File No. 33-84546
File No. 811-8786
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant [X]
Check the appropriate box:
[ ] Preliminary proxy statements [ ] Confidential, for Use
of the Commission
Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive proxy statements
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
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.
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PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
60 State Street
Boston, Massachusetts 02109
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
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TO BE HELD MARCH 5, 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the Real Estate Growth Portfolio (the "Portfolio") 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 2:30 p.m. (Boston time) on Tuesday, March
5, 1996. The purpose of the Meeting is to consider and act upon the following
proposals:
1. To approve the terms of a new Subadvisory Agreement with Boston Financial
Securities, Inc.; 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 January 22, 1996
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
January 31, 1996
Boston, Massachusetts
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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.
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PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
60 State Street
Boston, Massachusetts 02109
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PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 5, 1996
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 proxies will be used at the Special
Meeting of Shareholders (the "Meeting") of the Trust's Real Estate Growth
Portfolio (the "Portfolio") to be held on Tuesday, March 5, 1996 at 2:30 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 January 22,
1996 as the record date for the determination of shareholders of the Portfolio
entitled to notice of and to vote at the Meeting. On the record date, 54,610.466
shares of beneficial interest of the Portfolio were outstanding. As of such
date, except for The Pioneer Group, Inc. (which owned 19.1% of all outstanding
shares), the Allmerica Financial Life Insurance and Annuity Company
("Allmerica") was the sole shareholder of record of the Portfolio. Allmerica
will vote shares of the Portfolio held by it in accordance with instructions
received from variable annuity contract owners or participants ("Contract
Owners") for whose accounts such shares of the Portfolio are held. Accordingly,
this Proxy Statement is also intended to be used by Allmerica 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, Allmerica
will vote the shares of the Portfolio 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 Portfolio
and to Contract Owners on or about February 5, 1996. The Portfolio's semiannual
report for its fiscal period ended June 30, 1995 may be obtained free of charge
by writing to the Portfolio at its executive offices, 60 State Street, Boston,
Massachusetts 02109 or by calling 1-800-622-3265.
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PROPOSAL 1
APPROVAL OF THE TERMS OF A NEW
SUBADVISORY AGREEMENT WITH
BOSTON FINANCIAL SECURITIES, INC.
The Portfolio's Current Advisory Arrangements
Pioneering Management Corporation ("PMC") currently serves as the
Portfolio's investment adviser pursuant to a management contract, dated October
10, 1995, between the Trust, on behalf of the Portfolio, and PMC (the "Current
Management Contract"). Under the Current Management Contract, the Portfolio pays
PMC a management fee at a rate equal to 1.00% of the Portfolio's average daily
net assets.
On January 12, 1996, a majority of the Trustees, including a majority of
the Trustees who are not "interested persons" of the Trust or of PMC within the
meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act") (the "Independent Trustees"), voted to recommend to shareholders
of the Portfolio that they approve a subadvisory agreement among the Trust, on
behalf of the Portfolio, PMC and Boston Financial Securities, Inc. ("BFS"),
pursuant to which BFS would provide investment subadvisory services relating to
the management of the Portfolio's portfolio (the "Proposed Subadvisory
Agreement").
During 1995, the Portfolio experienced several changes in investment
management and subadvisory arrangements as a result of changes in the corporate
structures of the Portfolio's investment advisers and subadvisers and affiliated
entities. The Portfolio does not currently have an investment subadviser. Under
an Investment Subadvisory Agreement previously in effect among the Trust, on
behalf of the Portfolio, PMC and Winthrop Advisers Limited Partnership
("WALP")(the "WALP Subadvisory Agreement"), WALP provided subadvisory services
similar to those proposed to be provided by BFS under the Proposed Subadvisory
Agreement. The WALP Subadvisory Agreement terminated in July, 1995. At present,
PMC, at its own expense, has contracted with BFS for consulting advice regarding
real estate projects in which issuers of the Portfolio's portfolio securities
have an interest. This consulting arrangement will terminate upon effectiveness
of the Proposed Subadvisory Agreement. The changes in the Portfolio's management
and subadvisory arrangements over the past year are described in Appendix A to
this Proxy Statement.
Information regarding Boston Financial Securities, Inc.
BFS, 101 Arch Street, Boston, MA 02110, a registered investment adviser
organized as a Massachusetts corporation, has extensive experience and expertise
in placing, evaluating and providing advice with respect to real estate related
investments. BFS is an affiliate of the Boston Financial Group Limited
Partnership, a Massachusetts limited partnership ("BFGLP"), which together with
a predecessor business have been engaged since 1970 in structuring a variety of
real estate investment programs. Several other affiliates of BFS also provide a
variety of financial, consulting and management services to real estate
investors and developers.
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Mr. Fred N. Pratt, Jr. will have ultimate responsibility for overseeing
the provision of subadvisory services to the Portfolio under the Proposed
Subadvisory Agreement. Mr. Pratt was one of the founders of the original BFGLP
affiliate in 1969 and currently serves as the President and Chief Executive
Officer of BFGLP and as a Director of BFS. Mr. Pratt is also a principal of BFS,
BFGLP and other affiliates and was appointed a Vice-President of the Portfolio
on January 12, 1996. Mr. David Carter of BFS will have primary responsibility
for the day-to-day provision of subadvisory services to the Portfolio. Mr.
Carter joined BFS in January, 1995, having previously been employed as a real
estate securities analyst by PMC and WALP and its affiliates. It is expected
that Mr. Carter will be appointed as a Vice President of BFS in February, 1996.
Additional information pertaining to BFS is provided in Appendix B to
this Proxy Statement.
Terms of the Proposed Subadvisory Agreement
The material terms of the Proposed Subadvisory Agreement are described
below, which description is qualified in its entirety by reference to the copy
of the Proposed Subadvisory Agreement attached to this Proxy Statement as
Exhibit A.
Subadvisory Services. Pursuant to the terms of the Proposed Subadvisory
Agreement, BFS, as subadviser to the Portfolio, would (i) identify and analyze
real estate industry companies, including the real estate properties and other
permissible investments for the Portfolio, (ii) analyze market conditions
affecting the real estate industry generally and specific geographical and
securities markets in which the Portfolio may invest or is invested, (iii)
continuously review and analyze the investments in the Portfolio's portfolio and
(iv) furnish advisory reports based on such analysis to PMC. Pursuant to the
terms of the WALP Subadvisory Agreement previously in effect, WALP provided the
Portfolio with substantially similar investment subadvisory services.
Subadvisory Fees and Expense Limitation. As compensation for its
subadvisory services, PMC will pay BFS a subadvisory fee under the Proposed
Subadvisory Agreement equal to 0.30% per annum of the Portfolio's average daily
net assets. This fee is computed daily and paid monthly. Under the terms of the
WALP Subadvisory Agreement previously in effect, WALP was paid a Subadvisory fee
at the rate of 0.25% per annum of the Portfolio's average daily net assets.
BFS's subadvisory fee would be payable solely by PMC and the Portfolio would not
be responsible for its payment. Accordingly, the subadvisory fee will not result
in a higher overall management fee for the Portfolio or increase the Portfolio's
total operating expenses.
PMC has voluntarily and temporarily agreed not to impose a portion of
its management fee and, if necessary, to limit or otherwise reduce operating
expenses so that the Portfolio's expenses will not exceed 1.25% of its average
daily net assets. PMC may revise or terminate this agreement at any time. The
subadvisory fee payable by PMC to BFS would be reduced proportionally to the
extent that the management fee is reduced under this expense limitation or to
the extent that PMC after written notice to BFS elects to utilize a portion of
the management fees paid to it by the Portfolio to make payments to third
parties.
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Expenses. Under the Proposed Subadvisory Agreement, BFS pays all
expenses related to its services for the Portfolio with the exception of
bookkeeping, custodial, transfer agency, auditing, legal and certain other
specified expenses, which are paid by the Portfolio. The Portfolio also pays all
brokerage commissions and any taxes or other charges in connection with its
portfolio transactions.
Approval and Termination Provisions. The Proposed Subadvisory Agreement
was approved by the Board of Trustees, including a majority of the Independent
Trustees, on January 12, 1996. If initially approved by Shareholders, the
Proposed Subadvisory Agreement 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 Trust's Trustees or a "majority of the outstanding voting
securities" (as defined below) of the Portfolio. The Proposed Subadvisory
Agreement may be terminated without penalty on 60 days' written notice by the
Portfolio's Board of Trustees, by vote of holders of a majority of the
Portfolio's shares or by PMC or BFS, upon not less than 30 days' written notice
and not more than 60 days' written notice.
Standard of Care. The Proposed Subadvisory Agreement provides that, in
the absence of willful misfeasance, bad faith or gross negligence on the part of
BFS, or of the reckless disregard of its obligations and duties, BFS will not be
liable for any act or omission in the course of, or connected with, rendering
services under such Agreement. This "standard of care" is identical to that
under the WALP Subadvisory Agreement previously in effect and 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
PORTFOLIO APPROVE THE TERMS OF THE PROPOSED SUBADVISORY AGREEMENT
The Board of Trustees, including a majority of the Independent Trustees,
determined that the terms of the Proposed Subadvisory Agreement are fair and
reasonable and that approval of the terms of the Proposed Subadvisory Agreement
on behalf of the Portfolio is in the best interests of the Portfolio and its
shareholders. In making these determinations, the Trustees considered the
following: (a) the nature and quality of services to be provided by BFS under
the Proposed Subadvisory Agreement; (b) the similar material terms, other than
the difference in fee rates, under both the Proposed Subadvisory Agreement and
the WALP Subadvisory Agreement; and (c) the reasonableness of BFS's compensation
and profits and the financial and managerial stability of BFS.
In the event that this Proposal is not approved by the shareholders of
the Portfolio, the Proposed Subadvisory Agreement will not become effective and
no person will serve as a subadviser to the Portfolio. In such event, the
Trustees will consider what further action, if any, should be taken.
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Vote Required
Approval of this Proposal requires the affirmative vote of a "majority
of the outstanding voting securities" of the Portfolio, which for this purpose
means the affirmative vote of the lesser of (i) 67% or more of the outstanding
shares of the Portfolio present at the Meeting and entitled to vote, if the
holders of more than 50% of the outstanding shares of the Portfolio are present
or represented by proxy or (ii) more than 50% of the outstanding shares of the
Portfolio. Each Portfolio share is entitled to one vote.
OTHER MATTERS
The Portfolio'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, Allmerica 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 Allmerica 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 matter 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, Allmerica 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 have 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.
Shares of the Portfolio entitled to vote at the meeting (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.
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Shareholder Proposals
The Portfolio is not required to hold annual meetings of shareholders
and does not currently intend to hold such a meeting in 1997. 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 Allmerica 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 Allmerica will be reimbursed by PMC, upon request, for its
reasonable expenses in conducting such activities.
PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
January 29, 1996
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APPENDIX A
Additional Information Concerning Prior Advisory Arrangements
Prior to July 17, 1995, Pioneer Winthrop Advisers ("PWA") served as the
Portfolio's investment manager pursuant to a management contract dated April 28,
1995 (the "PWA Management Contract"), and WALP and PMC served as the Portfolio's
co-investment subadvisers pursuant to separate investment subadvisory contracts
dated April 28, 1995 (the WALP Subadvisory Agreement, described above, 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 had 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, 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 provided that it terminate automatically
in the event that the PWA Management Contract terminated. As such, the PMC
Subadvisory Agreement also terminated on July 17, 1995.
In anticipation of the Acquisition and the resulting termination of the
Prior Advisory Agreements, the Board of Trustees of the Portfolio, including a
majority of the Independent Trustees, approved an interim management contract
(the "Interim Management Contract") between the Trust, on behalf of the Trust,
and PMC. The Interim Management Contract became effective on July 17, 1995 (the
closing date of the Acquisition) and PMC provided investment advisory and
management services to the Portfolio under the Interim Management Contract until
the adoption of the Current Management Contract.
The Portfolio and PMC had received an order from the Securities and
Exchange Commission (the "Commission") permitting PMC to serve, without
shareholder approval, as the Portfolio'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 were
maintained in an interest-bearing escrow account and the amounts in such account
were paid to PMC only upon approval of the shareholders of the Portfolio at a
meeting held on October 10, 1995. At the same meeting, the shareholders also
voted to approve the Current Management Contract, pursuant to which, as
indicated above, PMC currently serves as the Portfolio's investment adviser.
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APPENDIX B
Additional Information Pertaining to BFS
Directors. The following table provides information with respect to the
Directors of BFS:
Name and Address Principal Occupation(s)
George J. Carter, Jr., President of BFS
101 Arch Street
Boston, MA 02110
Randolph G. Hawthorne Vice President, Treasurer and Director
101 Arch Street of BFS; Senior Vice President of BFGLP
Boston, MA 02110
Georgia Murray, Vice President and Director of BFS;
101 Arch Street Senior Vice President of BFGLP;
Boston, MA 02110 Director of Atlantic Bank and Trust
Company
Fred N. Pratt, Jr., Director of BFS; President and Chief
101 Arch Street Executive Officer of BFGLP; Trustee of
Boston, MA 02110 Pioneer Real Estate Shares
Ownership of BFS and Affiliates. As of December 31, 1995, the following
individuals each beneficially owned more than 5% of the outstanding Common Stock
of BFS:
Number of Shares
Name and Address (% of Shares Outstanding)
Mr. Hawthorne 1,270 (10.53%)
Ms. Murray 763 ( 6.33%)
Mr. Pratt 1,468 (12.17%)
Peter G. Fallon, Jr. 1,105 ( 9.16%)
101 Arch Street
Boston, MA 02110
William B. Haynsworth 1,289 (10.96%)
101 Arch Street
Boston, MA 02110
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Alvin H. Howell 1,361 (11.29%)
101 Arch Street
Boston, MA 02110
Donna C. Gibson 634 ( 5.26%)
101 Arch Street
Boston, MA 02110
At such date, Mr. Carter, BFS's principal executive officer, owned
beneficially less than 2% of the outstanding Common Stock of BFS. Each of the
above principals also owns BFGLP in substantially the same percentage amounts as
BFS. BFG-GP, Inc. ("BFGGP"), a Massachusetts corporation, is the general partner
of BFGLP. Mr. Pratt is the sole shareholder of BFGGP.
Similar Fund Advised By BFS. BFS has not previously served as an
investment adviser or subadviser to a registered investment company. It is
currently being proposed that BFS also serve as the investment subadviser to
Pioneer Real Estate Shares (the "Real Estate Fund") which has an investment
objective similar to that of the Portfolio. As of December 31, 1995, Real Estate
Fund had approximately $27 million in net assets. The proposed subadvisory fee
payable by PMC to BFS with respect to the Real Estate Fund would be payable
quarterly at an annual rate equal to 0.25% of the Real Estate Fund's average
daily net assets up to $27 million and 0.50% of average daily net assets in
excess of $27 million. 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. The subadvisory fee payable by PMC to BFS would be reduced
proportionally to the extent that the management fee is reduced under this
expense limitation or to the extent that PMC after written notice to BFS elects
to utilize a portion of the management fees paid to it by the Real Estate Fund
to make payments to third parties.
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EXHIBIT A
SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT made as of the ____ day of March, 1996, by and
among PIONEER VARIABLE CONTRACTS TRUST, a Delaware business trust (the "Trust"),
on behalf of the REAL ESTATE GROWTH PORTFOLIO (the "Portfolio"), PIONEERING
MANAGEMENT CORPORATION, a Delaware corporation (the "Manager") and BOSTON
FINANCIAL SECURITIES, INC., a Massachusetts corporation (the "Subadviser").
W I T N E S S E T H
WHEREAS, the Trust is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and the Manager and the Subadviser are investment advisers registered
under the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, the Portfolio is an investment series of the Trust, and
WHEREAS, pursuant to authority granted to the Manager by the Board of
Trustees of the Trust and pursuant to the provisions of the Management Contract
dated as of October 10, 1995 between the Manager and the Trust, on behalf of the
Portfolio (the "Management Contract"), the Manager has selected the Subadviser
to act as a sub-investment adviser of the Portfolio and to provide certain other
services, as more fully set forth below, and to perform such services under the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follow:
1. The Subadviser's Services.
(a) The Subadviser shall, to the extent reasonably required in the
conduct of the business of the Portfolio and upon request by the Portfolio or
the Manager, (i) identify, analyze and make investment recommendations regarding
real estate industry companies, including the real estate properties and other
permissible investments of the Portfolio, (ii) analyze market conditions
affecting the real estate industry generally and specific geographical and
securities markets in which the Portfolio may invest or is invested, (iii)
continuously review and analyze the investments in the Portfolio's portfolio,
and (iv) furnish to the Manager and the Portfolio advisory reports based on such
analysis. The Subadviser shall 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 the contents of such reports.
The Subadviser shall use its best efforts to ensure that any
recommendations it makes to the Manager regarding the purchase and sale of
portfolio securities are in compliance with the provisions of the Trust's
Declaration of Trust and By-laws and the 1940 Act, and with the investment
objectives, policies and restrictions (including, without limitation, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended,
for qualification as a regulated investment company) of the Portfolio, as each
of the same shall be from time to time in effect as set forth in the Portfolio's
Prospectus and Statement of Additional Information, or any investment guidelines
or other instructions received in writing from the Manager, and subject,
further, to such policies and instructions as the Manager may from time to time
establish and deliver to the Subadviser. Notwithstanding the foregoing, pursuant
to the
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terms of the Management Contract, the Manager is solely responsible for the
day-to-day management of the Portfolio's investment portfolio and for ensuring
that the Portfolio's investments comply with the Trust's Declaration of Trust
and By-laws and the 1940 Act, and with the investment objectives, policies and
restrictions of the Portfolio.
(b) The Subadviser shall not be responsible for the provision of
administrative, bookkeeping or accounting services to the Portfolio, except as
otherwise provided herein or as may be necessary for the Subadviser to supply to
the Manager, the Portfolio or its Trustees the information required to be
supplied under this Agreement.
(c) The Subadviser shall maintain separate books and detailed records
of all matters pertaining to the Portfolio (the "Portfolio's Books and
Records"). The Portfolio's Books and Records shall be available to the Manager
at any time upon request and shall be available for telecopying without delay to
the Manager during any day that the Portfolio is open for business.
(d) The Subadviser shall also ensure that its Access Persons (as
defined in the Trust's Code of Ethics) comply in all respects with the Trust's
Code of Ethics, as in effect from time to time.
(e) The Subadviser shall inform the Manager and the Trust's Trustees on
a current basis of changes in investment strategy or tactics or in key
personnel. The Subadviser will make its officers and employees available to meet
with the Trust's Trustees at least annually on due notice to review the
investments of the Portfolio in light of current and prospective economic and
market conditions.
(f) From time to time as the Manager or the Trustees of the Trust may
reasonably request, the Subadviser shall furnish to the Manager and to each of
the Trust's Trustees reports on securities held by the Portfolio, all in such
detail as the Manager or the Trustees may reasonably request.
(g) It shall be the duty of the Subadviser to furnish to the Trustees
of the Trust such information as may reasonably be necessary in order for the
Trustees to evaluate this Agreement or any proposed amendments thereto for the
purposes of casting a vote pursuant to Section 8 hereof.
2. Allocation of Charges and Expenses. The Subadviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Subadviser shall not be responsible for the Portfolio's or the
Manager's expenses, including brokerage and other expenses incurred in placing
orders for the purchase and sale of securities. Specifically, the Subadviser
will not be responsible for expenses of the Portfolio or the Manager, as the
case may be, including, but not limited to, the following: (i) charges and
expenses for determining from time to time the value of the Portfolio's net
assets and the keeping of its books and records and related overhead; (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 Portfolio; (iv) brokers' commissions, and issue and transfer
taxes, chargeable to the Portfolio in connection with securities transactions to
which the Portfolio 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 Portfolio to federal, state or other governmental agencies; (vi)
fees and expenses involved in registering and maintaining registrations of the
Portfolio and/or its shares with the Securities and Exchange Commission (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 Portfolio
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and the Trustees; (ix) distribution fees paid by the Portfolio in accordance
with Rule 12b-1 promulgated by the Commission pursuant to the 1940 Act, if any;
and (x) compensation and expenses of Trustees of the Trust. The Portfolio or the
Manager, as the case may be, shall reimburse the Subadviser for any such
expenses or other expenses of the Portfolio or the Manager, as may be reasonably
incurred by such Subadviser on behalf of the Portfolio or the Manager. The
Subadviser shall keep and supply to the Portfolio and the Manager adequate
records of all such expenses.
3. Information supplied by the Manager. The Manager shall provide the
Subadviser with the Trust's Declaration of Trust, By-laws, Prospectus and
Statement of Additional Information, and instructions, as in effect from time to
time; and the Subadviser shall have no responsibility for actions taken in
reliance on any such documents.
4. Representations, Warranties and Covenants. The Subadviser represents
and warrants to each of the Portfolio and the Manager that it is registered as
an "investment adviser" under the Subadvisers Act and covenants that it will
remain so registered for the duration of this Agreement.
The Subadviser has reviewed the Registration Statement of the Trust as
filed with the Commission and represents and warrants that with respect to
disclosure about the Subadviser or information relating directly or indirectly
to the Subadviser, such Registration Statement contains, as of the date hereof,
no untrue statement of any material fact and does not omit any statement of
material fact which was required to be stated therein or necessary to make the
statements contained therein not misleading.
Except as otherwise provided in Section 1(a) hereof, the Subadviser
agrees to comply with the requirements of the 1940 Act and the Advisers Act and
the respective rules and regulations thereunder, as applicable, as well as with
all other applicable Federal and state laws, rules, regulations and case law
that relate to the services and relationships described hereunder, and with the
provisions of the Registration Statement, as amended or supplemented, of the
Trust.
5. Subadviser's Compensation. The Manager shall pay to the Subadviser,
as compensation for the Subadviser's services hereunder, a fee equal to 0.30%
per annum of the Portfolio's average daily net assets. Such fee shall be
computed daily and paid monthly. The Portfolio shall have no responsibility for
any fee payable to the Subadviser.
The method of determining net assets of the Portfolio for purposes
hereof shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of Portfolio shares as described
in the Portfolio's Prospectus. If this Agreement shall be effective for only a
portion of a month, the aforesaid fee shall be prorated for that portion of such
month during which this Agreement is in effect.
In the event that the advisory fee payable by the Portfolio to the
Manager shall be reduced or the Manager agrees, after written notice to the
Subadviser, to utilize a portion of the advisory fee to make payments to a third
party, the amount payable to the Subadviser shall be likewise reduced by a
proportionate amount. The Subadviser 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 portion thereof would otherwise accrue). Any such fee reduction may
be discontinued or modified by the Subadviser at any time.
A-3
<PAGE>
6. Independent Contractor. In the performance of its duties hereunder,
the Subadviser is and shall be an independent contractor and unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Portfolio in any way or otherwise be
deemed to be an agent of the Portfolio or of the Manager.
7. Assignment and Amendments. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change of control of the Manager or the Subadviser, or
(ii) in the event of the termination of the Management Contract; provided that
such termination shall not relieve the Manager or the Subadviser of any
liability incurred hereunder.
The terms of this Agreement shall not be changed unless such change is
approved at a meeting by the affirmative vote of a majority of the outstanding
voting securities of the Portfolio and unless also approved by the affirmative
vote of a majority of Trustees of the Trust voting in person, including a
majority of the Trustees who are not interested persons of the Trust, the
Manager or the Subadviser, at a meeting called for the purpose of voting on such
change.
8. Duration and Termination. This Agreement shall become effective as
of the date first above written and shall remain in full force and effect
continually thereafter unless terminated automatically as set forth in Section 7
hereof or until terminated as follows:
(a) The Portfolio or the Manager may at any time terminate this
Agreement by not more than sixty (60) days' nor less than thirty (30) days'
written notice delivered or mailed by registered mail, postage prepaid, to the
Subadviser. Action of the Portfolio under this Subsection may be taken either
(i) by vote of the Trust's Trustees or (ii) by the affirmative vote of a
majority of the outstanding voting securities of the Portfolio;
(b) The Subadviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the Manager; or
(c) This Agreement shall automatically terminate on May 31 of any year
beginning on May 31, 1997, in which its terms and renewal shall not have been
approved by (i) a majority vote of the Trustees of the Trust voting in person,
including a majority of the Trustees who are not interested persons of the
Trust, the Manager or the Subadviser, at a meeting called for the purpose of
voting on such approval or (ii) the affirmative vote of a majority of the
outstanding voting securities of the Portfolio; provided, however, that if the
continuance of this Agreement is submitted to the shareholders of the Portfolio
for their approval and such shareholders fail to approve such continuance of
this Agreement as provided herein, the Subadviser may continue to serve
hereunder as to the Portfolio in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
Termination of this Agreement pursuant to this Section shall be without
payment of any penalty.
In the event of termination of this Agreement for any reason, the
Subadviser shall, immediately upon notice of termination or on such later date
as may be specified in such notice, cease all activity on behalf of the
Portfolio and with respect to any of its assets, except as expressly directed by
the Manager. In addition, the Subadviser shall deliver the Portfolio's Books and
Records to the Manager by such means and in accordance with such schedule as the
Manager shall direct and shall otherwise cooperate, as reasonably directed by
the Manager, in the transition of portfolio asset management to any successor of
the Subadviser, including the Manager.
A-4
<PAGE>
9. Certain Definitions. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Portfolio" means the affirmative vote, at an annual or special
meeting of shareholders of the Portfolio, duly called and held, (a) of 67% or
more of the shares of the Portfolio present (in person or by proxy) and entitled
to vote at such meeting, if the holders of more than 50% of the outstanding
shares of the Portfolio entitled to vote at such meeting are present (in person
or by proxy), or (b) of more than 50% of the outstanding shares of the Portfolio
entitled to vote at such meeting, whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under said Act.
10. Liability and Indemnification. In the absence of willful
misfeasance, bad faith or gross negligence on the part of the Subadviser, or of
reckless disregard of its obligations and duties hereunder (collectively,
"Malfeasance"), the Subadviser shall not be subject to any liability to the
Manager or the Portfolio, to any shareholder of the Portfolio, or to any person,
firm or organization, for any act or omission in the course of, or connected
with, rendering services hereunder. Nothing herein, however, shall derogate from
the Subadviser's obligations under federal and state securities laws
(collectively, the "Securities Laws").
The Manager shall indemnify the Subadviser for all liabilities and
related costs, including reasonable attorney's fees, which the Subadviser may
sustain in connection with the discharge without Malfeasance or negligence of
its obligations hereunder and in accordance with the Securities Laws. The
Subadviser shall indemnify the Manager and the Portfolio for all liabilities and
related costs, including reasonable attorneys fees, which either of them may
sustain as a result of the Subadviser's Malfeasance or violation of the
Securities Laws.
11. Enforceability. 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 uneforceability 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.
12. Limitation of Liability. The parties to this Agreement acknowledge
and agree that all litigation 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 Portfolio 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.
13. Jurisdiction. This Agreement shall be governed by and construed in
accordance with the substantive laws of The Commonwealth of Massachusetts and
the Subadviser consents to the jurisdiction of courts, both state or federal, in
Boston, Massachusetts, with respect to any dispute under this Agreement.
A-5
<PAGE>
14. Counterparts. 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.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed on their behalf by their duly authorized officers as of the date first
above written.
ATTEST: PIONEER VARIABLE CONTRACTS TRUST
(on behalf of the Real Estate Growth
Portfolio)
Name: Joseph P. Barri Name: John F. Cogan, Jr.
Title: Secretary Title: President
ATTEST: PIONEERING MANAGEMENT CORPORATION
Name: Joseph P. Barri Name: David D. Tripple
Title: Secretary Title: President
ATTEST: BOSTON FINANCIAL SECURITIES, INC.
Name: Name:
Title: Title
A-6
Pioneer Variable Contracts Trust --
Real Estate Growth Portfolio
60 State Street
Boston, MA 02109
February 1996
Dear Contract Holder,
I am writing to let you know that a special meeting will be held March 5, 1996,
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 proxy card
for you to use when voting by mail. Please take a moment to read the enclosed
materials and cast your vote on the yellow proxy card.
Your prompt vote will help 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.
Proposal 1:
Approve a new Subadvisory Agreement with Boston Financial Securities Inc. (BFS).
As subadviser to the Portfolio, BFS will identify and analyze real estate
industry companies, analyze market conditions, review investments in the
Portfolio and furnish advisory reports. Under the proposed Subadvisory
Agreement, Pioneering Management Corporation (PMC) will pay BFS an ongoing
subadvisory fee. The Portfolio will not be responsible for paying any
subadvisory fee to BFS; accordingly, there will be no increase in management fee
or operating expenses for the Portfolio.
Cast your vote by completing and signing the yellow proxy card enclosed in this
package. Please mail your completed and signed proxy as quickly as possible,
using the postage-paid envelope provided.
(callout in margin) Please vote! Your vote is extremely important, no matter how
many units you own.
Thank you for your prompt response.
Sincerely,
John F. Cogan, Jr.
Chairman
0196-3119
<PAGE>
Pioneer Variable Contracts Trust --
Real Estate Growth Portfolio
60 State Street
Boston, MA 02109
URGENT
PLEASE VOTE TODAY
Dear Contract Holder,
Time is running out. You have not yet returned the proxy cards we sent for you
to use in voting on the proposal up for consideration at Pioneer Variable
Contracts Trust -- Real Estate Growth Portfolio's March 5, 1996, contract holder
meeting. We need you to cast your vote today!
Voting now will help save money. If a majority of the Portfolio's investors have
not voted before March 5, we must delay the meeting and begin the proposal and
voting process all over again. This would be extremely costly.
If you have not already completed and returned the proxy cards included in our
earlier packages, please take a moment now to complete the enclosed yellow proxy
card and mail it to us today in the postage-paid envelope provided.
The 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. For your easy reference, on the back of this page is a
summary of what a FOR vote would mean for the proposal.
Vote today! Your vote is extremely important, no matter how many units you own.
Thank you for your immediate response.
Sincerely,
John F. Cogan, Jr.
Chairman
<PAGE>
back page
Here is what a FOR vote means for the proposal being considered.
Proposal 1:
Approve a new Subadvisory Agreement with Boston Financial Securities, Inc.
(BFS). As subadviser to the Portfolio, BFS will identify and analyze real estate
industry companies, analyze market conditions, review investments in the
Portfolio and furnish advisory reports. Under the proposed Subadvisory
Agreement, Pioneering Management Corporation (PMC) will pay BFS an ongoing
subadvisory fee. The Portfolio will not be responsible for paying any
subadvisory fee to BFS; accordingly, there will be no increase in management fee
or operating expenses for the Portfolio.
Please vote today! Your vote is extremely important, no matter how many units
you own.
0196-3121
PROXY PROXY
PIONEER VARIABLE CONTRACTS TRUST
Real Estate Growth Portfolio
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
To be held March 5, 1996
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
"Portfolio") of Pioneer Variable Contracts Trust (the "Trust") to be held on
Tuesday, March 5, 1996 at 2:30 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 Portfolio 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 a new Investment Subadvisory Agreement with Boston Financial
Securities, Inc.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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: , 1996
------------------------------------
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 MAILINGS
VOTING INSTRUCTIONS VOTING INSTRUCTIONS
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
VOTING INSTRUCTIONS FOR THE SPECIAL MEETING OF
SHAREHOLDERS OF THE REAL ESTATE GROWTH PORTFOLIO (THE "PORTFOLIO")
OF PIONEER VARIABLE CONTRACTS TRUST (THE "TRUST")
To be held March 5, 1996
THIS INSTRUCTION FORM IS SOLICITED BY ALLMERICA FINANCIAL LIFE INSURANCE AND
ANNUITY COMPANY ("ALLMERICA") FROM OWNERS OF VARIABLE ANNUITY CONTRACTS ISSUED
BY ALLMERICA ("CONTRACT OWNERS") WHO HAVE SPECIFIED THAT A PORTION OF THEIR
INVESTMENT BE ALLOCATED TO THE PORTFOLIO
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 Portfolio be cast as designated below at the Special Meeting of
Shareholders of the Portfolio to be held on Tuesday, March 5, 1996 at 2:30 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 a new Investment Subadvisory Agreement with Boston Financial
Securities, Inc.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FOR |_| AGAINST |_| ABSTAIN |_|
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
IN ITS DISCRETION, ALLMERICA 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
ALLMERICA 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 ALLMERICA
DATED: , 1996
-----------------------------------
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.
0296-3154
