As filed with the Securities and Exchange Commission on August 29, 1995.
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
/ / Confidential, for Use of te Commission Only (as permitted by Rule
14a-6(e)(2))
PIONEER VARIABLE CONTRACTS TRUST
(Name of Registrant as Specified in Its Charter)
PIONEER VARIABLE CONTRACTS TRUST
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2), previously paid with filing of
preliminary proxy materials.
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
60 State Street
Boston, Massachusetts 02109
----------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------------------------------
TO BE HELD OCTOBER 10, 1995
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the Real Estate Growth Portfolio (the "Fund") of Pioneer Variable
Contracts Trust, a Delaware business trust (the "Trust"), will be held at the
offices of Hale and Dorr, counsel to the Trust, at 60 State Street, 26th Floor,
Boston, Massachusetts 02109, at 2:00 p.m. (Boston time) on Tuesday, October 10,
1995. The purpose of the Meeting is to consider and act upon the following
proposals:
1. To approve the terms of a new Management Contract with Pioneering
Management Corporation and to approve the payment to Pioneering Management
Corporation of fees under an Interim Management Contract; and
2. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
Your Board of Trustees Recommends that You Vote in Favor of all Proposals
Shareholders of record as of the close of business on August 18, 1995
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Board of Trustees,
Joseph P. Barri, Secretary
August 29, 1995
Boston, Massachusetts
---------------------
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED FORM OF PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE MEETING.
0895-2690
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
60 State Street
Boston, Massachusetts 02109
----------------------------------------------
PROXY STATEMENT
----------------------------------------------
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 10, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Pioneer Variable Contracts Trust (the
"Trust"), a Delaware business trust (the "Fund"). The proxies will be used at
the Special Meeting of Shareholders (the "Meeting") of the Trust's Real Estate
Growth Portfolio (the "Fund") to be held on Tuesday, October 10, 1995 at 2:00
p.m. (Boston time). The Meeting will be held at the offices of Hale and Dorr,
counsel to the Fund, at 60 State Street, 26th Floor, Boston, Massachusetts
02109.
The Board of Trustees has fixed the close of business on August 18, 1895
as the record date for the determination of shareholders of the Fund entitled to
notice of and to vote at the Meeting. On the record date, 22,219.564 shares of
beneficial interest of the Fund were outstanding. As of such date, except for
The Pioneer Group, Inc. (which owned 45.6% of all outstanding shares), the SMA
Life Assurance Company ("SMA") was the sole shareholder of record of the Fund.
SMA will vote shares of the Fund held by it in accordance with instructions
received from variable annuity contract owners or participants ("Contract
Owners") for whose accounts such shares of the Fund are held. Accordingly, this
Proxy Statement is also intended to be used by SMA in obtaining such voting
instructions from Contract Owners. In the event that a Contract Owner gives no
instructions or leaves the manner of voting discretionary, SMA will vote the
shares of the Fund attributable to the Contract Owner in the same proportion as
shares for which instructions are received.
This Proxy Statement, the attached Notice and the enclosed proxy card
(or voting instructions card) are being mailed to shareholders of the Fund and
to Contract Owners on or about August 29, 1995. The Fund's semiannual report for
its fiscal period ended June 30, 1995 may be obtained free of charge by writing
to the Fund at its executive offices, 60 State Street, Boston, Massachusetts
02109 or by calling 1-800-622-3265.
2
<PAGE>
PROPOSAL 1
APPROVAL OF THE TERMS OF A NEW
MANAGEMENT CONTRACT WITH PIONEERING MANAGEMENT
CORPORATION AND APPROVAL OF THE
PAYMENT TO PIONEERING MANAGEMENT CORPORATION OF
FEES UNDER AN INTERIM MANAGEMENT CONTRACT
The Fund's Advisory Arrangements
Prior to July 17, 1995, Pioneer Winthrop Advisers ("PWA") served as the
Fund's investment manager pursuant to a management contract dated February 10,
1995 (the "PWA Management Contract"), and Winthrop Advisors Limited Partnership
("WALP") and Pioneering Management Corporation ("PMC") served as the Fund's
co-investment subadvisers pursuant to separate investment subadvisory contracts
dated February 10, 1995 (the "WALP Subadvisory Agreement" and the "PMC
Subadvisory Agreement," respectively). The PWA Management Contract and the WALP
and the PMC Subadvisory Agreements are referred to in this Proxy Statement as
the "Prior Advisory Agreements."
On July 17, 1995, the PWA Management Agreement and the WALP Subadvisory
Agreement terminated by operation of law as a result of the acquisition (the
"Acquisition") by Apollo Real Estate Advisors, L.P. ("Apollo") of W.L. Realty,
L.P. ("Realty LP"). Because Realty LP has an indirect controlling interest in
WALP and PWA, the Acquisition resulted in an ownership change in PWA and WALP.
Under the relevant provisions of the Investment Company Act of 1940, as amended
(the "Investment Company Act"), the ownership change in PWA and WALP caused an
"assignment" of the PWA Management Contract and the WALP Subadvisory Agreement
resulting in their automatic termination. Although the Acquisition did not
affect the ownership or control of PMC in any manner, the PMC Subadvisory
Agreement also terminated on July 17, 1995 by operation of a term providing for
automatic termination in the event of termination of the PWA Management
Agreement.
In anticipation of the termination of the Prior Advisory Agreements, the
Board of Trustees of the Trust, including a majority of the Trustees who are not
"interested persons" of the Trust or PMC (the "Independent Trustees"), approved
an interim management contract (the "Interim Management Contract") between the
Trust, on behalf of the Fund, and PMC. The Interim Management Contract became
effective July 17, 1995 (the Acquisition closing date) and PMC has provided
investment advisory and management services to the Fund under the Interim
Management Contract since that date. The Interim Management Contract expires on
October 30, 1995.
The Trust and PMC have received an order from the Securities and
Exchange Commission (the "Commission") permitting PMC to serve, without
shareholder approval, as the Fund's investment manager pursuant to the Interim
Management Contract until October 30, 1995. Pursuant to the terms of such order,
the fees earned by PMC under the Interim Management Contract will be maintained
in an interest-bearing escrow account and the amounts in such account will be
paid to PMC only upon approval of the Fund's shareholders of this Proposal or,
in the absence of such approval, will be remitted to the Fund. The Trustees,
3
<PAGE>
including a majority of the Independent Trustees, voted to recommend to
shareholders of the Fund that they approve the payment to PMC of the fees under
the Interim Management Contract.
At the same meeting, the Trustees, including a majority of the
Independent Trustees, also voted to recommend to shareholders of the Fund that
they approve a management contract between the Trust, on behalf of the Fund, and
PMC (the "Proposed Management Contract") pursuant to which PMC will serve as the
Fund's sole investment adviser after the expiration of the Interim Management
Contract.
The approval of this Proposal by the shareholders of the Fund will not
result in an increase in the rate of management fee payable by the Fund.
Information regarding Pioneering Management Corporation (PMC)
As described above, PMC currently serves as the Fund's investment
manager pursuant to the Interim Management Contract and, if approved by
shareholders, will continue to serve as the Fund's investment manager pursuant
to the Proposed Management Contract upon the expiration of the Interim
Management Contract. PMC, a registered adviser under the Investment Advisers Act
of 1940, serves as the investment manager for each of the mutual funds in the
Pioneer complex of mutual funds. PMC also manages Pioneer Interest Shares, Inc.
(a closed-end investment company) and advises certain other institutional
accounts. PMC is one of the oldest money managers in the United States and, as
of June 30, 1995, managed in excess of $12 billion in net assets worldwide, for
more than 900,000 investors. PMC is a wholly owned subsidiary of The Pioneer
Group, Inc. ("PGI"), a publicly traded Delaware corporation. PMC's and PGI's
executive offices are located at 60 State Street, Boston, Massachusetts 02109.
Terms of the Proposed and Interim Management Contracts
The material terms of the Interim and Proposed Management Contracts are
identical to those of the PWA Management Contract, except for the identities of
parties and the dates of execution and termination. Accordingly, the management
fee under the Interim and Proposed Management Contracts is payable at the same
rate as that previously payable under the PWA Management Contract. The following
description of the terms of the Interim and Proposed Management Contracts is
qualified in its entirety by reference to the copy of the Proposed Management
Contract attached to this Proxy Statement as EXHIBIT A.
Investment Advisory and Management Services. Pursuant to the terms of
the Proposed and Interim Management Contracts, PMC serves as the sole investment
adviser to the Fund and is responsible for the overall management of the Fund's
business affairs, subject only to the authority of the Fund's Board of Trustees.
PMC also makes all portfolio investment decisions for the Fund.
Mr. Robert Benson, a Senior Vice President of PMC, has been responsible
for the Fund's day-to-day portfolio decisions since the Fund's inception. Mr.
Benson continues to be responsible for the Fund's day-to-day portfolio decisions
4
<PAGE>
after the Acquisition. PMC has hired a former employee of WALP to continue to
provide to the Fund after the Acquisition the same level of real estate
securities advice that he previously provided through WALP. In addition, PMC at
its own expense has contracted, on a temporary basis, with an affiliate of WALP
for consulting advice regarding real estate projects in which issuers of the
Fund's portfolio securities have an interest.
The Fund's portfolio is now overseen by an Equity Committee, which
consists of PMC's most senior equity professionals, and a Portfolio Management
Committee, which consists of PMC's domestic equity portfolio managers. Both
committees are chaired by Mr. David Tripple, PMC's President and Chief
Investment Officer and Executive Vice President of the Trust.
Management Fees and Expense Limitation. As indicated above, the
management fee under the Interim and Proposed Management Contracts is the same
as the management fee under the PWA Management Contract.
As compensation for its investment advisory services, PMC earns a
management fee under the Interim Management Contract at a rate equal to 1.00%
per annum of the Fund's average daily net assets. This fee is computed daily and
payable monthly. As indicated above, the fee under the Interim Management
Contract will only be paid to PMC upon approval by shareholders of this
Proposal. The management fee, which is greater than those paid by most mutual
funds, reflects the added complexity and additional expenses associated with
analyzing real estate related securities and is comparable to those of other
mutual funds with similar investment objectives.
PMC has voluntarily agreed to continue on a temporary basis the expense
limitation previously agreed to by PWA. Under this expense limitation, PMC will
not impose a portion of its management fee and will make other arrangements, if
necessary, to limit the total operating expenses of the Fund to 1.75% of its
average daily net assets. Although this arrangement may be revised or
discontinued by PMC at its discretion at any time, PMC has no current intention
to do so.
During the period from March 1, 1995 (commencement of operations)
through June 30, 1995, the Fund paid no management fees to PWA under the PWA
Management Contract pursuant to the expense limitation. In the absence of the
expense limitation, the Fund would have paid management fees to PWA under the
PWA Management Contract in the amount of $433 for the same period. During the
period from March 1, 1995 through June 30, 1995, PWA paid no subadvisory fees to
either WALP or PMC. The subadvisory fees payable to WALP and PMC were reduced
proportionally to the extent that the management fee was reduced under PWA's
voluntary expense limitation. In the absence of PWA's voluntary expense
limitation, PWA would have paid subadvisory fees to each of WALP and PMC under
the WALP and PMC Subadvisory Agreements, respectively, in the amount of $130 for
the same period. As of June 30, 1995, the Fund's net assets were approximately
$177 thousand.
Expenses. Under the Interim and Proposed Management Contracts, PMC pays
all expenses related to its services for the Fund with the exception of
bookkeeping, custodial, transfer agency, auditing, legal and certain other
specified expenses, which are paid by the Fund. The Fund also pays all brokerage
commissions and any taxes or other charges in connection with its portfolio
transactions.
5
<PAGE>
Approval and Termination Provisions. The Interim and Proposed Management
Contracts were approved by the Board of Trustees, including a majority of the
Independent Trustees, of the Fund on June 6, 1995. The Interim Management
Contract expires on October 30, 1995. If this Proposal is approved by
shareholders of the Fund, the Proposed Management Contract will remain in effect
until May 31, 1997 and from year to year thereafter, provided that its
continuance is approved at least annually by the vote of a majority of the
Independent Trustees cast in person at a meeting called for the purpose of
voting on such approval, and either by vote of a majority of the Fund's Trustees
or a "majority of the outstanding voting securities" (as defined below) of the
Fund. The Interim and Proposed Management Contracts may be terminated without
penalty on 60 days' written notice by the Fund's Board of Trustees, by vote of
holders of a majority of the Fund's shares or by PMC.
Standard of Care. The Interim and Proposed Management Contracts provide
that, in the absence of willful misfeasance, bad faith or gross negligence on
the part of PMC, or of the reckless disregard of its obligations and duties, PMC
will not be liable for any act or omission in the course of, or connected with,
rendering services under such Contracts. This "standard of care", which is
identical to that under the PWA Management Contract, is consistent with the
Investment Company Act and common practice in the mutual fund industry.
Board of Trustees' Evaluation and Recommendation
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE FUND
APPROVE THE TERMS OF THE PROPOSED MANAGEMENT CONTRACT AND APPROVE THE PAYMENT OF
FEES UNDER THE INTERIM MANAGEMENT CONTRACT.
The Board of Trustees, including a majority of the Independent Trustees,
determined that the terms of the Proposed Management Contract are fair and
reasonable and that approval of the terms of the Proposed Management Contract on
behalf of the Fund is in the best interests of the Fund and its shareholders.
The Board of Trustees, including a majority of the Independent Trustees, also
determined that the payment of fees under the Interim Management Contract is
fair and reasonable and recommends that shareholders approve the payment of such
fees. In making these determinations, the Trustees considered the following: (a)
the identical material terms, including the management fee rate, under both the
Proposed Management Contract and the PWA Management Contract; (b) the
substantially similar nature and quality of services previously provided by PMC
under the PMC Subadvisory Agreement to those currently provided by PMC under the
Interim Management Contract; (c) PMC's hiring of a former employee of WALP to
continue to provide to the Fund after the Acquisition the same level of real
estate securities advice that he previously provided through WALP; (d) PMC's
contracting with an affiliate of WALP for consulting advice regarding real
estate projects in which issuers of the Fund's portfolio securities have an
interest; and (e) the reasonableness of PMC's compensation and profits and the
financial and managerial stability of PMC and its parent company.
In the event that this Proposal is not approved by the shareholders of
the Fund, the Interim Advisory Agreement will terminate on October 30, 1995, the
fees payable thereunder will be remitted to the Fund, the Proposed Management
Contract will not become effective and no person will then serve as the
investment manager to the Fund. In such event, the Trustees will consider what
further action should be taken.
6
<PAGE>
Additional Information Pertaining to PMC
For additional information concerning the management, ownership
structure, affiliations, brokerage policies and certain other matters pertaining
to PMC, see the Appendix.
Vote Required
Approval of this Proposal requires the affirmative vote of a "majority
of the outstanding voting securities" of the Fund, which for this purpose means
the affirmative vote of the lesser of (i) 67% or more of the outstanding shares
of the Fund present at the Meeting and entitled to vote, if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy or (ii) more than 50% of the outstanding shares of the Fund. Each Fund
share is entitled to one vote.
OTHER MATTERS
The Fund's management knows of no business to be brought before the
Meeting except as described above. However, if any other matters properly come
before the meeting, it is expected that, absent specific Contract Owner
instructions to the contrary, SMA will vote on such matters in accordance with
its best judgment. If Contract Owners desire additional information about the
matters proposed for action, the Trust's management will be pleased to hear from
them and to provide further information.
Proxies, Quorum and Voting at the Meeting
A proxy executed by SMA may be revoked at any time prior to its exercise
by execution of a superseding proxy, by submission of a written notice of
revocation to the Secretary of the Trust or by attending the Meeting and voting
in person. All properly executed and unrevoked proxies received in time for the
Meeting will be voted in accordance with the instructions contained in the
proxies. If no instruction is given, the persons named as proxies will vote the
shares represented thereby in favor of the matters set forth in the attached
Notice and will use their best judgment in connection with the transaction of
such other business as may properly come before the Meeting or any adjournment
thereof. As indicated above, SMA will vote shares for which it has not received
instructions (or for which voting is left to its discretion) in the same
proportion as shares for which instructions are received.
In the event that, at the time any session of the Meeting is called to
order, a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the Meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of the Proposal has not been received, the persons named as proxies will
vote those proxies which they are entitled to vote in favor of the Proposal for
such an adjournment and will vote those proxies required to be voted against the
Proposal against any such adjournment.
7
<PAGE>
Shares of the Fund (including shares which abstain or do not vote with
respect to the Proposal presented for shareholder approval) will be counted for
purposes of determining whether a quorum is present at the Meeting. Abstentions
from voting will be treated as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled to
vote with respect to a Proposal, but will not be counted as a vote in favor of
that Proposal. Accordingly, an abstention from voting has the same effect as a
vote against a Proposal.
Shareholder Proposals
The Fund is not required to hold annual meetings of shareholders and
does not currently intend to hold such a meeting in 1996. Instead, meetings will
be held only when and if required. Shareholder proposals for inclusion in the
proxy statement for any subsequent meeting must be received by the Trust at 60
State Street, Boston, Massachusetts 02109 within a reasonable time before any
such meeting.
Expenses and Methods of Solicitation
The costs of the Meeting, including solicitation of voting instructions,
will be paid by PMC. PMC and/or SMA may, at its expense, have one or more of its
officers, representatives or compensated third-party agents aid in the
solicitation of proxies by personal interview or telephone and telegraph,
provided that SMA will be reimbursed by PMC, upon request, for its reasonable
expenses in conducting such activities.
PIONEER VARIABLE CONTRACTS TRUST
Pioneer Real Estate Growth Portfolio
August 24, 1995
8
<PAGE>
APPENDIX
Additional Information Pertaining to PMC
Directors. The following table provides information with respect to the
Directors of PMC:
Name, Age and Address Principal Occupation(s)
- -------------------------------------------------------------------------------
John F. Cogan, Jr., 69 President and a Director of PGI;
60 State Street Chairman and a Director of PMC,
Boston, MA 02109 Pioneer Funds Distributor, Inc.
("PFD") and Teberebie Goldfields
Limited; Chairman, a Managing
Partner and Chief Executive Officer
of PWA; 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
Corporation ("PIC"), Pioneer Metals
and Technology, Inc. ("PMT") and
Pioneer International Corporation
("P. Intl."), Luscinia, Inc.,
Pioneer First Russia, Inc. ("First
Russia"), Pioneer Omega, Inc.
("Omega") and Theta Enterprises,
Inc.; Chairman, President and
Director of Pioneer Goldfields
Limited ("PGL"); Chairman, President
and Trustee of each of the mutual
funds in the Pioneer Complex of
Funds; Chairman, President and a
Director of Pioneer Interest Shares,
Inc. ("Interest Shares); 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");
and Chairman and Partner, Hale and
Dorr (Counsel to the Fund).
David D. Tripple, 51 Vice President and a Managing
60 State Street Partner of PWA; Executive Vice
Boston, MA 02109 President and Director of PGI;
Executive President, Chief
Investment Officer and a Director of
PMC; Director of PFD, PCC, Pioneer
SBIC Corp., P. Intl., PIC and First
Russia; Member of the Supervisory
Board of PFPT; Director and Vice
President of Omega; Executive Vice
President and Trustee of each of the
mutual funds in the Pioneer Complex
of Funds; Executive Vice President
and a Director of Interest Shares.
Robert L. Butler, 54 Executive Vice President and a
60 State Street Director of PGI; President and a
Boston, MA 02109 Director of PFD; Director of PSC,
PIC, and P. Intl.; Vice Chairman of
Pioneer GmbH; and a Member of the
Supervisory Board of PFPT.
9
<PAGE>
Ownership of PMC. PMC is a wholly-owned subsidiary of PGI. As of June
30, 1995, Mr. Cogan beneficially owned 3,656,841 shares (14.4%) of the
outstanding Common Stock of PGI. Mr. Cogan's beneficial holdings included
1,637,726 shares held in trusts with respect to which Mr. Cogan may be deemed to
be a beneficial owner by reason of his interest as a beneficiary and/or position
as a trustee and shares which Mr. Cogan has the right to acquire under
outstanding options within sixty days of June 30, 1995. At such date, Messrs.
Butler, and Tripple, PMC's other directors, each owned beneficially less than 2%
of the outstanding Common Stock of PGI. As of June 30, 1995, officers and
directors of PMC and Trustees and officers of the Fund beneficially owned an
aggregate of 4,596,866 shares of Common Stock of PGI, approximately 20% of the
outstanding Common Stock of PGI. During PGI's fiscal year ended December 31,
1994, there were no transactions in PGI Common Stock by any officer, Trustee of
the Fund or Director of PMC in an amount equal to or exceeding 1% of the
outstanding Common Stock of PGI.
Services Provided to the Fund By Affiliates of PMC. Pioneering Services
Corporation, a wholly owned subsidiary of PGI ("PSC"), serves as the Fund's
transfer agent and shareholder servicing agent. Under the terms of its contract
with the Fund, PSC's duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund for SMA and any other insurance company separate
account utilizing the Fund as an investment vehicle; (ii) distributing dividends
and capital gains associated with Fund portfolio accounts; and (iii) maintaining
certain account records. For the period from March 1, 1995 (commencement of
operations) through June 30, 1995, the Fund accrued $488 in fees for PSC's
services.
Pioneer Funds Distributor, Inc., an indirect wholly owned subsidiary of
PGI ("PFD"), serves as the Fund's principal underwriter. During the period from
March 1, 1995 (commencement of operations) through June 30, 1995, SMA paid PFD
approximately $750 in promotional and marketing allowances relating to the Fund.
Similar Fund Managed By PMC. PMC serves as the investment manager to
Pioneer Winthrop Real Estate Investment Fund (to be renamed Pioneer Real Estate
Shares effective September 1, 1995) (the "Real Estate Fund") which has an
investment objective similar to that of the Fund. As of June 30, 1995, Real
Estate Fund had $28 million in net assets. The management fee payable by the
Real Estate Fund is payable quarterly at an annual rate equal to 1.00% of the
Real Estate Fund's average daily net assets. PMC has voluntarily agreed not
impose a portion of its management fee and to make other arrangements, if
necessary, to limit the operating expenses of the Real Estate Fund to 1.75% of
its average daily net assets. This agreement may be revised or discontinued by
PMC at its discretion at any time.
Portfolio Transactions. All orders for the purchase or sale of portfolio
securities are placed on behalf of the Fund by PMC pursuant to authority
contained in the Interim and Proposed Management Contracts. In selecting brokers
or dealers, PMC considers factors relating to execution on the best overall
terms available, including, but not limited to, the size and type of the
transaction; the nature and character of the markets of the security to be
purchased or sold; the execution efficiency, settlement capability and financial
condition of the dealer; the dealer's execution services rendered on a
continuing basis; and the reasonableness of any dealer spreads.
10
<PAGE>
PMC may select broker-dealers which provide brokerage and/or research
services to the Fund and/or other investment companies or accounts managed by
PMC. 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 analysis
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). In addition, if PMC determines in good faith that the amount of
commissions charged by a broker is reasonable in relation to the value of the
brokerage and research services provided by such broker, the Fund may pay
commissions to such broker in an amount greater than the amount another firm may
charge. This information might be useful to PMC in providing services to the
Fund as well as to other investment companies or accounts managed by PMC,
although not all of such research may be useful to the Fund. Conversely, such
information provided to PMC by brokers and dealers through whom other clients of
PMC effect securities transactions might be useful to PMC in providing services
to the Fund. The receipt of such research is not expected to reduce PMC's normal
independent research activities; however, it enables PMC to avoid the additional
expense which might otherwise be incurred if it were to attempt to develop
comparable information through its own staff.
---------------------------
11
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
America Income Portfolio
60 State Street
Boston, Massachusetts 02109
----------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------------------------------------
TO BE HELD OCTOBER 10, 1995
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the America Income Portfolio (the "Fund") of Pioneer Variable
Contracts Trust, a Delaware business trust (the "Trust"), will be held at the
offices of Hale and Dorr, counsel to the Trust, at 60 State Street, 26th Floor,
Boston, Massachusetts 02109, at 2:00 p.m. (Boston time) on Tuesday, October 10,
1995. The purpose of the Meeting is to consider and act upon the following
proposals:
1. To approve the elimination of the Fund's fundamental investment restriction
limiting investment to certain types of U.S. Government Securities; and
2. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
Your Board of Trustees Recommends that You Vote in Favor of the Proposal
Shareholders of record as of the close of business on August 18, 1995
are entitled to notice of and to vote at the Meeting or any adjournment thereof.
By Order of the Board of Trustees,
Joseph P. Barri, Secretary
August 29, 1995
Boston, Massachusetts
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED FORM OF PROXY IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY STILL VOTE IN PERSON IF YOU
ATTEND THE MEETING.
0895-2747
<PAGE>
PIONEER VARIABLE CONTRACTS TRUST
America Income Portfolio
60 State Street
Boston, Massachusetts 02109
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 10, 1995
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Pioneer Variable Contracts Trust, a Delaware
business trust (the "Trust"). The proxies will be used at the Special Meeting of
Shareholders (the "Meeting") of the Trust's America Income Portfolio (the
"Fund") to be held on Tuesday, October 10, 1995 at 2:00 p.m. (Boston time). The
Meeting will be held at the offices of Hale and Dorr, counsel to the Trust, at
60 State Street, 26th Floor, Boston, Massachusetts 02109.
The Board of Trustees has fixed the close of business on August 18, 1895
as the record date for the determination of shareholders of the Fund entitled to
notice of and to vote at the Meeting. On the record date, 52,511.126 shares of
beneficial interest of the Fund were outstanding. As of such date, except for
The Pioneer Group, Inc. (which owned 19.3% of all outstanding shares), the SMA
Life Assurance Company ("SMA") was the sole shareholder of record of the Fund.
SMA will vote shares of the Fund held by it in accordance with instructions
received from variable annuity contract owners or participants ("Contract
Owners") for whose accounts such shares of the Fund are held. Accordingly, this
Proxy Statement is also intended to be used by SMA in obtaining such voting
instructions from Contract Owners. In the event that a Contract Owner gives no
instructions or leaves the manner of voting discretionary, SMA will vote the
shares of the Fund attributable to the Contract Owner in the same proportion as
shares for which instructions are received.
This Proxy Statement, the attached Notice and the enclosed proxy card
(or voting instructions card) are being mailed to shareholders of the Fund and
to Contract Owners on or about August 29, 1995. The Fund's semi-annual report
for its fiscal period ended June 30, 1995 may be obtained free of charge by
writing to the Fund at its executive offices, 60 State Street, Boston,
Massachusetts 02109 or by calling 1-800-622-3265.
2
<PAGE>
PROPOSAL 1
APPROVAL OF THE ELIMINATION OF THE FUND'S
INVESTMENT RESTRICTION LIMITING INVESTMENT TO
CERTAIN TYPES OF U.S. GOVERNMENT SECURITIES
The Trustees of the Trust recommend that the shareholders approve the
elimination of the Fund's fundamental investment policy limiting the Fund to
investment only in U.S. Government Securities that are backed by the full faith
and credit of the United States and in related when-issued commitments and
repurchase agreements ("FFC Securities").
Why is this change being proposed?
Investment Flexibility. Pioneering Management Corporation, the Fund's
investment adviser (the "Adviser"), believes that the flexibility to invest in
U.S. Government Securities not backed by the full faith and credit of the United
States government ("Non-FFC Securities") would be beneficial in pursuing the
Fund's investment objective of seeking as high a level of current income as is
consistent with the preservation of capital. In the Adviser's opinion, many
Non-FFC Securities present attractive investment opportunities which, under
certain market conditions, may offer higher yields than comparable FFC
Securities.
Minimal Increased Credit Risk. Certain Non-FFC Securities are supported
by the discretionary authority of the U.S. Government to purchase the issuer's
obligations or by the right of the issuer to borrow from the U.S. Treasury.
However, the U.S. Treasury is under no legal obligation to purchase securities
or to make loans. Other Non-FFC Securities are supported only by the credit of
the agency, authority or instrumentality itself. Agencies or instrumentalities
whose obligations are not backed by the full faith and credit of the U.S.
Government include, among others, the Federal National Mortgage Association
("Fannie Mae"), Federal Home Loan Banks, the Student Loan Marketing Association
("Sallie Mae"), the Tennessee Valley Authority, the Bank for Cooperatives and
the Federal Home Loan Mortgage Corporation.
Like FFC Securities, Non-FFC Securities do not involve the significant
credit risks usually associated with investments in other types of fixed income
securities. Although in theory Non-FFC Securities present marginally greater
credit risk than FFC Securities, the Adviser believes that this difference is
insignificant because of the solvency of the issuers of the Non-FFC Securities
in which the Fund would invest and the great unlikelihood that the U.S.
Government would ever permit an agency, authority or instrumentality to default
on its obligations.
The primary risks of investing in U.S. Government Securities of all
types instead relate to sensitivity to interest rate movements and, in the case
of mortgage-related U.S. Government Securities, prepayment and foreclosure
rates. The degree to which these risks are present in a particular investment is
independent of the credit underlying the investment. Any particular Non-FFC
Security may involve more interest rate and/or prepayment risk than some FFC
Securities and less than others. Consequently, in the Adviser's view, investment
of a portion of the Fund's assets in Non-FFC Securities would not materially
increase the Fund's overall risk profile as a result of additional credit risk.
3
<PAGE>
Facilitating Technical Tax Compliance. In order for a variable contract
based on an insurance company separate account to qualify for deferred tax
treatment under the Internal Revenue Code of 1986, as amended, the account must
satisfy certain portfolio diversification standards. Such standards must also be
met by the underlying investments of any mutual fund in which the account
invests that function exclusively as a separate account investment vehicle.
In order for the SMA separate account (or any future separate accounts
investing in the Fund) to satisfy the diversification standards, unless a safe
harbor or a start-up period exception is available, at the end of each calender
quarter or within 30 days thereafter, one of the applicable restrictions
provides that no more than 55% of the value of the Fund's assets may be
represented by investments in the securities of any one issuer; no more than 70%
of the value of the Fund's assets may be represented by investments in the
securities of any two issuers; no more than 80% of the value of the Fund's
assets may be represented by investments in the securities of any three issuers;
and no more than 90% of the value of the Fund's assets may be represented by
investments in the securities of any four issuers. For purposes of this test, it
is helpful to have available a larger number of issuers whose securities the
Fund may purchase, and each U.S. Government agency or instrumentality is treated
as a separate issuer. Under the Fund's current investment restriction, the
requirement is difficult to satisfy because there are only a small number of
agencies or instrumentalities that issue FFC Securities, and hence, a limited
number of eligible separate issuers. On the other hand, there is available a
relatively large number of separate issuers of Non-FFC Securities. Consequently,
the proposed change in the Fund's investment policy would enable the Fund more
easily to satisfy this technical requirement, satisfaction of which is necessary
for Contract Owners to receive the expected tax deferred treatment of their
investment.
What will the new policy be?
If shareholders approve the elimination of the current investment
restriction, the Trustees intend to adopt a more flexible non-fundamental
restriction that would permit investments by the Fund in Non-FFC Securities, as
well as FFC Securities. Shareholders should note that a non-fundamental
investment restriction could be amended or eliminated by the Trustees without a
shareholder vote. Consequently, in approving this Proposal, shareholders will
give up the ability to limit the Fund's investments to any particular category
or categories if the Trustees determine that a change is appropriate. Under the
new policy, PMC could invest up to 100% of the Fund's assets in Non-FFC
Securities, although it is expected that the Fund's portfolio normally would
consist of a mix of FFC and Non-FFC Securities. Upon the adoption of such a
policy, the Fund's prospectus and statement of additional information would be
revised accordingly, including the addition of disclosure regarding certain
specific types of Non-FFC Securities.
The Trustees recommend changing the fundamental investment restriction
with respect to investments in U.S. Government Securities to a non-fundamental
policy with the language to be added shown in boldface and the language to be
deleted shown in bracketed italics to provide that the Fund may not:
4
<PAGE>
Invest its assets, except in U.S. Government Securities [backed by the
full faith and credit of] issued or guaranteed as to principal and
interest by the U.S. Government, its agencies, authorities or
instrumentalities and in when-issued commitments and repurchase
agreements with respect to these securities.
As indicated above, the foregoing restriction may be changed by approval
of the Trustees without a vote of shareholders. The Trustees, however, have no
present intention to further revise this policy.
Vote Required
Approval of this Proposal requires the affirmative vote of a "majority
of the outstanding voting securities" of the Fund, which for this purpose means
the affirmative vote of the lesser of (i) 67% or more of the outstanding shares
of the Fund present at the Meeting and entitled to vote, if the holders of more
than 50% of the outstanding shares of the Fund are present or represented by
proxy or (ii) more than 50% of the outstanding shares of the Fund. Each Fund
share is entitled to one vote.
If the shareholders do not approve the Proposal, the fundamental
investment restriction of the Fund with respect to investments in U.S.
Government Securities will remain unchanged.
OTHER MATTERS
The Fund's management knows of no business to be brought before the
Meeting except as described above. However, if any other matters properly come
before the meeting, it is expected that, absent specific Contract Owner
instructions to the contrary, SMA will vote on such matters in accordance with
its best judgment. If Contract Owners desire additional information about the
matters proposed for action, the Trust's management will be pleased to hear from
them and to provide further information.
Proxies, Quorum and Voting at the Meeting
A proxy executed by SMA may be revoked at any time prior to its exercise
by execution of a superseding proxy, by submission of a written notice of
revocation to the Secretary of the Trust or by attending the Meeting and voting
in person. All properly executed and unrevoked proxies received in time for the
Meeting will be voted in accordance with the instructions contained in the
proxies. If no instruction is given, the persons named as proxies will vote the
shares represented thereby in favor of the matters set forth in the attached
Notice and will use their best judgment in connection with the transaction of
such other business as may properly come before the Meeting or any adjournment
thereof. As indicated above, SMA will vote shares for which it has not received
instructions (or for which voting is left to its discretion) in the same
proportion as shares for which instructions are received.
In the event that, at the time any session of the Meeting is called to
order, a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies which have been received to adjourn the Meeting
to a later date. In the event that a quorum is present but sufficient votes in
favor of the Proposal has not been received, the persons named as proxies will
5
<PAGE>
vote those proxies which they are entitled to vote in favor of the Proposal for
such an adjournment and will vote those proxies required to be voted against the
Proposal against any such adjournment.
Shares of the Fund (including shares which abstain or do not vote with
respect to the Proposal presented for shareholder approval) will be counted for
purposes of determining whether a quorum is present at the Meeting. Abstentions
from voting will be treated as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled to
vote with respect to the Proposal, but will not be counted as a vote in favor of
the Proposal. Accordingly, an abstention from voting has the same effect as a
vote against the Proposal.
Shareholder Proposals
The Fund is not required to hold annual meetings of shareholders and
does not currently intend to hold such a meeting in 1996. Instead, meetings will
be held only when and if required. Shareholder proposals for inclusion in the
proxy statement for any subsequent meeting must be received by the Trust at 60
State Street, Boston, Massachusetts 02109 within a reasonable time before any
such meeting.
Expenses and Methods of Solicitation
The costs of the Meeting, including solicitation of voting instructions,
will be paid by PMC. PMC and/or SMA may, at its expense, have one or more of its
officers, representatives or compensated third-party agents aid in the
solicitation of proxies by personal interview or telephone and telegraph,
provided that SMA will be reimbursed by PMC, upon request, for its reasonable
expenses in conducting such activities.
PIONEER VARIABLE CONTRACTS TRUST
America Income Portfolio
August 24, 1995
6
EXHIBIT A
PROPOSED FORM OF MANAGEMENT CONTRACT
MANAGEMENT CONTRACT
THIS AGREEMENT dated this _____ day of ________, 1995 between Pioneering
Management Corporation, a Delaware corporation (the "Manager"), and Pioneer
Variable Contracts Trust, a Delaware business trust, on behalf of Real Estate
Growth Portfolio (the "Portfolio").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the "Registration Statement") for the
purpose of registering its shares for public offering under the Securities Act
of 1933, as amended,
WHEREAS, the Trust currently issues eight series of shares, including the
Portfolio,
WHEREAS, the parties hereto deem it mutually advantageous that the Manager
should be engaged, subject to the supervision of the Trust's Board of Trustees
and officers, to manage the Portfolio,
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth
herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Portfolio with investment
research, advice and supervision and will furnish continuously an investment
program for the Portfolio consistent with the investment objectives and policies
of the Portfolio. The Manager will determine from time to time what securities
shall be purchased for the Portfolio, what securities shall be held or sold by
the Portfolio and what portion of the Portfolio's assets shall be held
uninvested as cash, subject always to the provisions of the Trust's Declaration
of Trust, By-Laws and its registration statements under the 1940 Act and under
the Securities Act of 1933 covering the Trust's shares, as filed with the
Securities and Exchange Commission, and to the investment objectives, policies
and restrictions of the Portfolio, 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 Trust may from time to time establish. To carry out
<PAGE>
such determinations, the Manager will exercise full discretion and act for the
Portfolio in the same manner and with the same force and effect as the Trust
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.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Portfolio and upon the Trust's request, furnish to the
Portfolio research, statistical and advisory reports upon the industries,
businesses, corporations or securities as to which such requests shall be made,
whether or not the Portfolio 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
Portfolio'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
Trust with respect to the Portfolio) and preserve such records for the periods
prescribed therefor by Rule 31a-2 of 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.The Manager recognizes that the Trust may from time to time create
additional portfolios of the Trust, that this agreement relates only to the
management of the assets of the single existing Portfolio of the Trust, and that
the management of the assets of any additional portfolio of the Trust will be
subject to one or more separate investment management agreements.
3. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the affairs
and investments with respect to the Portfolio, and shall arrange, if desired by
the Trust, for members of the Manager's organization to serve as officers or
agents of the Trust.
(b)The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or interested
persons of, the Manager and all officers of the Trust as such; and (ii) all
expenses not hereinafter specifically assumed by the Trust or the Portfolio
where such expenses are incurred by the Manager or by the Trust or the Portfolio
<PAGE>
in connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Portfolio.
(c)The Trust 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 Trust with respect to the Portfolio; (iv) issue
and transfer taxes, chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Trust to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Trust and/or its shares with the Commission, state or blue
sky securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Trust and the Trustees; (ix) distribution fees
paid by the Trust in accordance with Rule 12b-1 promulgated by the Commission
pursuant to the 1940 Act; (x) compensation of those Trustees of the Trust who
are not affiliated with or interested persons of the Manager, the Trust (other
than as Trustees), The Pioneer Group, Inc. or Pioneer Funds Distributor, Inc.;
(xi) the cost of preparing and printing share certificates; (xii) interest on
borrowed money, if any; and (xii) organizational expenses of the Trust or
Portfolio.
(d) In addition to the expenses described in Section 3(c) above, the
Trust shall pay all brokers' and underwriting commissions chargeable to the
Portfolio in connection with securities transactions to which the Portfolio is a
party.
4.It is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") under written agreements with each
such Subadviser, provided that any such agreement is first approved by the vote
of a majority of the Trustees, including a majority of the Trustees who are not
"interested persons" (as the term "interested person" is defined in the 1940
Act) of the Trust, the Manager or any such Subadviser, at a meeting of Trustees
called for the purpose of voting on such approval and by a vote of a "majority
of the outstanding voting securities" (as defined in the 1940 Act) of the
<PAGE>
Portfolio. The authorization given to the Manager in Sections 1 and 7 hereof may
be delegated by it under any such agreement to any of the Subadvisers, provided
that the Subadvisers shall be subject to the same restrictions and limitations
on the investments and brokerage discretion as the Manager. While the Manager
shall be responsible for allocating assets among the Subadvisers and monitoring
their relative performances, the Trust agrees that the Manager should not be
accountable to the Trust or the Portfolio or the Portfolio's shareholders for
any loss or other liability relating to specific investments directed by any
Subadviser (even though the Manager retains the right to reserve any such
investment), because the Trust and the Manager will be relying almost
exclusively on the expertise of the Subadvisers for the selection and monitoring
of specific investments directed by the Subadvisers.
5. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services hereunder, a fee at the rate of 1.00% per annum of the
Portfolio'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 Portfolio in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Portfolio 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 regulation. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust 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 Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
6.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
<PAGE>
any other individual, firm or corporation, but nothing contained herein will be
construed to protect the Manager against any liability to the Trust or Portfolio
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.
7. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, directors, 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 Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that 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 portfolio securities for
the account of the Portfolio, neither the Manager nor any of its Directors,
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 portfolio securities for the
Portfolio'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 Portfolio the most favorable execution
and net price available except as described herein. It is also understood that
it is desirable for the Portfolio 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 Portfolio
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
Portfolio with such brokers, subject to review by the Trust's Trustees from time
<PAGE>
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 Portfolio 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 Portfolio
and to such clients.
8.This Agreement shall become effective on the date hereof and shall
remain in force until May 31, 1997 and from year to year thereafter, but only so
long as its continuance is approved annually by a vote of the Trustees of the
Trust voting in person, including a majority of its Trustees who are not parties
to this Agreement or interested persons (as the term "interested persons" is
defined in the 1940 Act) of any such parties, at a meeting of Trustees called
for the purpose of voting on such approval or by a vote of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Portfolio,
subject to the right of the Trust and the Manager to terminate this contract as
provided in Section 9 hereof.
9.Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Directors or its Board of Trustees, as the case may be, or
by vote of a "majority of its outstanding voting securities" (as defined in the
1940 Act) of the Portfolio and the giving of 60 days' written notice to the
other party.
10.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.
11.The Trust agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Trust, the name of the
Trust, and any series thereof, will be changed to one that does not contain the
name "Pioneer" or otherwise suggest an affiliation with the Manager.
12.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 Portfolio, the Manager
will act solely as investment counsel for such clients and not in any way on
behalf of the Trust or Portfolio.
<PAGE>
13.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.
14.This Agreement and all performance hereunder shall be governed by
the laws of The Commonwealth of Massachusetts, which apply to contracts made and
to be performed in The Commonwealth of Massachusetts.
15.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.
16.The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, and of any and every
nature whatsoever shall be satisfied solely out of the assets of the portfolio
affected thereby and that no Trustee, officer or holder of shares of beneficial
interest of the Trust shall be personally liable for any of the foregoing
liabilities. The Trust's Certificate of Trust, as amended from time to time, is
on file in the Office of the Secretary of State of the State of Delaware. Such
Certificate of Trust and the Trust's Declaration of Trust describe in detail the
respective responsibilities and limitations on liability of the Trustees,
officers, and holders of shares of beneficial interest.
17.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.
<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 VARIABLE CONTRACTS TRUST
on behalf of
Real Estate Growth Portfolio
- --------------------------- ----------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary Chief Executive Officer
ATTEST: PIONEERING MANAGEMENT CORPORATION
- --------------------------- ----------------------------
Joseph P. Barri David D. Tripple
Secretary President
PROXY PROXY
PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
To be held October 10, 1995
The undersigned, having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) John F.
Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each of
them, attorneys or attorney of the undersigned (with full power of substitution
in them and each of them) for and in the name(s) of the undersigned to attend
the Special Meeting of Shareholders of the Real Estate Growth Portfolio (the
"Fund") of Pioneer Variable Contracts Trust (the "Trust") to be held on Tuesday,
October 10, 1995 at 2:00 p.m. (Boston time) at the offices of Hale and Dorr,
counsel to the Trust, 60 State Street, 26th Floor, Boston, Massachusetts 02109
(the "Meeting"), and any adjourned session or sessions thereof, and there to
vote and act upon the following matters (as more fully described in the
accompanying Proxy Statement) in respect of all shares of the Fund which the
undersigned will be entitled to vote or act upon, with all the powers the
undersigned would possess if personally present:
(1) Toapprove the terms of a new Management Contract with Pioneering
Management Corporation and to approve the payment to Pioneering
Management Corporation of fees under an Interim Management Contract:
FOR |_| AGAINST |_| ABSTAIN |_|
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
DATED: ......................, 1995
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED
<PAGE>
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL AVOID THE NEED
FOR ADDITIONAL ITEMS
VOTING INSTRUCTIONS VOTING INSTRUCTIONS
SMA LIFE ASSURANCE COMPANY
VOTING INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS
OF THE REAL ESTATE GROWTH PORTFOLIO (THE "FUND")
OF PIONEER VARIABLE CONTRACTS TRUST (THE "TRUST")
To be held October 10, 1995
THIS INSTRUCTION FORM IS SOLICITED BY SMA LIFE ASSURANCE COMPANY ("SMA") FROM
OWNERS OF VARIABLE ANNUITY CONTRACTS ISSUED BY SMA ("CONTRACT OWNERS") WHO HAVE
SPECIFIED THAT A PORTION OF THEIR INVESTMENT BE ALLOCATED TO THE FUND
The undersigned Contract Owner, having received notice of the meeting and
management's proxy statement therefor, and revoking all prior instructions,
hereby instructs that the votes attributable to the undersigned's interests with
respect to the Fund be cast as designated below at the Special Meeting of
Shareholders of the Fund to be held on Tuesday, October 10, 1995 at 2:00 p.m.
(Boston time) at the offices of Hale and Dorr, counsel to the Trust, 60 State
Street, 26th Floor, Boston, Massachusetts 02109 (the "Meeting"), and any
adjourned session or sessions thereof:
(1) To approve the terms of a new Management Contract with Pioneering
Management Corporation and to approve the payment to Pioneering
Management Corporation of fees under an Interim Management Contract:
FOR |_| AGAINST |_| ABSTAIN |_|
IN ITS DISCRETION, SMA IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE INTERESTS TO WHICH THIS FORM OF INSTRUCTION RELATES WILL BE VOTED BY SMA IN
THE MANNER DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THE VOTES
ATTRIBUTABLE TO THIS INSTRUCTION FORM WILL BE VOTED IN THE SAME RATIO AS VOTES
FOR WHICH INSTRUCTIONS HAVE BEEN RECEIVED BY SMA
DATED: ......................, 1995
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
<PAGE>
PROXY PROXY
PIONEER VARIABLE CONTRACTS TRUST
America Income Portfolio
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
To be held October 10, 1995
The undersigned, having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) John F.
Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each of
them, attorneys or attorney of the undersigned (with full power of substitution
in them and each of them) for and in the name(s) of the undersigned to attend
the Special Meeting of Shareholders of the America Income Portfolio (the "Fund")
of Pioneer Variable Contracts Trust (the "Trust") to be held on Tuesday, October
10, 1995 at 2:00 p.m. (Boston time) at the offices of Hale and Dorr, counsel to
the Trust, 60 State Street, 26th Floor, Boston, Massachusetts 02109 (the
"Meeting"), and any adjourned session or sessions thereof, and there to vote and
act upon the following matters (as more fully described in the accompanying
Proxy Statement) in respect of all shares of the Fund which the undersigned will
be entitled to vote or act upon, with all the powers the undersigned would
possess if personally present:
(1) To approve the elimination of the Fund's Fundamental investment
restriction limiting investment to certain types of U.S. Government
Securities:
FOR |_| AGAINST |_| ABSTAIN |_|
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
DATED: ......................, 1995
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED
<PAGE>
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL AVOID THE NEED
FOR ADDITIONAL ITEMS
VOTING INSTRUCTIONS VOTING INSTRUCTIONS
SMA LIFE ASSURANCE COMPANY
VOTING INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS
OF THE AMERICA INCOME PORTFOLIO (THE "FUND")
OF PIONEER VARIABLE CONTRACTS TRUST (THE "TRUST")
To be held October 10, 1995
THIS INSTRUCTION FORM IS SOLICITED BY SMA LIFE ASSURANCE COMPANY ("SMA") FROM
OWNERS OF VARIABLE ANNUITY CONTRACTS ISSUED BY SMA ("CONTRACT OWNERS") WHO HAVE
SPECIFIED THAT A PORTION OF THEIR INVESTMENT BE ALLOCATED TO THE FUND
The undersigned Contract Owner, having received notice of the meeting and
management's proxy statement therefor, and revoking all prior instructions,
hereby instructs that the votes attributable to the undersigned's interests with
respect to the Fund be cast as designated below at the Special Meeting of
Shareholders of the Fund to be held on Tuesday, October 10, 1995 at 2:00 p.m.
(Boston time) at the offices of Hale and Dorr, counsel to the Trust, 60 State
Street, 26th Floor, Boston, Massachusetts 02109 (the "Meeting"), and any
adjourned session or sessions thereof:
(1) To approve the elimination of the Fund's fundamental investment
restriction limiting investment to certain types of U.S. Government
securities:
FOR |_| AGAINST |_| ABSTAIN |_|
IN ITS DISCRETION, SMA IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
THE INTERESTS TO WHICH THIS FORM OF INSTRUCTION RELATES WILL BE VOTED BY SMA IN
THE MANNER DIRECTED BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THE VOTES
ATTRIBUTABLE TO THIS INSTRUCTION FORM WILL BE VOTED IN THE SAME RATIO AS VOTES
FOR WHICH INSTRUCTIONS HAVE BEEN RECEIVED BY SMA
DATED: ......................, 1995
....................................
....................................
Signature(s)
In signing, please write name(s)
exactly as appearing hereon. When
signing as attorney, executor,
administrator or other fiduciary,
please give your full title as such.
Joint owners should each sign
personally.
<PAGE>
Pioneer Vision Variable Annuity
60 State Street
Boston, MA 02109
August 1995
Dear Contract Holder,
I am writing to let you know that a special meeting will be held October 10,
1995, for contract holders of Pioneer Variable Contracts Trust -- America Income
Portfolio to vote on an important proposal. As a contract holder, you have the
opportunity to voice your opinion on this matter.
This package contains information about the proposal, along with the voting
instruction for you to use when voting by mail. Please take a moment to read the
enclosed materials and cast your vote on the yellow voting instruction.
Your prompt vote will help to save money. If a majority of the Portfolio's
investors have not voted prior to the meeting, we must try to obtain their votes
with additional mailings or phone solicitation. That is a costly process.
(callout in margin) Voting your units by mail is quick and easy. Everything you
need is enclosed.
The proposal up for approval has been reviewed by the Board of Trustees of
Pioneer Variable Contracts Trust -- America Income Portfolio, whose primary role
is to protect your interests as a contract holder. In the Trustees' opinion, the
proposal is fair and reasonable. The Trustees recommend that you vote FOR the
proposal.
(callout in margin) The Portfolio's Board of Trustees recommends that you vote
FOR the proposal.
Here is what a FOR vote means for the proposal being considered.
Increase the variety of U.S. government agency securities the Portfolio may own.
As proposed, the change to the Portfolio's fundamental investment policies would
allow the Portfolio to invest in select U.S. government agency securities that
do not bear the U.S. government's "full faith and credit" guarantee. This
additional flexibility should be beneficial to the Portfolio's objective of
generating as high a level of current income as is consistent with the
preservation of capital.
Cast your vote by completing and signing the yellow voting instruction enclosed
in this package. Please mail your completed and signed voting instruction as
quickly as possible, using the postage-paid envelope provided.
(callout in margin) Please vote! Your vote is extremely important, no matter how
many units you own.
Please feel free to call us at 1-800-622-3265 if you have any questions about
the proposal or the process of voting. Thank you for your prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman
0895-2747
<PAGE>
Pioneer Vision Variable Annuity
60 State Street
Boston, MA 02109
August 1995
Dear Contract Holder,
I am writing to let you know that a special meeting will be held October 10,
1995, for contract holders of Pioneer Variable Contracts Trust -- Real Estate
Growth Portfolio to vote on an important proposal. As a contract holder, you
have the opportunity to voice your opinion on this matter.
This package contains information about the proposal, along with the voting
instruction for you to use when voting by mail. Please take a moment to read the
enclosed materials and cast your vote on the yellow voting instruction.
Your prompt vote will help to save money. If a majority of the Portfolio's
investors have not voted prior to the meeting, we must try to obtain their votes
with additional mailings or phone solicitation. That is a costly process.
(callout in margin) Voting your units by mail is quick and easy. Everything you
need is enclosed.
The proposal up for approval has been reviewed by the Board of Trustees of
Pioneer Variable Contracts Trust -- Real Estate Growth Portfolio, whose primary
role is to protect your interests as a contract holder. In the Trustees'
opinion, the proposal is fair and reasonable. The Trustees recommend that you
vote FOR the proposal.
(callout in margin) The Portfolio's Board of Trustees recommends that you vote
FOR the proposal.
Here is what a FOR vote means for the proposal being considered.
Approve a new management contract with Pioneering Management Corporation (PMC),
and approve the Portfolio's payment of fees to PMC under an interim management
contract. Recently, Apollo Real Estate Advisors, L.P., acquired an indirect
controlling interest in Pioneer's joint venture partner, Winthrop Financial
Associates, and the Portfolio's previous manager, Pioneer Winthrop Advisers. As
a result, the Portfolio's previous management contracts automatically
terminated, an interim management contract with PMC was put in place and a
substantially identical new agreement has been proposed.
(callout in margin) As proposed, there would be no change to the management fee
paid by the Portfolio.
Cast your vote by completing and signing the yellow voting instruction enclosed
in this package. Please mail your completed and signed voting instruction as
quickly as possible, using the postage-paid envelope provided.
(callout in margin) Please vote! Your vote is extremely important, no matter how
many units you own.
Please feel free to call us at 1-800-622-3265 if you have any questions about
the proposal or the process of voting. Thank you for your prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman
0895-2746
