File No. 33-77472
File No. 811-8468
As filed with the Securities and Exchange Commission
on February ____, 1996.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X_/
----
Pre-Effective Amendment No. 3 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 / X /
----
Amendment No. 5 / X /
----
(Check appropriate box or boxes)
PIONEER INDIA FUND
(Exact name of registrant as specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
(617) 742-7825
(Registrant's Telephone Number, including Area Code)
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
It is proposed that this filing will become effective (check appropriate box):
x immediately upon filing pursuant to Rule 485(b)
Registrant has registered an indefinite amount of securities under the
Securities Act of 1933 pursuant to Section 24(f) of the Investment Company Act
of 1940. Registrant filed a Rule 24f-2 Notice for its fiscal year ended October
31, 1995 on November 16, 1995.
<PAGE>
PIONEER INDIA FUND
Cross-Reference Sheet Showing Location in Prospectus
and Statement of Additional Information of Information
Required by Items of the Registration Form
Location in
Prospectus or
Statement of
Form N-1A Item Number and Caption Additional
Information
1. Cover Page.............................................Prospectus - Cover
Page
2. Synopsis...............................................Prospectus - Expense
Information
3. Condensed Financial Information........................Prospectus -
Financial Highlights
4. General Description of Registrant......................Prospectus -
Investment Objective
and Policies;
Management of the
Fund; Fund Share
Alternatives; Share
Price; How to Buy
Fund Shares; How to
Sell Fund Shares; How
to Exchange Fund
Shares; The Fund
5. Management of the Fund.................................Prospectus -
Management of the
Fund
6. Capital Stock and Other Securities.....................Prospectus -
Investment Objective
and Policies; Fund
Share Alternatives;
Share Price; How to
Buy Fund Shares; How
to Sell Fund Shares;
How to Exchange Fund
Shares; The Fund
<PAGE>
7. Purchase of Securities Being
Offered..............................................Prospectus - Fund
Share Alternatives;
Share Price; How to
Buy Fund Shares; How
to Sell Fund Shares;
How to Exchange Fund
Shares; The Fund;
Shareholder Services;
Distribution Plans
8. Redemption or Repurchase...............................Prospectus - Fund
Share Alternatives;
Share Price; How to
Sell Fund Shares; How
to Exchange Fund
Shares; The Fund;
Shareholder Services
9. Pending Legal Proceedings..............................Not Applicable
10. Cover Page.............................................Statement of
Additional
Information - Cover
Page
11. Table of Contents......................................Statement of
Additional
Information - Cover
Page
12. General Information and History........................Statement of
Additional
Information - Cover
Page; Description of
Shares
13. Investment Objectives and Policy.......................Statement of
Additional
Information -
Investment Policies,
Restrictions and Risk
Factors
<PAGE>
14. Management of the Fund.................................Statement of
Additional
Information -
Management of the
Fund; Investment
Advisers
15. Control Persons and Principal Holders
of Securities...................................Statement of
Additional
Information -
Management of the
Fund
16. Investment Advisory and Other
Services........................................Statement of
Additional
Information -
Management of the
Fund; Investment
Advisers; Principal
Underwriter;
Distribution Plans;
Shareholder
Servicing/Transfer
Agent; Custodian;
Independent Public
Accountant
17. Brokerage Allocation and Other
Practices.......................................Statement of
Additional
Information -
Portfolio
Transactions
18. Capital Stock and Other Securities.....................Statement of
Additional
Information -
Description of Shares
19. Purchase Redemption and Pricing of
Securities Being Offered........................Statement of
Additional
Information - Letter
of Intention;
Systematic Withdrawal
Plan; Determination
of Net Asset Value
<PAGE>
20. Tax Status.............................................Statement of
Additional
Information - Tax
Status and Dividends
21. Underwriters...........................................Statement of
Additional
Information -
Principal
Underwriter;
Distribution Plans
22. Calculation of Performance Data........................Statement of
Additional
Information -
Investment Results
23. Financial Statements...................................Statement of
Additional
Information -
Financial Statements
<PAGE>
[Pioneer logo]
Pioneer India Fund
Prospectus
Class A, Class B and Class C Shares
February 28, 1996
Pioneer India Fund (the "Fund") seeks long-term growth of capital by
investing in a portfolio consisting primarily of equity securities of
companies in India. Any current income generated from these securities is
incidental to the investment objective of the Fund. The Fund is a diversified
open-end investment company designed for investors seeking to achieve long-
term capital growth. There is, of course, no assurance that the Fund will
achieve its investment objective.
Pioneering Management Corporation ("PMC") is the Fund's investment manager.
ITI Pioneer AMC Ltd. (the "Indian Adviser") is the Fund's investment adviser
in India and, subject to the Manager's supervision, is responsible for
managing the Fund's investments in the Indian securities markets. The Indian
Adviser is a joint venture between "PMC" and Investment Trust of India
Limited ("ITI"), a corporation organized under the laws of India. ITI was
established in 1946 and is one of India's leading providers of financial
services. The Indian Adviser was the first institution to establish
locally-registered private sector mutual funds in India.
Because of recent economic and political developments in India, both PMC and
the Indian Adviser believe that India's economy has significant potential to
experience rapid growth in the next several years. For these reasons, PMC and
the Indian Adviser also believe that the equity securities of many companies
in India offer significant potential for long-term capital growth.
Investments in India's securities markets entail significant risks in
addition to the risks customarily associated with investing in U.S.
securities. The Fund is intended for investors who can accept the risks
associated with its investments and may not be suitable for all investors.
See "Investment Objective and Policies--Risk Factors" for a discussion of
these risks. Because the Fund invests primarily in securities of companies in
India, the Fund is not intended to be a complete investment program.
Fund returns and share prices fluctuate and the value of your account upon
redemption may be more or less than your purchase price. Shares in the Fund
are not deposits or obligations of, or guaranteed or endorsed by, any bank or
other depository institution, and are not federally insured by the Federal
Deposit Insurance Corporation (FDIC), the Federal Reserve Board or any other
government agency. Shares of the Fund involve investment risks, including the
possible loss of some or all of the principal investment.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing in the Fund. Please read
and retain it for your future reference. More information about the Fund is
included in the Statement of Additional Information also dated February 28,
1996 (Part B of the Registration Statement), which is incorporated in this
Prospectus by reference. A copy of the Statement of Additional Information
may be obtained free of charge by calling Shareholder Services at
1-800-225-6292 or by written request to the Fund at 60 State Street, Boston,
Massachusetts 02109. Additional information about the Fund has been filed
with the Securities and Exchange Commission (the "SEC") and is available upon
request and without charge.
TABLE OF CONTENTS PAGE
- -------- ------------------------------------------------- -------
I. EXPENSE INFORMATION 2
II. FINANCIAL HIGHLIGHTS 3
III. INVESTMENT OBJECTIVE AND POLICIES 4
Risk Factors 5
IV. MANAGEMENT OF THE FUND 8
V. FUND SHARE ALTERNATIVES 10
VI. SHARE PRICE 10
VII. HOW TO BUY FUND SHARES 11
VIII. HOW TO SELL FUND SHARES 14
IX. HOW TO EXCHANGE FUND SHARES 15
X. DISTRIBUTION PLANS 16
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION 16
XII. SHAREHOLDER SERVICES 17
Account and Confirmation Statements 17
Additional Investments 17
Automatic Investment Plans 18
Financial Reports and Tax Information 18
Distribution Options 18
Directed Dividends 18
Direct Deposit 18
Voluntary Tax Withholding 18
Telephone Transactions and Related
Liabilities 18
FactFone(SM) 18
Retirement Plans 19
Telecommunications Device for the Deaf (TDD) 19
Systematic Withdrawal Plans 19
Reinstatement Privilege (Class A Shares Only) 19
XIII. THE FUND 19
XIV. INVESTMENT RESULTS 19
APPENDIX A: India 20
APPENDIX B: Certain Investment Practices 22
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses that
you, as a shareholder, will bear directly or indirectly when you invest in
the Fund. The table reflects annual operating expenses based on actual
expenses for the period ended October 31, 1995, expressed as a percentage of
the Fund's average net assets. For Class C shares, operating expenses are
based on estimated expenses that would have been incurred if Class C shares
had been outstanding for the entire fiscal year ended October 31, 1995.
Class A Class B Class C+
--------- --------- -----------
Shareholder Transaction Expenses
Maximum Initial Sales Charge on
Purchases (as a percentage of
offering price) 5.75% None None
Maximum Sales Charge on
Reinvestment of Dividends None None None
Maximum Deferred Sales Charge (as
a percentage of original
purchase price or redemption
price, as applicable) None(1) 4.00% 1.00%
Redemption Fee(2) None None None
Exchange Fee None None None
Annual Operating Expenses
(as a percentage of average net
assets):
Management Fee (after fee
reduction)(3) 0.00% 0.00% 0.00%
12b-1 Fees 0.23% 1.00% 1.00%
Other Expenses (including transfer
agent fee, custodian fees and
accounting and printing
expenses) (after expense
reduction)(3) 2.02% 1.97% 1.97%
======= ======= =========
Total Operating Expenses
(after fee and expense
reductions)(3) 2.25% 2.97% 2.97%
======= ======= =========
+ Class C shares were first offered on January 31, 1996.
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge.
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international bank wire transfers of redemption proceeds.
(3) PMC has agreed not to impose a portion of its management fee and to make
other arrangements, if necessary, to limit the Class A share operating
expenses of the Fund to 2.25% of the Fund's average daily net assets. The
portion of Fund-wide expenses attributable to Class B and Class C shares
will be reduced only to the extent such expenses were reduced for the
Class A shares of the Fund. This agreement is voluntary and temporary and
may be revised or terminated by the Manager at any time.
Class A Class B Class C
--------- --------- -----------
Expenses Absent Fee and Expense
Reductions
Management Fee 1.25% 1.25% 1.25%
Other Expenses 2.73% 2.66% 2.66%
Total Operating Expenses 4.21% 4.91% 4.91%
Example:
You would pay the following dollar amounts on a $1,000 investment, assuming a
5% annual return at the end of each time period:
One Three Five Ten
Year Years Years Years
------- ------- ------- ---------
Class A Shares $79 $124 $171 $301
Class B Shares
- --Assuming
complete
redemption at end
of period $70 $122 $176 $312*
- --Assuming no
redemption $30 $ 92 $156 $312*
Class C shares**
- --Assuming
complete
redemption at end
of period $40 $ 92 $156 $329
- --Assuming no
redemption $30 $ 92 $156 $329
*Class B shares convert to Class A shares eight years after purchase;
therefore, Class A share expenses are used after year eight.
**Class C shares redeemed during the first year after purchase are subject to
a 1% Contingent Deferred Sales Charge ("CDSC").
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 return vary from year to year and may be higher or lower than
those shown.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
fees and expenses are reduced or reallocated, see "Management of the Fund,"
"Distribution Plan" and "How to Buy Fund Shares" in this Prospectus and
"Management of the Fund," "Principal Underwriter" and "Distribution Plans" in
the Statement of Additional Information. The Fund's payment of a 12b-1 fee
may result in long-term shareholders indirectly paying more than the economic
equivalent of the maximum sales charge permitted under the Rules of Fair
Practice of the National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified
larger amounts of Class A shares and the value of shares owned in other
Pioneer mutual funds is taken into account in determining the applicable
initial sales charge. See "How to Buy Fund Shares." No sales charge is
applied to exchanges of shares of the Fund for shares of other publicly
available Pioneer mutual funds. See "How to Exchange Fund Shares."
2
<PAGE>
II. FINANCIAL HIGHLIGHTS
The following information has been derived from financial statements of the
Fund which have been audited by Arthur Andersen LLP, independent public
accountants, in connection with their examination of the Fund's financial
statements. Arthur Andersen LLP's report on the Fund's audited financial
statements as of October 31, 1995 appears in the Fund's Annual Report which
is incorporated by reference in the Fund's Statement of Additional
Information. The information listed below should be read in conjunction with
the financial statements contained in the Annual Report. Class C shares is a
new class of shares; no financial highlights exist for Class C shares. The
Annual Report includes more information about the Fund's performance and is
available free of charge by calling Shareholder Services at 1-800-225-6292.
Pioneer India Fund
Financial Highlights for Each Class A Share Outstanding Throughout Each
Period
June 23, 1994
Year ended (Commencement
October 31, of Operations) to
1995 October 31, 1994(+)
------------- --------------------
Net asset value, beginning of
period $ 11.28 $ 11.50
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.01) $ 0.04
Net realized and unrealized loss
on investments and foreign
currency related transactions*** (2.29) (0.26)
----------- ------------------
Total decrease from investment
operations $ (2.79) $ (0.22)
Distribution to shareholders from
net investment income (0.02) --
Net decrease in net asset value $ (2.81) $ (0.22)
----------- ------------------
Net asset value, end of period $ 8.47 $ 11.28
=========== ==================
Total return* (24.78%) (1.91%)
Ratio of net operating expenses to
average net assets 2.28%+++ 2.25%**
Ratio of net investment income
(loss) to average net assets (0.14%)+++ 0.92%**
Portfolio turnover rate 53.11% 108.73%**
Net assets, end of period (in
thousands) $8,397 $11,445
Ratios assuming no reduction of
fees or expenses by PMC:
Net operating expenses 4.21% 6.57%**
Net investment loss (2.07%) (3.40%)**
Ratios assuming a reduction of fees
and expenses by PMC and a
reduction for fees paid
indirectly:
Net operating expenses 2.25%
Net investment loss (0.11%)
Financial Highlights for Each Class B Share Outstanding Throughout Each
Period
June 23, 1994
Year ended (Commencement
October 31, of Operations) to
1995 October 31, 1994(+)
------------- --------------------
Net asset value, beginning of
period $ 11.24 $ 11.50
Increase (decrease) from investment
operations:
Net investment income (loss) $ (0.07) --
Net realized and unrealized loss
on investments and foreign
currency related transactions*** (2.77) (0.26)
----------- ------------------
Total decrease from investment
operations $ (2.84) $ (0.26)
Distribution to shareholders from
net investment income (0.01) --
Net decrease in net asset value $ (2.85) $ (0.26)
----------- ------------------
Net asset value, end of period $ 8.39 $ 11.24
=========== ==================
Total return* (25.31%) (2.26%)
Ratio of net operating expenses to
average net assets 3.01%+++ 3.21%**
Ratio of net investment income
(loss) to average net assets (0.86%)+++ (0.01%)**
Portfolio turnover rate 53.11% 108.73%**
Net assets, end of period (in
thousands) $5,991 $6,084
Ratios assuming no reduction of
fees or expenses by PMC:
Net operating expenses 4.91% 7.50%**
Net investment loss (2.76%) (4.28%)**
Ratios assuming a reduction of fees
and expenses by PMC and a
reduction for fees paid
indirectly:
Net operating expenses 2.97%
Net investment loss (0.82%)
+The per share data presented above is based upon average shares and
average net assets outstanding for the period presented.
+++Ratios include fees paid indirectly.
*Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of the period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
**Annualized.
***Includes the balancing effect of calculating per share amounts.
3
<PAGE>
III. INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is long-term growth of capital. The Fund
pursues this objective by investing, under normal circumstances, at least 65%
of its total assets in equity securities of Indian Companies (including
Depositary Receipts as defined below). For purposes of its investment
policies, the Fund considers a company to be an "Indian Company" if it (i) is
organized under the laws of India, (ii) derives at least 50% of its revenues
from goods produced or sold, investments made, or services performed, in
India, or has at least 50% of its assets in India, or (iii) has securities
that are traded principally on any Indian stock exchange (including India's
Over the Counter Exchange).
The Fund may invest up to 35% of its total assets in (i) equity securities of
issuers (other than Indian Companies) which, in the judgment of the Manager
or the Indian Adviser, may benefit from the Indian economy, (ii) debt
securities issued by Indian Companies or by the Government of India or its
agencies or instrumentalities, and (iii) short-term investments (as described
below).
Equity securities in which the Fund may invest consist of common and
preferred stock (including convertible preferred stock); American, Global or
other types of depositary receipts (collectively, "Depositary Receipts");
convertible bonds, notes and debentures; shares of closed-end investment
companies; equity interests in trusts, partnerships, joint ventures or
similar enterprises; and common stock purchase warrants and rights.
Substantially all of the equity securities purchased by the Fund are expected
to be traded on an Indian or other foreign stock exchange or over-the-counter
market. However, as described in "Risk Factors," the Fund may be subject to
significant delays or limitations on the timing and amount of its direct
investments in India.
Debt securities in which the Fund may invest consist of bonds, debentures,
notes and similar debt instruments which may be comparable in quality to debt
securities rated BB or lower by Standard & Poor's Ratings Group ("Standard &
Poors") or Ba or lower by Moody's Investors Service, Inc. ("Moody's"). The
Fund may invest up to 25% of its total assets in debt securities. For a
description of the risks of investing in lower quality debt securities, see
"Risk Factors" in this Prospectus. The Manager expects that most of the
Fund's investments in debt securities will not be rated by Standard & Poor's,
Moody's, or any other U.S. rating organization.
The Fund may employ forward foreign currency exchange contracts in an attempt
to hedge foreign currency risks associated with the Fund's investments.
However, there currently is no market, or only a limited market for these
contracts with respect to the Indian rupee (hereinafter the "rupee") and the
currencies of certain other foreign countries in which the Fund may invest.
Consequently, there can be no assurance that these contracts will be
available for hedging currency risks at the times when the Fund wishes to use
them. See Appendix B and the Statement of Additional Information for a
description of forward foreign currency exchange contracts and associated
risks.
The Fund also may invest in restricted and illiquid securities and repurchase
agreements, may purchase securities on a when-issued, delayed delivery or
forward commitment basis and may borrow money for temporary emergency
purposes. See Appendix B and the Statement of Additional Information for a
description of these investment and management techniques, associated risks
and limitations on the Fund's use of these techniques.
For temporary defensive purposes, the Fund may invest up to 100% of its total
assets in short-term investments (as described below). The Fund will assume a
temporary defensive posture when political and economic factors affect
India's economy or securities market to such an extent that PMC or the Indian
Adviser believes there to be extraordinary risks in being substantially
invested in the equity securities of Indian Companies.
In selecting securities for investment by the Fund, PMC and/or the Indian
Adviser perform a fundamental analysis of each company being considered for
inclusion in the Fund's portfolio. In performing this fundamental analysis,
PMC and the Indian Adviser consider a variety of factors, including financial
condition, growth prospects, asset valuation, management expertise, existing
or potential dividend payments, the liquidity of the security, the market
valuation of the company and the effect the investment would have on the
diversification of the Fund's portfolio. The specific size of the Fund's
investment in any one company is determined by the relationship of the
relative return and risk among individual investments, and may be affected by
limitations imposed by U.S. or Indian law.
Investment in India
Because of recent economic and political developments and changes in India,
PMC and the Indian Adviser believe that India's economy has significant
potential to experience rapid growth in the next several years. For these
reasons, PMC and the Indian Adviser also believe that the equity securities
of many Indian Companies offer significant potential for long-term capital
growth. For a summary description of India and its securities markets, see
Appendix A.
Since mid-1991, the Government of India, led by India's Prime Minister and
Finance Minister, has taken steps to liberalize India's trade policies,
reform India's financial sector, and place greater reliance on market
mechanisms to direct economic activity. A significant component of the
Government's reform program has been the creation and empowerment of the
Securities and Exchange Board of India (the "SEBI") as the governmental
regulator of India's securities market. Another important component of the
reform program has been the promotion of foreign investment in key areas of
India's economy and the further development of India's private sector. As a
result of this policy and other factors, foreign investment in India's
economy and securities market has increased significantly during the last two
years. See "Risk Factors," "Restrictions on Investment in India" and
Appendix A.
4
<PAGE>
In 1992, the Government of India announced, under a new policy intended to
encourage foreign investment, that Foreign Institutional Investors ("FIIs")
who satisfied certain conditions would be permitted to make direct
investments in India's securities market. Previously, non-Indian nationals
generally were not permitted to make portfolio investments in India's
securities market. Under the new policy, FIIs are permitted to invest
directly or on behalf of their institutional clients in any equity or debt
instrument which is listed on any Indian stock exchange. FIIs are required to
register with the SEBI. PMC is registered with the SEBI as an FII to invest
in India on behalf of the Fund and other approved clients. At present, FII
authorizations are granted for five years and may be renewed with the
approval of the SEBI. PMC intends to renew its registration as an FII on
March 18, 1998 (the date on which PMC's current FII registration expires).
See "Risk Factors" and "Restrictions on Investment in India."
Risk Factors
Investing in the Fund entails a substantial degree of risk. Because of the
special risks associated with investing in India, an investment in the Fund
may not be suitable for all investors and should not be considered an overall
investment program. Investors are strongly advised to consider carefully the
special risks involved in investing in India, which are in addition to the
usual risks of investing in developed countries around the world.
Investment in India and Certain Other Foreign Countries. The concentration
of the Fund's investments in Indian Companies will cause the value of the
Fund's assets to be particularly susceptible to the effects of political and
economic developments in India. India has a longstanding border dispute with
Pakistan. In addition, religious and ethnic unrest persists in India and has
caused disruptions in the recent past. It remains possible that disruption
associated with these tensions could destabilize India's economy and
adversely affect the net asset value of the Fund. Moreover, it is possible
that changes in the current leadership of the Government of India could
result in a halt in, or even reverse the progress of, economic reforms in
India. See Appendix A.
The Fund expects that, under normal circumstances, most of its investments
in Indian Companies will be in securities that are listed or traded on an
Indian stock exchange. The securities markets in India and in certain other
foreign countries in which the Fund may invest are smaller and less liquid,
and may be significantly more volatile, than the securities market in the
United States. The Bombay Stock Exchange (the "BSE") was established in 1875
and is the principal stock exchange in India. The BSE and the National Stock
Exchange ("NSE"), established in 1994 (see Appendix A), account for over
two-thirds of the secondary trading market in India. Although the BSE has
greater liquidity and a greater number of listed issues than many emerging
markets, the relatively small trading volume and market capitalization of
most securities listed on the BSE may cause the Fund's investments to be less
liquid and subject to greater volatility than comparable U.S. investments.
The limited liquidity of the BSE and other securities markets in which the
Fund may invest also may affect the Fund's ability to accurately value its
portfolio securities or to acquire or dispose of securities at the prices and
times that it desires or in order to meet redemption requests.
In managing the Fund's portfolio, PMC and the Indian Adviser will attempt
to prevent the Fund from being exposed to undue illiquidity risk that may be
associated with investing in the Indian securities market. For example, if
deemed appropriate by PMC or the Indian Adviser, the Fund may concentrate its
equity investments in Indian Companies in larger capitalization issuers
and/or issuers whose equity securities (including Depositary Receipts) are
traded in securities markets outside of India. At times, the market for such
securities may be more liquid than the market for equity securities of
smaller capitalization Indian Companies.
Disclosure and regulatory standards in India's securities markets and in
other foreign markets in which the Fund may invest are less stringent than
U.S. standards in certain respects. Although issuers in India are subject to
accounting, auditing and financial standards and requirements that are based
on U.K. standards and requirements, such standards and requirements, as well
as those applicable to other foreign issuers, may differ significantly from
those applicable to issuers located in developed countries. In addition,
there may be substantially less publicly available information about issuers
in India and many of the other foreign countries in which the Fund may invest
than there is about U.S. issuers.
There is generally less governmental supervision and regulation of
securities exchanges and securities professionals in India and other foreign
countries in which the Fund may invest than exists in the United States.
However, the Government of India, acting through the SEBI, has promulgated
several rules and regulations to reform India's securities market and
regulate the activities of securities professionals. For example, in late
1992, the SEBI promulgated regulations prohibiting insider trading in the
Indian securities markets. However, there can be no assurance that the SEBI
will be able to enforce such rules and regulations as effectively as similar
rules and regulations are enforced in U.S. securities markets. See Appendix A
for a further description of recent reforms in India's securities market.
The value of the Fund's investments in India could be adversely affected
by the circulation of improperly registered shares or the occurrence of other
fraudulent activities in India's securities markets. In 1992, irregularities
and frauds in the Indian securities transactions of several banks were
exposed. Certain bank officials and stockbrokers were found to have violated
established rules and guidelines by using bank funds for speculative
securities transactions. A special committee formed by the Government of
India's Parliament blamed the scandal on the Reserve Bank of India and
India's Ministry of Finance for failing to prevent and detect the fraudulent
activity and on the behavior of various market participants and four foreign
banks in particular. Subsequent to the discovery of the bank/securities
scandal, major Indian
5
<PAGE>
securities market indices fell more than 40% from their highest levels.
However, as a result of the scandal, India's Ministry of Finance strengthened
the SEBI's regulatory authority and made other significant reforms in India's
securities markets.
Indian stock exchanges have in the past been subject to repeated closure
and there can be no assurance that this will not recur. Settlement procedures
in India and other foreign countries in which the Fund may invest are less
developed and reliable than those in the United States and the Fund may
experience settlement delays or other material differences. In addition,
significant delays are common in registering transfers of securities in
India, and the Fund may be unable to sell portfolio securities until the
registration process is completed. The recent inflow of funds into the Indian
securities market has placed added strains on the settlement system, and
several custodial institutions in India have announced that they do not
possess the physical capacity to undertake new business. Although a number of
custodial institutions have augmented their capacity, the Fund may be subject
to significant delays or limitations on the timing of its direct investments
in India and significant limitations on the volume of trading during any
particular period, imposed by its subcustodian in India or otherwise as a
result of such physical or other operational constraints. The foregoing
factors could impede the ability of the Fund to effect portfolio transactions
on a timely basis, have an adverse effect on the net asset value of the
Fund's shares and make it more difficult for the Fund to obtain cash
necessary to satisfy applicable federal income tax requirements for avoiding
federal income and/or excise taxation. See "Dividends, Distributions and U.S.
Taxation."
The value of the Fund's investments in the securities of Indian Companies
and other foreign issuers may be adversely affected by fluctuations in the
relative rates of exchange between the currencies of different countries. The
Fund's investment performance may be significantly affected, either
positively or negatively, by currency exchange rates because the U.S. dollar
value of securities quoted or denominated in a foreign currency will increase
or decrease in response to changes in the value of foreign currencies in
relation to the U.S. dollar. In addition, the value of the Fund's investments
in Indian Companies and other foreign issuers may be adversely affected by
exchange control regulations. Under the FII guidelines as currently in effect
in India, PMC has received approvals required to establish bank and custodial
accounts and to convert rupees into U.S. dollars on behalf of the Fund.
Although the Government of India has announced its intention ultimately to
make the rupee fully convertible, there can be no assurance that it will not
impose restrictions in the future that may adversely affect the ability of
the Fund to convert its income and capital from certain investments from
rupees to U.S. dollars. See Appendix A.
Brokerage commissions and other securities transaction costs, including
custody costs, in India and in certain other foreign countries in which the
Fund may invest are generally higher than in the United States. In addition,
brokers in India and certain other countries in which the Fund may invest
generally are not as well capitalized as brokers in the United States, and
are therefore more susceptible to financial failure in times of market,
political or economic stress.
Additionally, in India and other foreign countries in which the Fund may
invest, there is the possibility of expropriation or confiscatory taxation,
limitations on the removal of securities, property or other assets of the
Fund, political or social instability, or diplomatic developments which could
adversely affect U.S. investments in these countries.
Investment in Lower Quality Debt Securities. The Fund's investments in
debt securities may consist of debt securities issued by Indian Companies or
the Government of India or its agencies or instrumentalities. These debt
securities may be comparable in quality to debt securities rated BB or lower
by Standard & Poor's or Ba or lower by Moody's. Debt securities of such
quality are commonly referred to in the United States as "junk bonds" and are
considered speculative, and payments of interest thereon and repayment of
principal may be questionable. In some cases, such securities may be highly
speculative, have poor prospects for reaching investment grade standing and
be in default. While generally providing greater income than investments in
higher quality securities, lower quality debt securities involve greater risk
of loss of principal and income, including the possibility of default or
bankruptcy of the issuers of such securities, and have greater price
volatility, especially during periods of economic uncertainty or change.
Lower quality debt securities also tend to be affected by economic changes
and short-term corporate developments to a greater extent than higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. Lower quality debt securities will also be affected by the
market's perception of their credit quality, especially during times of
adverse publicity, and the outlook for economic growth. The market for lower
quality debt securities is generally less liquid than the market for higher
quality debt securities. Therefore, PMC's and the Indian Adviser's judgment
may at times play a greater role in valuing these securities than in the case
of higher quality debt securities.
The Fund's investments in debt securities issued by the Government of
India or its agencies or instrumentalities involve special risks in addition
to those described above. The willingness or ability of an Indian
governmental issuer to repay principal and pay interest when due may be
affected adversely by the size of the issuer's debt service burden relative
to India's economy as a whole, changes in India's economy, political
constraints to which the issuer is subject and various other factors. In
addition, there are no legal proceedings available in India by which the Fund
could seek recourse for the default of a debt security issued by the
Government of India or one of its agencies or instrumentalities.
The Fund's investments in debt securities may also include zero coupon and
payment-in-kind debt securities, which tend to be affected to a greater
extent by interest rate changes, and therefore tend to be more volatile, than
debt securities which pay interest periodically and in cash.
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Restrictions on Investment in India
Under India's guidelines applicable to FIIs, the Fund's direct investments in
India may include only securities that are listed or traded on an Indian
stock exchange, and the Fund may not hold more than 5% of the total issued
capital of any issuer of such securities. Further, at least 70% of the total
investments made by the Fund pursuant to PMC's FII authorization must be in
equity securities. In addition, all non-resident portfolio investments,
including the Fund's investments, may not exceed 24% of the issued share
capital of any Indian issuer. Accordingly, the Fund's ability to invest in
certain Indian Companies may be restricted. Although the Government of India
recently has implemented policies to encourage foreign investment, there can
be no assurance that additional restrictions will not be imposed in the
future.
Indian Taxes
It is expected that most of the Fund's investments in Indian Companies will
be subject to the following taxes imposed by the Government of India. India
imposes a withholding tax at a rate of 20% on dividend and interest income
earned on Indian investments. India also imposes a tax on capital gains
realized on Indian investments at a rate of 10% on long-term capital gains
and 30% on short-term capital gains. Gains from all listed securities
(including debt) held for periods in excess of 12 months are treated as
long-term gains. Under the Income Tax Treaty in effect between India and the
United States, the applicable Indian tax rate on interest income is generally
reduced to 15%, and the applicable Indian tax rate on dividend income may be
reduced to 15% in the event that the Fund owns at least 10% of the voting
stock of the Indian resident company that pays dividends to the Fund. This
treaty does not reduce or eliminate the Indian taxation of capital gains the
Fund may realize with respect to its Indian investments. If the Fund elects
to "pass-through" to shareholders amounts of qualified foreign taxes it pays,
Fund shareholders will be required to include such amounts in income (in
addition to the dividends they actually receive) and certain Fund
shareholders may be able to claim a foreign tax credit or deduction on their
U.S. federal income tax returns for their proportionate shares of Indian
taxes paid by the Fund, subject to applicable limitations under the U.S.
Internal Revenue Code of 1986, as amended (the "Code"). "See Dividends,
Distributions and U.S. Taxation."
PMC may decide to explore opportunities for the Fund to invest in India
through a structure that would reduce withholding and other taxes imposed by
India.
Other Eligible Investments
Equity Securities of Companies That May Benefit From India's Economy. As
noted above, the Fund may invest in the equity securities of companies, other
than Indian Companies (defined above), that may benefit from India's economy.
The Fund's investments in the equity securities of such issuers may involve
some or all of the risks associated with investments in Indian issuers. See
"Risk Factors."
Short-Term Investments. As noted above, the Fund may invest in short-term
investments, consisting of corporate commercial paper and other short-term
commercial obligations, in each case rated or issued by international or
domestic companies with similar securities outstanding that are rated Prime-1
or better by Moody's, or A-1, AA or better by Standard & Poor's; obligations
(including certificates of deposit, time deposits, demand deposits and
bankers' acceptances) of banks (located in the United States or foreign
countries) with securities outstanding that are rated Prime-1, Aa or better
by Moody's, or A-1, AA or better by Standard and Poor's; obligations of
comparable quality issued or guaranteed by the U.S. Government or the
government of a foreign country or their respective agencies or
instrumentalities; and repurchase agreements.
In addition, the Fund may invest up to 100% of its total assets in such
short-term investments for temporary defensive purposes. The Fund will assume
a temporary defensive posture only when political and economic factors cause
PMC or the Indian Adviser to believe that there are extraordinary risks in
being substantially invested in the equity securities of Indian Companies.
Debt Securities. Although the Fund invests primarily in equity securities of
Indian Companies, the Fund may invest up to 25% of its total assets in debt
securities (including short-term debt securities) issued by Indian Companies
or by the Government of India or its agencies or instrumentalities. The Fund
may invest in debt securities of any quality or maturity. See "Risk Factors."
The net asset value of the Fund attributable to its investments in debt
securities can generally be expected to change as general levels of interest
rates fluctuate. The value of debt securities generally varies inversely with
changes in interest rates, and prices of debt securities with longer
maturities are more sensitive to interest rate changes than those with
shorter maturities.
Other Investment Companies. The Fund may invest up to 10% of its total
assets, calculated at the time of purchase, in the securities of closed-end
investment companies. The Fund may not invest more than 5% of its total
assets in the securities of any one investment company or acquire more than
3% of the voting securities of any other investment company. The Fund will
indirectly bear its proportionate share of any management or other fees paid
by closed-end investment companies in which it invests, in addition to its
own fees.
Investments in Depositary Receipts. The Fund may hold securities of foreign
issuers in the form of American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and other similar instruments or other
securities convertible into securities of eligible issuers. Generally, ADRs
in registered form are designed for use in U.S. securities markets, and GDRs
and other similar global instruments in bearer form are designed for use in
non-U.S. securities markets.
ADRs are denominated in U.S. dollars and represent the right to receive
securities of foreign issuers deposited in a U.S. bank or correspondent bank.
ADRs do not eliminate all the risk inherent in investing in the securities of
non-U.S. issuers. However, by investing in ADRs rather than directly in
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equity securities of non-U.S. issuers, the Fund will avoid currency risks
during the settlement period for either purchases or sales. GDRs are not
necessarily denominated in the same currency as the securities for which they
may be exchanged. For purposes of the Fund's investment policies, investments
in ADRs, GDRs and similar instruments will be deemed to be investments in the
equity securities of the foreign issuers into which they may be converted.
The Fund may acquire depositary receipts from banks that do not have a
contractual relationship with the issuer of the security underlying the
depositary receipt to issue and secure such depositary receipt. To the extent
the Fund invests in such unsponsored depositary receipts there may be an
increased possibility that the Fund may not become aware of events affecting
the underlying security and thus the value of the related depositary receipt.
In addition, certain benefits (i.e., rights offerings) which may be
associated with the security underlying the depositary receipt may not inure
to the benefit of the holder of such depositary receipt.
Investments in Initial Public Offerings. The Fund may invest in initial
public offerings of Indian issuers. At the initial stage of such an offering,
the issuer may reserve up to 24% of the offering for nonresident Indian
investors and certain foreign institutional investors such as the Fund. The
issuer also may reserve up to 20% of the offering for locally offered mutual
funds. The price available to the Fund in such an offering may be higher or
lower than the price available to other institutions. When the Fund commits
to purchase from the reserved portion of such an offering, it may be required
to place the purchase price in a bank deposit account (that does not pay
interest) before receiving securities. In addition, until the purchase is
settled, the Fund may not know if it will receive the amount of securities
for which it has subscribed.
Portfolio Turnover
The Fund will attempt to be substantially fully invested at all times, except
as described above. To the extent consistent with investment considerations,
PMC and the Indian Adviser intend to minimize the Fund's realization of
short-term capital gains with respect to securities subject to Indian
short-term capital gains taxes. See "Indian Taxes." However, changes in the
Fund's portfolio may be made promptly when determined by PMC or the Indian
Adviser to be advisable by reason of developments not foreseen at the time of
the initial investment decision, and usually without reference to the length
of time a security has been held. Accordingly, portfolio turnover rates are
not considered a limiting factor in the execution of investment decisions. It
is anticipated that the portfolio turnover rate of the Fund will not exceed
100% in the coming year. A high rate of portfolio turnover (100% or more)
involves correspondingly greater transaction costs which must be borne by the
Fund and its shareholders and may, under certain circumstances, make it more
difficult for the Fund to qualify as a regulated investment company under the
Code. See "Dividends, Distributions and Taxation."
The Fund's investment objective and certain investment restrictions
designated as fundamental in the Statement of Additional Information may be
changed by the Board of Trustees only with shareholder approval. The Fund's
investment policies and nonfundamental investment restrictions may be changed
by the Board of Trustees without shareholder approval. See "Investment
Policies, Restrictions and Risk Factors" in the Statement of Additional
Information.
IV. MANAGEMENT OF THE FUND
The Fund's Board of Trustees has overall responsibility for management and
supervision of the Fund. There are currently eight Trustees, six of whom are
not "interested persons" of the Fund as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"). The Board meets at least quarterly. By
virtue of the functions performed by Pioneering Management Corporation as
manager and by ITI Pioneer AMC Ltd. as Indian Adviser, the Fund requires no
employees other than its executive officers, all of whom receive their
compensation from the Manager or other sources. The Statement of Additional
Information contains the names and general business and professional
background of each Trustee and executive officer of the Fund.
The Manager
The Fund is managed under a contract with PMC. PMC is responsible for the
overall management of the Fund's business affairs and the day-to-day
management of Fund assets that are not under the Indian Adviser's management,
subject only to the authority of the Board of Trustees. PMC is a wholly-owned
subsidiary of The Pioneer Group, Inc. ("PGI"), a publicly-traded Delaware
corporation. Pioneer Funds Distributor, Inc. ("PFD"), an indirect
wholly-owned subsidiary of PGI, is the principal underwriter of the Fund.
Each international equity portfolio managed by PMC, including the Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
international equity 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 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.
Dr. Norman Kurland, Senior Vice President of PMC and Vice President of the
Fund, is generally responsible for the management of the international
portfolios managed by PMC. Dr. Kurland joined PMC in 1990 after working with
a variety of investment and industrial concerns. Mr. Tripple has been
responsible for the day-to-day management of the Fund since its inception.
Mr. Mark Madden, Vice President of PMC, has shared the responsibility for the
day-to-day management of the Fund with Mr. Tripple since April 3, 1995. Mr.
Madden joined PMC in 1990 after working for other investment and industrial
firms.
PMC manages and serves as the investment adviser for several other mutual
funds and is an investment adviser to certain other institutional accounts.
PMC's and PFD's
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executive offices are located at 60 State Street, Boston, Massachusetts
02109.
Under the terms of its contract with the Fund, PMC manages the Fund's
business affairs, supervises the Indian Adviser's performance of its
portfolio management responsibilities and allocates the management of Fund
assets between itself and the Indian Adviser. PMC's supervisory
responsibilities include consulting with the Indian Adviser on a regular
basis regarding the Indian Adviser's decisions to purchase, sell or hold
particular securities. PMC is authorized in its discretion to use Fund assets
that are under its management to buy and sell securities for the Fund's
account. PMC pays all advisory fees to the Indian Adviser and all ordinary
operating expenses, including executive salaries and the rental of office
space, relating to its services for the Fund, with the exception of the
following which are paid by the Fund: (a) charges and expenses for fund
accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by personnel of PMC or its
affiliates, office space and facilities and personnel compensation, training
and benefits; (b) the charges and expenses of auditors; (c) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing
agent and registrar appointed by the Fund with respect to shares of the Fund;
(d) issue and transfer taxes chargeable to the Fund in connection with
securities transactions to which the Fund is a party; (e) insurance premiums,
interest charges, dues and fees for membership in trade associations, and all
taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the Fund and/or its shares with the SEC,
individual states or blue sky securities agencies, territories and foreign
countries, including the preparation of prospectuses and statements of
additional information for filing with regulatory agencies; (g) all expenses
of shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and to Trustees; (i) distribution fees paid by the Fund
in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940
Act; (j) compensation of those Trustees of the Fund who are not affiliated
with or interested persons of PMC, the Fund (other than as Trustees), PGI or
PFD; (k) the cost of preparing and printing share certificates; and (l)
interest on borrowed money, if any. The Fund also pays all brokers' and
underwriting commissions chargeable to the Fund in connection with its
portfolio transactions.
Orders for the Fund's portfolio securities transactions in the Indian
securities markets are placed by the Indian Adviser. Orders for the Fund's
portfolio securities transactions in all other markets are placed by PMC.
Both PMC and the Indian Adviser strive 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 by the Indian Adviser or PMC to whether the broker-dealer provides
investment research or brokerage services or sells shares of the Fund or
other funds for which PGI or any affiliate or subsidiary serves as investment
adviser or manager. See the Statement of Additional Information for a further
description of PMC's and Indian Adviser'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 1.25% per annum of the
Fund's average daily net assets. While this fee, which is computed daily and
paid monthly, is higher than most management fees, the costs of managing the
Fund are significantly greater than the costs of managing a domestic fund.
PMC has agreed not to impose a portion of its management fee and to make
other arrangements, if necessary, to limit certain other expenses of the Fund
to the extent necessary to limit Class A expenses to 2.25% of the average
daily net assets attributable to Class A shares; the portion of the Fund-wide
expenses attributable to Class B and Class C shares will be reduced only to
the extent such expenses are reduced for Class A shares. This agreement is
voluntary and temporary and may be revised or terminated by PMC at any time.
During the year ended October 31, 1995, the Fund incurred expenses of
$722,606, including management fees paid or payable to PMC of $201,379.
Pursuant to its expense limitation agreement, PMC did not impose management
fees and limited expenses, resulting in a reduction of $308,065.
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD and
PMC and President and a Director of PGI, beneficially owned 15% of the
outstanding capital stock of PGI as of the date of this Prospectus.
The Indian Adviser
ITI Pioneer AMC Ltd., the Indian investment adviser to the Fund, is
responsible for investing the Fund's assets in the Indian securities markets
and providing certain related services to PMC, subject to the supervision of
PMC, which, in turn, is subject to the supervision of the Fund's Board of
Trustees. The Indian Adviser is a joint venture of PMC, a Delaware
corporation, and Investment Trust of India Limited ("ITI"), a corporation
organized under the laws of India. ITI was established in 1946 and is one of
India's leading providers of financial services. The Indian Adviser was the
first institution in India to establish locally-registered private sector
mutual funds in India. PMC and ITI currently own approximately 49% and 45%,
respectively, of the Indian Adviser's total equity capital.
All investment decisions made by the Indian Adviser are made by an investment
committee comprised of certain of the Indian Adviser's directors and
officers, including Ravi Mehrotra, Chief Investment Officer, and R. Sukumar,
Fund Manager. Prior to joining ITI Pioneer in 1993, Mr. Mehrotra worked in
the financial services and banking industries in India. Mr. Sukumar joined
ITI Pioneer in 1994 after working in the financial services industry.
As compensation for its services under its Subadvisory Agreement with PMC,
the Indian Adviser receives a subadvisory fee at an annual rate from 0.10% to
0.60% of the Fund's
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average gross assets invested in India's securities markets, including assets
invested in Depositary Receipts for securities traded in India's securities
markets. The fee, which is paid by PMC, accrues monthly and is paid
quarterly.
V. FUND SHARE ALTERNATIVES
The Fund continuously offers three Classes of shares designated as Class A,
Class B and Class C shares, as described more fully in "How to Buy Fund
Shares." If you do not specify in your instructions to the Fund which Class
of shares you wish to purchase, exchange or redeem, the Fund will assume that
your instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase; however, shares
redeemed within 12 months of purchase may be subject to a CDSC. Class A
shares are subject to distribution and service fees at a combined annual rate
of up to 0.25% of the Fund's average daily net assets attributable to Class A
shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 4% if redeemed within six years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is invested in the Fund
without deduction of any sales charge at the time you make your investment,
but the higher distribution fee paid by Class B shares will cause your Class
B shares (until conversion) to have a higher expense ratio and to pay lower
per share dividends, to the extent dividends are paid, than Class A shares.
Class B shares will automatically convert to Class A shares, based on
relative net asset value, eight years after the initial purchase.
Class C Shares. Class C shares are sold without an initial sales charge, but
are subject to a 1% CDSC if they are redeemed within the first year after
purchase. Class C shares are subject to distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to Class C shares. Your entire investment in Class C shares is
available to work for you from the time you make your investment, but the
higher distribution fee paid by Class C shares will cause your Class C shares
to have a higher expense ratio and to pay lower dividends, to the extent
dividends are paid, than Class A shares. Class C shares have no conversion
feature.
Selecting a Class of Shares. The decision as to which Class to purchase
depends on the amount you invest, the intended length of the investment and
your personal situation. If you are making an investment that qualifies for
reduced sales charges, you might consider Class A shares. If you prefer not
to pay an initial sales charge on an investment of $250,000 or less and you
plan to hold the investment for at least six years, you might consider Class
B shares. If you prefer not to pay an initial sales charge and you plan to
hold your investment for one to eight years, you may prefer Class C shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer fund and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold
outside the United States to persons who are not U.S. citizens may be subject
to different sales charges, CDSCs and dealer compensation arrangements in
accordance with local laws and business practices.
VI. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share, plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the fair market value
of its assets, less liabilities attributable to that Class, by the number of
shares of that Class outstanding. The net asset value is computed once daily,
on each day the New York Stock Exchange (the "Exchange") is open as of the
close of regular trading on the Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation, or securities for which sales prices are not generally reported,
are valued at the mean between the current bid and asked prices. Securities
quoted in international currencies are converted to U.S. dollars utilizing
foreign exchange rates employed by the Fund's independent pricing services.
Generally, trading in international securities is substantially completed
each day at various times prior to the close of regular trading on the
Exchange. The values of such securities used in computing the net asset value
of the Fund's shares are determined as of such times. Foreign currency
exchange rates are also generally determined prior to the close of regular
trading on the Exchange. Occasionally, events which affect the values of such
securities and such exchange rates may occur between the times at which they
are determined and the close of regular trading on the Exchange and will
therefore not be reflected in the computation of the Fund's net asset value.
If events materially affecting the value of such securities occur during such
period, then these securities are valued at their fair value as determined in
good faith by the Trustees. All assets of the Fund for which there is no
other readily available valuation method are valued at their fair value as
determined in good faith by the Trustees.
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VII. HOW TO BUY FUND SHARES
You may buy Fund shares from any securities broker-dealer which has a sales
agreement with PFD. If you do not have a securities broker-dealer, please
call 1-800-225-6292. Shares will be purchased at the public offering price,
that is, the net asset value per share plus any applicable sales charge, next
computed after receipt of a purchase order, except as set forth below.
The minimum initial investment is $1,000 for Class A, Class B and Class C
shares except as specified below. The minimum initial investment is $50 for
Class A accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B and Class C shares except that the subsequent minimum
investment amount for Class B and Class C share accounts may be as little as
$50 if an automatic investment plan (see "Automatic Investment Plans") is
established.
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 fund account; it may not be used to establish a new account. Proper
account identification will be required for each telephone purchase. A
maximum of $25,000 per account may be purchased by telephone each day. The
telephone purchase privilege is available to IRA accounts but may not be
available to other types of retirement plan accounts. Call PSC for more
information.
You are strongly urged to consult with your financial representative prior to
requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank 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 pre-designated
bank account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any applicable
sales charge next determined after PSC's receipt of a telephone purchase
instruction and receipt of good funds (usually three days after the purchase
instruction). You may always elect to deliver purchases to PSC by mail. See
"Telephone Transactions and Related Liabilities" for additional information.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the net
asset value per share next computed after receipt of a purchase order, plus a
sales charge as follows:
Sales Charge as a Dealer
Percentage of Allowance
---------------------- as a
Net Percentage of
Offering Amount Offering
Amount of Purchase Price Invested Price
- --------------------- --------- --------- --------------
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than
$100,000 4.50 4.71 4.00
$100,000 but less
than $250,000 3.50 3.63 3.00
$250,000 but less
than $500,000 2.50 2.56 2.00
$500,000 but less
than $1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- See below
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain group plans (described
below) subject to a CDSC of 1% which may be imposed in the event of a
redemption of Class A shares within 12 months of purchase. See "How to Sell
Fund Shares." PFD may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows: 1% on the
first $5 million invested; 0.50% on the next $45 million; and 0.25% on the
excess over $50 million. These commissions will not be paid if the purchaser
is affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "Waiver or Reduction of Contingent Deferred Sales Charge." In connection
with PGI's acquisition of Mutual of Omaha Fund Management Company and
contingent upon the achievement of certain sales objectives, PFD may pay to
Mutual of Omaha Investor Services, Inc. 50% of PFD's retention of any sales
commission on sales of the Fund's Class A shares through such dealer.
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other
fiduciary of a trust estate or fiduciary account or related trusts or
accounts including pension, profit-sharing and other employee benefit trusts
qualified under Section 401 or 408 of the Code, although more than one
beneficiary is involved. The sales charges applicable to a current purchase
of Class A shares of the Fund by a person listed above is determined by
adding the value of shares to be purchased to the aggregate value (at the
then current offering price) of shares of any of the other Pioneer mutual
funds previously purchased and then owned, provided PFD is notified by such
person or his or her broker-dealer each time a purchase is made which would
qualify. Pioneer mutual funds include all mutual funds for which PFD serves
as principal underwriter. See the "Letter of Intention" section of the
Account Application.
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Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be sold
at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to,
permits group solicitation of, or otherwise facilitates purchases by, its
employees, members or participants. Class A shares of the Fund may be sold at
net asset value without a sales charge to 401(k) retirement plans with 100 or
more participants or at least $500,000 in plan assets. In addition, Class A
shares of the Fund may be sold at net asset value per share without a sales
charge to Optional Retirement Program (the "Program") participants if (i) the
employer has authorized a limited number of investment company providers for
the Program, (ii) all authorized investment company providers offer their
shares to Program participants at net asset value, (iii) the employer has
agreed in writing to actively promote the authorized investment company
providers to Program participants and (iv) the Program provides for a
matching contribution for each participant contribution. Information about
such arrangements is available from PFD.
Class A shares of the Fund may be sold at net asset value per share without a
sales charge to: (a) current or former Trustees and officers of the Fund and
partners and employees of its legal counsel; (b) current or former directors,
officers, employees or sales representatives of PGI or its subsidiaries; (c)
current or former directors, officers, employees or sales representatives of
any subadviser or predecessor investment adviser to any investment company
for which PMC serves as investment adviser, and the subsidiaries or
affiliates of such persons; (d) current or former officers, partners,
employees or registered representatives of broker-dealers which have entered
into sales agreements with PFD; (e) members of the immediate families of any
of the persons above; (f) any trust, custodian, pension, profit-sharing or
other benefit plan of the foregoing persons; (g) insurance company separate
accounts; (h) certain "wrap accounts" for the benefit of clients of financial
planners adhering to standards established by PFD; (i) other funds and
accounts for which PMC or any of its affiliates serves as investment adviser
or manager; and (j) certain unit investment trusts. Shares so purchased are
purchased for investment purposes and may not be resold except through
redemption or repurchase by or on behalf of the Fund. The availability of
this privilege is conditioned upon the receipt by PFD of written notification
of eligibility. Class A shares may also be sold at net asset value in
connection with certain reorganization, liquidation, or acquisition
transactions involving other investment companies or personal holding
companies.
Reduced sales charges for Class A shares are available through an agreement
to purchase a specified quantity of Fund shares over a designated 13-month
period by completing the "Letter of Intention" section of the Account
Application. Information about the Letter of Intention procedure, including
its terms, is contained in the Statement of Additional Information. Investors
who are clients of a broker-dealer with a current sales agreement with PFD
may purchase Class A shares of the Fund at net asset value, without a sales
charge, to the extent that the purchase price is paid out of proceeds from
one or more redemptions by the investor of shares of certain other mutual
funds. In order for a purchase to qualify for this privilege, the investor
must document to the broker-dealer that the redemption occurred within the 60
days immediately preceding the purchase of shares of the Fund; that the
client paid a sales charge on the original purchase of the shares redeemed;
and that the mutual fund whose shares were redeemed also offers net asset
value purchases to redeeming shareholders of any of the Pioneer funds.
Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge. However, Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates shown in the table below. The
charge will be assessed on the amount equal to the lesser of the current
market value or the original purchase cost of the shares being redeemed. No
CDSC will be imposed on increases in account value above the initial purchase
price, including shares derived from the reinvestment of dividends or capital
gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the six-year-period. As a result, you will pay the
lowest possible CDSC.
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
- ------------------------- --------------------------------
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end of
the calendar quarter that is eight years after the purchase date, except as
noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase of the shares to which such shares relate. For
this purpose, Class B shares acquired through reinvestment of
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distributions will be attributed to particular purchases of Class B shares in
accordance with such procedures as the Trustees may determine from time to
time. The conversion of Class B shares to Class A shares is subject to the
continuing availability of a ruling from the Internal Revenue Service
("IRS"), for which the Fund is applying, or an opinion of counsel that such
conversions will not constitute taxable events for federal tax purposes.
There can be no assurance that such ruling or opinion will be available. The
conversion of Class B shares to Class A shares will not occur if such ruling
or opinion is not available and, therefore, Class B shares would continue to
be subject to higher expenses than Class A shares for an indeterminate
period.
Class C Shares
You may buy Class C shares at net asset value without the imposition of an
initial sales charge; however, Class C shares redeemed within one year of
purchase will be subject to a CDSC of 1.00%. The charge will be assessed on
the amount equal to the lesser of the current market value of the original
purchase cost of the shares being redeemed. No CDSC will be imposed on
increases in account value above the initial purchase price, including shares
derived from the reinvestment of dividends or capital gains distributions.
Class C shares do not convert to any other Class of Fund shares.
For the purpose of determining the time of any purchase, all payments during
a quarter will be aggregated and deemed to have been made on the first day of
that quarter. In processing redemptions of Class C shares, the Fund will
first redeem shares not subject to any CDSC, and then shares held for the
shortest period of time during the one-year period. As a result, you will pay
the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class C shares, including the payment
of compensation to broker-dealers.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class B
shares may be waived or reduced for non-retirement accounts if: (a) the
redemption results from the death of all registered owners of an account (in
the case of UGMAs, UTMAs and trust accounts, waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed or (b) the redemption is made in connection with
limited automatic redemptions as set forth in "Systematic Withdrawal Plans"
(limited in any year to 10% of the value of the account in the Fund at the
time the withdrawal plan is established).
The CDSC on Class B shares may be waived or reduced for retirement plan
accounts if: (a) the redemption results from the death or a total and
permanent disability (as defined in Section 72 of the Code) occurring after
the purchase of the shares being redeemed of a shareholder or participant in
an employer-sponsored retirement plan; (b) the distribution is to a
participant in an IRA, 403(b) or employer-sponsored retirement plan, is part
of a series of substantially equal payments made over the life expectancy of
the participant or the joint life expectancy of the participant and his or
her beneficiary (limited in any year to 10% of the value of the participant's
account at the time the distribution amount is established; a required
minimum distribution due to the participant's attainment of age 70-1/2 may
exceed the 10% limit only if the distribution amount is based on plan assets
held by Pioneer); (c) the distribution is from a 401(a) or 401(k) retirement
plan and is a return of excess employee deferrals or employee contributions
or a qualifying hardship distribution as defined by the Code or results from
a termination of employment (limited with respect to a termination to 10% per
year of the value of the plan's assets in the Fund as of the later of the
prior December 31 or the date the account was established unless the plan's
assets are being rolled over to or reinvested in the same class of shares of
a Pioneer mutual fund subject to the CDSC of the shares originally held); (d)
the distribution is from an IRA, 403(b) or employer-sponsored retirement plan
and is to be rolled over to or reinvested in the same class of shares in a
Pioneer mutual fund and which will be subject to the applicable CDSC upon
redemption; (e) the distribution is in the form of a loan to a participant in
a plan which permits loans (each repayment of the loan will constitute a new
sale which will be subject to the applicable CDSC upon redemption); or (f)
the distribution is from a qualified defined contribution plan and represents
a participant's directed transfer (provided that this privilege has been
pre-authorized through a prior agreement with PFD regarding participant
directed transfers).
The CDSC on Class C shares and on any Class A shares subject to a CDSC may be
waived or reduced as follows: (a) for automatic redemptions as described in
"Systematic Withdrawal Plans" (limited to 10% of the value of the account
subject to the CDSC); (b) if the redemption results from the death or a total
and permanent disability (as defined in Section 72 of the Code) occurring
after the purchase of the shares being redeemed of a shareowner or
participant in an employer-sponsored retirement plan; (c) if the
distribution is part of a series of substantially equal payments made over
the life expectancy of the participant or the joint life expectancy of the
participant and his or her beneficiary; or (d) if the distribution is to a
participant in an employer-sponsored retirement plan and is (i) a return of
excess employee deferrals or contributions, (ii) a qualifying hardship as
defined by the Code, (iii) from a termination of employment, (iv) in the form
of a loan to a participant in a plan which permits loans, or (v) from a
qualified defined contribution plan and represents a participant's directed
transfer (provided that this privilege has been pre-authorized through a
prior agreement with PFD regarding participant directed transfers).
The CDSC on Class B and Class C shares and on any Class A shares subject to a
CDSC may be waived or reduced for either non-retirement or retirement plan
accounts if: (a) the redemption is made by any state, county, or city, or any
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instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareholder's account.
Broker-Dealers
An order for any Class of Fund shares received by PFD from a broker-dealer
prior to the close of regular trading on the Exchange is confirmed at the
price appropriate for that Class as determined at the close of regular
trading on the Exchange on the day the order is received, provided the order
is received by PFD prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General
The Fund reserves the right in its sole discretion to withdraw all or any
part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VIII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) Fund shares on any day the Exchange is open
by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to the
Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must make your
request in writing (except for exchanges to other Pioneer funds which
can be requested by phone or in writing). Call 1-800-622-0176 for more
information.
(bullet) If you are selling shares from a non-retirement account, you may use
any of the methods described below.
Your shares will be sold at the share price next calculated after your order
is received in good order less any applicable CDSC. Sale proceeds generally
will be sent to you in cash, normally within seven days after your order is
received in good order. The Fund reserves the right to withhold payment of
the sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the
purchase date.
In Writing. You may sell your shares by delivering a written request, signed
by all registered owners, in good order to PSC, however, you must use a
written request, including a signature guarantee, to sell your shares if any
of the following situations apply:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last 30
days,
(bullet) the check is not being mailed to the address on your account (address
of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with a
different registration.
Your request should include your name, the Fund's name, your Fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the
sale to the address of record. Fiduciaries and corporations are required to
submit additional documents. For more information, contact PSC at
1-800-225-6292.
Written requests will not be processed until they are received in good order
by PSC. Good order means that there are no outstanding claims or requests to
hold redemptions on the account, certificates are endorsed by the record
owner(s) exactly as the shares are registered and, if a signature guarantee
is required, the signature(s) are guaranteed by an eligible guarantor. You
should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency or savings association. A notary public cannot
provide a signature guarantee. Signature guarantees are not accepted by
facsimile ("fax"). For additional information about the necessary
documentation for redemption by mail, please contact PSC at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have the
telephone redemption privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or
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 electronic funds transfer:
the proceeds must be sent to your bank address of record which must have been
properly pre-designated either on your Account Application or on an Account
Options Form and which must not have changed in the last 30 days. To redeem
by fax send your redemption request to 1-800-225-4240. You may always elect
to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to act
as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and
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reserves the right to terminate this procedure at any time. Your
broker-dealer must receive your request before the close of business on the
Exchange and transmit it to PFD before PFD's close of business to receive
that day's redemption price. Your broker-dealer is responsible for providing
all necessary documentation to PFD and may charge you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of the
Fund in an account with a net asset value of less than the minimum required
amount due to redemptions or exchanges, the Fund may redeem the shares held
in this account at net asset value if you have not increased the net asset
value of the account to at least the minimum required amount within six
months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more, or
by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer fund will continue to be subject to
the CDSC until the original 12-month period expires. However, no CDSC is
payable with respect to purchases of Class A shares by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least
$10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any period
in which any of the following conditions exist: the Exchange or BSE is closed
or trading on either exchange is restricted; an emergency exists as a result
of which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The net
asset value per share received upon redemption or repurchase may be more or
less than the cost of shares to an investor, depending on the market value of
the portfolio at the time of redemption or repurchase.
IX. HOW TO EXCHANGE FUND SHARES
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
fund out of which you wish to exchange and the name of the fund into which
you wish to exchange, your fund account number(s), the Class of shares to be
exchanged and the dollar amount or number of shares to be exchanged. Written
exchange requests must be signed by all record owner(s) exactly as the shares
are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each telephone exchange request, whether by
voice or by FactFone, will be recorded. You are strongly urged to consult
with your financial representative prior to requesting a telephone exchange.
See "Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one Pioneer
account for shares of the same Class in another Pioneer account on a monthly
or quarterly basis. The accounts must have identical registrations and the
originating account must have a minimum balance of $5,000. The exchange will
be effective on the 18th day of the month.
General. Exchanges must be at least $1,000. You may exchange your investment
from one Class of Fund shares at net asset value, without a sales charge, for
shares of the same Class of any other Pioneer mutual fund. Not all Pioneer
mutual funds offer more than one Class of shares. A new Pioneer account
opened through an exchange must have a registration identical to that on the
original account.
Shares which would normally be subject to a CDSC upon redemption will not be
charged the applicable CDSC at the time of the exchange. Shares acquired in
an exchange will be subject to the CDSC of the shares originally held. For
purposes of determining the amount of any applicable CDSC, the length of time
you have owned shares acquired by exchange will be measured from the date you
acquired the original shares and will not be affected by any subsequent
exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements below have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the fund exchanged and a purchase of shares in another
Pioneer mutual fund. Therefore, an exchange could result in a gain or loss on
the shares sold, depending on the tax basis of these shares and the timing of
the transaction, and special tax rules may apply.
You should consider the differences in objectives and policies of the Pioneer
mutual funds, as described in each fund's current prospectus, before making
any exchange. For the protection of the Fund's performance and shareholders,
the Fund and PFD reserve the right to refuse any exchange request or
restrict, at any time without notice, the number and/or frequency of
exchanges to prevent abuses of the exchange privilege. Such abuses may arise
from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market" or any other exchange request
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which, in the view of management, will have a detrimental effect on the
Fund's portfolio management strategy or its operations. In addition, the Fund
and PFD reserve the right to charge a fee for exchanges or to modify, limit,
suspend or discontinue the exchange privilege with notice to shareholders as
required by law.
X. DISTRIBUTION PLANS
The Fund has adopted a Plan of Distribution for each Class of shares (the
"Class A Plan," "Class B Plan," and "Class C Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Fund's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Fund: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Fund's
average daily net assets attributable to Class A shares; (ii) reimbursement
to PFD for its expenditures for broker-dealer commissions and employee
compensation on certain sales of the Fund's Class A shares with no initial
sales charge (see "How to Buy Fund Shares"); and (iii) reimbursement to PFD
for expenses incurred in providing services to Class A shareholders and
supporting broker-dealers and other organizations (such as banks and trust
companies) in their efforts to provide such services. Banks are currently
prohibited under the Glass-Steagall Act from providing certain underwriting
or distribution services. If a bank was prohibited from acting in any
capacity or providing any of the described services, management would
consider what action, if any, would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily and
may not exceed 0.25% of the Fund's average daily net assets attributable to
Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan 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 Fund's Class A shareholders. The
Class A Plan does not provide for the carryover of reimbursable expenses
beyond 12 months from the time the Fund is first invoiced for an expense. The
limited carryover provision in the Class A Plan may result in an expense
invoiced to the Fund in one fiscal year being paid in the subsequent fiscal
year and thus being treated for purposes of calculating the maximum
expenditures of the Fund as having been incurred in the subsequent fiscal
year. In the event of termination or non-continuance of the Class A Plan, the
Fund has 12 months to reimburse any expense which it incurs prior to such
termination or non-continuance, provided that payments by the Fund during
such twelve-month period shall not exceed 0.25% of the Fund's average daily
net assets attributable to the Class A shares during such period.
Both the Class B and the Class C Plan provide that the Fund will pay a
distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets attributable to the applicable Class of shares and will pay PFD a
service fee at the annual rate of 0.25% of the Fund's average daily net
assets attributable to that Class of shares. The distribution fee is intended
to compensate PFD for its distribution services to the Fund. The service fee
is intended to be additional compensation for personal services and/or
account maintenance services with respect to Class B or Class C shares. PFD
also receives the proceeds of any CDSC imposed on the redemption of Class B
or Class C shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first year's
service fee equal to 0.25% of the amount invested in Class B shares, are paid
to broker-dealers who have selling agreements with PFD. PFD may advance to
dealers the first year service fee at a rate up to 0.25% of the purchase
price of such shares and, as compensation therefor, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the 13th month following the purchase.
Commissions of up to 1% of the amount invested in Class C shares, consisting
of 0.75% of the amount invested and a first year's service fee of 0.25% of
the amount invested, are paid to broker-dealers who have selling agreements
with PFD. PFD may advance to dealers the first year service fee at a rate up
to 0.25% of the purchase price of such shares and, as compensation therefore,
PFD may retain the service fee paid by the Fund with respect to such shares
for the first year after purchase. Commencing in the 13th month following the
purchase of Class C shares, dealers will become eligible for additional
annual distribution fees and service fees of up to 0.75% and 0.25%,
respectively, of the net asset value of such shares.
Dealers may from time to time be required to meet certain criteria in order
to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan or the Class C Plan for which
there is no dealer of record or for which qualification standards have not
been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
XI. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund has elected to be treated, has qualified and intends to qualify each
year as a "regulated investment company" under Subchapter M of the Code so
that it will not pay federal income taxes on income and capital gains
distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal excise
tax on a portion of its undistributed ordinary income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The Fund
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intends to make distributions in a timely manner and, accordingly, does not
expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains,
if any, in December. Distributions from net short-term capital gains, if any,
may be paid with such dividends; distributions from income and/or capital
gains may also be made at such other times as may be necessary to avoid
federal income or excise tax.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. Dividends from the Fund's net investment income, certain net foreign
exchange gains and net short-term capital gains are taxable as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable
as long-term capital gains. For federal income tax purposes, all dividends
are taxable as described above whether a shareholder takes them in cash or
reinvests them in additional shares of the Fund. Information as to the
federal tax status of dividends and distributions will be provided to
shareholders annually. For further information on the distribution options
available to shareholders, see "Distribution Options" and "Directed
Dividends" below.
The Fund will be subject to foreign withholding taxes or other foreign taxes
on income (including interest, dividend and capital gains taxes imposed by
India and possibly other countries) from certain foreign investments, which
will reduce the yield on or return from those investments. In any year in
which the Fund qualifies, it may make an election that will permit certain of
its shareholders to take a credit (or, if more advantageous, a deduction) for
all or a portion of foreign income or other qualified taxes, including Indian
income taxes on interest, dividends and capital gains, paid by the Fund. Each
shareholder would then include in gross income (in addition to dividends
actually received) his or her proportionate share of the amount of qualified
foreign taxes paid by the Fund. If this election is made, the Fund will
notify its shareholders annually as to their share of the amount of foreign
taxes paid and the foreign source income of the Fund. Certain shareholders,
including shareholders not subject to U.S. federal income taxation, will not
be entitled to the benefit of a deduction or credit with respect to foreign
income taxes paid by the Fund. As a result of certain limitations under the
Code on foreign tax credits, which have different effects depending upon a
shareholder's particular tax situation, shareholders may be able to claim a
credit only for less than the full amount of their proportionate share of the
foreign taxes paid by the Fund. Further, the creditable portion may be
smaller to the extent the Fund's income consists of U.S.-source income,
generally including capital gains from the sale of both U.S. and foreign
stocks and securities and certain foreign currency gains, rather than
foreign-source income such as interest and dividends on foreign stocks and
securities.
Dividends and other distributions and the proceeds of redemptions,
repurchases or exchanges of Fund shares paid to individuals and other
non-exempt payees will 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 backup withholding applies. Please refer
to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income tax. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisers regarding state, local and
other applicable tax laws.
XII. SHAREHOLDER SERVICES
PSC is the shareholder services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O.
Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co.
(the "Custodian") serves as the custodian of the Fund's portfolio securities
and other assets. The principal business address of the Mutual Fund Division
of the Custodian is 40 Water Street, Boston, Massachusetts 02109. The
Custodian oversees a network of subcustodians and depositories in the
countries in which the Fund may invest. The Custodian has appointed Standard
Chartered Bank as subcustodian to hold investments purchased by the Fund in
India.
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
details of transactions are sent to shareholders as transactions occur except
Automatic Investment Plan transactions which are confirmed quarterly. The
Pioneer Combined Account Statement, mailed quarterly, is available to all
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment broker-dealer
or other party will not normally have an account with the Fund and might not
be able to utilize some of the services available to shareholders of record.
Examples of services which might not be available are investment or
redemption of shares by mail or telephone, automatic reinvestment of
dividends and capital gains distributions, withdrawal plans, Letters of
Intention, Rights of Accumulation, telephone exchanges and redemptions, and
newsletters.
Additional Investments
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B and Class C shares) to PSC (account number and
Class of shares should
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be clearly indicated). The bottom portion of a confirmation statement may be
used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer Investomatic
Plan, are invested in full and fractional shares of the 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
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a preauthorized draft drawn on a checking
account. Pioneer Investomatic Plan investments are voluntary, and you may
discontinue the Plan at any time without penalty upon 30 days' written notice
to PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareholder, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail to you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations; i.e., PGA IRA Cust for John Smith may
only go into another account registered PGA IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends and
capital gains, in cash, or have established a Systematic Withdrawal Plan, you
may choose to have those cash payments deposited directly into your savings,
checking, or NOW bank account. You may establish this service by completing
the appropriate section on the Account Application when opening a new account
or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from an account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
See "Share Price" for more information. For personal assistance, call
1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern Time on weekdays.
Computer-assisted transactions may be available to shareholders who have
pre-recorded certain bank information (see "FactFone(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 nor PSC nor 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 prices and yields of all publicly available Pioneer
mutual funds. In addition, you may use FactFone(SM) to make computer-
assisted telephone purchases, exchanges and redemptions from your Pioneer
accounts if you have activated your PIN. Telephone purchases and redemptions
require the establishment of a bank account of record. You are strongly urged
to consult with your financial representative prior to requesting any
telephone transaction. Shareholders whose accounts are registered in the name
of a broker-dealer or other third party may not be able to use FactFone(SM).
See "How to Buy Fund Shares," "How to Exchange Fund Shares," "How to Sell
Fund
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Shares" and "Telephone Transactions and Related Liabilities." Call PSC for
assistance.
Retirement Plans
You should contact the Retirement Plans Department of PSC at 1-800-622-0176
for information relating to retirement plans for business, age-weighted
profit sharing plans, Simplified Employee Pension Plans, IRAs and Section
403(b) retirement plans for employees of certain non-profit organizations
and public school systems, all of which are available in conjunction with
investments in the Fund. The Account Application accompanying this Prospectus
should not be used to establish any of these plans. Separate applications are
required.
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
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals will be limited to 10% of the value of the account if
a CDSC is applicable. See "Waiver or Reduction of Contingent Deferred Sales
Charge" for more information. Periodic checks of $50 or more will be sent to
you, or any person designated by you, monthly or quarterly, and your periodic
redemptions of shares may be taxable to you. Payments can be made either by
check or electronic transfer to a bank account designated by you. If you
direct that withdrawal checks be paid to another person after you have opened
your account, a signature guarantee must accompany your instructions.
Purchases of Class A shares of the Fund at a time when you have a SWP in
effect may result in the payment of unnecessary sales charges and may
therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or by
referring to the Statement of Additional Information.
Reinvestment Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Fund if you send a written request to PSC not more than
90 days after your shares were redeemed. Your redemption proceeds will be
reinvested at the next determined net asset value of the Class A shares of
the Fund immediately after receipt of the written request for reinstatement.
You may realize a gain or loss for federal income tax purposes as a result of
the redemption, and special tax rules may apply if a reinvestment occurs.
Subject to the provisions outlined under "How to Exchange Fund Shares" above,
you may also reinvest in Class A shares of other Pioneer mutual funds; in
this case you must meet the minimum investment requirement for each fund you
enter.
The 90-day reinstatement period may be extended by PFD for periods of up to
one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended, or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Options Form, which you may request by calling 1-800-225-6292.
XIII. THE FUND
Pioneer India Fund is an open-end, diversified management investment company
(commonly referred to as a mutual fund) organized as a Delaware business
trust on April 4, 1994. The Fund has authorized an unlimited number of shares
of beneficial interest. As an open-end management investment company, the
Fund continuously offers its shares to the public and under normal conditions
must redeem its shares upon the demand of any shareholder at the then current
net asset value per share, less any applicable CDSC. See "How to Sell Fund
Shares." The Fund is not required, and does not intend, to hold annual
shareholder meetings, although special meetings may be called for the purpose
of electing or removing Trustees, changing fundamental investment
restrictions or approving a management or subadvisory contract.
The Trustees have the authority, without further shareholder approval, to
classify and reclassify the shares of the Fund, or any additional series of
the Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of three classes of shares, designated
Class A, Class B and Class C. The shares of each class represent an interest
in the same portfolio of investments of the Fund. Each class has equal rights
as to voting, redemption, dividends and liquidation, except that each class
bears different distribution and transfer agent fees and may bear other
expenses properly attributable to the particular class. Class A, Class B and
Class C shareholders have exclusive voting rights with respect to the Rule
12b-1 distribution plans adopted by holders of those shares in connection
with the distribution of shares. The Fund reserves the right to create and
issue additional series of shares.
When issued and paid for in accordance with the terms of the Prospectus and
Statement of Additional Information, shares of the Fund are fully paid and
non-assessable by the Fund. Shares will remain on deposit with the Fund's
transfer agent and certificates will not normally be issued. The Fund
reserves the right to charge a fee for the issuance of certificates.
XIV. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized
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formula. The calculation for all Classes assumes the reinvestment of all
dividends and distributions at net asset value and does not reflect the
impact of federal or state income taxes. In addition, for Class A shares the
calculation assumes the deduction of the maximum sales charge of 5.75%; for
Class B and Class C shares the calculation reflects the deduction of any
applicable CDSC. The periods illustrated would normally include one, five and
ten years (or since the commencement of the public offering of the shares of
a Class, if shorter) through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited to
historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual fund performance may be
cited or compared with the investment results of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on market
conditions, the composition of the Fund's portfolio and operating expenses of
the Fund. All quoted investment results are historical and should not be
considered representative of what an investment in the Fund may earn in any
future period. For further information about the calculation methods and uses
of the Fund's investment results, see the Statement of Additional
Information.
APPENDIX A
INDIA
The information set forth in this Appendix is based on various publicly
available sources. No representation is made that any correlation exists or
will exist between India or its economy in general and the performance of the
Fund.
I. THE COUNTRY OF INDIA
Geography and Population
India is the seventh largest country in the world, covering an area of
approximately 3,300,000 square kilometers. It is situated in South Asia and
is bordered by Nepal, Bhutan and China in the north, Myanmar and Bangladesh
in the east, Pakistan in the west and Sri Lanka in the south.
India is the world's second most populous country. The 1991 census estimated
India's total population at approximately 844 million. Although migration
from rural to urban centers has been increasing steadily, India's population
remains predominantly rural; the 1991 census reported that 74.3% of the total
population still lives in the countryside. India's total population is
projected to increase to 925 million in 1996, 1 billion in 2001 and 1.1
billion in 2007.
Hindi is the official national language and is spoken by approximately 30% of
India's population. English is widely used in India as the language of
jurisprudence, commercial transactions and higher and technical education.
Government
India became independent from the United Kingdom in 1947. India is a federal
republic and is governed by a parliamentary democracy under the Constitution
of India. The executive, legislative and judicial functions of India's
Government are separated and certain powers are reserved to India's 25 States
and 7 Union Territories.
International Relations
With the exception of Pakistan, India's foreign relations are generally
stable. In 1993, India renegotiated its foreign debt to Russia and undertook
to rebuild its trade ties with the Central Asian states emerging from the
break-up of the former Soviet Union. In addition, India and China in
September 1993 agreed to pursue a negotiated settlement of the two countries'
longstanding border dispute. Although relations with the United States have
generally improved following the breakup of the former Soviet Union,
important differences persist between the United States and India regarding
relations with Pakistan, protection of intellectual property rights and
India's refusal to become a signatory to the Nuclear Non-Proliferation
Treaty. More than one million persons of Indian origin live in the United
States.
India's relations with Pakistan remain tense. The principal dispute between
the two countries relates to Pakistan's claim to the Indian border state of
Jammu and Kashmir, which was created in connection with the partition of
India at the time of independence. Meetings between the Indian and Pakistani
foreign ministers were held in early January 1994, but no progress was
reported on the Jammu and Kashmir issue.
Ethnic and Cultural Diversity and Conflict
India has a diverse mix of ethnic and cultural groups. The major line of
distinction, however, tends to be religion, which in some areas closely
mirrors cultural or ethnic divisions as well. There are a large number of
religions practiced in India, with Hinduism being the major religion,
followed by an estimated 82% of the total population.
Religious and ethnic differences have been a recurring source of conflict in
India throughout the post-independence era and on several occasions have
erupted in violence. Terrorists bombings have occurred from time to time in a
number of Indian cities. Since 1990, the Government of India has been
involved in a struggle with Muslim separatist guerilla groups in the State of
Jammu and Kashmir and has committed more than 250,000 army troops to control
the insurgency.
Overview of India's Economy and Recent Developments
Modern economic development in India began in the mid-1940s with the
publication of the Bombay Plan. The Planning Commission was established in
1950 to assess the country's available resources and to identify growth
areas. A centrally planned economic model was adopted, and in order to
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control the direction of private investment, all investment and major
economic decisions required government approval. Foreign investment was
allowed only selectively. This protectionist regime held back development of
India's economy until the mid-1980s when there began to be some move towards
liberalization and market orientation of the economy. With the measures
introduced in the budget of 1985, the annual growth of the country's real
gross domestic product ("GDP") rose from an average 3-4 percent since the
1940s to an average 6.1 percent between 1986 and 1990.
In 1991, faced with a rising oil import bill, an adverse balance of payments
and a large foreign debt, India had reached a position where it was unable to
obtain further commercial borrowings. At this time, the government of Prime
Minister Narasimha Rao took office and has since moved to significantly
reform the structure of India's economic system. The Government's reforms
generally have been supported by consensus among India's other main political
parties, including the BJP.
In July 1991, the new Government's Finance Minister, Dr. Manmohan Singh,
presented the new Government's first budget and announced a new industrial
policy. In consequence, for many industrial sectors, it became no longer
necessary to obtain government approval for new investments. Foreign
companies can now hold up to 51 percent of an Indian company as opposed to 40
percent previously. As a result of these policies and other factors, foreign
investment in India has greatly increased in recent years. For example, U.S.
private sector investment in India during 1992 and 1993 exceeded the total
amount of money invested in India by U.S. companies during the previous 40
years.
The process of liberalization was taken further with the budget of February
1992 when the rupee was made partially convertible and import tariffs were
reduced. Personal tax rates were brought down and it was announced that
foreign institutional investors would be able to invest directly in the
Indian capital markets. In September 1992, the guidelines for foreign
institutional investors were published and a number of foreign institutional
investors have been registered by the Securities and Exchange Board of India.
While political instability and communal violence have led to a slowdown in
India's economic growth and the implementation of reforms, the Manager and
the Indian Adviser believe that the prospects for economic growth and
liberalization remain sound.
The budgets of February 1993 and 1994 continued to demonstrate the Government
of India's commitment to economic reform. In particular, the rupee was
allowed to float freely, interest rates were reduced and major reductions
were made in customs and excise duties. Tax holidays were given to encourage
new investment in industrially backward areas and in new power projects. In
order to stimulate capital investment a system for computing long-term
capital gains tax was introduced, which favors those whose gains accrue over
a longer period. Further, the proposed Finance Bill 1994 proposes to reduce
tax rates for certain corporations and withdraw a surcharge applicable to
individual tax rates.
II. INDIA'S SECURITIES MARKET
There currently are 22 recognized stock exchanges in India (including the
Over The Counter Exchange of India). Activity and broad interest in the
market have increased in recent years compared to historical norms. This
increase reflects the growth of the private sector's role in the Indian
economy and greater participation in the market by individual investors and
foreign institutional investors. In addition, the Government of India has
actively promoted expanded capital market activity by both foreign and
domestic investors and has adopted policies designed to increase domestic
companies' reliance on the capital markets as a source of financing.
In 1991, the Government of India introduced a program of economic structural
reforms, including certain measures to stimulate growth and activity in
India's capital markets. These reforms included the grant of statutory
authority to the Securities and Exchange Board of India ("SEBI") as an
independent agency to promulgate and enforce rules governing India's capital
markets. The SEBI has undertaken a number of initiatives to reform the Indian
securities market and regulate the activities of securities professionals.
The SEBI has occasionally encountered resistance to its reforms from portions
of India's community of securities brokers.
A and B Shares
Equity securities that are traded in the Indian securities markets are
divided into two groups, A shares (also known as "specified shares") and B
shares (also known as "non-specified shares"). A shares are actively traded,
listed equity shares of companies which have a large equity base, and which
meet certain other requirements. All other listed equity shares traded in
India's securities markets are B shares.
The distinction between A shares and B shares is important because the trade
settlement practices for these two classes of securities are different. While
B shares trade only on a cash basis, trades in A shares may be effected on
either a cash basis or a "squared-up" basis. Squaring up a position involves
effecting a trade which is the opposite of an earlier trade. On the
settlement date for such a trade, only the net cash from the offsetting or
squared-up trades is transferred. Transactions in A shares are settled once
every 14 days through the Bombay Stock Exchange's clearing house.
Transactions involving B shares are settled once every 7 days among exchange
members.
The Bombay Stock Exchange
Shares listed on the Bombay Stock Exchange ("BSE") account for over 90% of
the market capitalization of securities listed on India's 22 stock exchanges.
The BSE was established in 1875 and is a self-regulatory organization owned
by its members and governed by a Board of Governors. The BSE at present
consists of approximately 560 member brokers. The BSE has a high daily
trading volume, both in terms of the number of transactions and their value.
Active trading on the BSE and other Indian stock exchanges is concentrated in
shares of relatively few issuers and only a limited portion of many
companies' shares are part of the public float. However, compared to the
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securities markets of many other emerging countries, India's securities
market is broad-based and unconcentrated in that the ten largest issuers
represent a relatively small portion of total market capitalization.
The BSE is officially open Monday through Friday. Trading is normally
conducted from 10:00 a.m. to 3:00 p.m. each day using a screen-based trading
system. The BSE is closed on bank holidays and certain religious holidays.
Special trading sessions are held outside normal trading hours simultaneously
with the annual Government budget announcements and on the commencement of
the BSE's financial year. A special trading session for odd lots is held for
an hour on Saturdays.
Orders executed on the BSE are transmitted from the offices of brokers to the
trading floor for execution by an open outcry auction. There are separate
trading posts for different groups of securities. Spreads may vary
considerably. A computerized system is used for settling daily transactions.
The BSE clearing house is managed by the State Bank of India and receives
payments and deliveries on behalf of members of the BSE in respect of A
shares. For B shares, delivery and payment is made outside the clearing house
directly among members. There is usually a lag of a few days between delivery
of securities by sellers and receipt of payment.
The following table shows performance information for the periods indicated
for the Bombay Stock Exchange, as represented by the BSE Sensitive Index,
which is comprised of securities of large capitalization issuers.
BSE SENSITIVE INDEX
[Base Year = 1979-80 = 100]
Period-End Index Level
----------- ------------
1982 235.83
1983 252.92
1984 271.87
1985 527.36
1986 524.45
1987 442.17
1988 666.26
1989 778.64
1990 1048.29
1991 1908.85
1992 2615.37
1993 3346.06
1994 3926.90
1995 xxxx.xx
The Over the Counter Exchange of India
The Over the Counter Exchange of India ("OTCEI") was built along the lines of
the U.S. Nasdaq National Market and began operations in mid-1992. Trading on
this exchange is fully automated. The OTCEI is a "quote driven market" with a
network of market makers and dealers. The OTCEI is operated only in Bombay at
present, and it intends to commence trading in Delhi and Madras. The OTCEI
mainly provides an avenue for raising funds for small companies having a
capital float between 300,000 rupees and 250 million rupees.
Creation of the National Stock Exchange
The NSE was created by the Government of India in part to increase the
interconnectivity among India's several stock exchanges and thereby to reduce
interexchange arbitrage opportunities (i.e., to increase the transparency of
India's securities exchanges). NSE commenced trading in late 1994 with fully
computerized trading, settlement and information dissemination systems.
Financial institutions own the NSE but they must apply and qualify for
trading on the same basis as others wishing to trade. Qualifications for
membership include capital adequacy standards and educational training.
Equity trading is open to both institutional and individual investors.
Trading volumes on the NSE have been increasing steadily, at time exceeding
the BSE's volume. Debt and equity trading will eventually be book-entry with
a central depositary. Futures and option trading began in 1995.
APPENDIX B
CERTAIN INVESTMENT PRACTICES
Forward Foreign Currency Exchange Contracts
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency exchange contracts to
facilitate settlement of foreign securities transactions or to protect
against changes in foreign currency exchange rates. The Fund might sell a
foreign currency on either a spot or forward basis to hedge against an
anticipated decline in the U.S. dollar value of securities in its portfolio
or securities it intends or has contracted to sell or to preserve the U.S.
dollar value of dividends, interest or other amounts it expects to receive.
Although this strategy could minimize the risk of loss due to a decline in
the value of the hedged foreign currency, it could also limit any potential
gain which might result from an increase in the value of the currency.
Alternatively, the Fund might purchase a foreign currency or enter into a
forward purchase contract for the currency to preserve the U.S. dollar price
of securities it is authorized to purchase or has contracted to purchase.
If the Fund enters into a forward contract to buy foreign currency for any
purpose, the Fund will be required to place cash or liquid, high grade debt
securities in a segregated account of the Fund maintained by the Fund's
custodian in an amount equal to the value of the Fund's total assets
committed to the consummation of the forward contract.
The use of forward foreign currency exchange contracts is a highly
specialized activity which involves investment techniques and risks that are
different from those associated with ordinary portfolio transactions. The use
of forward foreign currency exchange contracts involves (1) liquidity risk
that contractual positions cannot be easily closed out in the event of market
changes or generally in the absence of a liquid secondary market, (2)
correlation risk that changes in the value of a hedging position may not
match the foreign currency fluctuations intended to be hedged, and (3) market
risk that an incorrect prediction of exchange rates by PMC or the Indian
Adviser may cause the Fund to perform less favorably than if such position
had not been entered. The loss that may be incurred by the Fund in entering
into forward foreign currency exchange contracts is potentially unlimited.
There is no
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limit on the percentage of the Fund's assets that may be invested in forward
foreign currency exchange contracts.
There currently is no market, or only a limited market, for forward foreign
currency exchange contracts with respect to the rupee and the currencies of
certain other foreign countries in which the Fund may invest. Consequently,
there can be no assurance that such contracts will be available for hedging
currency risks at the times when the Fund wishes to use them. In addition,
the Fund's transactions in forward foreign currency exchange contracts may be
limited by the requirements for qualification of the Fund as a regulated
investment company for tax purposes. See "Tax Status" in the Statement of
Additional Information.
Repurchase Agreements
The Fund may enter into repurchase agreements not exceeding seven days in
duration. In a repurchase agreement, an investor (e.g., the Fund) purchases a
debt security from a seller which undertakes to repurchase the security at a
specified resale price on an agreed future date (ordinarily a week or less).
The resale price generally exceeds the purchase price by an amount which
reflects an agreed-upon market interest rate for the term of the repurchase
agreement. Repurchase agreements entered into by the Fund will be fully
collateralized with U.S. Treasury and/or U.S. Government agency obligations
with a market value of not less than 100% of the obligation, valued daily.
Collateral will be held in a segregated, safekeeping account for the benefit
of the Fund. In the event that a repurchase agreement is not fulfilled, the
Fund could suffer a loss to the extent that the value of the collateral falls
below the repurchase price or if the Fund is prevented from realizing the
value of the collateral by reason of an order of a court with jurisdiction
over an insolvency proceeding with respect to the other party to the
repurchase agreement.
Borrowing
The Fund may borrow money only from banks and only for temporary emergency
purposes such as in connection with the redemption of Fund shares or in
connection with the clearance of portfolio transactions. The aggregate amount
of the Fund's borrowings may not exceed 33-1/3% of the Fund's total assets
(including the amount borrowed) taken at market value. In addition, the Fund
will not purchase securities for its portfolio while the Fund's outstanding
borrowings exceed 5% of its total assets. The Fund will incur interest and
other expenses in connection with its borrowings.
Restricted and Illiquid Securities
The Fund may invest in restricted securities (i.e., securities that would be
required to be registered prior to distribution to the public), including
restricted securities eligible for resale to certain institutional investors
pursuant to Rule 144A under the Securities Act of 1933. In addition, the Fund
may invest up to 15% of its net assets in illiquid securities, including
restricted securities sold and offered under Rule 144A that are illiquid
either as a result of legal or contractual restrictions or the absence of a
trading market.
The Board of Trustees of the Fund may adopt guidelines and delegate to PMC
the daily function of determining and monitoring the liquidity of restricted
securities. The Board, however, will retain sufficient oversight and be
ultimately responsible for the determinations. Since it is not possible to
predict with assurance exactly how the market for restricted securities sold
and offered under Rule 144A will develop, the Board will carefully monitor
the Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund to the extent that qualified institutional
buyers become for a time uninterested in purchasing these restricted
securities. Securities of non-U.S. issuers that the Fund acquires in Rule
144A transactions, but which the Fund may resell publicly in a non-U.S.
securities market, are not considered restricted securities.
When-Issued Securities and Forward Commitments
The Fund may purchase securities on a when-issued, delayed delivery or
forward commitment basis. When these transactions are negotiated, the price
of the securities is fixed at the time of the commitment, but delivery and
payment take place after the date of the commitment. When-issued securities
and forward commitments involve a risk of loss if the value of the security
to be purchased declines prior to the settlement date. When the Fund
purchases securities on a when-issued, delayed delivery or forward commitment
basis, the Fund's custodian will maintain in a segregated account cash or
liquid, high grade debt securities having a value (determined daily) at least
equal to the amount of the Fund's purchase commitment.
23
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[Cover]
Pioneer India Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
JASKARAN S. TEJA, Vice President
NORMAN KURLAND, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT MANAGER
PIONEERING MANAGEMENT CORPORATION
INDIAN INVESTMENT ADVISER
ITI PIONEER AMC LTD.
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
0296-3185
(c)Pioneer Funds Distributor, Inc.
[Pioneer logo]
INDEPENDENT PUBLIC ACCOUNTANT
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications and 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
<PAGE>
PIONEER INDIA FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A, Class B and Class C Shares
February 28, 1996
This Statement of Additional Information (Part B of the Registration
Statement) is not a Prospectus, but should be read in conjunction with the
Prospectus (the "Prospectus") dated February 28, 1996 of Pioneer India Fund (the
"Fund"). A copy of the Prospectus can be obtained free of charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the Fund at 60
State Street, Boston, Massachusetts 02109. The most recent Annual Report to
Shareholders is attached to, and is hereby incorporated into, this Statement of
Additional Information.
TABLE OF CONTENTS
Page
1. Investment Policies, Restrictions and Risk Factors................... 2
2. Management of the Fund............................................... 9
3. Investment Advisers..................................................13
4. Principal Underwriter................................................14
5. Distribution Plans...................................................15
6. Shareholder Servicing/Transfer Agent.................................17
7. Custodian............................................................17
8. Independent Public Accountant........................................17
9. Portfolio Transactions...............................................18
10. Tax Status and Dividends.............................................19
11. Description of Shares................................................22
12. Certain Liabilities..................................................23
13. Determination of Net Asset Value.....................................24
14. Systematic Withdrawal Plan...........................................24
15. Letter of Intention..................................................25
16. Investment Results...................................................25
17. Financial Statements.................................................28
APPENDIX A--Description of Bond Ratings..............................29
APPENDIX B--Other Pioneer Information................................43
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED
OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES, RESTRICTIONS AND RISK FACTORS
The Fund's Prospectus identifies the investment objective and the principal
investment policies of the Fund and the risk factors associated with the Fund's
investments. Additional investment policies of the Fund and a supplemental
discussion of applicable risk factors are set forth below. This Statement of
Additional Information should be read in conjunction with the Prospectus.
Capitalized terms not otherwise defined herein have the meaning given to them in
the Prospectus.
Risk Factors Associated With Investments in India and Other Foreign Countries
The Fund is intended for long-term investors who can accept the risks
associated with investing primarily in equity securities of Indian Companies (as
defined in the Prospectus) and other foreign issuers, as well as the risks
associated with investments quoted or denominated in foreign currencies. In
addition, certain of the Fund's potential investment and management techniques
entail special risks. There can be no assurance that the Fund will achieve its
investment objective. See "Investment Objective and Policies--Risk Factors" in
the Prospectus.
The securities markets of India and most other countries with emerging
markets are each less liquid and subject to greater price volatility and have a
smaller market capitalization than the U.S. securities market. Issuers and
securities markets in India and these other countries are not subject to as
extensive and frequent accounting, financial and other reporting requirements or
as comprehensive government regulations as are issuers and securities markets in
the United States. Certain of the securities markets in which the Fund may
invest are marked by a relatively high concentration of market capitalization
and trading volume in a small number of issuers representing a limited number of
industries, as well as a high concentration of ownership of such securities by a
limited number of investors. See "Risk Factors" and "Restrictions on Investment
in India" in the Prospectus. The limited liquidity of these securities markets
may also affect the Fund's ability to accurately value its portfolio securities
or to acquire or dispose of securities at the price and time it wishes to do so
or in order to meet redemption requests.
Foreign investment in the securities market of India and in certain other
emerging markets is restricted or controlled to varying degrees. These
restrictions may limit the Fund's ability to invest in these countries and may
increase the expenses of the Fund. For a description of the restrictions on
foreign investment in India, see "Restrictions on Investment in India" in the
Prospectus and Appendix A to the Prospectus.
India and other emerging countries are subject to a greater degree of
economic, political and social instability than is the case in the United States
and most of the Western European countries. Such instability may result from,
among other things, the following: (i) authoritarian governments or military
involvement in political and economic decision making, including changes or
attempted changes in governments through extraconstitutional means; (ii) popular
unrest associated with demands for improved political, economic or social
conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring
countries; and (v) ethnic, religious and racial disaffection or conflict. Such
economic, political and social instability could disrupt the principal financial
markets in which the Fund invests and adversely affect the value of the Fund's
assets. For a description of possible sources of economic, political and social
instability in India, see "Risk Factors" and "Restrictions on Investment in
India" in the Prospectus and Appendix A to the Prospectus.
The Fund's income and, in some cases, capital gains from foreign securities
will be subject to applicable taxation in certain of the countries in which it
invests, and in some cases treaties may not be available to reduce the otherwise
applicable tax rates. For a description of the Indian taxes that will apply to
the Fund's investments in India, see "Indian Taxes" in the Prospectus. The Fund
may elect, when eligible, to "pass-through" to the Fund's shareholders those
taxes that are treated as income or certain other qualified taxes for U.S.
federal income tax purposes. If the Fund is eligible for and makes such
election, U.S. shareholders will be required to include in income their
proportionate shares of the amount of qualifying non-U.S. taxes paid by the Fund
and may be entitled to claim
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either a credit or deduction for all or a portion of such taxes. Certain
shareholders, including shareholders not subject to U.S. taxation, will not be
entitled to the benefit of a deduction or credit with respect to non-U.S. income
taxes paid by the Fund. See "Taxation." If the Fund does not make the election,
it may deduct foreign taxes that it has paid in computing its income available
for distribution to shareholders to satisfy applicable tax distribution
requirements.
Foreign securities markets also have different clearance and settlement
procedures than securities markets in the United States, and in certain foreign
markets there have been times when settlements have been unable to keep pace
with the volume of securities transactions for a variety of reasons (including,
in India, custodial infrastructure limitations), making it difficult to conduct
such transactions. For a discussion of such problems in India's securities
market, see "Risk Factors" and "Restrictions on Investment in India" in the
Prospectus. Such delays in settlement could result in temporary periods when a
portion of the Fund's assets are uninvested and no return is earned on such
assets. The inability of the Fund to make intended security purchases due to
settlement problems could result in lost opportunities to the Fund due to
subsequent increases in value of the securities. Conversely, the Fund's
inability to sell portfolio securities promptly because of settlement problems
may result in losses to the Fund due to subsequent declines in value of the
portfolio securities. In addition, because payments in connection with
securities transactions in certain foreign countries (including India) generally
are made to and received from brokers (and not clearinghouses) the Fund will be
exposed to broker-counterparty risk in connection with such transactions.
Effects of Fluctuations in Foreign Currency Exchange Rates
Because the Fund, under normal circumstances, will invest a substantial
portion of its assets in securities which are denominated or quoted in Indian
rupees (hereinafter "rupees") and other foreign currencies, the strength or
weakness of the U.S. dollar against such currencies will affect the Fund's
investment performance. A decline in the value of any particular foreign
currency against the U.S. dollar will cause a decline in the U.S. dollar value
of the Fund's holdings of securities denominated or quoted in such currency and,
therefore, may cause an overall decline in the Fund's net asset value and any
net investment income and capital gains to be distributed in U.S. dollars to
shareholders of the Fund. Even if the Fund attempts to hedge against the effects
of adverse changes in foreign currency exchange rates, there will be significant
limitations on the Fund's ability to hedge effectively against the currency
risks associated with its portfolio investments. See Appendix B to the
Prospectus.
The rate of exchange between the U.S. dollar and other currencies is
determined by several factors including the supply and demand for particular
currencies, central bank efforts to support particular currencies, the movement
of interest rates, the pace of business activity in certain other countries and
the United States, and other economic and financial conditions affecting the
world economy.
Although the Fund values its assets daily in terms of U.S. dollars, the
Fund does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund may do so from time to time, however, and
investors should be aware of the costs of currency conversion. Although currency
dealers do not charge a fee for conversion, they do realize a profit based on
the difference ("spread") between the prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to the Fund at
one rate, while offering a lesser rate of exchange should the Fund desire to
sell that currency to the dealer.
Forward Foreign Currency Exchange Contracts
The Fund may conduct foreign currency transactions on a spot (i.e., cash)
basis at the spot rate for purchasing or selling currency prevailing in the
foreign exchange market. The Fund also may enter into forward foreign currency
exchange contracts ("forward contracts") involving rupees or currencies of other
foreign countries in which the Fund may invest. Forward contracts are
contractual agreements to purchase or sell a specified currency at a specified
future date and price set at the time the parties enter into the contract.
Forward contracts are traded in the interbank market conducted directly between
currency traders (usually large commercial banks) and their customers.
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<PAGE>
Currently, there is no market, or only a limited market, for these
contracts with respect to the rupee and the currencies of certain other foreign
countries in which the Fund may invest. Consequently, there can be no assurance
that such contracts will be available for hedging currency risks at the time
when the Fund wishes to use them.
The Fund may enter into forward contracts to hedge against foreign currency
risk in the following circumstances. First, when the Fund intends to purchase or
sell a security denominated or quoted in a foreign currency, or when the Fund
anticipates the receipt in a foreign currency of dividend or interest payments
on such a security that it holds, the Fund may wish to "lock in" the U.S. dollar
price of the security or the U.S. dollar equivalent of such dividend or interest
payment, as the case may be. By entering into a forward contract for the
purchase or sale, for a fixed amount of U.S. dollars, of the amount of foreign
currency involved, the Fund will attempt to protect itself against an adverse
change in the relationship between the U.S. dollar and the subject foreign
currency during the period between the date on which the Fund enters into the
forward contract and the date on which the contract matures or is closed out.
Second, when Pioneering Management Corporation ("PMC"), the Fund's manager
and investment adviser, believes that the currency of a particular foreign
country may suffer a significant decline against the U.S. dollar, it may attempt
to hedge the Fund's exposure to such currency by entering into a forward
contract to sell, for a fixed amount of U.S. dollars, the amount of foreign
currency approximating the value of some or all of the Fund's portfolio
securities denominated or quoted in the subject foreign currency. The precise
matching of the forward contract amounts and the value of the portfolio
securities involved generally will not be possible because the future value (in
foreign currencies) of such securities will change as a consequence of
securities market movements between the date on which the contract is entered
into and the date it matures or is closed out.
The Fund's custodian will place cash or liquid, high grade debt securities
(i.e., securities rated in one of the top three rating categories by Standard &
Poor's Ratings Group ("Standard & Poors") or by Moody's Investors Service, Inc.
("Moody's") or, if unrated by such rating organizations, determined by PMC to be
of comparable credit quality) into a segregated account with the Fund's
custodian in an amount equal to the value of the Fund's total assets committed
to the consummation of forward contracts requiring the Fund to purchase foreign
currencies. If the value of the securities placed in the segregated account
declines, the Fund will place additional cash or securities in the account so
that the value of the account will equal the amount of the Fund's commitments
with respect to such contracts. The segregated account will be marked-to-market
on a daily basis.
Forward contracts entered into by the Fund for hedging purposes will limit
the opportunity for gain in the event that the value of the hedged currency
rises. In addition, the use of forward contracts to protect against a decline in
the value of a foreign currency to which the Fund has exposure will not
eliminate fluctuations in the prices of securities denominated or quoted in such
currency. It simply will establish a rate of exchange which the Fund will be
able to achieve at a specified future point in time. Moreover, it may not be
possible for the Fund to hedge against a currency devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the anticipated devaluation level.
The cost to the Fund of engaging in foreign currency transactions varies
with such factors as the currency involved, the size of the contract, the length
of the contract period and the market conditions then prevailing. Since
transactions in foreign currency and forward contracts are usually conducted on
a principal basis, no deposits, fees or commissions generally are involved. At
the maturity of a forward contract, the Fund may either accept or make delivery
of the currency specified in the contract or, at or prior to maturity, enter
into a closing purchase transaction involving the purchase or sale of an
offsetting contract. Closing purchase transactions with respect to forward
contracts are usually effected with the currency trader who is a party to the
original forward contract.
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<PAGE>
Illiquid Securities
The Fund may invest up to 15% of its net assets in illiquid securities. See
"Restricted and Illiquid Securities" in Appendix B to the Prospectus. Generally,
a security will be considered illiquid if the Fund is unable to dispose of such
security within seven days at approximately the price at which it values such
security. Securities may also be considered illiquid as a result of certain
legal or contractual restrictions on resale. The sale of illiquid securities, if
they can be sold at all, generally will require more time and result in higher
brokerage charges and other selling expenses than will the sale of liquid
securities, such as securities eligible for trading on U.S. securities exchanges
or in U.S. over-the-counter markets. Moreover, restricted securities (i.e.,
securities that would be required to be registered prior to distribution to the
general public), such as securities eligible for resale pursuant to Rule 144A or
Regulation S under the Securities Act of 1933, as amended (collectively, "144A
securities"), which may be illiquid for purposes of this limitation, often sell
at a price lower than similar securities that are not subject to restrictions on
resale.
The Board of Trustees has the ultimate responsibility for determining
whether specific securities, including Rule 144A securities, are liquid or
illiquid. The Board has delegated the function of making day-to-day
determinations to PMC, pursuant to guidelines reviewed and approved by the
Trustees. PMC takes into account a number of factors in making liquidity
determinations. These factors may include, but are not limited to: (i) the
frequency of trading in the security; (ii) the number of dealers who make quotes
for the security; (iii) the number of dealers who have undertaken to make a
market in the security; (iv) the number of potential purchasers; and (v) the
nature of the security and how trading is effected (e.g., the time needed to
sell the security, how offers are solicited and the mechanics of transfer). PMC,
with the Indian Adviser's assistance, will monitor the liquidity of the Fund's
portfolio securities on an ongoing basis and will report periodically to the
Trustees on this subject.
State securities laws may impose further limitations on the amount of
illiquid securities that the Fund may purchase.
Repurchase Agreements
The Fund may enter into repurchase agreements with "primary dealers" in
U.S. Government securities and banks which furnish collateral at least equal in
value or market price to the amount of their repurchase obligation. The Fund may
also enter into repurchase agreements involving certain foreign government
securities. The primary risk associated with repurchase agreements is that, if
the seller defaults, the Fund might suffer a loss to the extent that the
proceeds from the sale of the underlying securities and other collateral held by
the Fund in connection with the related repurchase agreement are less than the
repurchase price. Another risk is that, in the event of bankruptcy of the
seller, the Fund could be delayed in or prohibited from disposing of the
underlying securities and other collateral held by the Fund in connection with
the related repurchase agreement pending court proceedings. In evaluating
whether to enter a repurchase agreement, PMC will carefully consider the
creditworthiness of the seller pursuant to procedures reviewed and approved by
the Trustees. See "Repurchase Agreements" in Appendix B to the Prospectus.
When-Issued Securities and Forward Commitments
The Fund will purchase securities on a when-issued, delayed delivery or
forward commitment basis only with the intention of completing the transaction
and actually purchasing the securities. If deemed appropriate by PMC or the
Indian Adviser, however, the Fund may dispose of or renegotiate a commitment
after it is entered into, and may sell securities it has committed to purchase
before those securities are delivered to the Fund on the settlement date. In
these cases, the Fund may realize a taxable gain or loss.
When the Fund agrees to purchase securities on a when-issued, delayed
delivery or forward commitment basis, the Fund's custodian will set aside cash
or liquid, high grade debt securities equal to the amount of the commitment in a
segregated account. The market value of the Fund's net assets may fluctuate to a
greater degree
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<PAGE>
when it sets aside portfolio securities than when it sets aside cash. Because
the Fund's liquidity and ability to manage its portfolio might be affected when
it sets aside cash or portfolio securities to cover purchase commitments, the
Fund expects that its commitments to purchase when-issued securities and forward
commitments will not exceed 33% of the value of its total assets absent unusual
market conditions. When the Fund engages in when-issued and forward commitment
transactions, it relies on the other party to the transaction to consummate the
trade. Failure of such party to do so may result in the Fund incurring a loss or
missing an opportunity to obtain a price considered to be advantageous.
The market value of securities underlying a when-issued purchase or a
forward commitment to purchase securities, and any subsequent fluctuations in
their market value, are taken into account when determining the market value of
the Fund, starting on the day the Fund agrees to purchase the securities.
Investment Restrictions
The Fund has adopted certain additional investment restrictions which may
not be changed without the affirmative vote of the holders of a "majority" (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
the Fund's outstanding voting securities. The 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, forward foreign exchange contracts, repurchase agreements and
reverse repurchase agreements entered into in accordance with the Fund's
policies, and the pledge, mortgage or hypothecation of the 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 and except pursuant to reverse repurchase
agreements and then only in amounts not to exceed 33 1/3% of the Fund's total
assets (including the amount borrowed) taken at market value. The Fund will not
use leverage to attempt to increase income. The Fund will not purchase
securities while outstanding borrowings (including reverse repurchase
agreements) exceed 5% of the 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 the 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, the Fund may be deemed to be an
underwriter for purposes of the Securities Act of 1933, as amended (the "1933
Act").
(5) Purchase or sell real estate, except that the Fund may (i) lease office
space for its own use, (ii) invest in securities of issuers that invest in real
estate or interests therein, (iii) invest in securities that are secured by real
estate or interests therein, (iv) purchase and sell mortgage-related securities
and (v) hold and sell real estate acquired by the Fund as a result of the
ownership of securities.
(6) Make loans, except that the Fund may lend portfolio securities in
accordance with the Fund's investment policies and may purchase or invest in
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.
-6-
<PAGE>
(7) Invest in commodities or commodity contracts or in puts, calls, or
combinations of both, except interest rate futures contracts, options on
securities, securities indices, currency and other financial instruments,
futures contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the Fund's
investment policies.
(8) With respect to 75% of its total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies or instrumentalities), if
(a) such purchase would cause more than 5% of the Fund's total
assets, taken at market value, to be invested in the securities of such
issuer, or
(b) such purchase would at the time result in more than 10% of the
outstanding voting securities of such issuer being held by the Fund.
In addition, although the Fund is not currently registered in Germany, the
following restrictions will apply, to the extent required, upon such
registration. If and so long as the Fund is registered in Germany, the following
investment restrictions will apply which may not be changed without the prior
approval of the Fund's shareholders. The Fund may not:
(i) invest in the securities of any other domestic or foreign investment
company or investment fund, except in connection with a plan of merger or
consolidation with or acquisition of substantially all the assets of such other
investment company or investment fund;
(ii) purchase or sell real estate, or any interest therein, and real estate
mortgage loans, except that the Fund may invest in securities of corporate or
governmental entities secured by real estate or marketable interests therein or
securities issued by companies (other than real estate limited partnerships,
real estate investment trusts and real estate funds) that invest in real estate
or interests therein;
(iii) borrow money in amounts exceeding 10% of the Fund's total assets
(including the amount borrowed) taken at market value;
(iv) pledge, mortgage or hypothecate its assets in amounts exceeding 10% of
the Fund's total assets taken at market value;
(v) purchase securities on margin or make short sales; or
(vi) redeem its securities in-kind.
It is the fundamental policy of the Fund not to concentrate its investments
in securities of companies in any particular industry. In the opinion of the
Securities and Exchange Commission (the "Commission"), investments are
concentrated in a particular industry if such investments aggregate 25% or more
of the Fund's total assets. This policy does not apply to the Fund's investments
in U.S. Government securities.
The Fund does not intend to enter into any reverse repurchase agreement,
lend portfolio securities or invest in securities index put and call warrants,
as described in fundamental investment restrictions (2), (6) and (7) above,
during the coming year.
In addition, as a matter of nonfundamental investment policy and in
connection with the offering of its shares in various states and foreign
countries, the 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 PMC or the
Indian Adviser to save commissions or to average prices among them is not deemed
to result in a securities trading account.
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<PAGE>
(b) Purchase securities on margin or make short sales unless by virtue of
its ownership of other securities, the Fund has the right to obtain, without
payment of additional consideration, securities equivalent in kind and amount to
the securities sold and, if the right is conditional, the sale is made upon the
same conditions, except that the Fund may obtain such short-term credits as may
be necessary for the clearance of purchases and sales of securities and in
connection with transactions involving forward foreign currency exchange
transactions, options, futures contracts and options on futures contracts.
(c) Purchase a security if, as a result, (i) more than 10% of the Fund's
total assets would be invested in securities of closed-end investment companies,
(ii) such purchase would result in more than 3% of the total outstanding voting
securities of any one such closed-end investment company being held by the Fund,
or (iii) more than 5% of the Fund's total assets would be invested in any one
such closed-end investment company; provided, however, the Fund can exceed such
limitations in connection with a plan of merger or consolidation with or
acquisition of substantially all the assets of such other closed-end investment
company. The Fund will not invest in the securities of any open-end investment
company, except in connection with a plan of merger or consolidation with, or
acquisition of, substantially all the assets of such other open-end investment
company.
(d) Invest more than 10% of its total assets in the aggregate of (1)
securities of any issuer which, together with its predecessors, has been in
operation for less than three years and (2) restricted securities, excluding
securities eligible for resale pursuant to Rule 144A under the 1933 Act or
foreign securities which are offered or sold outside the United States in
accordance with Regulation S under the 1933 Act; provided, however, that the
Fund may not invest more than 15% of its net assets in restricted securities
including those eligible for resale under Rule 144A. Securities of non-U.S.
issuers that the Fund acquires in Rule 144A transactions, but which the Fund may
resell publicly in a non-U.S. securities market, are not considered restricted
securities.
(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 the Fund's net assets would be invested in
warrants, which are not listed on the New York Stock Exchange, the American
Stock Exchange or comparable international exchanges or more than 5% of the
value of the net assets of the Fund would be invested in warrants generally,
whether or not listed. For these purposes, warrants are to be valued at the
lesser of cost or market, but warrants acquired by the 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 Fund or directors or officers of PMC, the Indian
Adviser or any investment management subsidiary of PMC or the Indian Adviser
individually owns beneficially more than 0.5% and together own beneficially more
than 5% of the securities of such issuer.
(h) Purchase interests in oil, gas or other mineral leases or exploration
programs; however, this policy will not prohibit the acquisition of securities
of companies engaged in the production or transmission of oil, gas or other
minerals.
(i) Purchase any security which is illiquid, if more than 15% of the net
assets of the Fund, taken at market value, would be invested in such securities.
The Fund may not invest in repurchase agreements maturing in more than seven
days.
-8-
<PAGE>
(j) Invest more than 5% of its total assets in restricted securities,
excluding Rule 144A securities; provided, however, the Fund may not invest more
than 15% of its total assets in restricted securities, including such Rule 144A
securities. Securities of non-U.S. issuers that the Fund acquires in Rule 144A
transactions, but which the Fund may resell publicly in a non- U.S. securities
market, are not considered restricted securities.
(k) Write covered calls or put options with respect to more than 25% of the
value of its total assets or invest more than 5% of its total assets in puts,
calls, spreads, or straddles, other than protective put options.
(l) Invest in real estate limited partnerships.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the affairs of
the Fund. The officers of the Fund are responsible for the Fund's operations.
The Trustees and executive officers of the Fund are listed below, together with
their principal occupations during the past five years. An asterisk indicates
those Trustees who are interested persons of the Fund within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
JOHN F. COGAN, JR.*, Chairman of the Board, President and Trustee, DOB: June
1926
President, Chief Executive Officer and a Director of The Pioneer Group,
Inc. ("PGI"); Chairman and a Director of 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 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.
-9-
<PAGE>
JOHN W. KENDRICK, Trustee, DOB: July 1917
6363 Waterway Drive, Falls Church, VA 22044
Professor Emeritus and Adjunct Scholar, George Washington University;
Economic Consultant and Director, American Productivity and Quality Center;
American Enterprise Institute and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, Trustee, DOB: May 1948
One Boston Place, Suite 2635, Boston, MA 02108
President, Newbury, Piret & Company, Inc. (merchant banking firm) and
Trustee of all of the Pioneer mutual funds.
DAVID D. TRIPPLE*, Trustee and Executive Vice President, DOB: February 1944
Executive Vice President and a Director of PGI; President, Chief Investment
Officer and a Director of PMC; Director of PFD, PCC, PIC, PIntl , First Russia,
Omega and Pioneer SBIC Corporation, Executive Vice President and Trustee of all
of the Pioneer mutual funds.
STEPHEN K. WEST, Trustee, DOB: September 1928
125 Broad Street, New York, NY 10004
Partner, Sullivan & Cromwell (law firm); Trustee, The Winthrop Focus Funds
(mutual funds) and Trustee of all of the Pioneer mutual funds.
JOHN WINTHROP, Trustee, DOB: June 1936
One North Adgers Wharf, Charleston, SC 29401
President, John Winthrop & Co., Inc. (private investment firm); Director of
NUI Corp.; Trustee of Alliance Capital Reserves, Alliance Government Reserves
and Alliance Tax Exempt Reserves and Trustee of all of the Pioneer mutual funds,
except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Treasurer, DOB: April 1937
Senior Vice President, Chief Financial Officer and Treasurer of PGI;
Treasurer of PFD, PMC, PSC, PCC, PIC, PIntl, PMT, PGL, First Russia, Omega and
Pioneer SBIC Corporation; Treasurer and Director of PPC and Treasurer of all of
the Pioneer mutual funds.
JOSEPH P. BARRI, Secretary, DOB: August 1946
Secretary of PGI, PMC, PPC, PIC, PIntl, PMT, First Russia, Omega and PCC;
Clerk of PFD and PSC; Partner, Hale and Dorr (counsel to the Fund) and Secretary
of all of the Pioneer mutual funds.
ERIC W. RECKARD, Assistant Treasurer, DOB: June 1956
Manager of Fund Accounting of PMC since May 1994; Manager of Auditing,
Compliance and Business Analysis for PGI prior to May 1994 and Assistant
Treasurer of all of the Pioneer mutual funds.
ROBERT P. NAULT, Assistant Secretary, DOB: March 1964
General Counsel and Assistant Secretary of PGI since 1995; Assistant
Secretary of PMC, PIntl, PGL, First Russia, Omega and all of the Pioneer mutual
funds; Assistant Clerk of PFD and PSC: and formerly of Hale and Dorr (counsel to
the Fund) where he most recently served as junior partner.
JASKARAN S. TEJA, Vice President, DOB: March 1930
Senior Vice President, PIntl since 1992; Director, PGI since 1994, the
Indian Adviser since 1993, Forest-Starma, Komsomols-on-Amur, Russia since 1993,
Pioneer Investments, Russia since 1993; Independent International Consultant
from 1988 to 1992; Permanent Representative/Ambassador of India to the United
Nations and other international organizations before 1988.
-10-
<PAGE>
NORMAN KURLAND, Vice President, DOB: November 1949
Senior Vice President of PMC since 1993; Vice President of PMC from 1990 to
1993; Vice President of Pioneer Europe Fund, Pioneer Emerging Markets Fund and
Pioneer International Growth Fund.
The Fund's Amended and Restated Declaration of Trust (the "Declaration of
Trust") provides that the holders of two-thirds of its outstanding shares may
vote to remove a Trustee of the Fund at any meeting of shareholders. See
"Description of Shares" below. The business address of all officers is 60 State
Street, Boston, Massachusetts 02109.
All of the outstanding capital stock of PFD, PMC and PSC is owned, directly
or indirectly, by PGI, a publicly-owned Delaware corporation. PMC, the Fund's
investment adviser, serves as the investment adviser for the Pioneer mutual
funds listed below and manages the investments of certain institutional
accounts.
The table below lists all the Pioneer mutual funds currently offered to the
public and the investment adviser and principal underwriter for each fund.
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.
-11-
<PAGE>
PMC also manages the investments of certain institutional private accounts.
To the knowledge of the Fund, no officer or Trustee of the Fund owned 5% or more
of the issued and outstanding shares of PGI as of the date of this Statement of
Additional Information, except Mr. Cogan who then owned approximately 15% of
such shares. On January 31, 1996, Merrill Lynch, Pierce, Fenner & Smith, Inc.,
250 Vesey Street, World Financial Center, North Tower, New York, New York 10281
owned of record approximately 24.85% of the Fund's Class B shares (189,699
shares) and approximately 8.6% of the Fund's Class A shares (100,791 shares). On
the same date, Oppenheimer & Co., Inc., P.O. Box 3484, Church Street Station,
New York, New York 10008, owned of record approximately 10.84% of the Fund's
Class A shares (126,422.250 shares), and PFD owned 100% of the Fund's Class C
shares.
Compensation of Officers and Trustees
Commencing on November 1, 1995, the Fund will pay an annual trustees' fee
to each Trustee who is not affiliated with PGI, PMC, PFD or PSC consisting of
two components: (a) a base fee of $500 and (b) a variable fee, calculated on the
basis of the Fund's average net assets, estimated to be approximately $18 for
1996. In addition, the Fund will pay a per meeting fee of $120 to each Trustee
who is not affiliated with PGI, PMC, PFD or PSC. The Fund also will pay an
annual committee participation fee to each Trustee who serves as a member of any
committees established to act on behalf of one or more of the of Pioneer mutual
funds. Committee fees will be allocated to the Fund on the basis of the Fund's
average net assets. Each Trustee who is a member of the Audit Committee for the
Pioneer mutual funds will receive an annual fee equal to 10% of the aggregate
annual trustees' fee, except the Committee Chair who will receive an annual
trustees' fee equal to 20% of the aggregate annual trustees' fee. The 1996 fees
for the Audit Committee members and Chair are expected to be approximately
$6,000 and $12,000, respectively. Members of the Pricing Committee for the
Pioneer mutual funds, as well as any other committee which renders material
functional services to the Board of Trustees for the Pioneer mutual funds, will
receive an annual fee equal to 5% of the annual trustees' fee, except the
Committee Chair who will receive an annual trustees' fee equal to 10% of the
annual trustees' fee. The 1996 fees for the Pricing Committee members and Chair
are expected to be approximately $3,000 and $6,000, respectively. Any such fees
paid to affiliates or interested persons of PGI, PMC, PFD or PSC are reimbursed
to the Trust under its Management Contract. The Fund pays no salaries of
compensation to any of its officers.
For the fiscal year ended October 31, 1995, the Fund 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 Fund's Audit Committee, except for the Chairman of such Committee, who
received an annual fee of $250. The Fund also paid an annual trustees' fee of
$500 plus expenses to each Trustee affiliated with PMC, PSC or PFD. Any such
fees and expenses paid to affiliates or interested persons of PMC, PFD or PSC
were reimbursed to the Fund under its Management Contract. The Fund paid no
salaries or compensation to any of its officers.
The following table sets forth certain information with respect to the
compensation of each Trustee of the Fund: +
<TABLE>
<CAPTION>
Pension or Retirement Total Compensation
Benefits Accrued from Pioneer Family
Aggregate Compensation as Part of the of Funds (33 Funds
Name of Trustee from the Fund* Trust's Expenses including the Fund)**
<S> <C> <C> <C>
John F. Cogan, Jr. $500.00 $0 $11,000
Richard H. Egdahl, M.D. $743.25 $0 $63,315
Margaret B. W. Graham $743.25 $0 $63,315
John W. Kendrick $743.25 $0 $62,398
Marguerite A. Piret $988.08 $0 $76,704
David D. Tripple $500.00 $0 $11,000
-12-
<PAGE>
Stephen K. West $927.33 $0 $68,180
John Winthrop $943.75 $0 $71,199
<FN>
* As of fiscal period ended October 31, 1995.
** As of December 31, 1995.
+ No Trustee received or accrued any pension or other retirement benefits
from the Fund during either of the covered periods.
</FN>
</TABLE>
3. INVESTMENT ADVISERS
The Manager. As described in the Prospectus, PMC, 60 State Street, Boston,
Massachusetts, serves as the Fund's investment manager. The Fund's management
contract with PMC expires initially on June 22, 1996, but it is renewable
annually after such date by the vote of a majority of the Board of Trustees of
the Fund (including a majority of the Board of Trustees who are not parties to
the contract or interested persons of any such parties) cast in person at a
meeting called for the purpose of voting on such renewal. This contract
terminates if assigned and may be terminated without penalty by either party by
vote of its Board of Directors or Trustees, as the case may be, or a majority of
the Fund's 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 1.25% per annum of the Fund's
average daily net assets. This fee is normally computed daily and paid monthly.
PMC has agreed not to impose a portion of its management fee and to make other
arrangements, if necessary, to limit certain other expenses of the Fund to the
extent necessary to limit Class A expenses to 2.25% of the average daily net
assets attributable to the Fund's Class A shares; the portion of the Fund-wide
expenses attributable to Class B and Class C shares will be reduced only to the
extent such expenses are reduced for Class A shares. This Agreement is voluntary
and temporary and may be revised or terminated by PMC at any time. For the
fiscal year ended October 31, 1995, the Fund paid or owed total management fees
to PMC of approximately $201,379. Pursuant to its expense limitation agreement,
PMC did not impose this fee and limited the Fund's expenses. For the period from
June 23, 1994 through October 31, 1994, the Fund paid or owed total management
fees to PMC of approximately $40,723. Pursuant to its expense limitation
agreement, PMC did not impose this fee and limited the Fund's expenses.
PMC has agreed that if in any fiscal year the aggregate expenses of the
Fund exceed the expense limitation established by any state having jurisdiction
over the Fund, PMC will reduce its management fee to the extent required by
state law. The most restrictive state expense limit currently applicable to the
Fund provides that the 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. In the past,
the relevant state has granted relief for mutual funds that invest in emerging
markets, such as the Fund, because of their higher operating costs, and the Fund
expects to seek such relief to the extent it becomes necessary to do so.
The Indian Adviser. As described in the Prospectus, ITI Pioneer AMC Ltd.
(the "Indian Adviser") serves as investment adviser with respect to the Fund's
investments in India. The Indian Adviser is a joint venture between PMC and
Investment Trust of India, Ltd., a leading provider of financial services in
India. The Indian Adviser has entered into an advisory contract with PMC and the
Fund. The advisory contract expires initially on June 22, 1996, but it is
renewable annually after such date by the vote of a majority of the Board of
Trustees of the Fund (including a majority of the Board of Trustees who are not
parties to the contract or interested persons of any such parties) cast in
person at a meeting called for the purpose of voting on such renewal. The
advisory contract terminates if assigned and may be terminated without penalty
by any party by vote of its Board of Directors or Trustees, as the case may be,
or a majority of the Fund's outstanding voting securities and the giving of
sixty days' written notice.
-13-
<PAGE>
In accordance with the following schedule, the Indian Adviser is entitled
to a subadvisory fee (payable by PMC and not by the Fund) as compensation for
its subadvisory services and expenses incurred:
(degree) 0.10% of the Fund's average gross assets invested in India's
securities markets, including assets invested in American, Global
or other types of depositary receipts for securities traded in
India's securities markets if such gross assets are no greater
than $15,000,000;
(degree) 0.20% of such gross assets if such gross assets are greater than
$15,000,000 but no greater than $45,000,000;
(degree) 0.40% of such gross assets if such gross assets are greater than
$45,000,000 but no greater than $60,000,000; and
(degree) 0.60% of such gross assets if such gross assets are greater than
$60,000,000.
The above subadvisory fee is normally computed monthly and paid quarterly. In
addition, the applicable fee rate applies to all assets that are the basis for
the Indian Adviser's fee. For example, if such assets were $50,000,000 for any
one year, the Indian Adviser's fee pursuant to the above fee schedule would be
$200,000 ($50,000,000 X 0.40%). For the period June 23, 1994 (commencement of
operations) through October 31, 1995, the Manager paid or owed subadvisory fees
to the Indian Adviser of approximately $1,178. For the fiscal year ended October
31, 1995, PMC paid or owed subadvisory fees to the Indian Adviser of
approximately $16,151.
4. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter in connection with the continuous
offering of the shares of the Fund pursuant to an Underwriting Agreement, dated
June 22, 1994. The Trustees who were not "interested persons" (as defined in the
1940 Act) of the Fund approved the Underwriting Agreement, which will continue
in effect from year to year, if annually approved by the Trustees, in
conjunction with the continuance of the Plans of Distribution. See "Distribution
Plans" below. The Underwriting Agreement provides that PFD will bear certain
distribution expenses not borne by the Fund. For the fiscal years ending October
31, 1994 (commencement of operations June 23,1994) and 1995, net underwriting
commissions earned by PFD were approximately $6, 439 and $21,354, respectively.
Commissions reallowed to dealers during such periods were approximately $608,257
and $140,268, respectively. During the fiscal year ended October 31, 1995,
CDSCs, at a rate from a maximum of 4.0% of the lower of the cost or market value
of the shares being redeemed, of $38,902 were deducted from redemptions of Class
B shares made within six years of purchase (as described in "How to Buy Fund
Shares" in the Prospectus). Such CDSCs are paid to PFD in reimbursement of
expenses related to servicing of shareholder accounts and compensation paid to
dealers and sales personnel.
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. PFD
also pays certain expenses in connection with the distribution of the Fund's
shares, including the cost of preparing, printing and distributing advertising
or promotional materials, and the cost of printing and distributing prospectuses
and supplements to prospective shareholders. The Fund bears the cost of
registering its shares under federal, state and foreign securities law. See
"Distribution Plans" below.
The Fund and PFD have agreed to indemnify each other against certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
Under the Underwriting Agreement, PFD will use its best efforts in rendering
services to the Fund.
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<PAGE>
The Fund will not generally issue Fund shares for consideration other than
cash. At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities provided (i) the
securities meet the investment objectives and policies of the Fund; (ii) the
securities are acquired by the Fund for investment and not for resale; (ii) the
securities are not restricted as to transfer either by law or liquidity of
market; and (iv) the securities have a value which is readily ascertainable (and
not established only by valuation procedures) as evidenced by a listing on the
American Stock Exchange or the New York Stock Exchange or by quotation on the
Nasdaq National Market. An exchange of securities for Fund shares will generally
be a taxable transaction to the shareholder.
The redemption price of shares of beneficial interest of the Fund may, at
PMC's discretion, be paid in cash or portfolio securities. The Fund has,
however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to
which the Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the Fund's net asset value during any 90-day period for any
one shareholder. Should the amount of redemptions by any shareholder exceed such
limitation, the Fund will have the option of redeeming the excess in cash or
portfolio securities. In the latter case, the securities are taken at their
value employed in determining the Fund's net asset value. A shareholder whose
shares are redeemed in-kind may incur brokerage charges in selling the
securities received in-kind. The selection of such securities will be made in
such manner as the Board deems fair and reasonable.
5. DISTRIBUTION PLANS
The Fund has adopted plans of distribution pursuant to Rule 12b-1
promulgated by the Securities and Exchange Commission ("SEC") under the 1940 Act
with respect to its Class A, Class B and Class C shares (the "Class A Plan",
"Class B Plan" and the "Class C Plan") (together, the "Plans").
The Class A Plan. Pursuant to the Class A Plan the Fund may reimburse PFD
for its expenditures in financing any activity primarily intended to result in
the sale of the Class A shares. Certain categories of such expenditures have
been approved by the Board of Trustees and are set forth in the Prospectus. See
"Distribution Plans" in the Prospectus. The expenses of the Fund pursuant to the
Class A Plan are accrued daily at a rate which may not exceed the annual rate of
0.25% of the Fund's average daily net assets attributable to Class A shares.
The Class B Plan. The Class B Plan provides that the Fund shall pay PFD, as
the Fund's distributor for its Class B shares, a daily distribution fee equal on
an annual basis to 0.75% of the Fund's average daily net assets attributable to
Class B shares and will pay PFD a service fee equal to 0.25% of the Fund's
average daily net assets attributable to Class B shares (which PFD will in turn
pay to securities dealers which enter into a sales agreement with PFD at a rate
of up to 0.25% of the Fund's average daily net assets attributable to Class B
shares owned by investors for whom that securities dealer is the holder or
dealer of record). This service fee is intended to be consideration for personal
services and/or account maintenance services rendered by the dealer with respect
to Class B shares. PFD will advance to dealers the first-year service fee at a
rate equal to 0.25% of the amount invested. As compensation therefor, PFD may
retain the service fee paid by the Fund with respect to such shares for the
first year after purchase. Dealers will become eligible for additional service
fees with respect to such shares commencing in the thirteenth month following
purchase. Dealers may from time to time be required to meet other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to the Fund. PFD pays commissions
to dealers as well as expenses of printing prospectuses and reports used for
sales purposes, expenses with respect to the preparation and printing of sales
literature and other distribution related expenses, including, without
limitation, the cost necessary to provide distribution-related services or
personnel,
-15-
<PAGE>
travel, office expenses and equipment. The Class B Plan also provides that PFD
will receive all CDSCs attributable to Class B shares. (See "Distribution Plans"
in the Prospectus.)
The Class C Plan. The Class C Plan provides that the Fund will pay PFD, as
the Fund's distributor for its Class C shares, a distribution fee accrued daily
and paid quarterly, equal on an annual basis to 0.75% of the Fund's average
daily net assets attributable to Class C shares and will pay PFD a service fee
equal to 0.25% of the Fund's average daily net assets attributable to Class C
shares. PFD will in turn pay to securities dealers which enter into a sales
agreement with PFD a distribution fee and a service fee at rates of up to 0.75%
and 0.25%, respectively, of the Fund's average daily net assets attributable to
Class C shares owned by investors for whom that securities dealer is the holder
or dealer of record. The service fee is intended to be in consideration of
personal services and/or account maintenance services rendered by the dealer
with respect to Class C shares. PFD will advance to dealers the first-year
service fee at a rate equal to 0.25% of the amount invested. As compensation
therefor, PFD may retain the service fee paid by the Fund with respect to such
shares for the first year after purchase. Commencing in the thirteenth month
following a purchase of Class C shares, dealers will become eligible for
additional service fees at a rate of up to 0.25% of the current value of the
amount invested and additional compensation at a rate of up to 0.75% of the
amount invested with respect to such shares. Dealers may from time to time be
required to meet certain other criteria in order to receive service fees. PFD or
its affiliates are entitled to retain all service fees payable under the Class C
Plan for which there is no dealer of record or for which qualification standards
have not been met as partial consideration for personal services and/or account
maintenance services performed by PFD or its affiliates for shareholder
accounts.
The purpose of distribution payments to PFD under the Class C Plan is to
compensate PFD for its distribution services with respect to the Class C shares
of the Fund. PFD pays commissions to dealers as well as expenses of printing
prospectuses and reports used for sales purposes, expenses with respect to the
preparation and printing of sales literature and other distribution-related
expenses, including, without limitation, the cost necessary to provide
distribution-related services, or personnel, travel office expenses and
equipment. The Class C Plan also provides that PFD will receive all CDSCs
attributable to Class C shares. (See "Distributions Plans" in the Prospectus.)
General. In accordance with the terms of the Plans, PFD provides to the
Fund for review by the Trustees a quarterly written report of the amounts
expended under the respective Plans and the purpose for which such expenditures
were made. In the Trustees' quarterly review of the Plans, they will consider
the continued appropriateness and the level of reimbursement or compensation the
Plans provide. No interested person of the Fund, nor any Trustee of the Fund who
is not an interested person of the Fund, has any direct or indirect financial
interest in the operation of the Plans except to the extent that PFD and certain
of its employees may be deemed to have such an interest as a result of receiving
a portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees,
including all of the Trustees who are not, and were not at the time they voted,
interested persons of the Fund, as defined in the 1940 Act (none of whom has or
have any direct or indirect financial interest in the operation of the Plans)
(the "Qualified Trustees"), cast in person at a meeting called for the purpose
of voting on the Plans. In approving the Plans, the Trustees identified and
considered a number of potential benefits which the Plans may provide. The Board
of Trustees believes that there is a reasonable likelihood that the Plans will
benefit the Fund and its current and future shareholders. Under their terms, the
Plans remain in effect from year to year provided such continuance is approved
annually by vote of the Trustees in the manner described above. The Plans may
not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein without
approval of the shareholders of the Class or Classes affected thereby, and
material amendments of the Plans must also be approved by the Trustees in the
manner described above. A Plan may be terminated at any time, without payment of
any penalty, by vote of the majority of the Trustees who are not interested
persons of the Fund and have no direct or indirect financial interest in the
operations of the Plan, or by a vote of a majority of the outstanding voting
securities of the respective Class of the Fund (as defined in
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the 1940 Act). A Plan will automatically terminate in the event of its
assignment (as defined in the 1940 Act). In the Trustees' quarterly review of
the Plans, they will consider the Plans' continued appropriateness and the level
of compensation they provide.
During the fiscal year ended October 31, 1995, the Fund incurred total
distribution fees of $21,507 and $65,619 pursuant to the Class A Plan and the
Class B Plan, respectively. Distribution fees were paid by the Fund to PFD in
reimbursement of expenses related to servicing of shareholder accounts and to
compensate dealers and sales personnel. Class C shares were first offered on
January 31, 1996.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts,
to act as shareholder servicing agent and transfer agent for the Fund. This
contract terminates if assigned and may be terminated without penalty by either
party by vote of its Board of Directors or Trustees, as the case may be, or a
majority of the Fund's outstanding voting securities and the giving of ninety
days' written notice.
Under the terms of its contract with the Fund, PSC will service shareholder
accounts, and its duties will include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii) distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii) maintaining account records
and responding to routine shareholder inquiries.
PSC receives an annual fee of $22.00 per Class A, Class B and Class C
shareholder account from the Fund as compensation for the services described
above. This fee is set at an amount determined by vote of a majority of the
Trustees (including a majority of the Trustees who are not parties to the
contract with PSC or interested persons of any such parties) to be comparable to
fees for such services being paid by other investment companies.
7. CUSTODIAN
Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109
(the "Custodian"), is the custodian of the Fund's assets. The Custodian's
responsibilities include safekeeping and controlling the Fund's cash and
securities in the United States as well as in foreign countries, handling the
receipt and delivery of securities, and collecting interest and dividends on the
Fund's investments. The Custodian fulfills its function in foreign countries
through a network of subcustodian banks located in the foreign countries (the
"Subcustodians"). The Subcustodian of Fund assets held in India is Standard
Chartered Bank. The Custodian also provides bookkeeping and pricing assistance
to the Fund and assistance in arranging for forward contracts as described above
under "Investment Policies, Restrictions and Risk Factors."
The Custodian does not determine the investment policies of the Fund or
decide which securities it will buy or sell. The Fund may invest in securities
issued by the Custodian or any of the Subcustodians, deposit cash in the
Custodian or any Subcustodian and deal with the Custodian or any of the
Subcustodians as a principal in securities transactions. Portfolio securities
may be deposited into the Federal Reserve-Treasury Department Book Entry System
or the Depository Trust Company in the United States or in recognized central
depositories in foreign countries . In selecting Brown Brothers Harriman & Co.
and its network of foreign subcustodians as the custodians for foreign
securities, the Board of Trustees made certain determinations required by Rule
17f-5 promulgated under the 1940 Act. The Trustees annually review and approve
the continuation of the Fund's international subcustodian arrangements.
8. INDEPENDENT PUBLIC ACCOUNTANT
Arthur Andersen LLP, One International Place, Boston, Massachusetts 02110,
is the Fund's independent public accountant, providing audit services, tax
return review, and assistance and consultation with respect to the preparation
of filings with the Commission.
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9. PORTFOLIO TRANSACTIONS
Orders for the Fund's portfolio securities transactions in the Indian
securities market are placed by the Indian Adviser. Orders for the Fund's
portfolio securities transactions in all other markets are placed by PMC. In
selecting brokers or dealers, PMC and the Indian Adviser consider factors
relating to best execution, including, but not limited to, the size and type of
the transaction; the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads. Many
transactions in foreign equity securities are executed by broker-dealers in
foreign countries in which commission rates are fixed and non-negotiable (unlike
commission rates are in the United States) and are generally higher than in the
United States.
PMC and the Indian Adviser may select broker-dealers which provide
brokerage and/or research services to the Fund and/or other investment companies
or accounts managed by PMC or the Indian Adviser. Such 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; furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends, portfolio strategy
and performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement). PMC
and the Indian Adviser maintain a listing of broker-dealers who provide such
services on a regular basis. However, because many transactions on behalf of the
Fund and other investment companies or accounts managed by PMC are placed with
broker-dealers (including broker-dealers on the listing) without regard to the
furnishing of such services, it is not possible to estimate the proportion of
such transactions directed to such dealers solely because such services were
provided. Management of the Fund believes that no exact dollar value can be
calculated for such services.
The research received from broker-dealers may be useful to PMC and the
Indian Adviser in rendering investment management services to the Fund as well
as to other investment companies or accounts managed by PMC or the Indian
Adviser, although not all of such research may be useful to the Fund.
Conversely, such information provided by brokers or dealers who have executed
transaction orders on behalf of such other accounts may be useful to PMC or the
Indian Adviser in carrying out its obligations to the Fund. The receipt of such
research has not reduced PMC's normal independent research activities; however,
it has enabled PMC and the Indian Adviser to avoid the additional expenses which
might otherwise be incurred if it was to attempt to develop comparable
information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices
and executions, preference may be given to a broker-dealer which has sold shares
of the Fund as well as shares of other investment companies or accounts managed
by PMC or the Indian Adviser. This policy does not imply a commitment to execute
all portfolio transactions through all broker-dealers that sell shares of the
Fund. In addition, if PMC or the Indian Adviser determines in good faith that
the amount of commissions charged by a broker is reasonable in relation to the
value of the brokerage and research services provided by such broker, the Fund
may pay commissions to such broker in an amount greater than the amount another
firm may charge.
The Trustees periodically review PMC's and the Indian Adviser's performance
of their respective responsibilities in connection with the placement of
portfolio transactions on behalf of the Fund.
In addition to the Fund, the Manager acts as investment adviser to the
other Pioneer funds and certain private accounts with investment objectives
similar to those of the Fund. Similarly, the Indian Adviser acts as investment
adviser to certain investment funds registered in India. These funds have
investment objectives similar to the Fund's investment objective. Accordingly,
securities may meet investment objectives of the Fund, such other funds and such
private accounts. In such cases, the decision to purchase for one fund or
account rather than another is based on a number of factors. The determining
factors in most cases are the amount of securities of the issuer then
outstanding,
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the value of those securities and the market for them. Other factors considered
include other investments which each fund or account presently has in a
particular industry or country and the availability of funds in each fund or
account.
It is possible that, at times, identical securities will be held by more
than one fund and/or account. However, the position of any fund or account in
the same issue may vary and the length of time that any fund or account may
choose to hold its investment in the same issue may likewise vary. To the extent
that the Fund, another fund in the Pioneer complex or a private account managed
by the Manager or the Indian Adviser seeks to acquire the same security at about
the same time, the Fund may not be able to acquire as large a position in the
security as it desires or it may have to pay a higher price for the security.
Similarly, the Fund may not be able to obtain as large an execution of an order
to sell or as high a price for any particular portfolio security if the Manager
or the Indian Adviser decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one account, the resulting
participation in volume transactions could produce better executions for the
Fund or other account. In the event that more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each.
For the fiscal years ended October 31, 1994 (commencement of operations
June 23, 1994) and 1995, the Fund paid or accrued aggregate brokerage
commissions of $41,282 and $34,936, respectively.
10. TAX STATUS AND DIVIDENDS
It is the Fund's policy to meet the requirements of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), for qualification as a
regulated investment company. These requirements relate to the sources of its
income, diversification of its assets, and distribution of its income to
shareholders. If the Fund meets all such requirements and distributes to its
shareholders, in accordance with the Code's timing requirements, all investment
company taxable income and net capital gain, if any, which it receives, the Fund
will be relieved of the necessity of paying federal income tax.
In order to qualify as a regulated investment company under Subchapter M,
the Fund must, among other things, derive at least 90% of its annual gross
income from dividends, interest, gains from the sale or other disposition of
stock, securities or foreign currencies, or other income (including gains from
options, futures and forward contracts) derived with respect to its business of
investing in such stock, securities or currencies (the "90% income test"), limit
gains from the sale of stock, securities and certain other investments held for
less than three months to less than 30% of its annual gross income (the "30%
test") and satisfy certain annual distribution and quarterly diversification
requirements. For purposes of the 90% income test, income the Fund earns from
equity interests in certain entities that are not treated as corporations (e.g.,
are treated as partnerships or trusts) for U.S. tax purposes will generally have
the same character for the Fund as in the hands of such entities; consequently,
the Fund may be required to limit its equity investments in such entities that
earn fee income, rental income, or other nonqualifying income.
Dividends from investment company taxable income, which includes net
investment income, net short-term capital gain in excess of net long-term
capital loss, and certain net foreign exchange gains are taxable as ordinary
income, whether received in cash or in additional shares. Dividends from net
long-term capital gain in excess of net short-term capital loss, if any, whether
received in cash or additional shares, are taxable to the Fund's shareholders as
long-term capital gains for federal income tax purposes without regard to the
length of time shares of the Fund have been held. The federal income tax status
of all distributions will be reported to shareholders annually.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
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Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
forward foreign currency contracts, foreign currencies, or payables or
receivables denominated in a foreign currency are subject to Section 988 of the
Code, which generally causes such gains and losses to be treated as ordinary
income and losses and may affect the amount, timing and character of
distributions to shareholders. Any such transactions that are not directly
related to the Fund's investment in stock or securities may increase the amount
of gain it is deemed to recognize from the sale of certain investments held for
less than 3 months for purposes of the 30% test and may under future Treasury
regulations produce income not among the types of "qualifying income" for
purposes of the 90% income test. If the net foreign exchange loss for a year
were to exceed the Fund's investment company taxable income (computed without
regard to such loss) the resulting overall ordinary loss for such year would not
be deductible by the Fund or its shareholders in future years.
If the Fund acquires the stock of certain non-U.S. corporations that
receive at least 75% of their annual gross income from passive sources (such as
interest, dividends, rents, royalties or capital gain) or hold at least 50% of
their assets in investments producing such passive income ("passive foreign
investment companies"), the Fund could be subject to federal income tax and
additional interest charges on "excess distributions" received from such
companies or gain from the sale of stock in such companies, even if all income
or gain actually received by the Fund is timely distributed to its shareholders.
The Fund would not be able to pass through to its shareholders any credit or
deduction for such a tax. Certain elections may, if available, ameliorate these
adverse tax consequences, but any such election would require the Fund to
recognize taxable income or gain without the concurrent receipt of cash. The
Fund may limit and/or manage its holdings in passive foreign investment
companies to minimize its tax liability or maximize its return from these
investments.
The Fund may invest in debt obligations that are in the lowest rating
categories or are unrated, including debt obligations of issuers not currently
paying interest as well as issuers who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the
Fund. Tax rules are not entirely clear about issues such as when the Fund may
cease to accrue interest, original issue discount, or market discount, when and
to what extent deductions may be taken for bad debts or worthless securities,
payments received on obligations in default should be allocated between
principal and income, and whether exchanges of debt obligations in a workout
context are taxable. These and other issues will be addressed by the Fund, in
the event it invests in such securities, in order to seek to distribute
sufficient income to preserve its status as a regulated investment company and
avoid becoming subject to federal income or excise tax.
If the Fund invests in certain PIKs, zero coupon securities, or, in
general, any other securities with original issue discount (or with market
discount if the Fund elects to include market discount in income currently), the
Fund must accrue income on such investments for each taxable year, which
generally will be prior to the receipt of the corresponding cash payments.
However, the Fund must distribute, at least annually, all or substantially all
of its net income, including such accrued income, to shareholders to qualify as
a regulated investment company under the Code and avoid Federal income and
excise taxes. Therefore, the Fund may have to dispose of its portfolio
securities under disadvantageous circumstances to generate cash, or may have to
leverage itself by borrowing the cash, to satisfy distribution requirements.
At the time of an investor's purchase of Fund shares, a portion of the
purchase price is often attributable to realized or unrealized appreciation in
the Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions from such appreciation or income 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.
Redemptions and exchanges are taxable events. Any loss realized by a
shareholder upon the redemption or other sale of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to the
extent of any amounts treated as distributions of long-term capital gain with
respect to such shares.
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In addition, if Class A shares redeemed or exchanged have been held for
less than 91 days, (1) in the case of a reinvestment at net asset value pursuant
to the reinstatement privilege, the sales charge paid on such shares is not
included in their tax basis under the Code, and (2) in the case of an exchange,
all or a portion of the sales charge paid on such shares is not included in
their tax basis under the Code, to the extent a sales charge that would
otherwise apply to the shares received is reduced pursuant to the exchange
privilege. In either case, the portion of the sales charge not included in the
tax basis of the shares redeemed or surrendered in an exchange is included in
the tax basis of the shares acquired in the reinvestment or exchange. Losses on
certain redemptions may be disallowed under "wash sale" rules in the event of
other investments in the Fund (including those made pursuant to automatic
dividend reinvestment) within a period of 61 days beginning 30 days before and
ending 30 days after a redemption or other sale of shares.
For federal income tax purposes, the Fund is permitted to carry forward a
net capital loss in any year to offset net capital gains, if any, during the
eight years following the year of the loss. To the extent subsequent net 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. On October 31, 1995, the Fund had capital loss carryforwards of
$737,343, which will expire between 2002 and 2003 if not utilized.
Only a small portion, if any, of the Fund's dividends paid to U.S.
corporate shareholders may qualify for the 70% dividends-received deduction
available to corporations, because the Fund does not expect that it will
generally receive any significant amount of qualifying dividends, i.e.,
dividends from U.S domestic corporations. The Code contains holding period
requirements, debt-financing restrictions and other limitations relating to any
otherwise qualifying dividends.
The Fund will be subject to withholding and other taxes imposed by foreign
countries (including, in the case of India and possibly other countries, taxes
on interest, dividends and capital gains, as described in the Prospectus) with
respect to its investments in those countries. Tax conventions between certain
countries and the U.S. may reduce or eliminate such taxes in some cases. If more
than 50% of the Fund's total assets at the close of any taxable year consists of
stock or securities of foreign corporations, the Fund may elect to pass through
to shareholders their pro rata shares of qualified foreign taxes paid by the
Fund, with the result that shareholders would be required to include such taxes
in their gross incomes (in addition to dividends and distributions actually
received by shareholders) and would treat such taxes as foreign taxes paid by
them.
Qualified foreign taxes generally include taxes that would be treated as
income taxes under U.S. tax regulations but do not include most other taxes,
such as stamp taxes, securities transaction taxes, and similar taxes. If the
Fund makes the election described above, shareholders may deduct their pro rata
portion of qualified foreign taxes paid by the Fund in computing their income
subject to U.S. federal income taxation or, alternatively, use them as foreign
tax credits, subject to applicable limitations under the Code, against their
U.S. federal income taxes. Shareholders who do not itemize deductions for
federal income tax purposes will not, however, be able to deduct their pro rata
portion of qualified foreign taxes paid by the Fund, although such shareholders
will be required to include their shares of such taxes in gross income.
If the Fund makes this election and a shareholder chooses to take a credit
for the foreign taxes deemed paid by such shareholder, the amount of the credit
that may be claimed in any year may not exceed the same proportion of the U.S.
tax against which such credit is taken which the shareholder's taxable income
from foreign sources (but not in excess of the shareholder's entire taxable
income) bears to his entire taxable income. For this purpose, long-term and
short-term capital gains the Fund realizes and distributes to shareholders will
generally not be treated as income from foreign sources in their hands, nor will
distributions of certain foreign currency gains subject to Section 988 of the
Code and of any other income realized by the Fund that is deemed, under the
Code, to be U.S.-source income in the hands of the Fund. This foreign tax credit
limitation may also be applied separately to certain specific categories of
foreign-source income and the related foreign taxes. As a result of these rules,
which have different effects
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depending upon each shareholder's particular tax situation, certain shareholders
may not be able to claim a credit for the full amount of their proportionate
share of the foreign taxes paid by the Fund. Shareholders who are not liable for
U.S. income taxes, including tax-exempt shareholders, will ordinarily not
benefit from this election. If the Fund does make the election, it will provide
required tax information to shareholders. If the Fund does not make the
election, it may deduct such taxes in computing its income available for
distribution to shareholders to satisfy applicable tax distribution
requirements.
Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions, and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
Provided that the Fund qualifies as a regulated investment company ("RIC")
under the Code, it will not be required to pay any Massachusetts income,
corporate excise or franchise taxes. Provided that the Fund qualifies as a RIC,
the Fund should also not be required to pay Delaware corporation income tax.
Certain foreign currency forward contracts may cause the Fund to recognize
gains or losses from marking-to-market at the end of its taxable year even
though such contracts may not have been closed out or disposed of. Certain
forward contracts on currency may be subject to Section 988, described above,
and accordingly produce ordinary income or loss. Losses on certain forward
contracts and/or offsetting positions (portfolio securities or other positions
with respect to which the Fund's risk of loss is substantially diminished by one
or more forward contracts) may also be deferred under the tax straddle rules of
the Code, which may also affect the characterization of capital gains or losses
from straddle positions and certain successor positions as long-term or
short-term. The tax rules applicable to forward contracts and straddles may
affect the amount, timing and character of the Fund's income and loss and hence
of distributions to shareholders. Certain tax elections may be available that
would enable the Fund to ameliorate some adverse effects of the tax rules
described in this paragraph.
Federal law requires that the Fund withhold (as "backup withholding") 31%
of reportable payments, including dividends, capital gain dividends, and the
proceeds of redemptions (including exchanges) and repurchases, to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that the Social Security Number
or other Taxpayer Identification Number is their correct number and that they
are not currently subject to backup withholding, or that they are exempt from
backup withholding. The Fund may nevertheless be required to withhold if it
receives notice from the IRS or a broker that the number provided is incorrect
or backup withholding is applicable as a result of previous underreporting of
interest or dividend income.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates, and who are subject to
U.S. federal income tax. The description does not address special tax rules
applicable to certain classes of investors, such as tax-exempt entities,
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. non-resident alien withholding tax (or non-resident alien withholding tax
at a lower treaty rate) on any amounts treated as ordinary dividends from the
Fund and, unless an effective IRS Form W-8 or authorized substitute is on file,
to 31% backup withholding on certain other payments from the Fund. Shareholders
should consult their own tax advisers on these matters and on state, local and
other applicable tax laws.
11. DESCRIPTION OF SHARES
The Fund's Agreement and Declaration of Trust permits the Board of Trustees
to authorize the issuance of an unlimited number of full and fractional shares
of beneficial interest (without par value) which may be divided into such
separate series as the Trustees may establish. Currently, the Fund consists of
only one series. The Trustees may,
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however, establish additional series of shares in the future, and may divide or
combine the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interests in the Fund. The Agreement and
Declaration of Trust further authorizes the Trustees to classify or reclassify
any series of the shares into one or more classes. Pursuant thereto, the
Trustees have authorized the issuance of three classes of shares of the Fund,
Class A shares, Class B shares and Class C shares. Each share of a class of the
Fund represents an equal proportionate interest in the assets of the Fund
allocable to that class. Upon liquidation of the Fund, shareholders of each
class of the Fund are entitled to share pro rata in the Fund's net assets
allocable to such class available for distribution to shareholders. The Fund
reserves the right to create and issue additional series or classes of shares,
in which case the shares of each class of a series would participate equally in
the earnings, dividends and assets allocable to that class of the particular
series.
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 elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees. No amendment adversely affecting the rights of shareholders may be
made to the Fund's Agreement and Declaration of Trust without the affirmative
vote of a majority of its shares. Shares have no preemptive or conversion
rights. Shares are fully paid and non-assessable by the Trust, except as stated
below.
12. CERTAIN LIABILITIES
As a Delaware business trust, the Fund's operations are governed by its
Agreement and Declaration of Trust dated April 4, 1994. A copy of the Fund's
Certificate of Trust, also dated April 4, 1994, is on file with the Office of
the Secretary of State of the State of Delaware. Generally, Delaware business
trust shareholders are not personally liable for obligations of the Delaware
business trust under Delaware law. The Delaware Business Trust Act (the
"Delaware Act") provides that a shareholder of a Delaware business trust shall
be entitled to the same limitation of liability extended to shareholders of
private for-profit corporations. The Trust's Agreement and Declaration of Trust
expressly provides that the Trust has been organized under the Delaware Act and
that the Agreement and Declaration of Trust is to be governed by Delaware law.
It is nevertheless possible that a Delaware business trust, such as the Fund,
might become a party to an action in another state whose courts refused to apply
Delaware law, in which case the trust's shareholders could be subject to
personal liability.
To guard against this risk, the Agreement and Declaration of Trust (i)
contains an express disclaimer of shareholder liability for acts or obligations
of the Fund and provides that notice of such disclaimer may be given in each
agreement, obligation and instrument entered into or executed by the Fund or its
Trustees, (ii) provides for the indemnification out of Fund property of any
shareholders held personally liable for any obligations of the Fund or any
series of the Fund and (iii) provides that the Fund shall, upon request, assume
the defense of any claim made against any shareholder for any act or obligation
of the Fund and satisfy any judgment thereon. Thus, the risk of a Fund
shareholder incurring financial loss beyond his or her investment because of
shareholder liability is limited to circumstances in which all of the following
factors are present: (1) a court refused to apply Delaware law; (2) the
liability arose under tort law or, if not, no contractual limitation of
liability was in effect; and (3) the Fund itself would be unable to meet its
obligations. In the light of Delaware law, the nature of the Fund's business and
the nature of its assets, the risk of personal liability to a Fund shareholder
is remote.
The Agreement and Declaration of Trust further provides that the Fund shall
indemnify each of its Trustees and officers against liabilities and expenses
reasonably incurred by them, in connection with, or arising out of, any action,
suit or proceeding, threatened against or otherwise involving such Trustee or
officer, directly or indirectly, by reason of being or having been a Trustee or
officer of the Fund. The Agreement and Declaration of Trust does not authorize
the Fund to indemnify any Trustee or officer against any liability to which he
or she would otherwise be subject by reason of or for willful misfeasance, bad
faith, gross negligence or reckless disregard of such person's duties.
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13. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of
the close of regular trading (currently 4:00 p.m., Eastern Time) on each day on
which the New York Stock Exchange (the "Exchange") is open for trading. As of
the date of this Statement of Additional Information, the Exchange is open for
trading every weekday except for the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. The net asset value per share of each class
of the Fund is also determined on any other day in which the level of trading in
its portfolio securities is sufficiently high so that the current net asset
value per share might be materially affected by changes in the value of its
portfolio securities. The Fund is not required to determine its net asset value
per share on any day in which no purchase orders for the shares of the Fund
become effective and no shares are tendered for redemption.
The net asset value per share of each class of the Fund is computed by
taking the value of all of the Fund's assets attributable to that class, less
the Fund's liabilities attributable to that class, and dividing it by the number
of outstanding shares of that class. For purposes of determining net asset
value, expenses of the classes of the Fund are accrued daily.
Securities which have not traded on the date of valuation or securities for
which sales prices are not generally reported are valued at the mean between the
last bid and asked prices. Securities for which no market quotations are readily
available (including those the trading of which has been suspended) will be
valued at fair value as determined in good faith by the Board of Trustees,
although the actual computations may be made by persons acting pursuant to the
direction of the Board. As stated in the Prospectus, when the Fund invests in
initial public offerings of Indian issuers it may not know if it will receive
the total amount of securities for which it has subscribed. Such investments
will also be valued at fair value as determined in good faith by the Board of
Trustees, although the actual computations may be made by persons acting
pursuant to the direction of the Board.
The maximum offering price per Class A share is the net asset value per
Class A share, plus the maximum sales charge. Class B and Class C shares are
offered at net asset value without the imposition of an initial sales charge.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from shares of the Fund
deposited by the applicant under this SWP. The applicant must deposit or
purchase for deposit with PSC shares of the Fund having a total value of not
less than $10,000. Periodic checks of $50 or more will be sent to the applicant,
or any person designated by him, monthly or quarterly, provided that withdrawals
from Class B and Class C share accounts may be limited as described in
"Systematic Withdrawal Plans" in the Prospectus. A designation of a third party
to receive checks requires an acceptable signature guarantee.
Any income dividends or capital gains distributions on shares under the SWP
will be credited to the Plan 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. Redemptions are taxable transactions to
shareholders. In addition, the amounts received by a shareholder cannot be
considered as an actual yield or income on his or her investment because part of
such payments may be a return of his or her investment.
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The SWP may be terminated at any time (1) by written notice to PSC or from
PSC to the shareholder; (2) upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3) when all shares under the SWP have been redeemed.
15. LETTER OF INTENTION
Purchases in the Fund of $50,000 or more of Class A shares (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in the Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Class
A shares of $50,000 over a 13-month period would be charged at the 4.50% 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 his shares in the Fund and all other Pioneer Funds held of record
as of the date of his Letter of Intention as a credit toward determining the
applicable scale of sales charge for the Class A shares to be purchased under
the Letter of Intention.
The Letter of Intention authorizes PSC to escrow shares having a purchase
price equal to 5% of the stated investment in the Letter of Intention. A Letter
of Intention is not a binding obligation upon the investor to purchase, or the
Fund to sell, the full amount indicated and the investor should read the
provisions of the Letter of Intention contained in the Account Application
carefully before signing.
16. INVESTMENT RESULTS
One of the primary methods used to measure the performance of a class of
the Fund is "total return." "Total return" will normally represent the
percentage change in value of an account, or of a hypothetical investment in a
class of the Fund, over any period up to the lifetime of that class of the Fund.
Total return calculations will usually assume the reinvestment of all dividends
and capital gains distributions and will be expressed as a percentage increase
or decrease from an initial value, for the entire period or for one or more
specified periods within the entire period. Total return percentages for periods
of less than one year will usually be annualized; total return percentages for
periods longer than one year will usually be accompanied by total return
percentages for each year within the period and/or by the average annual
compounded total return for the period. The income and capital components of a
given return may be separated and portrayed in a variety of ways in order to
illustrate their relative significance. Performance may also be portrayed in
terms of cash or investment values, without percentages. Past performance cannot
guarantee any particular future result.
The Fund's average annual total return quotations for each class of its
shares as that information may appear in the Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A, Class B and Class C
shares are computed by finding the average annual compounded rates of return
that would cause a hypothetical investment in that class made on the first day
of a designated period (assuming all dividends and distributions are reinvested)
to equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
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P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000, less the maximum
sales load of $57.50 for Class A shares or the deduction
of the CDSC for Class B or Class C shares at the end of
the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000 initial
payment made at the beginning of the designated period (or
fractional portion thereof)
For purposes of the above computation, it is assumed that the maximum sales
charge of 5.75% was deducted from the initial investment and that all dividends
and distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided
above), recurring fees, if any, that are charged to all shareholder accounts of
a particular class 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 class' mean
account size.
The average annual total returns for Class A and Class B shares of the Fund
for the specified periods ended October 31, 1995 were as follows:
1 Year 5 Years 10 Years Life*
------ ------- -------- ----
Class A Shares (29.12) N/A N/A (23.43)
Class B Shares (28.28) -- N/A (22.94)
* Commencement of operations, June 23, 1994.
Class A share results reflect the maximum sales charge of 5.75%. Class B
share results reflect the effect of the CDSC that would have been charged if
shares were redeemed at the end of each period. If PMC's voluntary fee and
expense reduction agreement had not been in place, total return would have been
lower. Class C shares were first offered on January 31, 1996.
Other Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the Fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. For example, total return of the Fund's
classes may be compared to averages or rankings prepared by Lipper Analytical
Services, Inc., a widely recognized independent service which monitors mutual
fund performance; the Europe Australia Far East Index ("EAFE"), an unmanaged
index of international stock markets, Morgan Stanley Capital International USA
Index, an unmanaged index of U.S. domestic stock markets, or other appropriate
indices of Morgan Stanley Capital International ("MSCI"); International Finance
Corporation Composite, an unmanaged index of foreign stock markets including
Latin America, East Asia, South Africa, Europe/Mid East and; the Standard &
Poor's 500 Stock Index ("S&P 500"), an unmanaged index of common stocks; or the
Dow Jones Industrial Average, a recognized unmanaged index of common stocks of
30 industrial companies listed on the New York Stock Exchange.
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<PAGE>
In addition, the performance of the classes of the Fund may be compared to
alternative investment or savings vehicles and/or to indexes or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumer's Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, the New York Times, Smart Money, USA Today, U.S. News
and World Report, The Wall Street Journal and Worth may also be cited (if the
Fund is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Systems, CDA/Wiesenberger Investment Companies Service, Donoghue's
Mutual Fund Almanac, Investment Company Data, Inc., Johnson's Charts, Kanon
Bloch Carre & Co., Micropal, Inc., Morningstar, 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 shareholders of the Fund.
The Fund may also present, from time to time, historical information
depicting the value of a hypothetical account in one or more classes of the Fund
since the Fund's inception.
In presenting investment results, the Fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows
shareholders to dial toll-free 1-800-225-4321 and hear recorded fund
information, including:
(degree) net asset value prices for all Pioneer mutual funds;
(degree) annualized 30-day yields on Pioneer'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 funds.
Yields are calculated in accordance with standard formulas mandated by the
Commission.
In addition, by using a personal identification number ("PIN"),
shareholders may enter purchases, exchanges and redemptions, access their
account balance and last three transactions and may order a duplicate statement.
See "FactFoneSM" in the Prospectus for more information.
All performance numbers communicated through FactFone represent past
performance; figures for all quoted bond funds include the maximum applicable
sales charge. A shareholder's actual yield and total return will vary with
changing market conditions. The value of Class A, Class B and Class C shares
(except for Pioneer money market funds, which seek a stable $1.00 share price)
will also vary and may be worth more or less at redemption than their original
cost.
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17. FINANCIAL STATEMENTS
The audited financial statements of the Fund for the period June 23, 1994
(commencement of operations) through October 31, 1995 are attached hereto. A
copy of the Fund's annual report may be obtained without charge by calling
Shareholder Services at 1-800-225-6292 or by written request to the Fund at 60
State Street, Boston, Massachusetts 02109.
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APPENDIX A
DESCRIPTION OF BOND RATINGS
The rating systems described herein are believed to be the most recent ratings
systems available from Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group at the date of this Statement of Additional Information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such ratings,
they undertake no obligation to do so, and the ratings indicated do not
necessarily represent ratings which will be given to these securities on the
date of the Fund's fiscal year end.
MOODY'S INVESTORS SERVICE, INC.
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger 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 a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Unrated: Where no rating has been assigned or where a rating has been suspended
or withdrawn, it may be for reasons unrelated to the quality of the issue.
Should no rating be assigned, the reason may be one of the following:
1. An application for rating was not received or accepted.
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2. The issue or issuer belongs to a group of securities or companies that are
not rated as a matter of policy.
3. There is a lack of essential data pertaining to the issue or issuer.
4. The issue was privately placed, in which case the rating is not published
in Moody's publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's believe
possess the strongest investment attributes are designated by the symbols Aa1,
A1, Baa1 and Be.
Standard & Poor's Ratings Group1
AAA: Bonds rated AAA have the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the higher rated issues only in small degree.
A: Bonds rated A have a very strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than in higher rated categories.
BB, B, CCC, CC, C: Bonds rated BB, B, CCC, CC and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties of major risk exposures to adverse
conditions.
D: Bonds rated D are in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period.
Plus (+) or Minus (-): The ratings from "AA" to "B" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
- --------
1 Rates all governmental bodies having $1,000,000 or more of debt
outstanding, unless adequate information is not available.
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Unrated: Indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligations as a matter of policy.
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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
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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
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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.
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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
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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
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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
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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
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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
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<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
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<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
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<PAGE>
Pioneer India A
Sales Net Asset
Initial Offering Charge Shares Value Per Initial Net
Date Investment Price Included Purchased Share Asset Value
- ---- ---------- ------- -------- --------- ----- -----------
6/23/94 $10,000 $12.20 5.75% 819.672 $11.50 $9,425
Value of Shares
(Dividends and Capital Gains Reinvested)
From From Cap Gains From Dividends
Date Investment Reinvested Reinvested Total Value
12/31/94 $8,344 $0 $15 $8,359
12/31/95 $6,680 $0 $12 $6,692
Pioneer India B
Sales Net Asset
Initial Offering Charge Shares Value Per Initial Net
Date Investment Price Included Purchased Share Asset Value
- ---- ---------- ------- -------- --------- ----- -----------
6/23/94 $10,000 $11.50 0.00% 869.565 $11.50 $10,000
Value of Shares
(Dividends and Capital Gains Reinvested)
From From Cap Gains From Dividends
Date Investment Reinvested Reinvested Total Value
12/31/94 $8,826 $0 $5 $8,831
12/31/95 $7,018 $0 $4 $6,737
Past performance is no guarantee of future results. Fund returns and share
price will fluctuate and upon redemption your shares may be worth more or less
than your original purchase amount.
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<PAGE>
APPENDIX B
OTHER PIONEER INFORMATION
The Pioneer family of mutual funds was established in 1928 with the
creation of Pioneer Fund. Pioneer is one of the oldest, most respected and
successful money managers in the United States. India is one of the world's most
dynamic and rapidly growing markets with liberalized pro-business government
policies and a huge, burgeoning middle class eager for consumer goods. Pioneer
India Fund is the first open-end U.S. mutual fund with both U.S. and Indian
advisers, providing global expertise with local perspective.
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 637,060 non-retirement shareholder
accounts and 345,309 retirement shareholder accounts in Pioneer's funds. Total
assets for all Pioneer funds were $12,764,708,124, representing a total of
982,369 shareholder accounts.
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<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
The financial highlights of the Registrant are included in
Part A of the Registration Statement and the financial
statements of the Registrant are incorporated by reference
into Part B of the Registration Statement from the 1995 Annual
Report to Shareholders for the year ended October 31, 1995
(filed electronically on December 28, 1995; file no. 811-8468;
accession number 0000921447-95-000015).
(b)
Exhibits:
1.1 Agreement and Declaration of Trust of the
Registrant.*
1.2 Certificate of Trust of the Registrant.*
1.3 Establishment and Designation of Class A, Class B and
Class C shares of Beneficial Interest.*
2. By-Laws of the Registrant.*
3. None.
4. None.
5.1 Management Contract between the Registrant and
Pioneering Management Corporation.*
5.2 Subadvisory Contract between Pioneering Management
Corporation and ITI Pioneer AMC Ltd.*
6.1. Underwriting Agreement between the Registrant and
Pioneer Funds Distributor, Inc.*
6.2. Form of Dealer Sales Agreement.*
7. None.
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8. Custodian Agreement between the Registrant and Brown
Brothers Harriman & Co.*
9. Investment Company Service Agreement between the
Registrant and Pioneering Services Corporation.*
10. Not Applicable.
11. Consent of Independent Public Accountants.*
12. Not Applicable.
13. Share Purchase Agreement.*
14. None.
15.1 Class A Distribution Plan.*
15.2 Class B Distribution Plan.*
15.3 Class C Distribution Plan.*
16. None.
17. Financial Data Schedule.*
18.1 Rule 18f-3 Plan Covering Two Classes of Shares.*
18.2 Rule 18f-3 Plan Covering Three Classes of Shares.*
19. Powers of Attorney.*
- -------------
* Filed electronically herewith.
Item 25. Persons Controlled By or Under Common Control With Registrant.
ITI Pioneer AMC Ltd., ("ITI Pioneer"), an Indian corporation, is a joint venture
between Pioneering Management Corporation ("PMC"), a Delaware corporation, and
Investment Trust of India Ltd. ("ITI"), an Indian corporation. ITI and PMC own
approximately 54% and 45%, respectively, of the total equity capital of ITI
Pioneer.
The Pioneer Group, Inc., a publicly-traded Delaware corporation ("PGI"), owns
100% of the outstanding capital stock of PMC, Pioneering Services Corporation
("PSC"), Pioneer Funds
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Distributor, Inc. ("PFD"), Pioneer Capital Corporation ("PCC"), Pioneer Funds
Marketing GmbH ("GmbH"), Pioneer SBIC Corp. ("SBIC"), Pioneer Associates, Inc.,
Pioneer International Corporation, Pioneer Plans Corporation ("PPC"), Pioneer
Goldfields Limited ("PGL"), and Pioneer Investments Corporation ("PIC"), all
Massachusetts corporations. PGI also owns 100% of the outstanding capital stock
of Pioneer Metals and Technology, Inc. ("PMT"), a Delaware corporation, and
Pioneer First Polish Trust Fund Joint Stock Company ("First Polish"), a Polish
corporation. PGI owns 90% of the outstanding shares of Teberebie Goldfields
Limited ("TGL"). Pioneer Fund, Pioneer II, Pioneer Three, Pioneer Bond Fund,
Pioneer Intermediate Tax-Free Fund, Pioneer Growth Trust, Pioneer Europe Fund,
Pioneer International Growth Fund, Pioneer Short-Term Income Trust, Pioneer
Tax-Free State Series Trust, Pioneer Money Market Trust and Pioneer America
Income Trust (each of the foregoing, a Massachusetts business trust), and
Pioneer Interest Shares, Inc. (a Nebraska corporation) and Pioneer Growth
Shares, Pioneer Income Fund, Pioneer Emerging Markets Fund, Pioneer Tax-Free
Income Fund, Pioneer Small Company Fund, Pioneer Real Estate Shares, the
Registrant and Pioneer Variable Contracts Trust (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 Chairman
and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities.
The following table sets forth the approximate number of record holders of each
class of securities of the Registrant as of January 31, 1996:
Class A Class B Class C
Number of Record Holders: 1,799 1,050 1
Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated April 4, 1994
(the "Declaration"), establishing the Registrant as a business trust under
Delaware law, there is no contract,
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<PAGE>
arrangement or statute under which any director, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Declaration
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 trustees, 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 trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its 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.
The business and other connections of the officers and directors of the
Registrant's investment manager, Pioneering Management Corporation, are listed
on the Form ADV of Pioneering Management Corporation as currently on file with
the Commission (File No. 801- 8255). The following sections of such Form ADV are
incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of Schedule D.
The business and other connections of the officers and directors of the
Registrant's investment adviser in India, ITI Pioneer AMC Ltd., are listed on
the Form ADV of ITI Pioneer AMC Ltd. as currently on file with the Commission
(File No. 801-46648). The following sections of such Form ADV are incorporated
herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of Schedule D.
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Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
and Trustee President
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
Constance S. Spiros Vice President None
Marcy Supovitz Vice President None
Mary Kleeman Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant None
Vice President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
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<PAGE>
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
* The principal business address of each person listed 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 the Statement of Additional
Information.
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) The Registrant undertakes to deliver, or cause to be
delivered with the Registrant's prospectus, to each person to whom such
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 under the
Investment Company Act of 1940, as amended, from which the specified information
is incorporated by reference, unless such person currently holds securities of
the Registrant and otherwise has received a copy of such report, in which case
the Registrant shall state in its 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. 3 to its
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Post-Effective Amendment No. 3 to such Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and The Commonwealth of Massachusetts, on the
21st day of February, 1996.
PIONEER INDIA FUND
By:/s/John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 3 to the Registrant's Registration Statement has
been signed below by the following persons in the capacities and on the date
indicated:
Signature Title
/s/John F. Cogan, Jr. Chairman of the Board )
John F. Cogan, Jr. and President )
(Principal Executive )
Officer) )
)
/s/William H. Keough* Chief Financial Officer )
William H. Keough and Treasurer (Principal )
Financial and Accounting )
Officer) )
Trustees:
/s/John F. Cogan, Jr. )
John F. Cogan, Jr. )
)
)
)
Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. )
)
)
Margaret B. W. Graham* )
Margaret B. W. Graham )
)
)
John W. Kendrick* )
John W. Kendrick )
)
)
Marguerite A. Piret* )
Marguerite A. Piret )
)
)
David D. Tripple* )
David D. Tripple )
)
)
Stephen K. West* )
Stephen K. West )
)
)
John Winthrop* )
John Winthrop )
- --------------
*By:/s/John F. Cogan, Jr. Dated: February 21, 1996
------------------------
John F. Cogan, Jr.
Attorney-in-fact
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Exhibit Index
Exhibit
Number Document Title
1.1 Agreement and Declaration of Trust of the Registrant.
1.2 Certificate of Trust of the Registrant.
1.3 Establishment and Designation of Class A, Class B and Class C shares of
Beneficial Interest.
2. By-Laws of the Registrant.
5.1 Management Contract between the Registrant and Pioneering Management
Corporation.
5.2 Subadvisory Contract between Pioneering Management Corporation and ITI
Pioneer AMC Ltd.
6.1. Underwriting Agreement between the Registrant and Pioneer Funds
Distributor, Inc.
6.2. Form of Dealer Sales Agreement.
8. Custodian Agreement between the Registrant and Brown Brothers Harriman &
Co.
9. Investment Company Service Agreement between the Registrant and
Pioneering Services Corporation.
11. Consent of Independent Public Accountants.
13. Share Purchase Agreement.
15.1 Class A Distribution Plan.
15.2 Class B Distribution Plan.
15.3 Class C Distribution Plan.
17. Financial Data Schedules.
18.1 Rule 18f-3 Plan Covering Two Classes of Shares.
18.2 Rule 18f-3 Plan Covering Three Classes of Shares.
19. Powers of Attorney.
PIONEER INDIA FUND
AGREEMENT AND DECLARATION OF TRUST
This AGREEMENT AND DECLARATION OF TRUST is made on April 4, 1994 by
John F. Cogan, Jr. and Marguerite A. Piret (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 shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. The name of the Trust created by this Agreement and Declaration
of Trust is "Pioneer India Fund."
Section 2. Definitions. Unless otherwise provided or required by the context:
(a) "Administrator" means the party, other than the Trust, to the
contract described in Article III, Section 3 hereof.
(b) "By-laws" means the By-laws of the Trust adopted by the Trustees,
as amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the "governing instrument" within the meaning of the
Delaware Act.
(c) "Class" means the class of Shares of a Series established pursuant
to Article V.
(d) "Commission," "Interested Person" and "Principal Underwriter" have
the meanings provided in the 1940 Act. Except
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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) "Covered Person" means a person so defined in Article IV, Section
2.
(f) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(g) "Declaration" shall mean this Agreement and Declaration of Trust,
as amended or restated 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.
(h) "Delaware Act" means Chapter 38 of Title 12 of the Delaware Code
entitled "Treatment of Delaware Business Trusts," as amended from time to time.
(i) "Distributor" means the party, other than the Trust, to the
contract described in Article III, Section 1 hereof.
(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 Article III, Section 2 hereof.
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(l) "Net Asset Value" means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
and governments and agencies and political subdivisions, thereof, whether
domestic or foreign.
(n) "Series" means a series of Shares established pursuant to Article
V.
(o) "Shareholder" means a record owner of Outstanding Shares;
(p) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class is divided
from time to time (including whole Shares and fractions of Shares). "Outstanding
Shares" means Shares shown in the books of the Trust or its transfer agent as
then issued and outstanding, but does not include Shares which have been
repurchased or redeemed by the Trust and which are held in the treasury of the
Trust.
(q) "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.
(r) "Trust" means Pioneer India Fund established hereby, and reference
to the Trust, when applicable to one or more Series, refers to that Series.
(s) "Trustees" means the persons who have signed this Declaration of
Trust, so long as they shall continue in office in accordance with the terms
hereof, and all other persons who may from time to time be duly qualified and
serving as Trustees in
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accordance with Article II, in all cases in their capacities as Trustees
hereunder.
(t) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the Trust or any Series
or the Trustees on behalf of the Trust or any Series.
(u) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
ARTICLE II
THE TRUSTEES
Section 1. Management of the Trust. The business and affairs of the
Trust shall be managed by or under the direction of the Trustees, and they shall
have all powers necessary or desirable to carry out that responsibility. The
Trustees may execute all instruments and take all action they deem necessary or
desirable to promote the interests of the Trust. Any determination made by the
Trustees in good faith as to what is in the interests of the Trust shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 2. Powers. The Trustees in all instances shall act as
principals, free of the control of the Shareholders. The Trustees shall have
full power and authority to take or refrain from taking any action and to
execute any contracts and instruments that they may consider necessary or
desirable in the management of the Trust. The Trustees shall not in any way be
bound or limited by current or future laws or customs applicable to trust
investments, but shall have full power and authority to make any investments
which they, in their sole discretion, deem proper to accomplish the purposes of
the Trust. The Trustees may exercise all of their powers without recourse to any
court or
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other authority. Subject to any applicable limitation herein or in the By-laws
or resolutions of the Trust, the Trustees shall have power and authority,
without limitation:
(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; or any other security, property or instrument in which the
Trust or any of its Series shall be authorized to invest.
(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.
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(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 or other property in the name of the Trust
exclusively for Trust purposes 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 adopt By-laws not inconsistent with this Declaration providing
for the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.
(i) To elect and remove such officers and appoint and terminate such
agents as they deem appropriate.
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(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.
(k) To retain one or more transfer agents and shareholder servicing
agents, or both.
(l) To provide for the distribution of Shares either through a
Principal Underwriter as provided herein or by the Trust itself, or both, or
pursuant to a distribution plan of any kind.
(m) To set record dates in the manner provided for herein or in the
By-laws.
(n) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, independent contractor, manager,
investment adviser, custodian or underwriter.
(o) To hold any security or other property (i) in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form,
or (ii) either in the Trust's or Trustees' own name or in the name of a
custodian or a nominee or nominees, subject to safeguards according to the usual
practice of business trusts or investment companies.
(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.
(q) To the full extent permitted by Section 3804 of the Delaware Act,
to allocate assets, liabilities and expenses of the
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Trust to a particular Series and assets, liabilities and expenses to a
particular Class or to apportion the same between or among two or more Series or
Classes, provided that any liabilities or expenses incurred by a particular
Series or Class shall be payable solely out of the assets belonging to that
Series or Class as provided for in Article V, Section 4.
(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.
(s) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes.
(t) To make distributions of income, capital gains, returns of capital
(if any) and redemption proceeds to Shareholders in the manner hereinafter
provided for.
(u) To establish committees for such purposes, with such membership,
and with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.
(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles V and VI, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of
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the particular Series with respect to which such Shares are issued.
(w) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of New York or of any other state) which is
classified as a partnership for federal income tax purposes.
(x) To carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary or desirable to
accomplish any purpose or to further any of the foregoing powers, and to take
every other action incidental to the foregoing business or purposes, objects or
powers.
(y) To sell or exchange any or all of the assets of the Trust, subject
to Article IX, Section 4.
(z) To enter into joint ventures, partnerships and other combinations
and associations.
(aa) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such Committee, depositary or trustee as the Trustees shall deem
proper;
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(bb) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;
(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(dd) To enter into contracts of any kind and description;
(ee) To interpret the investment policies, practices or limitations of
any Series or Class; and
(ff) To guarantee indebtedness and contractual obligations of others.
The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed
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an action on behalf of the Trust or the applicable Series, and not an action in
an individual capacity. No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the Trustees, or to
see to the application of any payments made or property transferred to the
Trustees or upon their order. In construing this Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
Section 3. Certain Transactions. Except as prohibited by applicable
law, the Trustees may, on behalf of the Trust, buy any securities from or sell
any securities to, or lend any assets of the Trust 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 any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.
Section 4. Initial Trustees; Election and Number of Trustees. The
initial Trustees shall be the person initially signing this Declaration. The
number of Trustees (other than the initial Trustees) shall be fixed from time to
time by a majority of the Trustees; provided, that there shall be at least one
(1) Trustee and no more than fifteen (15). The Shareholders shall elect the
Trustees (other than the initial Trustees) on such dates as the Trustees may fix
from time to time.
Section 5. Term of Office of Trustees. Each Trustee shall hold office
for life or until his successor is elected or the Trust terminates; except that
(a) any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a
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majority of the then Trustees, specifying the effective date of removal; (c) any
Trustee who requests to be retired, or who is declared bankrupt or has become
physically or mentally incapacitated or is otherwise unable to serve, may be
retired by a written instrument signed by a majority of the other Trustees,
specifying the effective date of retirement; and (d) any Trustee may be removed
at any meeting of the Shareholders by a vote of at least two-thirds of the
Outstanding Shares.
Section 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in number of Trustees, provided that such appointment
shall become effective only at or after the expected vacancy occurs. As soon as
any such Trustee has accepted his appointment in writing, the trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance, and he shall be deemed a Trustee hereunder. The
Trustees' power of appointment is subject to Section 16(a) of the 1940 Act.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in this Article II, 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. The
death, declination to serve, resignation, retirement, removal or incapacity of
one or more Trustees, or all of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this Declaration of
Trust.
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Section 7. Temporary Vacancy or Absence. Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy is filled, or while any
Trustee is absent from his domicile (unless that Trustee has made arrangements
to be informed about, and to participate in, the affairs of the Trust during
such absence), or is physically or mentally incapacitated, the remaining
Trustees shall have all the powers hereunder and their certificate as to such
vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power
of attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.
Section 8. Chairman. The Trustees shall appoint one of their number to
be Chairman of the Board of Trustees. The Chairman shall preside at all meetings
of the Trustees, shall be responsible for the execution of policies established
by the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.
Section 9. Action by the Trustees. The Trustees shall act by majority
vote at a meeting duly called at which a quorum is present, including a meeting
held by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the President or
by any one of the Trustees. Notice of the time, date and place of all Trustees'
meetings shall be given to each Trustee as set forth in the By-laws; provided,
however, that no notice is required if the Trustees provide for regular or
stated meetings. Notice need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who signs a waiver of notice either
before or after the meeting. The Trustees by majority vote may delegate to any
Trustee or Trustees or
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committee authority to approve particular matters or take particular actions on
behalf of the Trust. Any written consent or waiver may be provided and delivered
to the Trust by facsimile or other similar electronic mechanism.
Section 10. Ownership of Trust Property. The Trust Property of the
Trust and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
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Section 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.
Section 12. Trustees, etc. as Shareholders. Subject to any restrictions
in the By-laws, any Trustee, officer, agent or independent contractor of the
Trust may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.
Section 13. Series of Trustees. In connection with the establishment of
one or more Series or Classes, the Trustees establishing such Series or Class
may appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the "Series Trustees"). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Trustees shall have, to the exclusion of any other
Trustee of the Trust, all the powers and authorities of Trustees hereunder with
respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders only shall entitle the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees
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affects all Series of the Trust or two or more Series represented by different
Trustees.
ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS
Section 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 whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 2. Advisory or Management Contract. 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 persons to whom the Investment Adviser
delegates certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees
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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.
Section 3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes separate administration agreements
with respect to each Series or Class, whereby the other party to such agreement
shall undertake to manage the business affairs of the Trust or of a Series or
Class thereof of the Trust and furnish the Trust or a Series or a Class thereof
with office facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms and conditions as the
Trustees may in their discretion determine.
Section 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 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.
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Section 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), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians, including such foreign banks and
securities depositories as meet the requirements of applicable provisions of the
1940 Act, and upon such terms and conditions as may be agreed upon between the
Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 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 this Article III or for services
as Custodian, Transfer Agent or disbursing agent or for related
services may have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in
Sections 1, 2, 3 or 4 of this Article III or for services as Custodian,
Transfer Agent or disbursing
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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.
ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Limitation of Liability. All persons contracting with or
having any claim against the Trust or a particular Series shall look only to the
assets of all Series or such particular Series for payment under such contract
or claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
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them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
Section 3. Indemnification. (a) Subject to the exceptions and
limitations contained in subsection (b) below:
(i)every person who is, or has been, a Trustee or an 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) ("Covered
Person") shall be indemnified by the Trust or the appropriate
Series to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid
by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Covered
Person and against amounts paid or incurred by him in the
settlement thereof; and
(ii) as used herein, 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 Covered Person:
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(i)who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the Trust
or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office, or (B) not to have
acted in good faith in the reasonable belief that his action
was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person 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; (B)
by at least a majority of those Trustees who are neither
Interested Persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to
a full trial-type inquiry); (C) by written opinion of
independent legal counsel based upon a review of readily
available facts (as opposed to a full trial-type inquiry) or
(D) by a vote of a majority of the Outstanding Shares entitled
to vote (excluding any Outstanding 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 be
exclusive of or affect any other rights to which any Covered Person may now or
hereafter be entitled, and shall inure to the benefit of the heirs, executors
and administrators of a Covered Person.
(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final
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disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.
(e) Any repeal or modification of this Article IV by the Shareholders,
or adoption or modification of any other provision of the Declaration or By-laws
inconsistent with this Article, shall be prospective only, to the extent that
such repeal, or modification would, if applied retrospectively, adversely affect
any limitation on the liability of any Covered Person or indemnification
available to any Covered Person with respect to any act or omission which
occurred prior to such repeal, modification or adoption.
Section 3. Indemnification of Shareholders. If any Shareholder or
former Shareholder of any Series shall be held personally liable solely by
reason of his being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder (or
his heirs, executors, administrators or other legal representatives or in the
case of any entity, its general successor) shall be entitled out of the assets
belonging to the applicable Series to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected Series, shall, upon request by such Shareholder, assume the
defense of any claim made against such Shareholder for any
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act or obligation of the Series and satisfy any judgment thereon from the assets
of the Series.
Section 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 5. No Duty of Investigation; Notice in Trust Instruments, Etc.
No purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust or a Series thereof shall be
bound to make any inquiry concerning the validity of any transaction purporting
to be made by the Trustees or by said officer, employee or agent or be liable
for the application of money or property paid, loaned, or delivered to or on the
order of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other
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insurance as the Trustees in their sole judgment shall deem advisable.
Section 6. Reliance on Experts, Etc. Each Trustee, officer or employee
of the Trust or a Series thereof shall, in the performance of his duties, powers
and discretions hereunder 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
SERIES; CLASSES; SHARES
Section 1. Establishment of Series or Class. The Trust shall consist of
one or more Series. The Trustees hereby establish a single Series which shall be
designated Pioneer India Fund. Each additional Series shall be established and
is effective upon the adoption of a resolution of a majority of the Trustees or
any alternative date specified in such resolution. The Trustees may designate
the relative rights and preferences of the Shares of each Series. The Trustees
may divide the Shares of any Series into Classes. 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; provided, that all Shares
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shall be identical except for such variations as shall be fixed and determined
between different Series or Classes by the Trustees in establishing and
designating such Class or Series. 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. The Trust shall maintain separate and distinct records for each Series
and hold and account for the assets thereof separately from the other assets of
the Trust or of any other Series. A Series may issue any number of Shares or any
Class thereof and need not issue Shares. Each Share of a Series shall represent
an equal beneficial interest in the net assets of such Series. Each holder of
Shares of a Series or a Class thereof shall be entitled to receive his pro rata
share of all distributions made with respect to such Series or Class. Upon
redemption of his Shares, such Shareholder shall be paid solely out of the funds
and property of such Series. The Trustees may adopt and change the name of any
Series or Class.
Section 2. Shares. The beneficial interest in the Trust shall be
divided into transferable Shares of one or more separate and distinct Series or
Classes established by the Trustees. The number of Shares of each Series and
Class is unlimited and each Share shall have no par value per Share or such
other amount as the Trustees may establish. All Shares issued hereunder shall be
fully paid and nonassessable. Shareholders shall have no preemptive or other
right to subscribe to any additional Shares or other securities issued by the
Trust. The Trustees shall have full power and authority, in their sole
discretion and without obtaining Shareholder approval, to issue original or
additional Shares at such times and on such terms and conditions as they deem
appropriate; to issue fractional Shares and Shares held in the treasury; to
establish and to change in any manner Shares of any Series or Classes with such
preferences, terms of conversion, voting powers, rights and privileges as the
Trustees may determine (but the Trustees may not change Outstanding Shares in a
manner materially adverse to the Shareholders of such Shares); to divide or
combine the Shares of any Series or Classes into a greater or lesser number; to
classify or reclassify any unissued
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Shares of any Series or Classes into one or more Series or Classes of Shares; to
abolish any one or more Series or Classes of Shares; to issue Shares to acquire
other assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses; and to take such other action with
respect to the Shares as the Trustees may deem desirable. Shares held in the
treasury shall not confer any voting rights on the Trustees and shall not be
entitled to any dividends or other distributions declared with respect to the
Shares.
Section 3. Investment in the Trust. The Trustees shall accept
investments in any Series or Class from such persons and on such terms as they
may from time to time authorize. At the Trustees' discretion, such investments,
subject to applicable law, may be in the form of cash or securities in which
that Series is authorized to invest, valued as provided in Article VI, Section
3. Investments in a Series shall be credited to each Shareholder's account in
the form of full Shares at the Net Asset Value per Share next determined after
the investment is received or accepted as may be determined by the Trustees;
provided, however, that the Trustees may, in their sole discretion, (a) impose a
sales charge upon investments in any Series or Class, (b) issue fractional
Shares, (c) determine the Net Asset Value per Share of the initial capital
contribution or (d) authorize the issuance of Shares at a price other than Net
Asset Value to the extent permitted by the 1940 Act or any rule, order or
interpretation of the Commission thereunder. The Trustees shall have the right
to refuse to accept investments in any Series at any time without any cause or
reason therefor whatsoever.
Section 4. Assets and Liabilities of Series. All consideration received
by the Trust for the issue or sale of Shares of a particular Series, 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
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proceeds in whatever form the same may be), shall be held and accounted for
separately from the assets of every other Series and are referred to as "assets
belonging to" that Series. The assets belonging to a Series shall belong only to
that Series for all purposes, and to no other Series, subject only to the rights
of creditors of that Series. Any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Series shall be allocated by the Trustees between and among one
or more Series as the Trustees deem fair and equitable. Each such allocation
shall be conclusive and binding upon the Shareholders of all Series for all
purposes, and such assets, earnings, income, profits or funds, or payments and
proceeds thereof shall be referred to as assets belonging to that Series. The
assets belonging to a Series shall be so recorded upon the books of the Trust,
and shall be held by the Trustees in trust for the benefit of the Shareholders
of that Series. The assets belonging to a Series shall be charged with the
liabilities of that Series and all expenses, costs, charges and reserves
attributable to that Series, except that liabilities and expenses allocated
solely to a particular Class shall be borne by that Class. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series or Class shall be
allocated and charged by the Trustees between or among any one or more of the
Series or Classes in such manner as the Trustees deem fair and equitable. Each
such allocation shall be conclusive and binding upon the Shareholders of all
Series or Classes for all purposes.
Without limiting the foregoing, but subject to the right of the
Trustees to allocate general liabilities, expenses, costs, charges or reserves
as herein provided, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the
assets of any other Series. Notice of this contractual limitation on liabilities
among Series may, in the Trustees' discretion, be set forth in the certificate
of trust of the Trust
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(whether originally or by amendment) as filed or to be filed in the Office of
the Secretary of State of the State of Delaware pursuant to the Delaware Act,
and upon the giving of such notice in the certificate of trust, the statutory
provisions of Section 3804 of the Delaware Act relating to limitations on
liabilities among Series (and the statutory effect under Section 3804 of setting
forth such notice in the certificate of trust) shall become applicable to the
Trust and each Series. Any person extending credit to, contracting with or
having any claim against any Series may look only to the assets of that Series
to satisfy or enforce any debt, with respect to that Series. No Shareholder or
former Shareholder of any Series shall have a claim on or any right to any
assets allocated or belonging to any other Series.
Section 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent of a duly executed
instrument of transfer, together with a Share certificate if one is outstanding,
and such evidence or the genuineness of each such execution and authorization
and of such other matters as may be required by the Trustees. Upon such
delivery, and subject to any further requirements specified by the Trustees or
contained in the By-laws, the transfer shall be recorded on the books of the
Trust. Until a transfer is so recorded, the Shareholder of record of Shares
shall be deemed to be the holder of such Shares
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for all purposes hereunder and neither the Trustees nor the Trust, nor any
transfer agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
Section 6. Status of Shares; Limitation of Shareholder Liability.
Shares shall be deemed to be personal property giving Shareholders only the
rights provided in this Declaration. Every Shareholder, by virtue of having
acquired a Share, shall be held expressly to have assented to and agreed to be
bound by the terms of this Declaration and to have become a party hereto. No
Shareholder shall be personally liable for the debts, liabilities, obligations
and expenses incurred by, contracted for, or otherwise existing with respect to,
the Trust or any Series. The death, incapacity, dissolution, termination or
bankruptcy of a Shareholder during the existence of the Trust shall not operate
to terminate the Trust, nor entitle the representative of any such Shareholder
to an accounting or to take any action in court or elsewhere against the Trust
or the Trustees, but entitles such representative only to the rights of such
Shareholder under this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of the Trust Property or
right to call for a partition or division of the same or for an accounting, nor
shall the ownership of Shares constitute the Shareholders as partners. Neither
the Trust nor the Trustees shall have any power to bind any Shareholder
personally or to demand payment from any Shareholder for anything, other than as
agreed by the Shareholder. Shareholders shall have the same limitation of
personal liability as is extended to shareholders of a private corporation for
profit incorporated in the State of Delaware. Every written obligation of the
Trust or any Series shall contain a statement to the effect that such obligation
may only be enforced against the assets of the appropriate Series or all Series;
however, the omission of such statement shall not operate to bind or create
personal liability for any Shareholder or Trustee.
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ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series.
The Trustees may adopt and offer to Shareholders such dividend reinvestment
plans, cash dividend payout plans or similar plans as the Trustees deem
appropriate.
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Section 2. Redemptions. Each Shareholder of a Series shall have the
right at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any Series or Class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.
Section 3. Determination of Net Asset Value. The Trustees shall cause
the Net Asset Value of Shares of each Series or Class
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to be determined from time to time in a manner consistent with applicable laws
and regulations. The Trustees may delegate the power and duty to determine Net
Asset Value per Share to one or more Trustees or officers of the Trust or to a
custodian, depository or other agent appointed for such purpose. The Net Asset
Value of Shares shall be determined separately for each Series or Class at such
times as may be prescribed by the Trustees or, in the absence of action by the
Trustees, as of the close of regular trading on the New York Stock Exchange on
each day for all or part of which such Exchange is open for unrestricted
trading.
Section 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.
Section 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, provided payment is not made for the Shares prior to the time as of
which such Net Asset Value is determined.
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ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. The Shareholders shall have power to vote
only with respect to (a) the election of Trustees as provided in Section 2 of
this Article; (b) the removal of Trustees as provided in Article II, Section
3(d); (c) any investment advisory or management contract as provided in Article
VIII, Section 1; (d) any termination of the Trust as provided in Article IX,
Section 4; (e) the amendment of this Declaration to the extent and as provided
in Article X, Section 8; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or any State, or as the Trustees
may consider desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series or Class, except (a) when required by the 1940
Act, Shares shall be voted in the aggregate and not by individual Series or
Class, and (b) when the Trustees have determined that the matter affects the
interests of more than one Series or Class, then the Shareholders of all such
Series or Classes shall be entitled to vote thereon. 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. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy or in any manner provided for in the By-laws. The By-laws
may provide that proxies may be given by any electronic or telecommunications
device or in any other manner, but if a proposal by anyone other than the
officers or Trustees is submitted to a vote of the Shareholders of any Series or
Class, or if there is a proxy contest or proxy solicitation or proposal in
opposition to any proposal by the officers or Trustees, Shares may be voted only
in person or by written proxy. Until Shares of a Series are issued, as to that
Series the Trustees may exercise all rights of Shareholders and may take any
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action required or permitted to be taken by Shareholders by law, this
Declaration or the By-laws. Meetings of Shareholders shall be called and notice
thereof and record dates therefor shall be given and set as provided in the
By-laws.
Section 2. Quorum; Required Vote. One-third of the Outstanding Shares
of each Series or Class, or one-third of the Outstanding Shares of the Trust,
entitled to vote in person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting with respect to such Series or Class, or
with respect to the entire Trust, respectively. Any lesser number shall be
sufficient for adjournments. Any adjourned session of a Shareholders' meeting
may be held within a reasonable time without further notice. Except when a
larger vote is required by law, this Declaration or the By-laws, a majority of
the Shares voting at a Shareholders' meeting in person or by proxy shall decide
any matters to be voted upon with respect to the entire Trust and a plurality of
such Shares shall elect a Trustee; provided, that if this Declaration or
applicable law permits or requires that Shares be voted on any matter by
individual Series or Classes, then a majority of the Shares of that Series or
Class (or, if required by law, a majority of the Shares outstanding and entitled
to vote of that Series or Class) voting at a Shareholders' meeting in person or
by proxy on the matter shall decide that matter insofar as that Series or Class
is concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.
Section 3. Record Dates. For the purpose of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution, the Trustees may from time to time fix a
date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or
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distribution. Without fixing a record date, the Trustees may for distribution
purposes close the register or transfer books for one or more Series (or
Classes) any time prior to the payment of a distribution. Nothing in this
Section shall be construed as precluding the Trustees from setting different
record dates for different Series (or Classes).
Section 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES
Section 1. Payment of Expenses by the Trust. Subject to Article V,
Section 4, the Trust or a particular Series shall pay, or shall reimburse the
Trustees from the assets belonging to all Series or the particular Series, for
their expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents and fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing
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services for the Trust or any Series; costs of Trustee meetings; Commission
registration fees and related expenses; state or foreign securities laws
registration fees and related expenses; and for such non-recurring items as may
arise, including litigation to which the Trust or a Series (or a Trustee or
officer of the Trust acting as such) is a party, and for all losses and
liabilities by them incurred in administering the Trust. The Trustees shall have
a lien on the assets belonging to the appropriate Series, or in the case of an
expense allocable to more than one Series, on the assets of each such Series,
prior to any rights or interests of the Shareholders thereto, for the
reimbursement to them of such expenses, disbursements, losses and liabilities.
Section 2. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
ARTICLE IX
MISCELLANEOUS
Section 1. Trust Not a Partnership. This Declaration creates a trust
and not a partnership. No Trustee shall have any power to bind personally either
the Trust's officers or any Shareholder.
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Section 2. Trustee Action. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.
Section 3. Record Dates. The Trustees may fix in advance a date up to
ninety (90) days before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
Section 4. Termination of the Trust. (a) This Trust shall have
perpetual existence. Subject to the vote of a majority of the Shares outstanding
and entitled to vote of the Trust or of each Series to be affected, the Trustees
may
(i)sell and convey all or substantially all of the assets of
all Series or any affected Series to another Series or to
another entity which is an open-end investment company as
defined in the 1940 Act, or is a series thereof, for adequate
consideration, which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued
or contingent, of the Trust or any affected Series, and which
may include shares of or interests in such Series, entity, or
series thereof; or
(ii) at any time sell and convert into money all or
substantially all of the assets of all Series or any affected
Series.
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Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.
(b) The Trustees may take any of the actions specified in subsection
(a) (i) and (ii) above without obtaining the vote of a majority of the Shares
Outstanding and entitled to vote of the Trust or any Series if a majority of the
Trustees determines that the continuation of the Trust or Series is not in the
best interests of the Trust, such Series, or their respective Shareholders as a
result of factors or events adversely affecting the ability of the Trust or such
Series to conduct its business and operations in an economically viable manner.
Such factors and events may include the inability of the Trust or a Series to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Trust or the Series or affecting assets of the type in which the
Trust or Series invests, or economic developments or trends having a significant
adverse impact on the business or operations of the Trust or such Series.
(c) Upon completion of the distribution of the remaining proceeds or
assets pursuant to subsection (a), the Trust or affected Series shall terminate
and the Trustees and the Trust shall be discharged of any and all further
liabilities and duties hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and discharged. Upon
termination of the Trust, following completion of winding up of its business,
the Trustees shall cause a certificate of cancellation of the Trust's
certificate of trust to be filed in accordance with the Delaware Act, which
certificate of cancellation may be signed by any one Trustee.
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<PAGE>
Section 5. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval unless such approval is required by applicable law, (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(b) Pursuant to and in accordance with the provisions of Section
3815(f) of the Delaware Act, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 5 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.
(c) The Trustees may create one or more business trusts to which all or
any part of the assets, liabilities, profits or losses of the Trust or any
Series or Class thereof may be transferred and may provide for the conversion of
Shares in the Trust or any Series or Class thereof into beneficial interests in
any such newly created trust or trusts or any series or classes thereof.
Section 6. Declaration of Trust. The original or a copy of this
Declaration of Trust and of each amendment hereto or Declaration of Trust
supplemental shall be kept at the office of the Trust where it may be inspected
by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a
Trustee or an officer of the Trust as to the authenticity of the Declaration of
Trust or any such amendments or supplements and as to any
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<PAGE>
matters in connection with the Trust. The masculine gender herein shall include
the feminine and neuter genders. Headings herein are for convenience only and
shall not affect the construction of this Declaration of Trust. This Declaration
of Trust may be executed in any number of counterparts, each of which shall be
deemed an original.
Section 7. Applicable Law. This Declaration and the Trust created
hereunder are governed by and construed and administered according to the
Delaware Act and the applicable laws of the State of Delaware; provided,
however, that there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the
Delaware Code, or (b) any provisions of the laws (statutory or common) of the
State of Delaware (other than the Delaware Act) pertaining to trusts which
relate to or regulate (i) the filing with any court or governmental body or
agency of trustee accounts or schedules of trustee fees and charges, (ii)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding of trust assets, or (vii) the
establishment of fiduciary or other standards of responsibilities or limitations
on the acts or powers of trustees, which are inconsistent with the limitations
or liabilities or authorities and powers of the Trustees set forth or referenced
in this Declaration. The Trust shall be of the type commonly called a Delaware
business trust, and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust under
Delaware law. The Trust specifically reserves the right to exercise any of the
powers or privileges afforded to trusts or actions that may be engaged in by
trusts under the
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<PAGE>
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
Section 8. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section l, (b) to this Section 8, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, any amendment to Article IV
which would have the effect of reducing the indemnification and other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon.
Section 9. Derivative Actions. In addition to the requirements set
forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative
action on behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action; and
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<PAGE>
(b) the Trustees must be afforded a reasonable amount of time to
consider such shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisers in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
Section 10. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as set forth in the By-laws. The Trustees may change the fiscal
year of the Trust without Shareholder approval.
Section 11. Severability. The provisions of this Declaration are
severable. If the Trustees determine, with the advice of counsel, that any
provision hereof conflicts with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination. If any
provision hereof shall be held invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall attach only to such provision only in
such jurisdiction and shall not affect any other provision of this Declaration.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the date first written above.
John F. Cogan, Jr.,
as Trustee and not individually
975 Memorial Drive, #802
Cambridge, Massachusetts 02138
Marguerite A. Piret,
as Trustee and not individually
162 Washington Street
Belmont, Massachusetts 02178
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CERTIFICATE OF TRUST
THIS Certificate of Trust of Pioneer India Fund (the "Trust"), dated
April 4, 1994, is being duly executed and filed by John F. Cogan, Jr. and
Marguerite A. Piret, as Trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. ss. 3801, et seq.).
111 Name. The name of the business trust formed hereby is PIONEER INDIA
FUND.
121 Registered Agent. The business address of the registered office of
the Trust in the State of Delaware is 1201 North Market Street in the City of
Wilmington, County of New Castle, 19801. The name of the Trust's registered
agent at such address is Delaware Corporation Organizers, Inc.
131 Effective Date. This Certificate of Trust shall be effective upon
the date and time of filing.
141 Series Trust. Notice is hereby given that pursuant to Section 3804
of the Delaware Business Trust Act, the debts, liabilities, obligations and
expenses incurred, contracted for or otherwise existing with respect to a
particular series of the Trust shall be enforceable against the assets of such
series only and not against the assets of the Trust generally. The Trust is
<PAGE>
a registered investment company under the Investment Company Act of 1940, as
amended.
IN WITNESS WHEREOF, the undersigned, being the Trustees of the Trust,
have executed this Certificate of Trust as of the date first above-written.
-------------------------------
John F. Cogan, Jr.
As Trustee and not individually
--------------------------------
Marguerite A. Piret
As Trustee and not individually
PIONEER INDIA FUND
Establishment and Designation
of
Class A Shares, Class B Shares and Class C Shares
of Beneficial Interest of
Pioneer India Fund
The undersigned, being a majority of the Trustees of Pioneer India Fund a
Delaware business trust (the "Fund"), acting pursuant to Article V, Section 1 of
the Agreement and Declaration of Trust dated April 4, 1994 of the Fund (the
"Declaration"), do hereby divide the shares of beneficial interest of the Fund
(the "Shares") to create three classes of Shares of the Fund as follows:
1. The three classes of Shares established and designated hereby are
"Class A Shares," "Class B Shares" and "Class C Shares," respectively.
2. Class A Shares, Class B Shares and Class C Shares shall each be
entitled to all of the rights and preferences accorded to Shares under
the Declaration.
3. The purchase price of Class A Shares, Class B Shares and Class C
Shares, the method of determining the net asset value of Class A
Shares, Class B Shares and Class C Shares and the relative dividend
rights of holders of Class A Shares, Class B Shares and Class C Shares
shall be established by the Trustees of the Trust in accordance with
the provisions of the Declaration and shall be set forth in the
Trust's Registration Statement on Form N-1A under the Securities Act
of 1933 and/or the Investment Company Act of 1940, as amended and as
in effect at the time of issuing such Shares.
4. The Trustees, acting in their sole discretion, may determine that any
Shares of the Fund issued are Class A Shares, Class B Shares, Class C
Shares or Shares of any other class of the Fund hereinafter
established and designated by the Trustees.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument this 7th
day of November, 1995.
John F. Cogan, Jr. Marguerite A. Piret
as Trustee and not individually as Trustee and not individually
975 Memorial Drive, #802 162 Washington Street
Cambridge, MA 02138 Belmont, MA 02178
Richard H. Egdahl, M.D. David D. Tripple
as Trustee and not individually as Trustee and not individually
Health Policy Institute 6 Woodbine Road
53 Bay State Road Belmont, MA 02178
Boston, MA 02215
Margaret B.W. Graham Stephen K. West, Esq.
as Trustee and not individually as Trustee and not individually
The Keep Sullivan & Cromwell
P.O. Box 110 125 Broad Street
Little Deer Isle, ME 04650 New York, NY 10004
John W. Kendrick John Winthrop
as Trustee and not individually as Trustee and not individually
6363 Waterway Drive One North Adgers Wharf
Falls Church, VA 22044 Charleston, SC 29401
BY-LAWS
of
PIONEER INDIA FUND
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a Chairman, a President,
a Treasurer, a Secretary, and such other officers with such other titles as
provided for herein or as the Trustees may from time to time elect. It shall not
be necessary for any Trustee or other officer to be a holder of shares in the
Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The Chairman and President shall be chosen annually by
and from the Trustees.
Two or more offices may be held by a single person except the offices
of President and Secretary. The officers shall hold office until their
successors are 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.
<PAGE>
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to fully
carry out that responsibility.
SECTION 2. Executive and other Committees. The Trustees may elect from their own
number an Executive Committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust, and such other powers and duties as the Trustees
may from time to time delegate to such Committee. The Trustees may also elect
from their own number other Committees from time to time, the number composing
such Committees and the powers conferred upon the same to be determined by vote
of the Trustees.
SECTION 3. Chairman of the Trustees. The Chairman shall preside at all meetings
of the Trustees and he may be the chief executive, financial and accounting
officer of the Trust. The Chairman may also perform such other duties as the
Trustees may from time to time designate.
SECTION 4. President. The President shall be the chief operating officer of the
Trust and, subject to the Trustees, shall have general supervision over the
business and policies of the Trust. The President shall have full power and
authority to bind the Trust and in connection therewith may execute and deliver
in the name and on behalf of the Trust any and all agreements, instruments,
notes and writings of any nature that he may consider necessary or appropriate
in connection with the management of the Trust. The President shall perform such
duties additional to all of the foregoing as the Trustees may from time to time
designate.
SECTION 5. Treasurer. The Treasurer may be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank(s) or trust compan(ies) as
the Trustees shall
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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.
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
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Declaration of Trust and as hereinafter provided by these By-Laws.
SECTION 2. Special Meetings. A special meeting of the Shareholders of any Series
shall be called by the Secretary whenever ordered by the Trustees or requested
in writing by the holder or holders of at least one-tenth of the outstanding
Shares of any such Series entitled to vote. If the Secretary, when so ordered or
requested, refuses or neglects for more than two days to call such special
meeting, the Trustees or the Shareholders so requesting may, in the name of the
Secretary, call the meeting by giving notice thereof in the manner required when
notice is given by the Secretary.
SECTION 3. Notices. Except as above provided, notices of any special meeting of
the Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting, a written
or printed notification of such meeting, at least fifteen days before the
meeting, to such address as may be registered with the Trust by the Shareholder.
SECTION 4. Place of Meeting. All special meetings of the Shareholders shall be
held at the principal place of business of the Trust in Boston, Massachusetts or
at such other place in the United States as the Trustees may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Meetings. Meetings of the Trustees shall be called orally or in
writing by the Chairman or at his order or direction or by any two other
Trustees, and if the Secretary when so requested refuses or fails for more than
one day to call such meeting, the Chairman, or such two other Trustees, may in
the name of the Secretary call such meeting by giving due notice in the manner
required when notice is given by the Secretary.
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<PAGE>
SECTION 2. Quorum. A majority of the Trustees shall constitute a quorum for the
transaction of business.
SECTION 3. Notices. Except as otherwise provided, notice of any meeting of the
Trustees shall be given by the Secretary to each Trustee, by mailing to him,
postage prepaid, addressed to him at his address as registered on the books of
the Trust or, if not so registered, at his last known address, a written or
printed notification of such meeting at least three days before the meeting or
by delivering such notice to him at least two days before the meeting, or by
telephoning him or by sending to him at least one day before the meeting, by
prepaid telegram, addressed to him at his said registered address, if any, or if
he has no such registered address, at his last known address, notice of such
meeting.
SECTION 4. Place of Meeting. All meetings of the Trustees shall be held at the
principal place of business of the Trust in Boston, Massachusetts, or such other
place within or without the Commonwealth as the person or persons requesting
said meeting to be called may designate, but any meeting may adjourn to any
other place.
SECTION 5. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 6. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by a majority of the Trustees and
filed with the records of the Trustees' meetings, or by telephone consent
provided a quorum of Trustees participate in any such telephone meeting. Such
consent shall be treated as a vote of the Trustees for all purposes, provided
however, no such consent shall be effective if the Investment Company Act of
1940 requires that a particular action be taken only at a meeting of the
Trustees.
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ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust and the
status of the owners thereof shall be defined, established and governed by
applicable provisions of law, the Declaration of Trust and as herein provided by
these By-Laws.
SECTION 2. Transfers. Shares may be transferred on the books of the Trust by
written request to the Trust or its transfer agent, with such proof of authority
or the authenticity of signature as the Trust or its transfer agent may
reasonably require. Except as may be otherwise required by law, by the
Declaration of Trust or by these By-Laws, the Trust shall be entitled to treat
the record holder of shares of beneficial interest as shown on its books as the
owner of such shares for all purposes, including the payment of dividends and
the right to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such shares until the shares have been transferred on the
books of the Trust in accordance with the requirements of these By-Laws.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what
extent, and at what times and places, and under what conditions and regulations
the accounts and books of the Trust or any of them shall be open to the
inspection of the shareholders; and no shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by law
or otherwise by the Trustees or by resolution of the shareholders.
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<PAGE>
ARTICLE VII
Custodian
The Custodian(s) employed by the Trust pursuant to Section 3.6 of the
Declaration of Trust shall be required to enter into a contract with the Trust
which shall contain in substance the following provisions:
(a) The Trust will cause all securities and funds owned by the
Trust to be delivered or paid to the Custodian(s).
(b) The Custodian(s) will receive and receipt for any moneys
due to the Trust and deposit the same in its own banking
department and in such other banking institutions, if
any, as the Custodian(s) and the Trustees may approve.
The Custodian(s) shall have the sole power to draw upon
any such account.
(c) The Custodian(s) shall release and deliver securities owned by
the Trust in the following cases only:
(1) Upon the sale of such securities for the account of
the Trust and receipt of payment therefor;
(2) To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided that in any such case, the
cash is to be delivered to the Custodian(s);
(3) To the issuer thereof or its agent for transfer into
the name of the Trust, the Custodian(s) or a nominee
of either, or for exchange for a different number of
bonds or certificates representing the same aggregate
face amount or number of units; provided that in any
such case the new securities are to be delivered to
the Custodian(s);
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<PAGE>
(4) To the broker selling the same for examination, in
accord with the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization,
reorganization or readjustment of the securities of
the issuer of such securities or pursuant to
provisions to any deposit agreement; provided that,
in any such case, the new securities and cash, if
any, are to be delivered to the Custodian(s);
(6) In the case of warrants, rights, or similar
securities, the surrender thereof in the exercise of
such warrants, rights or similar securities or the
surrender of interim receipts or temporary securities
for definitive securities;
(7) To any pledge by way of pledge or hypothecation to
secure any loan; and
(8) For deposit in a system for the central handling of
securities.
(d) The Custodian(s) shall pay out moneys of the Trust only upon
the purchase of securities for the account of the Trust and
the delivery in due course of such securities to the
Custodian(s), or in connection with the conversion, exchange
or surrender of securities owned by the Trust as set forth in
(c), or for the redemption or repurchase of shares issued by
the Trust or for the making of any disbursements authorized by
the Trustees pursuant to the Declaration of Trust or these
By-laws, or for the payment of any expense or liability
incurred by the Trust; provided that, in every case where
payment is made by the Custodian(s) in advance of receipt of
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<PAGE>
the securities purchased, the Custodian(s) shall be absolutely
liable to the Trust for such securities to the same extent as
if the securities had been received by the Custodian(s).
(e) The Custodian(s) shall make deliveries of securities and
payments of cash only upon written instructions signed or
initialed by such officer or officers or other agent or agents
of the Trust as may be authorized to sign or initial such
instructions by resolution of the Trustees; it being
understood that the Trustees may from time to time authorize a
different person or persons to sign or initial instructions
for different purposes.
The contract between the Trust and the Custodian(s) may contain any
such other provisions not inconsistent with the provisions of Section 3.6 of the
Declaration of Trust or with these By-laws as the Trustees may approve.
Such contract shall be terminable by either party upon written notice
to the other within such time not exceeding sixty (60) days as may be specified
in the contract; provided, however, that upon termination of the contract or
inability of the Custodian(s) to continue to serve, the Custodian(s) shall, upon
written notice of appointment of another bank or trust company as custodian,
deliver and pay over to such successor custodian all securities and moneys held
by it for account of the Trust. In such case, the Trustees shall promptly
appoint a successor custodian, but in the event that no successor custodian can
be found having the required qualifications and willing to serve, it shall be
the duty of the Trustees to call as promptly as possible a special meeting of
the Shareholders to determine whether the Trust shall function without a
custodian or shall be liquidated. If so directed by vote of the holders of a
majority of the outstanding Shares, the Custodian(s) shall deliver and pay over
all property of the Trust held by it as specified in such vote.
Such contract shall also provide that, pending appointment of a
successor custodian or a vote of the shareholders specifying some other
disposition of the funds and property, the
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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 INDIA FUND"
"A DELAWARE BUSINESS TRUST 1994"
SECTION 2. Fiscal Year. The fiscal year of the Trust shall be the period of
twelve months ending on the last day of December in each calendar year.
SECTION 3. Reports to Shareholders. The Trustees shall at least semi-annually
submit to the shareholders a written financial report of the transactions of the
Trust including financial statements which shall at least annually be certified
by independent public accountants.
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SECTION 4. Voting of Securities. Except as the Trustees may otherwise designate,
the President or Treasurer may waive notice of, and act as, or appoint any
person or persons to act as, proxy or attorney-in-fact for the Trust (with or
without power of substitution) at, any meeting of stockholders or shareholders
of any corporation or other organization, the securities of which may be held by
the Trust.
SECTION 5. Evidence of Authority. A certificate by the Secretary or Assistant
Secretary, or a temporary Secretary, as to any action taken by the shareholders,
Trustees, any committee or any officer or representative of the Trust shall as
to all persons who rely on the certificate in good faith be conclusive evidence
of such action.
SECTION 6. Declaration of Trust. All references in these By-Laws to the
Declaration of Trust shall be deemed to refer to the Agreement and Declaration
of Trust of the Trust dated April 4, 1994, and known as "Pioneer India Fund," 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 22nd day of June, 1994 between Pioneer India
Fund, a Delaware business trust (the "Fund"), and Pioneering Management
Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Fund is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Fund's Board of
Trustees and officers, to manage the Fund,
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Fund and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Fund with investment
research, advice and supervision and will furnish continuously an investment
program for the Fund consistent with the investment objectives and policies of
the Fund. The Manager will determine from time to time what securities shall be
purchased for the Fund, what securities shall be held or sold by the Fund and
what portion of the Fund's assets shall be held uninvested as cash, subject
always to the provisions of the Fund's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the 1933 Act covering the Fund's shares, as filed with the Securities
and Exchange Commission, and to the investment objectives, policies and
restrictions of the Fund, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Board of
Trustees of the Fund may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for the Fund
in the same manner and with the same force and effect as the Fund itself might
or could do with respect to purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
<PAGE>
(b) The Manager will, to the extent reasonably required in the
conduct of the business of the Fund and upon the Fund's request, furnish to the
Fund research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Fund shall at the time have any investment in such industries,
businesses, corporations or securities. The Manager will use its best efforts in
the preparation of such reports and will endeavor to consult the persons and
sources believed by it to have information available with respect to such
industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with
respect to the Fund's securities transactions required by sub-paragraphs (b)(5),
(6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than
those records being maintained by the custodian or transfer agent appointed by
the Fund) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Fund office space in the offices of the Manager or
in such other place as may be agreed upon from time to time, and all necessary
office facilities, equipment and personnel for managing the Fund's affairs and
investments, and shall arrange, if desired by the Fund, for members of the
Manager's organization to serve as officers or agents of the Fund.
(b) The Manager shall pay directly or reimburse the Fund for:
(i) the compensation (if any) of the Trustees who are affiliated with, or
"interested persons" (as defined in the 1940 Act) of, the Manager and all
officers of the Fund as such; and (ii) all expenses not hereinafter specifically
assumed by the Fund where such expenses are incurred by the Manager or by the
Fund in connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Fund.
(c) The Fund shall assume and shall pay: (i) charges and
expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
the Manager, or its affiliates, office space and facilities and personnel
compensation, training and benefits; (ii) the charges and expenses of auditors;
(iii) the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the Fund with respect to
the Fund; (iv) issue and transfer taxes chargeable to the Fund in connection
with securities transactions to which the Fund is a party; (v) insurance
premiums, interest charges, dues and fees for membership in trade associations
and all taxes and corporate fees payable by the Fund to federal, state or other
governmental
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<PAGE>
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Fund and/or its shares with the Commission, state or blue
sky securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Fund and the Trustees; (ix) distribution fees
paid by the Fund in accordance with Rule 12b-1 promulgated by the Commission
pursuant to the 1940 Act; (x) compensation of those Trustees of the Fund who are
not affiliated with or interested persons of the Manager, the Fund (other than
as Trustees), The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.; (xi)
the cost of preparing and printing share certificates; and (xii) interest on
borrowed money, if any.
(d) In addition to the expenses described in Section 2(c)
above, the Fund shall pay all brokers' and underwriting commissions chargeable
to the Fund in connection with securities transactions to which the Fund is a
party.
3. (a) The Fund shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee at the rate of 1.25%
per annum of the Fund's average daily net assets. The management fee payable
hereunder shall be computed daily and paid monthly in arrears. In the event of
termination of this Agreement, the fee provided in this Section shall be
computed on the basis of the period ending on the last business day on which
this Agreement is in effect subject to a pro rata adjustment based on the number
of days elapsed in the current month as a percentage of the total number of days
in such month.
(b) If the operating expenses of the Fund in any year exceed
the limits set by state securities laws or regulations in states in which shares
of the Fund are sold, the amount payable to the Manager under subsection (a)
above will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Fund to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to
time agree not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or a portion thereof would otherwise accrue)
and/or undertake to pay or reimburse the Fund for all or a portion of its
expenses not otherwise required to
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<PAGE>
be borne or reimbursed by the Manager. Any such fee reduction or undertaking may
be discontinued or modified by the Manager at any time.
(d) It is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") to provide investment advisory
services to the Fund by entering into a written agreement with each such
Subadviser; provided, that any such agreement first shall be approved by the
vote of a majority of the Trustees, including a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Fund, the Manager
or any such Subadviser, at a meeting of Trustees called for the purpose of
voting on such approval and by the affirmative vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Fund. The
authority given to the Manager in Sections 1 through 6 hereof may be delegated
by it under any such agreement; provided, that any Subadviser shall be subject
to the same restrictions and limitations on investments and brokerage discretion
as the Manager. The Trust agrees that the Manager shall not be accountable to
the Trust or the Fund or the Fund's shareholders for any loss or other liability
relating to specific investments directed by any Subadviser, even though the
Manager retains the right to reverse any such investment, because, in the event
a Subadviser is retained, the Fund and the Manager will rely almost exclusively
on the expertise of such Subadviser for the selection and monitoring of specific
investments.
4. The Manager will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Manager, whether or not such recommendation shall have been based upon
its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, but nothing contained herein will be
construed to protect the Manager against any liability to the Fund or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
5. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Fund or deemed to violate or give rise to any
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<PAGE>
duty or obligation of the Manager to the Fund except as otherwise imposed by
law. The Fund recognizes that the Manager, in effecting transactions for its
various accounts, may not always be able to take or liquidate investment
positions in the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for
the account of the Fund, neither the Manager nor any of its Trustees, officers
or employees will act as a principal or agent or receive any commission except
as permitted by the 1940 Act. The Manager shall arrange for the placing of all
orders for the purchase and sale of securities for the Fund's account with
brokers or dealers selected by the Manager. In the selection of such brokers or
dealers and the placing of such orders, the Manager is directed at all times to
seek for the Fund the most favorable execution and net price available except as
described herein. It is also understood that it is desirable for the Fund that
the Manager have access to supplemental investment and market research and
security and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities for the Fund with such brokers, subject to
review by the Fund's Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Manager in connection with its or its
affiliates' services to other clients.
(c) On occasions when the Manager deems the purchase or sale
of a security to be in the best interest of the Fund as well as other clients,
the Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such clients.
6. This Agreement shall become effective on the date hereof and shall
remain in force until June 22, 1996 and from year to year thereafter, but only
so long as its continuance is approved annually by a vote of the Trustees of the
Fund voting in person, including a majority of its Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 1940 Act) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 1940 Act) of the Fund, subject to the right of the Fund and the
Manager to terminate this contract as provided in Section 8 hereof.
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<PAGE>
7. Either party hereto may, without penalty, terminate this Agreement
by vote of its Board of Trustees or Directors, as the case may be, or by vote of
a "majority of its outstanding voting securities" (as defined in the 1940 Act)
of the Fund and the giving of 60 days' written notice to the other party.
8. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
9. The Fund agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Fund, the name of the
Fund, and any series thereof, will be changed to one that does not contain the
name "Pioneer" or otherwise suggest an affiliation with the Manager.
10. The Manager is an independent contractor and not an employee of the
Fund for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Fund, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Fund or series thereof.
11. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
12. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts.
13. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
14. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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<PAGE>
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 INDIA FUND
/s/Joseph P. Barri /s/John F. Cogan
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEERING MANAGEMENT
CORPORATION
/s/Joseph P. Barri /s/David D.Tripple
Joseph P. Barri David D. Tripple
Secretary President
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SUBADVISORY CONTRACT
AGREEMENT made as of the 22nd day of June 1994 by and between
PIONEERING MANAGEMENT CORPORATION, a Delaware corporation (the "Manager"), and
ITI PIONEER AMC LTD., a corporation organized under the laws of India ("ITI
Pioneer").
WITNESSETH:
WHEREAS, the Manager desires to utilize the technical services of ITI
Pioneer as financial counsel with respect to the portfolio investments of
Pioneer India Fund, a Delaware business trust and a registered open-end
investment company (the "Fund"); and
WHEREAS, ITI Pioneer is willing to perform such services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
1. ITI Pioneer's Services. ITI Pioneer will provide the following
technical services, including investment advisory services, to the Manager,
which is located outside India:
(a) Subject to the directions of the Manager and the
limitations set forth below and elsewhere herein, ITI Pioneer will act
as investment adviser with respect to such portion of the Fund's assets
as the Manager designates from time to time. In such capacity, ITI
Pioneer will purchase, hold and sell portfolio securities and monitor
on a continuing basis the performance of such portfolio securities;
provided, however, that, before investing any such assets in a
particular initial public offering, ITI Pioneer will obtain the
Manager's written authorization to make such investment. ITI Pioneer
will make investments hereunder only in securities markets located in
India.
<PAGE>
(b) ITI Pioneer will advise the Manager on a prompt basis each
day by electronic telecommunication of each confirmed purchase and sale
of a portfolio security that it effects hereunder, and will provide the
Manager with a separate confirmation for each lot involved in the
trade. Each such communication will specify the name of the issuer, the
full description of the security including its class, the amount or
number of shares or units of the security purchased or sold, the market
price, commission, government charges and gross or net price, trade
date, settlement date and identity of the effecting broker or dealer
and, if different, the identity of the clearing broker. Each such
communication will also contain settlement instructions for the
transaction (unless standing instructions previously provided by ITI
Pioneer apply to the transaction) and specify the exchange on which the
trade was executed, the nature of the settlement arrangements and the
lot-level of the trade. With respect to any security purchased
hereunder, ITI Pioneer will also provide the Manager with the local
identification number of the security, the industry sector of the
issuer and the total amount of the issuer's issued and outstanding
voting securities. ITI Pioneer will not have any authority to instruct
the Fund's custodian or any of the Fund's subcustodians concerning the
Fund's portfolio securities.
(c) ITI Pioneer will arrange for the placing of orders for the
purchase and sale of securities hereunder with brokers or dealers
selected by ITI Pioneer, and will provide the Manager at all times with
a current master list of brokers and dealers in India with which such
orders may be placed. In the selection of such brokers or dealers and
the placing of such orders, ITI Pioneer is directed at all times to
seek the most favorable price and execution available (from the Fund's
perspective). In seeking the most favorable price and execution, ITI
Pioneer will consider all factors it deems relevant, including by way
of illustration, the size and type of the transaction; the nature of
the market for the security to be purchased or sold; the execution
efficiency, settlement capability and financial condition of the
dealer; the dealer's execution services
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<PAGE>
rendered on a continuing basis; and the reasonableness of any dealer
spreads.
(d) ITI Pioneer will assure that at least two representatives
of the Manager, as specified by the Manager, are authorized at all
times to give directions (without restriction of any kind) to brokers
and dealers employed by ITI Pioneer to execute portfolio transactions
for the Fund; provided, that notwithstanding anything herein to the
contrary ITI Pioneer will have no responsibility for knowing of any
such direction given unless the Manager has given ITI Pioneer written
notice of the giving of such direction.
(e) ITI Pioneer's portfolio management personnel will make
themselves available on a regular basis to discuss (via telephone) the
Fund's investments and prospective investments and other matters
relevant to the Fund with a representative of the Manager.
(f) ITI Pioneer will provide the Manager with the following
information on a regular basis (unless a different frequency is
specified):
(i) advice concerning the Fund's investments
that are not direct investments in
securities markets located in India,
including recommendations to purchase, sell
or hold securities;
(ii) immediate comment by telex or facsimile on
earnings reports, creditworthiness changes
and other public announcements or
developments concerning Indian issuers of
securities held, or being considered for
purchase, by the Fund (including American,
Global or other types of depositary receipts
for such securities), followed by more
detailed comment and analysis;
(iii) comments by telex or facsimile, at the end
of each day on which one or more Indian
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<PAGE>
securities markets are open for business,
describing major relevant news items and
reasons for price fluctuations in India's
securities markets on such day;
(iv) research reports on industries and
individual issuers of Indian securities;
(v) macro-economic analyses, including analyses
of economic and political trends and
developments and their potential effect on
India's securities markets and the Fund's
investments;
(vi) information concerning regulatory and
procedural developments with respect to
India's securities markets (e.g., changes in
settlement or registration procedures,
changes in the laws/guidelines governing
foreign investment in India);
(vii) the current market price of each portfolio
security of the Fund that is under ITI
Pioneer's management and identification of
the source for such price (e.g., price at
which last reported sale of security was
effected on the principal exchange for such
security), on a daily basis so that such
information can be used in calculating the
Fund's net asset value on such day; and
(viii) information that the Manager considers
necessary to determine whether the portfolio
securities of the Fund that are under ITI
Pioneer's management are liquid.
(ix) other information upon which the Manager and
ITI Pioneer agree in writing from time to
time and which is described on Schedule A
hereto.
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<PAGE>
2. Information To Be Provided By The Manager. The Manager will provide
ITI Pioneer with the following information at the specified frequencies:
(i) a daily report of the Fund's cash balance;
(ii) a weekly list of all portfolio assets of the Fund, showing
the cost and market value of each such asset, the net
asset value of the Fund and the percentage of the Fund's
assets represented by each holding;
(iii) a weekly status report on the registration of the Fund's
portfolio securities and the liquidity of the Fund's
portfolio;
(iv) a weekly report on unsettled portfolio trades of the Fund;
(v) a weekly report of variances between contracted and actual
settlement amounts;
(vi) upon reasonable request by ITI Pioneer, a report on
foreign ownership levels for particular Indian issuers;
(vii) upon reasonable request by ITI Pioneer, a report showing
the amount of a particular Indian issuer's total issued
capital owned by the Fund and any other investor whose
securities holdings in such issuer, together with the
Fund's, are subject to a percentage limitation imposed by
Indian law; and
(viii) other information upon which the Manager and ITI Pioneer
agree in writing from time to time and which is described
on Schedule A hereto.
3. Additional Services.
(a) ITI Pioneer will be responsible for monitoring corporate
actions, including without limitation dividends, stock splits and
rights offerings (collectively, "Corporate
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<PAGE>
Actions"), of Indian issuers of securities held by the Fund, which
securities are not registered in the Fund's name, and for giving the
Manager timely notice of each such Corporate Action. ITI Pioneer will
also be responsible for (i) assisting the Manager in monitoring
Corporate Actions of Indian issuers of securities held by the Fund,
which securities are registered in the Fund's name, and (ii) providing
the Manager with book closure dates for all portfolio securities of the
Fund under ITI Pioneer's management.
(b) ITI Pioneer will maintain an investment ledger showing the
details of all portfolio transactions effected by ITI Pioneer
hereunder. In addition, ITI Pioneer will require that its Access
Persons (as defined in the Code of Ethics described in Section 4(a)
hereof) provide ITI Pioneer with monthly reports of their personal
securities transactions. These books, records and reports will be
available to the Manager at any time upon request and, upon request by
the Manager, will be made available (by facsimile and express mail)
without delay to the Manager during any day that the Fund is open for
business.
(c) From time to time as the Manager may reasonably request,
ITI Pioneer will furnish to the Manager reports on securities held in
the Fund's portfolio, all in such detail as the Manager may reasonably
request. ITI Pioneer will also inform the Manager on a current basis of
changes in its investment strategy or key personnel. ITI Pioneer will
make its key personnel available to meet with representatives of the
Manager in the United States, or at such other location on which ITI
Pioneer and the Manager agree, at least annually on due notice to
review the investments made hereunder in light of current and
prospective political, economic and market conditions in India.
(d) ITI Pioneer will be responsible for ensuring compliance
with any transaction volume limit with respect to the Fund's
investments in India's securities markets, imposed by the Fund's
subcustodian in India or otherwise, except that, with respect to any
such limit that is not imposed by Indian law, ITI Pioneer will have no
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<PAGE>
responsibility hereunder unless the Manager has informed ITI Pioneer in
writing of such limit.
(e) ITI Pioneer will furnish to the Manager such information
as may reasonably be necessary in order for the Trustees of the Fund to
evaluate this Contract or any proposed amendments hereto for the
purpose of casting a vote pursuant to Section 8 or 12 hereof.
(f) ITI Pioneer will be responsible for providing such other
services with respect to the Fund as the Manager may reasonably
request.
4. Compliance.
(a) ITI Pioneer will not effect portfolio transactions or
provide advice hereunder that is contrary to the Fund's investment
policies and restrictions as stated in the Fund's prospectus and
statement of additional information, as such prospectus and statement
of additional information are revised and updated from time to time.
The Manager will forward promptly prospectuses and statements of
additional information, as so revised and updated, to ITI Pioneer. ITI
Pioneer will not effect portfolio transactions or provide advice
hereunder that conflicts with applicable requirements imposed by the
U.S. Investment Company Act of 1940, as amended (the "1940 Act"), the
U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act"),
or the laws, rules or guidelines of the Government of India, any agency
or instrumentality thereof, or any Indian stock exchange, including
without limitation percentage limitations that apply to the Fund's
investments in Indian issuers (collectively, "Applicable Law"). As used
herein, the term "Applicable Law" will include without limitation the
investment restrictions and compliance matters listed in ITI Pioneer's
compliance manual as provided by the Manager to ITI Pioneer, as the
same may be revised and updated from time to time.
(b) Without limiting the foregoing, under no circumstances may
ITI Pioneer or any other "affiliated
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<PAGE>
person" (as defined in the 1940 Act) of the Fund, or any affiliated
person of ITI Pioneer or of any such other affiliated person, act as a
principal in a portfolio transaction with the Fund or any other
investment company managed by the Manager. In addition, no portfolio
transaction on behalf of the Fund may be executed by or through ITI
Pioneer or any such affiliated person as a broker, except on terms
expressly approved in advance by the Manager, which terms are in
compliance with Section 17(e) of the 1940 Act.
5. ITI Pioneer's Registration and Other Agreements. ITI Pioneer
represents and warrants to the Manager that it is registered as an investment
adviser under the Advisers Act and will remain so registered for the duration of
this Contract. It is understood that ITI Pioneer and the Manager may have
advisory, management, service or other contracts with other individuals or
entities, and may have other interests and businesses. When recommending a
portfolio transaction hereunder in which ITI Pioneer, any affiliated person of
ITI Pioneer (other than the Manager), or any other advisory client of ITI
Pioneer has a direct or indirect interest, ITI Pioneer will notify the Manager
of such interest.
6. Compensation. The Manager will pay to ITI Pioneer for its technical
services hereunder a fee at the annual rate of:
0.10% of the Fund's average gross assets invested in India's
securities markets, including assets invested in American,
Global or other types of depositary receipts for securities
traded in India's securities markets if such gross assets are
no greater than $15,000,000;
0.20% of such gross assets if such gross assets are greater
than $15,000,000 but no greater than $45,000,000;
0.40% of such gross assets if such gross assets are greater
than $45,000,000 but no greater than $60,000,000; and
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<PAGE>
0.60% of such gross assets if such gross assets are greater
than $60,000,000.
To illustrate the application of the foregoing, if such gross assets equal
$50,000,000 for any particular year, then ITI Pioneer's annual fee hereunder
will be $200,000 (0.40% X $50,000,000). ITI Pioneer's fees hereunder will be
calculated and accrued monthly based on the average of the Fund's gross assets
invested in India's securities markets and in such depositary receipts on the
first and last day (on which this Contract is effective) of each calendar month,
and such fee will be payable quarterly) after the end of each calendar quarter
on the 15th day of January, April, July and October of each year with respect to
the preceding quarter. If this Contract is effective for only a portion of a
quarter, the aforesaid fee will be prorated for that portion of such quarter
during which this Contract is in effect.
7. Liability and Indemnification. ITI Pioneer will not be liable for
any error of judgment or for any loss sustained by reason of the adoption of any
investment policy or the purchase, sale, or retention of any security, except
that nothing contained herein will be construed to protect ITI Pioneer against
any liability to the Manager by reason of (a) willful misfeasance, bad faith or
gross negligence in the performance of its duties, (b) its reckless disregard of
its obligations and duties under this Contract or (c) any mistake or negligence
of ITI Pioneer with respect to (i) Applicable Law, (ii) the direction of
portfolio transactions to a broker or dealer that is an affiliated person of the
Fund or an affiliated person of such an affiliated person (including affiliated
persons of ITI Pioneer) in violation of the terms and provisions hereof, (iii)
ITI Pioneer's responsibilities with respect to Corporate Actions of issuers of
securities held by the Fund, but not registered in the Fund's name, or (iv) ITI
Pioneer's responsibilities under Section 3(d) hereof (collectively,
"Malfeasance").
The Manager will indemnify ITI Pioneer for all liabilities and related
costs, including reasonable attorney's fees, which ITI Pioneer may sustain in
the discharge of its obligations hereunder without Malfeasance and in accordance
with Applicable
-9-
<PAGE>
Law; provided, that indemnifiable liabilities and costs will not include the
costs of performing the services that ITI Pioneer is obligated to perform
pursuant to this Contract. The amounts specified in Section 6 hereof will be ITI
Pioneer's sole compensation with respect to the performance of such services.
ITI Pioneer will indemnify the Manager for all liabilities and related costs,
including reasonable attorney's fees, which the Manager may sustain as a result
of ITI Pioneer's Malfeasance or violation of Applicable Law, including without
limitation the amount of any payment made by the Manager to the Fund for the
purpose of reimbursing the Fund for a loss caused by ITI Pioneer's Malfeasance
or violation of Applicable Law, regardless of whether or not the Manager was
legally required to make such payment to the Fund.
8. Term and Renewal. This Contract will become effective on the date
hereof and will remain in force until June 22, 1996 and from year to year
thereafter, but only so long as its continuance is approved annually by a vote
of the Trustees of the Fund voting in person, including a majority of its
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 1940 Act) of any such parties, at a meeting of Trustees called
for the purpose of voting on such approval or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Fund, subject
to the respective rights of the Fund, the Manager and ITI Pioneer to terminate
this Contract as provided in Section 9 hereof.
9. Termination. Either party hereto may, without penalty, terminate
this Contract by vote of its Board of Directors. In addition, the Fund may cause
this Contract to terminate by vote of a "majority of its outstanding voting
securities" (as defined in the 1940 Act) and the giving of 60 days' written
notice to the Manager and ITI Pioneer.
10. Assignment. This Contract will terminate automatically in the event
of its "assignment" (as defined in the 1940 Act).
11. Independent Contractor Status. ITI Pioneer is an independent
contractor and not an employee of the Manager or of the Fund for any purpose.
Unless otherwise expressly provided herein or otherwise authorized in writing,
ITI Pioneer will have
-10-
<PAGE>
no authority to act for or represent the Fund or the Manager in any way or
otherwise be deemed to be an agent of the Fund or of the Manager. If any
occasion should arise in which ITI Pioneer gives any advice to its clients
concerning the shares of the Fund, ITI Pioneer will act solely as investment
counsel for such clients and not in any way on behalf of the Manager, the Fund
or any series thereof.
12. Entire Agreement. This Contract states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
13. Applicable Law. This Contract and all performance hereunder will be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts. ITI Pioneer consents to the jurisdiction of courts, both state
and federal, in Boston, Massachusetts with respect to any dispute under this
Contract.
14. Savings Clause. Any term or provision of this Contract which is
invalid or unenforceable in any jurisdiction will be ineffective, as to such
jurisdiction, to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Contract or affecting the validity or enforceability of any of the terms or
provisions of this Contract in any other jurisdiction.
15. Counterparts. This Contract may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
16. Captions. Captions of sections have been added only for convenience
and will not be deemed to be a part of this Contract.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized officers and
-11-
<PAGE>
their seal to be hereto affixed as of the day and year first above written.
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Joseph P. Barri /s/David D. Tripple
Joseph P. Barri David D. Tripple
Secretary President
ATTEST: ITI PIONEER AMC LTD.
/s/Vivek Reddy
Chief Executive
-12-
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this 22nd day of June 1994, by and
between Pioneer India Fund, a Delaware business trust ("Pioneer"), and Pioneer
Funds Distributor, Inc., a Massachusetts corporation (the "Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer 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 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 each class of each Portfolio of
Pioneer (the "Shares") for sale to investors either directly or indirectly
through other broker-
<PAGE>
dealers. The Underwriter is not required to purchase any specified number of
Shares, but will purchase from Pioneer only a sufficient number of Shares as may
be necessary to fill unconditional orders received from time to time by the
Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering
price based upon the net asset value of the Shares, to be calculated for each
class of Shares as described in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the offering,
plus any 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, if any, 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 any anniversary hereof if its
terms and renewal have not been approved by a majority vote of the Trustees of
Pioneer voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the
-2-
<PAGE>
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 the 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.
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 applicable 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 Certificate of Trust, as amended from time to
time, is on file in the Office of Secretary of State of the State of
-3-
<PAGE>
Delaware, and a copy of Pioneer's Declaration of Trust, as amended from time to
time, has been provided to the Underwriter. The Declaration of Trust describes
in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of Shares of Pioneer.
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 INDIA FUND
- ---------------------------- ---------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
- --------------------------- ---------------------------
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
AGREEMENT BETWEEN
BROWN BROTHERS HARRIMAN & CO.
AND
PIONEER INDIA FUND
<PAGE>
CUSTODIAN AGREEMENT
AGREEMENT made this 2nd day of May 1994, between PIONEER INDIA 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 Incorpora-tion and By-Laws (or comparable documents)
of the Fund and all amendments thereto, and copies of such votes and other
proceed-ings 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 in the United States: Except for securities and funds
held by any Subcustodians 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 20).
<PAGE>
C. Registered Name; Nominee - To hold registered securities of
the Fund (1) in the name or any nominee name of the Custodian or the
Fund, or in the name or any nominee name of any Agent appointed
pursuant to Section 6F, or (2) in street certificate form, so-called,
and in any case with or without any indication of fiduciary capacity,
provided that securities are held in an account of the Custodian
containing only assets of the Fund or only assets held as fiduciary or
custodian for customers.
D. Purchases - Upon receipt of Proper Instructions, as defined
in Section X on Page 16, insofar as funds are available for the
purpose, to pay for and receive securities purchased for the account of
the Fund, payment being made only upon receipt of the securities (1) by
the Custodian, or (2) by a clearing corporation of a national
securities exchange of which the Custodian is a member, or (3) by a
Securities System. However, (i) in the case of repurchase agreements
entered into by the Fund, the Custodian (as well as an Agent) may
release funds to a Securities System or to a Subcustodian prior to the
receipt of advice from 'the Securities System or Subcustodian that the
securities underlying such repurchase agreement have been transferred
by book entry into the Account (as defined in Section 2U) of the
Custodian (or such Agent) maintained with such Securities System or
Subcustodian, so long as such payment instructions to the Securities
System or Subcustodian include a requirement that delivery is only
against payment for securities, (ii) in the case of foreign exchange
contracts, options, time deposits, call account deposits, currency
deposits, and other deposits, contracts or options pursuant to Sections
2J, 2L, 2M and 2N, the Custodian may make payment therefor without
receiving an instrument evidencing said deposit, contract or option so
long as such payment instructions detail specific securities to be
acquired, and (iii) in the case of securities in which payment for the
security and receipt of the instrument evidencing the security are
under generally accepted trade practice or the terms of the instrument
representing the security expected to take place in different locations
or
-2-
<PAGE>
through separate parties, such as commercial paper which is indexed to
foreign currency exchange rates, derivatives and similar securities,
the Custodian may make payment for such securities prior to delivery
thereof in accordance with such generally accepted trade practice or
the terms of the instrument representing such security.
E. Exchanges - Upon receipt of proper instructions, to
exchange securities held by it for the account of the Fund for other
securities in connection with any reorganization, recapitalization,
split-up of shares, change of par value, conversion or other event,
relating to the securities or the issuer of such securities, and to
deposit any such securities in accordance with the terms of any
reorganization or protective plan. Without proper instructions, the
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 and further provided the Custodian shall at the time of
surrendering securities or instruments receive a receipt or other
evidence of ownership thereof.
F. Sales of Securities - Upon receipt of proper instructions,
to make delivery of securities which have been sold for the account of
the Fund, but only against payment therefor (1) in cash, by a certified
check, bank cashier's check, bank credit, or bank wire transfer, or (2)
by credit to the account of the Custodian with a clearing corporation
of a national securities exchange of which the Custodian is a member,
or (3) by credit to the account of the Custodian or an Agent of the
Custodian with a Securities System; provided, however, that (i) in the
case of delivery of physical certificates or instruments representing
securities, the Custodian may make delivery to the broker buying the
securities, against receipt therefor, for examination in accordance
with "street delivery" custom,
-3-
<PAGE>
provided that the payment therefor is to be made to the Custodian
(which payment may be made by a broker's check) or that such securities
are to be returned to the Custodian, and (ii) in the case of securities
referred to in clause (iii) of the last sentence of Section 2D, the
Custodian may make settlement, including with respect to the form of
payment, in accordance with generally accepted trade practice relating
to such securities or the terms of the instrument representing said
security.
G. Depositary Receipts - Upon receipt of proper instructions,
to instruct a Subcustodian or an Agent to surrender securities to the
depositary used by an issuer of American Depositary Receipts or
International Depositary Receipts (hereinafter collectively referred to
as "ADRs") for such securities against a written receipt therefor
adequately describing such securities and written evidence satisfactory
to the Subcustodian or Agent that the depositary has acknowledged
receipt of instructions to issue with respect to such securities ADRs
in the name of the Custodian, or a nominee of the Custodian, for
delivery to the Custodian in Boston, Massachusetts, or at such other
place as the Custodian may from time to time designate. Upon receipt of
proper instructions, to surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs surrendered and
written evidence satisfactory to the Custodian that the issuer of the
ADRs 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
-4-
<PAGE>
delivered or the tendered securities are to be returned to the
Custodian.
I. Stock Dividends, Rights, Etc. - To receive and collect all
stock dividends, rights and other items of like nature; and to deal
with the same pursuant to proper instructions relative thereto.
J. Options - Upon receipt of proper instructions, to receive
and retain confirmations or other documents evidencing the purchase or
writing of an option on a security or securities index by the Fund; to
deposit and maintain in a segregated account, either physically or by
book-entry in a Securities System, securities subject to a covered call
option written by the Fund; and to release and/or transfer such
securities or other assets only in accordance with the provisions of
any agreement among the Fund, the Custodian and a broker-dealer
relating to such securities or other assets a notice or other
communication evidencing the expiration, termination or exercise of
such covered option furnished by The Options Clearing Corporation, the
securities or options exchange on which such covered option is traded
or such other organization as may be responsible for handling such
options transactions.
K. Borrowings - Upon receipt of proper instructions, to
deliver securities of the Fund to lenders or their agents as collateral
for borrowings effected by the Fund, provided that such borrowed money
is payable to or upon the Custodian's order as Custodian for the Fund.
L. Demand Deposit Bank Accounts - To open and operate an
account or accounts in the name of the Fund on the Custodian's books
subject only to draft or order by the Custodian. All funds received by
the Custodian from or for the account of the Fund shall be deposited in
said account(s). The responsibilities of the Custodian to the Fund for
deposits accepted on the Custodian's books shall be that of a U.S. bank
for a similar deposit.
-5-
<PAGE>
If and when authorized by proper instructions, the Custodian
may open and operate an additional account(s) in such other banks or
trust companies as may be designated by the Fund in such instructions
(any such bank or trust company so designated by the Fund being
referred to hereafter as a "Banking Institution"), provided that such
account(s) (hereinafter collectively referred to as "demand deposit
bank accounts") shall be in the name of the Custodian for account of
the Fund and subject only to the Custodian's draft or order. Such
demand deposit accounts may be opened with Banking Institutions in the
United States and in other countries and may be denominated in either
U. S. Dollars or other currencies as the Fund may determine. All such
deposits shall be deemed to be portfolio securities of the Fund and
accordingly the responsibility of the Custodian therefore shall be the
same as and no greater than the Custodian's responsibility in respect
of other portfolio securities of the Fund.
M. Interest Bearing Call or Time Deposits - To place interest
bearing fixed term and call deposits with such banks and in such
amounts as the Fund may authorize pursuant to proper instructions. Such
deposits may be placed with the Custodian or with Subcustodians or
other Banking Institutions as the Fund may determine. Deposits may be
denominated in U. S. Dollars or other currencies and need not be
evidenced by the issuance or delivery of a certificate to the
Custodian, provided that the Custodian shall include in its records
with respect to the assets of the Fund appropriate notation as to the
amount and currency of each such deposit, the accepting Banking
Institution and other appropriate details, and shall retain such forms
of advice or receipt evidencing the deposit, if any, as may be
forwarded to the Custodian by the Banking Institution. Such deposits,
other than those placed with the Custodian, shall be deemed portfolio
securities of the Fund and the responsibilities of the Custodian
therefor shall be the same as those for demand deposit bank accounts
placed with other banks, as described in Section L of this Agreement.
The responsibility of the Custodian for such deposits accepted
-6-
<PAGE>
on the Custodian's books shall be that of a U. S. bank for a similar
deposit.
N. Foreign Exchange Transactions and Futures Contracts
Pursuant to proper instructions, to enter into foreign exchange
contracts or options to purchase and sell foreign currencies for spot
and future delivery on behalf and for the account of the Fund. Such
transactions may be undertaken by the Custodian with such Banking
Institutions, including the Custodian and Subcustodian(s) as
principals, as approved and authorized by the Fund. Foreign exchange
contracts and options other than those executed with the Custodian,
shall be deemed to be portfolio securities of the Fund and the
responsibilities of the Custodian therefor shall be the same as those
for demand deposit bank accounts placed with other banks as described
in Section 2-L of this agreement. Upon receipt of proper instructions,
to receive and retain confirmations evidencing the purchase or sale of
a futures contract or an option on a futures contract by the Fund; to
deposit and maintain in a segregated account, for the benefit of any
futures commission merchant or to pay to such futures commission
merchant, assets designated by the fund as initial, maintenance or
variation "margin" deposits intended to secure the Fund's performance
of its obligations under any futures contracts purchased or sold or any
options on futures contracts written by the Fund, in accordance with
the provisions of any agreement or agreements among any of the Fund,
the Custodian and such futures commission merchant, designated to
comply with the rules of the Commodity Futures Trading Commission
and/or any contract market, or any similar organization or
organizations, regarding such margin deposits; and to release and/or
transfer assets in such margin accounts only in accordance with any
such agreements or rules.
0. Stock Loans - Upon receipt of proper instructions, to
deliver securities of the Fund, in connection with loans of securities
by the Fund, to the borrower thereof prior to receipt of the
collateral, if any, for such borrowing, provided that for stock loans
secured by cash collateral the Custodian's instructions to the
Securities System require
-7-
<PAGE>
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 with transfer of securities,
and (iii) pursuant to proper instructions to take such other actions
with respect to collection or receipt of funds or transfer of
securities which involve an investment decision.
Q. Dividends, Distributions and Redemptions - Upon receipt of
proper instructions from the Fund, or upon receipt of instructions from
the Fund's shareholder servicing agent or agent with comparable duties
(the "Shareholder Servicing Agent") (given by such person or persons
and in such manner on behalf of the Shareholder Servicing Agent as the
Fund shall have authorized), the Custodian shall release funds or
securities to the Shareholder Servicing Agent or otherwise apply funds
or securities, insofar as available, for the payment of dividends or
other distributions to Fund shareholders. Upon
-8-
<PAGE>
receipt of proper instructions from the Fund, or upon receipt of
instructions from the Shareholder Servicing Agent (given by such person
or persons and in such manner on behalf of the Shareholder Servicing
Agent as the Fund shall have authorized), the Custodian shall release
funds or securities, insofar as available, to the Shareholder Servicing
Agent or as such Agent shall otherwise instruct for payment to Fund
shareholders who have delivered to such Agent a request for repurchase
or redemption of their shares of capital stock of the Fund.
R. Proxies, Notices, Etc. - Promptly to deliver or mail to the
Fund all forms of proxies and all notices of meetings and any other
notices or announcements affecting or relating to securities owned by
the Fund that are received by the Custodian, and upon receipt of proper
instructions, to execute and deliver or cause its nominee to execute
and deliver such proxies or other authorizations as may be required.
Neither the Custodian nor its nominee shall vote upon any of such
securities or execute any proxy to vote thereon or give any consent or
take any other action with respect thereto (except as otherwise herein
provided) unless ordered to do so by proper instructions.
S. Nondiscretionary Details - Without the necessity of express
authorization from the Fund, 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.
T. Bills - Upon receipt of proper instructions, to pay or
cause to be paid, insofar as funds are available for the purpose,
bills, statements, or other obligations of the Fund.
U. Deposit of Fund Assets in Securities Systems - The
Custodian may deposit and/or maintain securities owned by the Fund in
(I) The Depository Trust Company, (ii) any book-entry system as
provided in Subpart 0 of Treasury Circular
-9-
<PAGE>
No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, or the book-entry
regulations of federal agencies substantially in the form of Subpart 0,
or (iii) any other domestic clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and whose
use the Fund has previously approved in writing (each of the foregoing
being referred to in this Agreement as a "Securities System").
Utilization of a Securities System shall be in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may deposit and/or maintain Fund
securities, either directly or through one or more Agents
appointed by the Custodian (provided that any such agent shall
be qualified to act as a custodian of the Fund pursuant to the
Investment Company Act of 1940 and the rules and regulations
thereunder), in a Securities System provided that such
securities are represented in an account ("Account") of the
Custodian or such Agent in the Securities System which shall
not include any assets of the Custodian or Agent other than
assets held as a fiduciary, custodian, or otherwise for
customers;
2) The records of the Custodian with respect to
securities of the Fund which are maintained in a Securities
System shall identify by book-entry those securities belonging
to the Fund;
3) The Custodian shall pay for securities purchased
for the account of the Fund upon (i) receipt of advice from
the Securities System that such securities have been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund upon (i)
receipt of advice from the Securities System that
-10-
<PAGE>
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 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
-11-
<PAGE>
delivered and the name of the person or persons to whom delivery is to
be made.
W. Investment Limitations - In performing its duties
generally, and more particularly in connection with the purchase, sale
and exchange of securities made by or for the Fund, the Custodian may
assume unless and until notified in writing to the contrary that proper
instructions received by it are not in conflict with or in any way
contrary to any provisions of the Fund's Declaration of Trust or
Certificate of Incorporation or By-Laws (or comparable documents) or
votes or proceedings of the shareholders or Directors of the Fund. The
Custodian shall in no event be liable to the Fund and shall be
indemnified by the Fund for any violation which occurs in the course of
carrying out instructions given by the Fund of any investment
limitations to which the Fund is subject or other limitations with
respect to the Fund's powers to make expenditures, encumber securities,
borrow or take similar actions affecting the Fund.
X. Proper Instructions - Proper instructions shall mean a
tested telex from the Fund or a written request, direction, instruction
or certification signed or initialed on behalf of the Fund by one or
more person or persons as the Board of Trustees or Directors 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 Trustees or Directors 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
-12-
<PAGE>
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, Trustees, Directors,
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.
Proper instructions may include communications effected
directly between electromechanical or electronic devices or systems, in
addition to tested telex, provided that the Fund and the Custodian
agree to the use of such device or system.
Y. Segregated Account - The Custodian shall upon receipt of
proper instructions establish and maintain on its books a segregated
account or accounts for and on behalf of the Fund, into which account
or accounts may be transferred cash and/or securities of the Fund,
including securities maintained by the Custodian pursuant to Section 2U
hereof, (i) in accordance with the provisions of any agreement among
the Fund, the Custodian and a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. (or any futures commission
merchant registered under 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
-13-
<PAGE>
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 Outside the United States: Securities, funds and other property
of the Fund may be held by subcustodians appointed pursuant to the provisions of
this Section 3 (a "Subcustodian"). The Custodian may, at any time and from time
to time, appoint any bank or trust company (meeting the requirements of a
custodian or an "eligible foreign custodian" under the Investment Company Act of
1940 and the rules and regulations thereunder) to act as a Subcustodian for the
Fund, and the Custodian may also utilize directly and any Subcustodian may
utilize such securities depositories located outside the United States (as shall
be approved in writing by Fund) and as meet the requirements of an "eligible
foreign custodian" as aforesaid, provided that the Fund shall have approved in
writing (1) any such bank or trust company and the subcustodian agreement to be
entered into between such bank or trust company and the Custodian, and (2) if
the Subcustodian is a bank 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, and (3) the securities
depositories, if any, through which the Subcustodian or the Custodian is
authorized 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 bank or trust company that has been appointed
as a Subcustodian 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
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<PAGE>
Fund has approved to date are set forth on Appendix A hereto. Such Appendix
shall be amended from time to time as Subcustodians, and/or countries and/or
securities depositories are changed, added or deleted. The Fund shall be
responsible for informing the Custodian sufficiently in advance of a proposed
investment which is to be held in a country not listed on Appendix A, in order
that there shall be sufficient time for the Fund to give the approval required
by the preceding paragraph and for the Custodian to put the appropriate
arrangements in place with such Subcustodian, including negotiation of a
subcustodian agreement and submission of such subcustodian agreement to the Fund
for approval.
If the Fund shall have invested in a security to be held in a country
before the foregoing procedures have been completed, such security shall be held
by such agent as the Custodian may appoint. In any event, the Custodian shall be
liable to the Fund for the actions of such agent if and only to the extent the
Custodian shall have recovered from such agent for any damages caused the Fund
by such agent. At the request of the Fund, Custodian agrees to remove any
securities held on behalf of the Fund by such agent, if practical, to an
approved Subcustodian. Under such circumstances Custodian will collect income
and respond to corporate actions on a best efforts basis.
With respect to securities and funds held by a Subcustodian, either
directly or indirectly (including by a securities depository or clearing
agency), notwithstanding any provision of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of the securities or payment, respectively, and securities or
payment may be received in a form, in accordance with governmental regulations,
rules of securities depositories and clearing agencies, or generally accepted
trade practice in the applicable local market.
With respect to the securities and funds held by a Subcustodian, either
directly or indirectly, (including by a securities depository or a clearing
agency) including demand and interest bearing deposits, currencies or other
deposits and foreign exchange contracts as referred to in Sections 2L, 2M or
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<PAGE>
2N, the Custodian shall be liable to the Fund if and only to the extent that
such Subcustodian is liable to the Custodian and the Custodian recovers under
the applicable subcustodian agreement. The Custodian shall nevertheless 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 such Subcustodian.
In the event that any Subcustodian appointed pursuant to the provisions
of this Section 3 fails to perform any of its obligations under the terms and
conditions of the applicable subcustodian agreement, the Custodian shall use its
best efforts to cause such Subcustodian to perform such obligations. In the
event that the Custodian is unable to cause such Subcustodian to perform fully
its obligations thereunder, the Custodian shall forthwith upon the Fund's
request terminate such Subcustodian in accordance with the termination
provisions under the applicable subcustodian agreement and, if necessary or
desirable, appoint another subcustodian in accordance with the provisions of
this Section 3. At the election of the Fund, it shall have the right to enforce,
to the extent permitted by the subcustodian agreement and applicable law, the
Custodian's rights against any such Subcustodian for loss or damage caused the
Fund by such Subcustodian.
At the written request of the Fund, the Custodian will terminate any
subcustodian appointed pursuant to the provisions of this Section 3 in
accordance with the termination provisions under the applicable subcustodian
agreement. 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.
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<PAGE>
If necessary or desirable, the Custodian may appoint another
subcustodian to replace a Subcustodian terminated pursuant to the foregoing
provisions of this Section 3, such appointment to be made upon approval of the
successor subcustodian by the Fund's Board of Directors or Trustees in
accordance with the provisions of this Section 3.
In the event the Custodian receives a claim from a Subcustodian under
the indemnification provisions of any subcustodian agreement, the Custodian
shall promptly give written notice to the Fund of such claim. No more than
thirty days after written notice to the Fund of the Custodian's intention to
make such payment, the Fund will reimburse the Custodian the amount of such
payment except in respect of any negligence or misconduct of the Custodian.
4. Assistance by the Custodian as to Certain Matters: The Custodian may
assist generally in the preparation of reports to Fund shareholders and others,
audits of accounts, and other ministerial matters of like nature.
5. Powers and Duties of the Custodian with Respect to its Role as
Financial Agent: The Fund hereby also appoints the Custodian as the 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 3la-1
and 3la-2 thereunder) and under applicable Federal and State tax laws.
All such records will be the property of the Fund and in the event of
termination of this Agreement shall be delivered to the successor
custodian.
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<PAGE>
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
maybe reasonably imposed by the Custodian.
D. Calculation of Net Asset Value - To compute and determine
the net asset value per share of capital stock of the Fund as of the
close of business on the New York Stock Exchange on each day on which
such Exchange is open, unless otherwise directed by proper
instructions. Such computation and determination shall be made in
accordance with (1) the provisions of the Fund's Declaration of Trust
or Certificate of Incorporation or By-Laws, as they may from time to
time be amended and delivered to the Custodian, (2) the votes of the
Board of Trustees or Directors of the Fund at the time in force and
applicable, as they may from time to time be delivered to the
Custodian, and (3) proper instructions from such officers of the Fund
or other persons as are from time to time authorized by the Board of
Trustees or Directors of the Fund to give instructions with respect to
computation and determination of the net asset value. On each day that
the Custodian shall compute the net asset value per share of the Fund,
the Custodian shall provide the Fund with written reports which permit
the Fund to verify that portfolio transactions have been recorded in
accordance with the Fund's instructions and are reconciled with the
Fund's trading records.
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<PAGE>
In computing the net asset value, the Custodian may rely upon
any information furnished by proper instructions, including without
limitation any information (1) as to accrual of liabilities of the Fund
and as to liabilities of the Fund not appearing on the books of account
kept by the Custodian, (2) as to the existence, status and proper
treatment of reserves, if any, authorized by the Fund, (3) as to the
sources of quotations to be used in computing the net asset value,
including those listed in Appendix B, (4) as to the fair value to be
assigned to any securities or other property for which price quotations
are not readily available, and (5) as to the sources of information
with respect to "corporate actions" affecting portfolio securities of
the Fund, including those listed in Appendix B. (Information as to
"corporate actions" shall include information as to dividends,
distributions, stock splits, stock dividends, rights offerings,
conversions, exchanges, recapitalizations, mergers, redemptions, calls,
maturity dates and similar transactions, including the ex- and record
dates and the amounts or other terms thereof.)
In like manner, the Custodian shall compute and determine the
net asset value as of such other times as the Board of Trustees or
Directors of the Fund from time to time may reasonably request.
Notwithstanding any other provisions of this Agreement,
including Section 6C, the following provisions shall apply with respect
to the Custodian's foregoing responsibilities in this Section 5D: The
Custodian shall be held to the exercise of reasonable care in computing
and determining net asset value as provided in this Section 5D, but
shall not be held accountable or liable for any losses, damages or
expenses the Fund or any shareholder or former shareholder of the Fund
may suffer or incur arising from or based upon errors or delays in the
determination of such net asset value unless such error or delay was
due to the Custodian's negligence, gross negligence or reckless or
willful misconduct in determination of such net asset value. (The
parties hereto acknowledge, however, that the Custodian's causing an
error or delay in the determination of net asset
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<PAGE>
value may, but does not in and of itself, constitute negligence, gross
negligence or reckless or willful misconduct.)
In no event shall the Custodian be liable or responsible to
the Fund, any present or former shareholder of the Fund or any other
party for any error or delay which continued or was undetected after
the date of an audit performed by the certified public accountants
employed by the Fund if, in the exercise of reasonable care in
accordance with generally accepted accounting standards, such
accountants should have become aware of such error or delay in the
course of performing such audit. The Custodian's liability for any such
negligence, gross negligence or reckless or willful misconduct which
results in an error in determination of such net asset value shall be
limited to the direct, out-of-pocket loss the Fund, shareholder or
former shareholder shall actually incur, measured by the difference
between the actual and the erroneously computed net asset value, and
any expenses the Fund shall incur in connection with correcting the
records of the Fund affected by such error (including charges made by
the Fund's registrar and transfer agent for making such corrections) or
communicating with shareholders or former shareholders of the Fund
affected by such error.
Without limiting the foregoing, the Custodian shall not be
held accountable or liable to the Fund, any shareholder or former
shareholder thereof or any other person for any delays or losses,
damages or expenses any of them may suffer or incur resulting from (1)
the Custodian's failure to receive timely and suitable notification
concerning quotations or corporate actions relating to or affecting
portfolio securities of the Fund or (2) any errors in the computation
of the net asset value based upon or arising out of quotations or
information as to corporate actions if received by the Custodian either
(i) from a source which the Custodian was authorized pursuant to the
second paragraph of this Section 5D to rely upon, or (ii) from a source
which in the Custodian's reasonable judgment was as reliable a source
for such quotations or information as the sources authorized pursuant
to that paragraph. Nevertheless, the Custodian
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<PAGE>
will use its best judgment in determining whether to verify through
other sources any information it has received as to quotations or
corporate actions if the Custodian has reason to believe that any such
information might be incorrect.
In the event of any error or delay in the determination of
such net asset value for which the Custodian may be liable, the Fund
and the Custodian will consult and make good faith efforts to reach
agreement on what actions should be taken in order to mitigate any loss
suffered by the Fund or its present or former shareholders, in order
that the Custodian's exposure to liability shall be reduced to the
extent possible after taking into account all relevant factors and
alternatives. Such actions might include the Fund or the Custodian
taking reasonable steps to collect from any shareholder or former
shareholder who has received any overpayment upon redemption of shares
such overpaid amount or to collect from any shareholder who has
underpaid upon a purchase of shares the amount of such underpayment or
to reduce the number of shares issued to such shareholder. It is
understood that in attempting to reach agreement on the actions to be
taken or the amount of the loss which should appropriately be borne by
the Custodian, the Fund and the Custodian will consider such relevant
factors as the amount of the loss involved, the Fund's desire to avoid
loss of shareholder good will, the fact that other persons or entitles
could have been reasonably expected to have detected the error sooner
than the time it was actually discovered, the appropriateness of
limiting or eliminating the benefit which shareholders or former
shareholders might have obtained by reason of the error, and the
possibility that other parties providing services to the Fund might be
induced to absorb a portion of the loss incurred.
E. 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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<PAGE>
6. Standard of Care and Related Matters:
A. Liability of the Custodian with Respect to Proper
Instruction; 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
Trustees or Directors 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 Custodian shall be without
liability for any action reasonably taken or omitted pursuant to such
advice.
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<PAGE>
B. Liability of the Custodian with Respect to Use of
Securities System - With respect to the portfolio securities, cash and
other property of the Fund held by a Securities System, the Custodian
shall be liable to the Fund only for any loss or damage to the Fund
resulting from use of the Securities System if caused by any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from any failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the Securities System. At the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian with
respect to any claim against the Securities System or any other person
which the Custodian may have as a consequence of any such loss or
damage to the Fund if and to the extent that the Fund has not been made
whole for any such loss or damage.
C. Liability of the Custodian with respect to Subcustodians
The Custodian shall be liable to the Fund for any loss or damage to the
Fund caused by or resulting from the acts or omissions of any
Subcustodian to the extent that under the terms set forth in the
subcustodian agreement between the Custodian and the Subcustodian (or
in the subcustodian agreement between a Subcustodian and any secondary
Subcustodian), the Subcustodian (or secondary Subcustodian) has failed
to perform in accordance with the standard of conduct imposed under
such subcustodian agreement as determined in accordance with the law
which is adjudicated to govern such agreement and in accordance with
any determination of any court as to the duties of said Subcustodian
pursuant to said agreement. The Custodian shall also be liable to the
Fund for its own negligence in transmitting any instructions received
by it from the Fund and for its own negligence in connection with the
delivery of any securities or funds held by it to any Subcustodian.
D. Standard of Care; Liability; Indemnification - The
Custodian shall be held only to the exercise of reasonable care and
diligence in carrying out the provisions of this Agreement, provided
that the Custodian shall not thereby be
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<PAGE>
required to take any action which is in contravention of any applicable
law. The Fund agrees to indemnify and hold harmless the Custodian and
its nominees from all claims and liabilities (including counsel fees)
incurred or assessed against it or its nominees in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's breach of the relevant standard of conduct set forth in this
Agreement. Without limiting the foregoing indemnification obligation of
the Fund, the Fund agrees to indemnify the Custodian and any nominee in
whose name portfolio securities or other property of the Fund is
registered against any liability the Custodian or such nominee may
incur by reason of taxes assessed to the Custodian or such nominee or
other costs, liability or expense incurred by the Custodian or such
nominee resulting directly or indirectly from the fact that portfolio
securities or other property of the Fund is registered in the name of
the Custodian or such nominee.
It is also understood that the Custodian shall not be liable
for any loss involving any securities, currencies, deposits or other
property of the Fund, whether maintained by it, a Subcustodian, a
securities depository, an agent of the Custodian or a Subcustodian, a
Securities System, or a Banking Institution, or for any loss arising
from a foreign currency transaction or contract, where the loss results
from a Sovereign Risk or where the entity maintaining such securities,
currencies, deposits or other property of the Fund, whether the
Custodian, a Subcustodian, a securities depository, an agent of the
Custodian or a Subcustodian, a Securities System or a Banking
Institution, has exercised reasonable care maintaining such property or
in connection with the transaction involving such property. A
"Sovereign Risk" shall mean nationalization, expropriation,
devaluation, revaluation, confiscation, seizure, cancellation,
destruction or similar action by any governmental authority, de facto
or de jure; or enactment, promulgation, imposition or enforcement by
any such governmental authority of currency restrictions, exchange
controls, taxes, levies or other charges affecting the Fund's property;
or acts of war, terrorism, insurrection or
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<PAGE>
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 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.
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<PAGE>
H. Powers of Attorney - Upon request, the Fund shall deliver
to the Custodian such proxies, powers of attorney or other instruments
as may be reasonable and necessary or desirable in connection with the
performance by the Custodian or any Subcustodian of their respective
obligations under this Agreement or any applicable subcustodian
agreement.
7. Compensation of the Custodian: The Fund shall pay the Custodian a
custody fee based on such fee schedule as may from time to time be agreed upon
in writing by the Custodian and the Fund. Such fee, together with all amounts
for which the Custodian is to be reimbursed in accordance with Section 6D, shall
be billed to the Fund in such a manner as to permit payment by a direct cash
payment to the Custodian.
8. Termination; Successor Custodian: This Agreement shall continue in
full force and effect until terminated by either party by an instrument in
writing delivered or mailed, postage prepaid, to the other party, such
termination to take effect not sooner than seventy five (75) days after the date
of such delivery or mailing. In the event of termination the Custodian shall be
entitled to receive prior to delivery of the securities, funds and other
property held by 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
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to the subject matter hereof. No provision of this Agreement may be amended or
terminated except by a statement in writing signed by the party against which
enforcement of the amendment or termination is sought.
In connection with the operation of this Agreement, the Custodian and
the Fund may agree in writing from time to time on
such provisions interpretative of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general tenor of
this Agreement. No interpretative or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this Agreement.
The section headings in this Agreement are for the convenience of the
parties and in no way alter, amend, limit or restrict the contractual
obligations of the parties set forth in this Agreement.
10. Governing Law: This instrument is executed and delivered in The
Commonwealth of Massachusetts and shall be governed by and construed according
to the laws of said Commonwealth.
11. Notices: Notices and other writings delivered or mailed postage
prepaid to the Fund addressed to the Fund at 60 State Street, Boston,
Massachusetts 02109 or to such other address as the Fund may have designated to
the Custodian in writing, or to the Custodian at 40 Water Street, Boston,
Massachusetts 02109, Attention: Manager, Securities Department, or to such other
address as the Custodian may have designated to the Fund in writing, shall be
deemed to have been properly delivered or given hereunder to the respective
addressee.
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.
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<PAGE>
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 INDIA FUND BROWN BROTHERS HARRIMAN & CO.
By By
Joseph P. Barri
Secretary
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INVESTMENT COMPANY SERVICE AGREEMENT
June 22, 1994
Pioneer India Fund, a Delaware 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 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
<PAGE>
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 times
as are prescribed for each service in the Exhibits attached hereto. Customer
agrees to examine or to ask any other authorized recipient to examine each such
report or copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports will be
retained by PSC for six years from the year of creation, during the first two of
which the same will be in readily accessible form. At the end of six years, such
records and documents, will be turned over to Customer by PSC unless Customer
authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
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<PAGE>
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 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
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<PAGE>
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 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.
-4-
<PAGE>
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 $20.83 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
-5-
<PAGE>
provisions of Section 8 dealing with indemnification, shall where applicable
continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Agreement and Declaration of Trust of
Customer, and of any amendments thereto, certified by an
officer of the Customer.
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
-6-
<PAGE>
E. Opinion of counsel for Customer as to the due authorization by
and binding effect of this Agreement on Customer, the
applicability of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, and the
approval by such public authorities as may be prerequisite to
lawful sale and deliver in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith
upon such amendments and changes being available, but in no
case later than the effective date.
13. LIABILITY. The parties to this Agreement acknowledge and agree that
all liabilities arising, directly or indirectly, under this Agreement, of any
and every nature whatsoever, including without limitation, liabilities arising
in connection with any agreement of 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 Agreement and
Declaration of Trust, dated April 4, 1994, 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 this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
-7-
<PAGE>
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
/S/Joseph P. Barri, Clerk /S/William H. Smith, Jr.
Joseph P. Barri, Clerk William H. Smith, Jr.
President
PIONEER INDIA FUND
/S/Joseph P. Barri, Secretary /S/John F. Cogan, Jr.
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
-8-
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's
shares pay to the Customer's custodian the net asset value per
share and pay to the underwriter and to the dealer their
commission, if any, on a bimonthly basis.
4. Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from
withdrawals from share accounts (It is the policy of PSC to
issue share certificates only upon request of the
shareholder). Maintain records showing name, address,
certificate numbers and number of shares.
6. Deposit certificates to shareholder accounts when furnished
with such documents as PSC deems necessary to authorize the
deposit.
7. Reinvest or disburse dividends and other distributions upon
direction of shareholder.
8. Establish the proper registration of ownership of shares.
<PAGE>
9. Pass upon the adequacy of documents submitted by a shareholder
or his legal representative to substantiate the transfer of
ownership of shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the
Customer in accordance with properly executed transfer
instructions furnished to PSC.
11. Upon receiving appropriate detailed instructions and written
materials prepared by Customer and, where applicable, proxy
proofs checked by Customer, mail shareholder reports, proxies
and related materials of suitable design for automatic
enclosing, receive and tabulate executed proxies, and furnish
an annual meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information
as Customer may reasonably request for the purpose of
compliance by Customer with the applicable tax and securities
law of various jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely
fashion.
16. Provide Customer with such information regarding
correspondence as well as enable Customer to comply with
related N-SAR requirements.
17. Maintain continuous proof of the outstanding shares of
Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property
reports for those accounts that have been
<PAGE>
indicated by the Post Office to be not at the address of
record with no forwarding address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees/Directors outlining the level of
service provided.
22. Provide sale/statistical reporting for purposes of providing
fund management with information to maximizing the return to
shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing
agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on
information furnished to PSC on behalf of Customer (i.e.,
copies of trade confirmations and other documents deemed
necessary or desirable by PSC on the first business day
following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate
documentation; or
b. Written or telephone authorization (where no share
certificates are issued).
3. Verify there are sufficient available shares in an account to
cover redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's
treasury share account or, if applicable, cancel such shares
for retirement.
5. Pay the applicable redemption or repurchase price to the
shareholder in accordance with Customer's Prospectus and
Declaration of Trust on or before the seventh calendar day
succeeding any receipt of certificates or requests for
redemption or repurchase in "good order" as defined in the
Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of
the total number of shares presented and covered by such
requests within a reasonable period of time following receipt.
<PAGE>
7. Promptly notify the shareholder if any such certificate or
request for redemption or repurchase is not in "good order"
together with notice of the documents required to comply with
the good order standards. Upon receipt of the necessary
documents PSC shall effect such redemption at the net asset
value applicable at the date and time of receipt of such
documents.
<PAGE>
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included
in Customer's N-SAR.
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly
executed exchange authorization. PSC will redeem existing
shares and use the proceeds to purchase new shares. Shares of
Customer purchased directly or acquired through reinvestment
of dividends on such shares may be exchanged for shares of
other Pioneer funds (which funds have sales charges) only by
payment of the applicable sales charge, if any, as described
in Customer's Prospectus. Shares of Customer acquired by
exchange and through reinvestment of dividends on such shares
may be re-exchanged to another Pioneer fund at their
respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered
for exchange. Mail new shares certificates, if requested, or
an account statement confirming the exchange by first class
mail to the address of record.
4. Maintain a record of unprocessed exchanges and produce a
periodic report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions,
either through reinvestment or in cash, in accordance with
shareholder instructions.
2. On the mailing date, Customer shall make available to PSC
collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns
of distributions and, in the case of Federal returns, mail
information copies to shareholders and report and pay Federal
income taxes withheld from distributions made to non-resident
aliens.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated November 27, 1995 included in Pioneer India Fund's 1995 Annual Report (and
to all references to our firm) included in or made a part of the Pioneer India
Fund Post-Effective Amendment No. 3 and Amendment No. 5 to Registration
Statement File Nos. 33-77472 and 811-8468, respectively.
/S/ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 26, 1996
SHARE PURCHASE AGREEMENT
This Agreement is made as of the 16th day of June, 1994 between The
Pioneer Group, Inc., a Delaware corporation ("PGI"), and Pioneer India Fund, a
Delaware business trust (the "Fund").
WHEREAS, the Fund wishes to sell to PGI, and PGI wishes to purchase
from the Fund, $750,000 of Class A shares of beneficial interest of the Fund
(65,217 Class A shares) and $250,000 of Class B shares of beneficial interest of
the Fund (21,739 Class B shares) at a purchase price of $11.50 per share
(collectively, the "Shares"); and
WHEREAS, PGI is purchasing $75,000 of the Class A shares (6,522 Class A
shares) and $25,000 of the Class B shares (2,174 Class B shares) for the purpose
of providing the initial capitalization of the Fund as required by the
Investment Company Act of 1940;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PGI is
delivering to the Fund a check in the amount of $1,000,000 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.
3. PGI further agrees that it may not withdraw $75,000 of the Class A
shares (6,522 Class A shares) or $25,000 of the Class B shares (2,174 Class B
shares) from the Fund at a rate, which at any time during the Fund's first five
years of operations, exceeds in the aggregate $1,666.67 per month.
<PAGE>
Executed as of the date first set forth above.
THE PIONEER GROUP, INC.
John F. Cogan, Jr.
President
PIONEER INDIA FUND
Joseph P. Barri
Secretary
-2-
CLASS A DISTRIBUTION PLAN
PIONEER INDIA FUND
CLASS A DISTRIBUTION PLAN, dated as of June 16, 1994, of PIONEER INDIA
FUND, a Delaware business trust (the "Fund").
WITNESSETH
WHEREAS, the Fund is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Fund intends to distribute shares of beneficial interest
(the "Class A Shares") of each series of the Fund ("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 Class A distribution plan
(the "Class A Plan") as a plan of distribution pursuant to such Rule;
WHEREAS, the Fund desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Fund's Class A Shares in connection with the Class A Plan;
WHEREAS, the Fund has entered into an underwriting agreement (in a form
approved by the Fund's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Fund in connection with the offering and distribution of Class A
Shares (the "Underwriting Agreement");
WHEREAS, the Fund also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class A Shares in connection with the
offering of Class A Shares, (b) PFD may compensate any Dealer that sells Class A
Shares in the manner
<PAGE>
and at the rate or rates to be set forth in an agreement between PFD and such
Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of shares, its profits or any
other source available to it;
WHEREAS, the Fund recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of shares by the Fund,
and PFD may retain (or receive from the Fund, as the case may be) all such
deferred sales charges; and
WHEREAS, the Board of Trustees of the Fund, in considering whether the
Fund should adopt and implement this Class A Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class A Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Fund for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class A Plan will
benefit the Fund and its Class A shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby adopts this
Class A Plan for the Fund as a plan of distribution of Class A Shares in
accordance with Rule 12b-1, on the following terms and conditions:
The amount of compensation paid during any one year pursuant to this
Class A Plan may not exceed 0.25% of the average daily net assets of the Class A
Shares of each Portfolio attributable to such year.
Subject to the limit in paragraph 1, the Fund shall reimburse PFD for
amounts expended by PFD to finance any activity which is primarily intended to
result in the sale of Class A Shares of the Fund or the provision of services to
Class A Shareholders of the Fund, including but not limited to commissions or
other payments to Dealers and salaries and other expenses of PFD relating to
selling or servicing efforts;
-2-
<PAGE>
provided, that the Board of Trustees of the Fund shall approve categories of
expenses for which reimbursement shall be made pursuant to this paragraph 2 and,
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 0.25% per annum of each Portfolio's average daily net
assets attributable to Class A Shares; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on certain
sales of the Fund's Class A Shares with no initial sales charge; and (iii)
reimbursement to PFD for expenses incurred providing services to Class A
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 Fund). Such reimbursement shall be paid ten
(10) days after the end of the month or quarter, as the case may be, in which
such expenses are incurred. The Fund acknowledges that PFD will charge an
initial sales charge or a contingent deferred sales charge in connection with
certain sales of Class A Shares of the Fund and that PFD will reallow to Dealers
all or a portion of such sales charges, as described in the Fund's Prospectus
from time to time. Nothing contained herein is intended to have any effect
whatsoever on PFD's ability to charge any such sales charges or to reallow all
or any portion thereof to Dealers.
The Fund understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class A
Shares and the provision of services to Class A Shareholders of the Fund.
Nothing in this Class A Plan shall be construed as requiring the Fund to make
any payment to any Dealer or to have any obligations to any Dealer in connection
with services as a dealer of the Class A Shares. PFD shall agree and undertake
that any agreement entered into between PFD and any Dealer shall provide that
such Dealer shall look solely to PFD for compensation for its services
thereunder and that in no event shall such Dealer seek any payment from the
Fund.
Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Declaration of Trust or By-
-3-
<PAGE>
Laws or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Fund's Board of
Trustees of the responsibility for and control of the conduct of the affairs of
the Fund.
This Class A 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 Fund and who have no direct or indirect financial
interest in the operation of the Class A Plan or in any agreement related to the
Class A Plan (the "Qualified Trustees"), such votes to be cast in person at a
meeting called for the purpose of voting on this Class A Plan.
This Class A Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Fund and a majority of the Qualified Trustees.
If such annual approval is not obtained, this Class A Plan shall expire on June
16, 1994. In the event of termination or non-continuance of this Class A 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 0.25% of such
Portfolio's average daily net assets attributable to Class A Shares during such
period.
This Class A Plan may be amended at any time by the Board of Trustees;
provided, that this Class A Plan may not be amended to increase materially the
limitation on the annual percentage of average daily net assets which may be
expended hereunder without the approval of holders of a "majority of the
outstanding Class A Shares" of the Fund and may not be materially amended in any
case without a vote of a majority of both the Trustees and the Qualified
Trustees. Any amendment of this Class A 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 Class A Plan may be terminated at any time by a vote
of a majority of the Qualified
-4-
<PAGE>
Trustees or by a vote of the holders of a "majority of the outstanding Class A
Shares" of the Fund.
In the event of termination or expiration of this Class A Plan, the
Fund 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 Fund during such twelve-month period shall not
exceed 0.25% of the Fund's average daily net assets attributable to Class A
Shares during such period and provided further that such payments are
specifically approved by the Board of Trustees, including a majority of the
Qualified Trustees.
The Fund and PFD shall provide to the Fund's Board of Trustees, and the
Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class A Plan and the purposes for which such
expenditures were made.
While this Class A Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Fund.
For the purposes of this Class A Plan, the terms "interested persons"
and "specifically approved at least annually" are used as defined in the 1940
Act. For the purpose of this Class A Plan, the term "majority of the outstanding
Class A Shares" is used as the term "majority of the outstanding voting
securities" is defined in the 1940 Act.
The Fund shall preserve copies of this Class A 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.
-5-
<PAGE>
This Class A Plan shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts and the applicable provisions of
the 1940 Act.
If any provision of this Class A 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.
-6-
CLASS B DISTRIBUTION PLAN
PIONEER INDIA FUND
CLASS B DISTRIBUTION PLAN, dated as of June 16, 1994 of PIONEER INDIA
FUND, a Delaware business trust (the "Fund").
WITNESSETH
WHEREAS, the Fund is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Fund intends to distribute shares of beneficial interest
(the "Class B Shares") of the Fund in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B distribution plan (the "Class B Plan") as a plan
of distribution pursuant to such Rule;
WHEREAS, the Fund desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Fund's Class B Shares in connection with the Class B Plan;
WHEREAS, the Fund has entered into an underwriting agreement (in a form
approved by the Fund's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Fund in connection with the offering and distribution of Class B
Shares (the "Underwriting Agreement");
WHEREAS, the Fund also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) PFD may compensate any Dealer that sells Class B
Shares in the manner
<PAGE>
and at the rate or rates to be set forth in an agreement between PFD and such
Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class B Shares, its profits
or any other source available to it;
WHEREAS, the Fund recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class B Shares by
the Fund, and PFD may retain (or receive from the Fund, as the case may be) all
such deferred sales charges; and
WHEREAS, the Board of Trustees of the Fund, in considering whether the
Fund should adopt and implement this Class B Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Fund for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Fund and its Class B Shareholders;
NOW, THEREFORE, the Board of Trustees of the Fund hereby adopts this
Class B Plan for the Fund as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Fund is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection
with the Fund's Class B Shares. Such compensation shall be
calculated and accrued daily and paid monthly or at such other
intervals as the Board of Trustees may determine.
(b) The amount of compensation paid during any one
year for distribution services may not exceed 0.75%
-2-
<PAGE>
of the average daily net assets of the Class B Shares of the
Fund attributable to such year.
(c) Distribution services and expenses for which PFD
may be compensated pursuant to this Plan include, without
limitation: compensation to and expenses (including allocable
overhead, travel and telephone expenses) of (i) Dealers,
brokers and other dealers who are members of the National
Association of Securities Dealers, Inc. ("NASD") or their
officers, sales representatives and employees, (ii) PFD and
any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their
officers, sales representatives and employees, who engage in
or support distribution of the Fund's Class B Shares; printing
of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of
sales literature and advertising materials.
(d) The amount of compensation paid during any one
year for personal and account maintenance services and
expenses may not exceed 0.25% of the average daily net assets
of the Class B Shares of the Fund attributable to such year.
As partial consideration for personal services and/or account
maintenance services provided by PFD to the Class B Shares,
PFD shall be entitled to be paid any fees payable under this
clause (d) with respect to Class B Shares for which no dealer
of record exists, where less than all consideration has been
paid to a dealer of record or where qualification standards
have not been met.
(e) Personal and account maintenance services for
which PFD or any of its affiliates, banks or Dealers may be
compensated pursuant to this Plan include, without limitation:
payments made to or on account of PFD or any of its
affiliates, banks, other brokers and dealers who are members
of the NASD, or their officers, sales representatives and
employees, who respond to
-3-
<PAGE>
inquiries of, and furnish assistance to, shareholders
regarding their ownership of Class B Shares or their accounts
or who provide similar services not otherwise provided by or
on behalf of the Fund.
(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class B Shares by the Fund
and PFD may retain (or receive from the Fund as the case may
be) all such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant
to clauses (b) and (d) of this paragraph 1 shall be made
whenever necessary to ensure that no payment is made by the
Fund in excess of the applicable maximum cap imposed on asset
based, front-end and deferred sales charges by subsection (d)
of Section 26 of Article III of the Rules of Fair Practice of
the NASD.
2. The Fund understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to Class B Shareholders of the Fund.
Nothing in this Class B Plan shall be construed as requiring the Fund to make
any payment to any Dealer or to have any obligations to any Dealer in connection
with services as a dealer of the Class B Shares. PFD shall agree and undertake
that any agreement entered into between PFD and any Dealer shall provide that
such Dealer shall look solely to PFD for compensation for its services
thereunder and that in no event shall such Dealer seek any payment from the
Fund.
3. Nothing herein contained shall be deemed to require the Fund to take
any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Fund's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Fund.
-4-
<PAGE>
4. This Class B Plan shall become effective upon approval by a vote of
the Board of Trustees and a vote of a majority of the Trustees who are not
"interested persons" of the Fund and who have no direct or indirect financial
interest in the operation of the Class B Plan or in any agreements related to
the Class B Plan (the "Qualified Trustees"), such votes to be cast in person at
a meeting called for the purpose of voting on this Class B Plan.
5. This Class B Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Fund and a majority of the Qualified Trustees.
If such annual approval is not obtained, this Class B Plan shall expire on June
16, 1995.
6. This Class B Plan may be amended at any time by the Board of
Trustees; provided that this Class B Plan may not be amended to increase
materially the limitations on the annual percentage of average daily net assets
which may be expended hereunder without the approval of holders of a "majority
of the outstanding Class B Shares" of the Fund and may not be materially amended
in any case without a vote of a majority of both the Trustees and the Qualified
Trustees. This Class B Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees or by a vote of the holders of a "majority of
the outstanding Class B Shares" of the Fund.
7. The Fund and PFD shall provide to the Fund's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class B Plan and the purposes for which such
expenditures were made.
8. While this Class B Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Fund.
9. For the purposes of this Class B Plan, the terms "interested
persons" and "specifically approved at least annually" are used as defined in
the 1940 Act. For the purposes
-5-
<PAGE>
of this Class B Plan, the term "majority of the outstanding Class B Shares" is
used as the term "majority of the outstanding voting securities" is defined in
the 1940 Act.
10. The Fund shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11. This Class B Plan shall be construed in accordance with the laws of
The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12. If any provision of this Class B Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Class B
Plan shall not be affected thereby.
-6-
CLASS C SHARES DISTRIBUTION PLAN
PIONEER INDIA FUND
CLASS C SHARES DISTRIBUTION PLAN, dated as of January 31, 1996 of PIONEER
INDIA FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest (the
"Class C Shares") of the Trust in accordance with Rule 12b-1 promulgated by the
Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class C Shares distribution plan (the "Class C Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class C Shares in connection with the Class C Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a form
approved by the Trust's Board of Trustees in a manner specified in such Rule
12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
C Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain the
services of firms or individuals to act as dealers or wholesalers (collectively,
the "Dealers") of the Class C Shares in connection with the offering of Class C
Shares, (b) PFD may compensate any Dealer that sells Class C Shares in the
manner and at the rate or rates to be set forth in an agreement between PFD and
such Dealer and (c) PFD may make such payments to the Dealers for distribution
services out of the fee paid to PFD hereunder, any deferred sales charges
imposed by PFD in connection with the repurchase of Class C shares, its profits
or any other source available to it;
<PAGE>
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class C Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class C Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class C Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class C Plan will
benefit the Trust and its Class C shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class
C Plan for the Trust as a plan of distribution of Class C Shares in accordance
with Rule 12b-1, on the following terms and conditions:
1.
(a) The Trust is authorized to compensate PFD for (1)
distribution services and (2) personal and account maintenance
services performed and expenses incurred by PFD in connection with
the Trust's Class C Shares. Such compensation shall be calculated
and accrued daily and paid monthly or at such other intervals as
the Board of Trustees may determine.
(b) The amount of compensation paid during any one year
for distribution services with respect to Class C Shares shall be
.75% of the Trust's average daily net assets attributable to Class
C Shares for such year.
(c) Distribution services and expenses for which PFD may
be compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel
and telephone expenses) of (i) Dealers, brokers and other dealers
who are members of the National Association of Securities Dealers,
Inc. ("NASD") or their officers, sales representatives and
employees, (ii) PFD and any of its affiliates and any of their
respective officers, sales representatives and employees, (iii)
banks and their officers, sales representatives and employees, who
engage in or support distribution of the Trust's Class C Shares;
printing of reports and prospectuses for other than existing
shareholders; and preparation, printing and distribution of sales
literature and advertising materials.
-2-
<PAGE>
(d) The amount of compensation paid during any one year
for personal and account maintenance services and expenses shall
be .25% of the Trust's average daily net assets attributable to
Class C Shares for such year. As partial consideration for
personal services and/or account maintenance services provided by
PFD to the Class C Shares, PFD shall be entitled to be paid any
fees payable under this clause (d) with respect to Class C shares
for which no dealer of record exists, where less than all
consideration has been paid to a dealer of record or where
qualification standards have not been met.
(e) Personal and account maintenance services for which
PFD or any of its affiliates, banks or Dealers may be compensated
pursuant to this Plan include, without limitation: payments made
to or on account of PFD or any of its affiliates, banks, other
brokers and dealers who are members of the NASD, or their
officers, sales representatives and employees, who respond to
inquiries of, and furnish assistance to, shareholders regarding
their ownership of Class C Shares or their accounts or who provide
similar services not otherwise provided by or on behalf of the
Trust.
(f) PFD may impose certain deferred sales charges in
connection with the repurchase of Class C Shares by the Trust and
PFD may retain (or receive from the Trust as the case may be) all
such deferred sales charges.
(g) Appropriate adjustments to payments made pursuant to
clauses (b) and (d) of this paragraph 1 shall be made whenever
necessary to ensure that no payment is made by the Trust in excess
of the applicable maximum cap imposed on asset based, front-end
and deferred sales charges by subsection (d) of Section 26 of
Article III of the Rules of Fair Practice of the NASD.
2. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class C
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class C Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class C Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
-3-
<PAGE>
3. Nothing herein contained shall be deemed to require the Trust to take
any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4. This Class C Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class C of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class C Plan or in any agreements
related to the Class C Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class C Plan.
5. This Class C Plan will remain in effect indefinitely, provided that such
continuance is "specifically approved at least annually" by a vote of both a
majority of the Trustees of the Trust and a majority of the Qualified Trustees.
If such annual approval is not obtained, this Class C Plan shall expire on
January 31, 1997.
6. This Class C Plan may be amended at any time by the Board of Trustees,
provided that this Class C Plan may not be amended to increase materially the
limitations on the annual percentage of average net assets which may be expended
hereunder without the approval of holders of a "majority of the outstanding
voting securities" of Class C of the Trust and may not be materially amended in
any case without a vote of a majority of both the Trustees and the Qualified
Trustees. This Class C Plan may be terminated at any time by a vote of a
majority of the Qualified Trustees or by a vote of the holders of a "majority of
the outstanding voting securities" of Class C of the Trust.
7. The Trust and PFD shall provide to the Trust's Board of Trustees, and
the Board of Trustees shall review, at least quarterly, a written report of the
amounts expended under this Class C Plan and the purposes for which such
expenditures were made.
8. While this Class C Plan is in effect, the selection and nomination of
Qualified Trustees shall be committed to the discretion of the Trustees who are
not "interested persons" of the Trust.
-4-
<PAGE>
9. For the purposes of this Class C Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
10. The Trust shall preserve copies of this Class C Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11. This Class C Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12. If any provision of this Class C Plan shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of the Class C Plan
shall not be affected thereby.
-5-
[ARTICLE]6
[CIK] 0000921447
[NAME] PIONEER INDIA FUND
[SERIES]
[NUMBER] 001
[NAME] PIONEER INDIA FUND CLASS A
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 18479630
[INVESTMENTS-AT-VALUE] 13581483
[RECEIVABLES] 294622
[ASSETS-OTHER] 3521
[OTHER-ITEMS-ASSETS] 776263
[TOTAL-ASSETS] 14655889
[PAYABLE-FOR-SECURITIES] 187772
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 79821
[TOTAL-LIABILITIES] 267593
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 20018796
[SHARES-COMMON-STOCK] 991672
[SHARES-COMMON-PRIOR] 1014788
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (737343)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (4893157)
[NET-ASSETS] 14388296
[DIVIDEND-INCOME] 100803
[INTEREST-INCOME] 244236
[OTHER-INCOME] 0
[EXPENSES-NET] (409057)
[NET-INVESTMENT-INCOME] (64018)
[REALIZED-GAINS-CURRENT] (686172)
[APPREC-INCREASE-CURRENT] (3941018)
[NET-CHANGE-FROM-OPS] (4691208)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (18504)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 616544
[NUMBER-OF-SHARES-REDEEMED] 641099
[SHARES-REINVESTED] 1439
[NET-CHANGE-IN-ASSETS] (3140839)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (116086)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 201379
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 722606
[AVERAGE-NET-ASSETS] 9546251
[PER-SHARE-NAV-BEGIN] 11.28
[PER-SHARE-NII] (0.01)
[PER-SHARE-GAIN-APPREC] (2.78)
[PER-SHARE-DIVIDEND] (0.02)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 8.47
[EXPENSE-RATIO] 2.28
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
<PAGE>
[ARTICLE] 6
[CIK] 0000921447
[NAME] PIONEER INDIA FUND
[SERIES]
[NUMBER] 002
[NAME] PIONEER INDIA FUND CLASS B
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] OCT-31-1995
[PERIOD-END] OCT-31-1995
[INVESTMENTS-AT-COST] 18479630
[INVESTMENTS-AT-VALUE] 13581483
[RECEIVABLES] 294622
[ASSETS-OTHER] 3521
[OTHER-ITEMS-ASSETS] 776263
[TOTAL-ASSETS] 14655889
[PAYABLE-FOR-SECURITIES] 187772
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 79821
[TOTAL-LIABILITIES] 267593
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 20018796
[SHARES-COMMON-STOCK] 713880
[SHARES-COMMON-PRIOR] 541146
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] (737343)
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] (4893157)
[NET-ASSETS] 14388296
[DIVIDEND-INCOME] 100803
[INTEREST-INCOME] 244236
[OTHER-INCOME] 0
[EXPENSES-NET] (409057)
[NET-INVESTMENT-INCOME] (64018)
[REALIZED-GAINS-CURRENT] (686172)
[APPREC-INCREASE-CURRENT] (3941018)
[NET-CHANGE-FROM-OPS] (4691208)
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] (3795)
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 435995
[NUMBER-OF-SHARES-REDEEMED] 263505
[SHARES-REINVESTED] 244
[NET-CHANGE-IN-ASSETS] (3140839)
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] (116086)
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 201379
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 722606
[AVERAGE-NET-ASSETS] 6560461
[PER-SHARE-NAV-BEGIN] 11.24
[PER-SHARE-NII] (0.07)
[PER-SHARE-GAIN-APPREC] (2.77)
[PER-SHARE-DIVIDEND] (0.01)
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 8.39
[EXPENSE-RATIO] 3.01
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
PIONEER INDIA FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares and Class B Shares
October 4, 1995
Each class of shares of Pioneer India Fund (the "Fund") will have the
same relative rights and privileges and be subject to the same sales charges,
fees and expenses, except as set forth below. The Board of Trustees of the Fund
may determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus, shares may be exchanged only for shares of the same class of another
Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial
sales charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the
imposition of an initial sales charge. However, Class B shares redeemed within a
specified number of years of purchase will be subject to a CDSC as set forth in
the Fund's prospectus. Class B Shares are sold subject to the minimum purchase
requirements set forth in the Fund's prospectus. Class B Shares shall be
entitled to the shareholder services set forth from time to time in the Fund's
prospectus with respect to Class B Shares. Class B Shares are subject to fees
calculated as a stated percentage of the net assets attributable to Class B
shares under
<PAGE>
the Class B Rule 12b-1 Distribution Plan as set forth in such Distribution Plan.
The Class B Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class B Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class B Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class B shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund
at the end of a specified number of years after the initial purchase date of
Class B shares, except as provided in the Fund's prospectus. Such conversion
will occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote
of a majority (or whatever greater percentage may, from time to time, be
required under Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "Act")) of (a) all of the Trustees of the Fund, and (b) those of the
Trustees who are not "interested persons" of the Fund, as such term may be from
time to time defined under the Act.
Article IV. Amendments
No material amendment to the Plan shall be effective unless it is
approved by the Board of Trustees in the same manner as is provided for approval
of this Plan in Article III.
-2-
PIONEER INDIA FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class B Shares and Class C Shares
January 31, 1996
Each class of shares of Pioneer India Fund (the "Fund") will have the same
relative rights and privileges and be subject to the same sales charges, fees
and expenses, except as set forth below. The Board of Trustees may determine in
the future that other distribution arrangements, allocations of expenses
(whether ordinary or extraordinary) or services to be provided to a class of
shares are appropriate and amend this Plan accordingly without the approval of
shareholders of any class. Except as set forth in the Fund's prospectus, shares
may be exchanged only for shares of the same class of another Pioneer mutual
fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial sales
charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class B
<PAGE>
shares redeemed within a specified number of years of purchase will be subject
to a CDSC as set forth in the Fund's prospectus. Class B Shares are sold subject
to the minimum purchase requirements set forth in the Fund's prospectus. Class B
Shares shall be entitled to the shareholder services set forth from time to time
in the Fund's prospectus with respect to Class B Shares. Class B Shares are
subject to fees calculated as a stated percentage of the net assets attributable
to Class B shares under the Class B Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class B Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's Class B Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class B Shares on a per
account basis except to the extent, if any, such an allocation would cause the
Fund to fail to satisfy any requirement necessary to obtain or rely on a private
letter ruling from the IRS relating to the issuance of multiple classes of
shares. Class B shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class B shares.
Class B Shares will automatically convert to Class A Shares of the Fund at
the end of a specified number of years after the initial purchase date of Class
B shares, except as provided in the Fund's prospectus. Such conversion will
occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
shares were purchased.
Article III. Class C Shares
Class C Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class C shares redeemed within one year of
purchase will be subject to a CDSC as set forth in the Fund's prospectus. Class
C Shares are sold subject to the minimum purchase requirements set forth in the
Fund's prospectus. Class C Shares shall be entitled to the shareholder services
set forth from time to time in the Fund's prospectus with respect to Class C
Shares. Class C Shares are subject to fees calculated as a stated percentage of
the net assets attributable to Class C shares under the Class C Rule 12b-1
Distribution Plan as set forth in such Distribution Plan. The Class C
Shareholders of the Fund have exclusive voting rights, if any, with respect to
the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees are
allocated to Class C Shares on a
-2-
<PAGE>
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the IRS relating to the issuance of multiple classes
of shares. Class C shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class C shares.
The initial purchase date for Class C shares acquired through (i)
reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
shares were purchased.
Article IV. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote of a
majority (or whatever greater percentage may, from time to time, be required
under Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"Act")) of (a) all of the Trustees of the Fund, and (b) those of the Trustees
who are not "interested persons" of the Fund, as such term may be from time to
time defined under the Act.
Article V. Amendments
No material amendment to the Plan shall be effective unless it is approved
by the Board of Trustees in the same manner as is provided for approval of this
Plan in Article IV.
-3-
POWER OF ATTORNEY
We, the undersigned Trustees of Pioneer India Fund, a Delaware business
trust, do hereby severally constitute and appoint John F. Cogan, Jr., David D.
Tripple, and Joseph P. Barri, and each of them acting singly, to be our true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for each of us, in the name of each of us and in the
capacity as trustee, any and all amendments to the Registration Statement on
Form N-1A to be filed by Pioneer India Fund under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), 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 the name of each of us and on behalf of
each of us in the capacity as trustee to enable Pioneer India Fund to comply
with the 1940 Act and the 1933 Act, and all requirements of the Securities and
Exchange Commission thereunder, hereby ratifying and confirming the signature of
each of us as it may be signed by said attorneys or each of them to any and all
amendments to said Registration Statement.
IN WITNESS WHEREOF, we have hereunder set our hands on this Instrument
the 16th day of June, 1994.
/S/John W. Kendrick, Trustee /S/David D. Tripple, Trustee
John W. Kendrick, Trustee David D. Tripple, Trustee
/S/Richard H. Egdahl, M.D., /S/Stephen K. West, Trustee
Richard H. Egdahl, M.D., Stephen K. West, Trustee
Trustee
/S/Margaret B.W. Graham, Trustee /S/John Winthrop, Trustee
Margaret B.W. Graham, Trustee John Winthrop, Trustee
<PAGE>
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer India Fund, a Delaware
business trust, does hereby severally constitute and appoint David D. Tripple
and Joseph P. Barri, 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 capacities indicated below, any
and all amendments to the Registration Statement on Form N-1A to be filed by
Pioneer India Fund under the Investment Company Act of 1940, as amended (the
"1940 Act"), and under the Securities Act of 1933, as amended (the "1933 Act"),
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 my behalf in the capacities indicated to enable Pioneer
India Fund to comply with the 1940 Act and the 1933 Act, 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 this Instrument the
____ day of April, 1994.
John F. Cogan, Jr., Chairman, Trustee and President
<PAGE>
POWER OF ATTORNEY
The undersigned officer of Pioneer India Fund, a Delaware business
trust, does hereby severally constitute and appoint John F. Cogan, Jr., David D.
Tripple and Joseph P. Barri, 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 capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer India Fund under the Investment Company Act of 1940, as amended
(the "1940 Act"), and under the Securities Act of 1933, as amended (the "1933
Act"), 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 my behalf in the capacities indicated to enable
Pioneer India Fund to comply with the 1940 Act and the 1933 Act, 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 this Instrument the
____ day of April, 1994.
William H. Keough
Treasurer
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of Pioneer India Fund, a Delaware business
trust, does hereby severally constitute and appoint John F. Cogan, Jr. and
Joseph P. Barri, 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 capacities indicated below, any
and all amendments to the Registration Statement on Form N-1A to be filed by
Pioneer India Fund under the Investment Company Act of 1940, as amended (the
"1940 Act"), and under the Securities Act of 1933, as amended (the "1933 Act"),
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 my behalf in the capacities indicated to enable Pioneer
India Fund to comply with the 1940 Act and the 1933 Act, 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 this Instrument the
____ day of April, 1994.
Marguerite A. Piret, Trustee
