and Chief Financial Officer
<PAGE>
POWER OF ATTORNEY
I, the undersigned trustee and officer of Pioneer Tax-Free State Series
Trust, a Massachusetts business trusts, do hereby constitute and appoint John F.
Cogan, Jr. and Joseph P. Barri, to be my true, sufficient and lawful attorney,
with full power to sign for me, in my name and in the capacity indicated below,
any and all amendments to the Registration Statement on Form N-1A to be filed by
Pioneer Tax-Free State Series 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 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 Tax-Free State
Series 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: November 6, 1992 /s/David D. Tripple
-------------------
David D. Tripple, Executive
Vice President and Trustee
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of Pioneer Bond Fund, Pioneer Europe Fund,
Pioneer Fund, Pioneer Growth Trust, Pioneer International Growth Fund, Pioneer
Money Market Trust, Pioneer Municipal Bond fund, Pioneer Short-Term Income
Trust, Pioneer Tax-Free State Series Trust, Pioneer II, Pioneer Three and
Pioneer U.S. Government Trust (collectively, the "Funds"), all Massachusetts
business trusts, do hereby constitute and appoint John F. Cogan, Jr., Joseph P.
Barri and William H. Keough, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacity indicated
below, any and all amendments to the Registration Statements on Forms N-1A to be
filed by the Funds under the Investment Company Act of 1940, as amended, and
under the Securities Act of 1933, as amended, with respect to the offering of
the Funds' shares of beneficial interest, no par value, and any and all other
documents and papers relating thereto, and generally to do all such things in my
name and on my behalf in the capacity indicated to enable the Funds to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended, and all requirements of the Securities and Exchange Commission
thereunder, hereby ratifying and confirming my signature as it may be signed by
said attorneys or each of them to any and all amendments to said Registration
Statements.
IN WITNESS WHEREOF, I have hereunder set my hand on the date set
opposite my signature.
Dated: 9/24/93 /s/Stephen K. West
Stephen K. West
Trustee
