SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
Pioneer Variable Contracts Trust
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
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PRELIMINARY PROXY MATERIAL
PIONEER VARIABLE CONTRACTS TRUST
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL GROWTH VCT PORTFOLIO
PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR AUGUST __, 2000
This is the formal agenda for your portfolio's special shareholder
meeting. It tells you the matters you will be asked to vote on and the time and
place of the meeting, in case you want to attend in person. Each portfolio's
shareholder meeting is expected to be held at the same time. The shareholders of
each portfolio will be asked to vote on the following proposals with respect to
their portfolio.
TO THE SHAREHOLDERS OF EACH PORTFOLIO:
A special meeting of shareholders of your portfolio will be held at the
offices of Hale and Dorr LLP, 60 State Street, 26th Floor, Boston, Massachusetts
on August __, 2000 at 2:00 p.m., Boston time, to consider the following:
1. A proposal to approve a new management contract between Pioneer Variable
Contracts Trust (the trust), on behalf of the portfolio, and Pioneer
Investment Management, Inc., your portfolio's investment adviser
("Pioneer"). This new contract will take effect only if the proposed
acquisition of The Pioneer Group, Inc. ("PGI"), the parent of Pioneer, by
UniCredito Italiano S.p.A. ("UniCredito") is consummated;
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2. To elect the eight trustees of the trust as named in the attached proxy
statement, to serve on the board of trustees until their successors have
been duly elected and qualified; and
3. To consider any other business that may properly come before the meeting.
TO THE OWNERS OF VARIABLE ANNUITY OR LIFE INSURANCE CONTRACTS:
You are being asked to vote on the proposals listed above on the
enclosed voting instruction card. Your vote will instruct the insurance company
that issued your contract how to vote the shares of the portfolio attributable
to your contract at the special meeting of shareholders
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ALL THE PROPOSALS. APPROVAL OF
NEW MANAGEMENT CONTRACTS IS REQUIRED BECAUSE OF THE CHANGE IN CONTROL OF PGI.
THERE ARE NO MATERIAL DIFFERENCES BETWEEN THE EXISTING MANAGEMENT CONTRACTS AND
THE PROPOSED MANAGEMENT CONTRACTS. APPROVAL OF PROPOSAL 1 WILL NOT INCREASE THE
MANAGEMENT FEE RATES PAYABLE BY ANY PORTFOLIO.
Shareholders of record as of the close of business on June 16, 2000 are
entitled to vote at the meeting and any related follow-up meetings.
By Order of the Board of Trustees,
Joseph P. Barri, SECRETARY
Boston, Massachusetts
June ______, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY OR, IF YOU ARE A CONTRACT OWNER, THE ENCLOSED VOTING INSTRUCTION
CARD.
8764-00-0600
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JOINT PROXY STATEMENT
OF
PIONEER VARIABLE CONTRACTS TRUST
PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL GROWTH VCT PORTFOLIO
PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
SPECIAL MEETING OF SHAREHOLDERS
This proxy statement contains the information you should know before
voting on the proposals summarized below.
EACH PORTFOLIO WILL FURNISH WITHOUT CHARGE A COPY OF ITS MOST RECENT
ANNUAL REPORT AND ANY MORE RECENT SEMIANNUAL REPORT TO ANY SHAREHOLDER OR
CONTRACT OWNER UPON REQUEST. SHAREHOLDERS AND CONTRACT OWNERS WHO WANT TO OBTAIN
A COPY OF THE REPORTS SHOULD CONTACT THEIR INSURANCE PROVIDERS, DIRECT ALL
WRITTEN REQUESTS TO THE ATTENTION OF THE PORTFOLIO, AT THE ADDRESS LISTED ABOVE,
OR SHOULD CALL PIONEERING SERVICES CORPORATION, AT 1-800-225-6292.
INTRODUCTION
This proxy statement is being used by the board of trustees of Pioneer
Variable Contracts Trust (the trust) to solicit proxies to be voted at a special
meeting of shareholders of each of its 15 separate investment portfolios. Each
portfolio's special meeting will be held at the same time at the offices of Hale
and Dorr LLP, 60 State Street, 26th Floor, Boston, Massachusetts 02109 at 2:00
p.m., Boston time, on August __, 2000, and at any adjournments of the meeting to
a later date, for the purposes as set forth in the accompanying notice of
special meeting of shareholders.
This proxy statement and the enclosed proxy card and voting instruction
card are being mailed to shareholders and contract owners on or about June __,
2000. Annual reports for the
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portfolios' fiscal years ended December 31, 1999 were previously mailed to
shareholders and contract owners.
The special shareholder meeting is being called to consider, among
other things, proposals related to the proposed acquisition (the "Transaction")
of all of the outstanding shares of The Pioneer Group, Inc. ("PGI"), the parent
company of each portfolio's investment adviser, Pioneer Investment Management,
Inc. ("Pioneer"), by UniCredito Italiano S.p.A. ("UniCredito"). If Proposal 1,
regarding the approval of the proposed management contracts (as defined below),
is adopted and the Transaction is consummated, Pioneer will continue as
investment adviser to each portfolio. The Transaction is conditioned upon
approval of Proposal 1 by shareholders of the portfolios and approval of similar
proposals by shareholders of other funds in the Pioneer Family of Funds,
together representing at least 92.5% of the aggregate assets in the Pioneer
Family of Funds. The Transaction and the terms of the proposed management
contracts are discussed below.
WHO IS ELIGIBLE TO VOTE
IF YOU HOLD SHARES OF A PORTFOLIO DIRECTLY:
Shareholders of record of a portfolio as of the close of business on
June 16, 2000 (the "record date") are entitled to vote on all of that
portfolio's business at the special shareholder meeting and any adjournments
thereof. Each share is entitled to one vote. Shares represented by properly
executed proxies, unless revoked before or at the meeting, will be voted
according to shareholders' instructions. If you sign a proxy, but do not fill in
a vote, your shares will be voted in favor of each of the nominees for trustee
and to approve the other proposals. If any other business comes before the
special shareholder meeting, your shares will be voted at the discretion of the
persons named as proxies.
IF YOU ARE THE OWNER OF A VARIABLE ANNUITY OR VARIABLE LIFE INSURANCE CONTRACT:
If you are the owner of a variable annuity or variable life insurance
contract (a "contract owner"), the insurance company that issued your contract
is the record owner of portfolio shares. By completing and returning the
enclosed voting instruction card, you will instruct the insurance company how to
vote the shares of the portfolio(s) which are attributable to your contract.
THE TRANSACTION
INFORMATION CONCERNING UNICREDITO
UniCredito is a corporation organized under the laws of the Republic of
Italy, and its shares trade on the Milan Stock Exchange. Now the holder of eight
major Italian banks, UniCredito is Italy's second largest banking group, as
measured by market capitalization, and was formed in 1998 by the merger between
Credito Italiano S.p.A., one of Italy's major banks, and UniCredito S.p.A., an
Italian bank holding company. Through approximately 3,600 branches worldwide,
UniCredito offers a range of services relating to, among other things, banking,
life and property/casualty insurance and equipment leasing.
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UniCredito's asset management group of subsidiaries, branded EuroPlus,
is one of Europe's largest and fastest-growing asset managers, with
approximately $80 billion in assets under management, 90 established mutual
funds (in Italy and Luxembourg) and 13 new funds ready to be launched. EuroPlus
currently serves approximately 200 institutional clients and over 5,000 high net
worth clients. Its share of the retail and institutional markets in Italy and
Europe makes EuroPlus the largest institutional account manager in Italy, the
third largest mutual fund manager in Italy and the fifth largest mutual fund
manager in Europe. EuroPlus operates primarily through two arms: EuroPlus
Research and Management in Dublin and EuroPlus SGR in Milan.
Upon completion of the Transaction, PGI and the EuroPlus subsidiaries
of UniCredito will be owned by Pioneer Global Asset Management, a new wholly
owned subsidiary of UniCredito with combined assets under management of over
$100 billion. Pioneer Global Asset Management will conduct its asset management
business through three operational units: Pioneer Research & Management
(currently EuroPlus Research and Management), Pioneer SGR (currently EuroPlus
SGR) and Pioneer U.S. (currently PGI).
The corporate seat of UniCredito is located in Genoa, Italy, where
UniCredito was founded in 1870. The principal executive offices of UniCredito
are located at Piazza Cordusio, 20123 Milan, Italy, and its telephone number is
011-39-02-88621.
THE TERMS OF THE MERGER AGREEMENT
At the closing of the Transaction, UniCredito will acquire, by merging
a wholly owned subsidiary into PGI, all the issued and outstanding shares of
common stock of PGI for an aggregate merger consideration of approximately $1.2
billion or $43.50 per share. Immediately prior to the effective time of the
Transaction, PGI will also distribute to its stockholders all of the shares of a
newly formed company that will conduct, after the effective date of the merger,
PGI's gold exploration, timber, Russian investment management and Eastern
European real estate and venture capital businesses. The merger consideration is
not subject to adjustment, and there is no financing condition to the
consummation of the Transaction. Messrs. John F. Cogan, Jr. and David D.
Tripple, trustees of the trust and executive officers of PGI and Pioneer, will
receive a portion of the merger consideration in exchange for their shares of
PGI, and Mr. Cogan will also receive a bonus payment of $1 million upon
consummation of the Transaction. Mr. Cogan is expected to become the Deputy
Chairman of Pioneer Global Asset Management and non-executive Chairman of
Pioneer U.S. Mr. Tripple is expected to be Chief Executive Officer of Pioneer
U.S.
The Transaction is expected to close during the third quarter of 2000,
provided that a number of conditions set forth in the merger agreement, dated as
of May 14, 2000, between PGI and UniCredito (the "Merger Agreement"), are met or
waived. These conditions include the approval of the Merger Agreement by PGI's
stockholders, the approval of the new management contracts by shareholders of
the portfolios and approval of similar new management contracts by shareholders
of other funds in the Pioneer Family of Funds, together representing at least
92.5% of the aggregate assets in the Pioneer Family of Funds, and obtaining
certain regulatory approvals.
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No change in any portfolio's portfolio manager(s) or portfolio
management team is anticipated to occur in connection with the Transaction. PGI
has agreed to provide bonus payments and other benefits to certain Pioneer
personnel in order that there is no disruption in the quality of services
provided to shareholders of the portfolios in connection with the Transaction.
However, the Transaction is not conditioned upon the continued employment of any
Pioneer personnel, and there can be no assurance that any particular Pioneer
employee will choose to remain employed by UniCredito or its affiliates.
ANTICIPATED BENEFITS OF THE TRANSACTION
Pioneer anticipates that the Transaction and its affiliation with
UniCredito will benefit Pioneer and the portfolios in a number of ways,
including the following:
o Pioneer's expertise will be enhanced by the experience and expertise of
UniCredito's investment management professionals. While no change in the
management of the portfolios is currently planned, Pioneer will be able to
draw upon the expertise of UniCredito's team of professionals to strengthen
Pioneer's portfolio management capabilities.
o The combination will provide additional opportunities for Pioneer's
personnel and provide the security of being part of a larger, financially
stronger company. This development should further Pioneer's ability to
attract and retain highly qualified staff members.
o UniCredito has made the growth of its asset management operations a key
component of its business plans. This commitment should assist Pioneer in
continuing to expand its business, attract more assets to the portfolios
and maintain the high level of services it provides to the portfolios.
The following table summarizes each proposal to be presented at the
special shareholder meeting and the portfolios whose shareholders are solicited
with respect to each proposal:
<TABLE>
<CAPTION>
PROPOSAL AFFECTED PORTFOLIOS
<S> <C>
1. Approval of new management contracts All portfolios, with all classes voting
together
2. Election of trustees All portfolios voting together
</TABLE>
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PROPOSAL 1
APPROVAL OF A NEW MANAGEMENT CONTRACT
(EACH PORTFOLIO)
SUMMARY
Pioneer has served as each portfolio's investment adviser since the
portfolio's inception. Pioneer also serves as the investment adviser for each
fund in the Pioneer Family of Funds and for other institutional accounts.
Pioneer, a registered investment adviser under the Investment Advisers Act of
1940, as amended, is a wholly owned subsidiary of PGI. Both Pioneer and PGI are
located at 60 State Street, Boston, Massachusetts 02109.
At meetings of the board of trustees of the trust held on May 25, 2000
and June __, 2000, the trustees, including all of the trustees who are not
"interested persons" of the trust, Pioneer or UniCredito, unanimously approved
as in the best interest of shareholders, and voted to recommend that the
shareholders of each portfolio approve, a proposal to adopt a new management
contract with Pioneer (each, a "proposed management contract") effective upon
consummation of the Transaction.
Shareholders of each portfolio are being asked to approve the proposed
management contract between the trust, on behalf of the portfolio, and Pioneer.
The consummation of the Transaction will constitute an "assignment" (as defined
in the Investment Company Act of 1940 (the "1940 Act")) of each current
management contract with Pioneer (the "existing management contract"). As
required by the 1940 Act, each existing management contract provides for its
automatic termination in the event of an assignment. Accordingly, the existing
management contracts will terminate upon the consummation of the Transaction and
the new management contracts are being proposed to enable Pioneer to continue to
manage the portfolios.
TERMS OF THE PROPOSED MANAGEMENT CONTRACTS AND EXISTING MANAGEMENT CONTRACTS
The terms of each portfolio's proposed management contract are
substantially identical to the terms of that portfolio's existing management
contract, except for the dates of execution, effectiveness and termination and
for certain non-material amendments to conform the terms of the management
contracts. The stated management fees to be paid by the portfolios are identical
under the proposed management contracts and the existing management contracts.
Except as discussed under the caption "Other provisions," all the terms
described below with respect to a portfolio's proposed management contract were
contained in that portfolio's existing management contract.
Each existing management contract is substantially similar except for
the method and rate for calculating each portfolio's management fee, effective
dates and renewal dates; therefore they are discussed below as the "existing
management contract." The following summary of the proposed management contracts
is qualified by reference to the representative form of proposed management
contract attached to this proxy statement as EXHIBIT A. Because the proposed
management contracts are substantially similar, only one representative proposed
management contract for the portfolios is included as EXHIBIT A. The date that
the existing management contracts were most recently submitted to shareholders
for approval and the purpose for such
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submission is set forth in EXHIBIT C. Information regarding Pioneer, its
principal executive officer and directors, its other investment company clients
and brokerage policy is included in EXHIBIT D to this proxy statement.
MANAGEMENT SERVICES. The management services to be provided by Pioneer
to each portfolio under the proposed management contract are identical to those
provided by Pioneer under the portfolio's existing management contract. Pursuant
to the terms of the existing management contract, Pioneer serves as investment
adviser to the portfolio and is responsible for the overall management of the
portfolio's business affairs subject only to the authority of the board of
trustees. Pioneer is authorized to buy and sell securities for the account of
the portfolio and to designate brokers to carry out such transactions. Pioneer
may not make any purchase the cost of which exceeds the portfolio's available
liquid assets and may not make any purchase which would violate any fundamental
policy or restriction in the portfolio's prospectus or statement of additional
information as in effect from time to time.
PAYMENT OF EXPENSE AND TRANSACTION CHARGES. The proposed management
contract and the existing management contract for each portfolio will contain
identical provisions relating to the expenses to be borne by the portfolio. Each
portfolio's existing management contract and proposed management contract
provide that the expenses borne by the portfolio will include: (i) the charges
and expenses for fund accounting, pricing and appraisal services and related
overhead, including, to the extent such services are performed by personnel of
Pioneer 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 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 such regulatory agencies, state or blue sky securities agencies and foreign
jurisdictions, including the preparation of prospectuses and statements of
additional information for filing with such regulatory authorities; (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 and the trustees; (ix) any distribution fees paid by
the portfolio in accordance with Rule 12b-1 under the 1940 Act; (x) compensation
of those trustees of the trust who are not affiliated with, or "interested
persons" of, Pioneer, the trust (other than as trustees), PGI or Pioneer Funds
Distributor, Inc. ("PFD"); (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any.
Under both the existing and the proposed management contracts for each
portfolio, Pioneer, at its own expense, will furnish to each portfolio office
space in its offices or in such other place as may be agreed upon from time to
time, and all necessary office facilities, equipment and personnel for managing
the affairs and investments and supervising the keeping of the books of each
portfolio and shall arrange, if desired by the trust, for members of Pioneer's
organization to serve as officers or agents of the trust.
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Also, under both the existing and proposed management contracts for
each portfolio, Pioneer will pay directly or reimburse the portfolio for: (i)
compensation (if any) of the trustees who are affiliated with, or "interested
persons" (as defined in the 1940 Act) of, Pioneer and all officers of the trust
as such; and (ii) all expenses not specifically assumed by the portfolio where
such expenses are incurred by Pioneer or by the portfolio in connection with the
management of the affairs of, and the investment and reinvestment of the assets
of, the portfolio.
The trust has also entered into an administration agreement with
Pioneer pursuant to which the portfolio authorizes Pioneer to provide certain
fund accounting services and legal services that Pioneer is not required to
provide under the existing management contract. Under the administration
agreement, Pioneer is reimbursed for its allocable portion of its direct costs
of such services. The allocable portion of such costs is based upon the time
worked by Pioneer's employees rendering such services for the portfolios as a
percentage of the total hours worked by such employees. Pioneer's direct costs
include any out-of-pocket expenses incurred by Pioneer in rendering such
services, an allocable portion of the salaries and benefits of the employees
rendering such services and a reasonable allocation of overhead. Annual
allocation and reimbursement of these expenses is subject to annual approval of
the trust's independent trustees.
MANAGEMENT FEES. For its services, Pioneer is entitled to a management
fee which is payable at the fixed annual rate set forth in EXHIBIT B to this
proxy statement. That rate, expressed as a percentage of the portfolio's average
daily net assets, will be the same under each portfolio's proposed management
contract as under its existing management contract. If each proposed management
contract had been in effect for the fiscal year ended December 31, 1999, the
amount of management fees payable to Pioneer by each portfolio would have been
identical to those payable under each existing management contract. THERE WILL
BE NO INCREASE IN THE MANAGEMENT FEE RATES IN CONNECTION WITH THE TRANSACTION.
The aggregate amount of management fees incurred by each portfolio for
the fiscal year ended December 31, 1999, and the amount of any reimbursements
resulting from the expense limitation (if any) then in effect, are set forth in
EXHIBIT C to this proxy statement.
OTHER PROVISIONS UNDER THE EXISTING AND PROPOSED MANAGEMENT CONTRACTS
STANDARD OF CARE. Under each existing and proposed management contract,
Pioneer "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 [Pioneer]
. . .." Pioneer, however, shall not be protected against liability by reason of
its ". . . 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" either the existing or proposed management contract.
PIONEER'S AUTHORITY. Each existing and proposed management contract
provides that Pioneer shall have full discretion to act for the portfolio in
connection with the purchase and sale of portfolio securities subject only to
the trust's declaration of trust, bylaws, currently effective registrations
under the 1940 Act and the Securities Act of 1933, as amended, investment
objective, policies and restrictions of the portfolio in effect from time to
time, and specific policies and instructions established from time to time by
the trustees.
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PORTFOLIO TRADING. Each existing and proposed management contract
expressly permits Pioneer to engage in portfolio trading. For a more detailed
description of Pioneer's current portfolio brokerage practices, see EXHIBIT D to
this proxy statement.
EXPENSE LIMITATION. Each existing and proposed management contract
provides that Pioneer may from time to time agree not to impose all or a portion
of its fee or otherwise take action to reduce expenses of the portfolio. Except
as may otherwise be agreed to by Pioneer, any such fee limitation or expense
reduction is voluntary and may be discontinued or modified by Pioneer at any
time. The existing and proposed management contracts for each portfolio (other
than Pioneer Strategic Income VCT Portfolio) also contain a provision which
limits each portfolio's operating expenses to the highest limit set by state
securities law. The proposed management contract for Pioneer Strategic Income
VCT Portfolio would be revised to eliminate this provision because it is no
longer necessary under federal securities laws.
OTHER PROVISIONS. Each existing and proposed management contract
includes a provision that the portfolio may pay for charges and expenses of
counsel to the "non-interested" trustees as well as counsel to the portfolio.
The existing contracts do not expressly permit Pioneer to consider the sale of
the portfolio's shares in selecting brokers and dealers. The proposed management
contracts would be amended to include a provision expressly permitting Pioneer
to consider the sale of the portfolio's shares in selecting brokers and dealers.
The existing and proposed management contracts for each portfolio contain a
provision which permits Pioneer to delegate its investment advisory duties to a
subadviser. Any use of subadvisers would be subject to approval by the trust's
independent trustees. The existing and proposed management contracts for each
portfolio contain a provision which prohibits the portfolio from using the name
"Pioneer" in the event Pioneer or any of its affiliates ceases to act as the
investment adviser of the portfolio.
Each existing and proposed management contract includes provisions that
provide that: (i) the law of The Commonwealth of Massachusetts shall be the
governing law of the contract; (ii) Pioneer is an independent contractor and not
an employee of the portfolio; (iii) the contract is the entire agreement between
the parties with respect to the matters described therein; (iv) the contract may
be executed using counterpart signature pages; and (v) invalid or unenforceable
provisions of the contract are severable and do not render the entire agreement
invalid or unenforceable.
MISCELLANEOUS
If approved by shareholders, each portfolio's proposed management
contract will become effective upon the consummation of the Transaction and will
continue in effect for an initial period of [two years] and thereafter will
continue from year to year subject to annual approval by the board of trustees
in the same manner as the existing management contract. Each portfolio's
proposed management contract terminates if assigned (as defined in the 1940 Act)
and may be terminated without penalty by either party, by vote of its board or
by a vote of a majority of the outstanding voting securities of the portfolio
and upon 60 days' written notice.
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ADDITIONAL INFORMATION PERTAINING TO PIONEER
For additional information concerning the management, ownership
structure, affiliations, brokerage policies and certain other matters pertaining
to Pioneer, see EXHIBIT D to this proxy statement.
FACTORS CONSIDERED BY THE TRUSTEES
The trustees of the trust determined that the terms of each proposed
management contract are fair and reasonable and that approval of the proposed
management contract on behalf of each portfolio is in the best interests of the
portfolio. The trustees also determined that the continuity and efficiency of
management services after the consummation of the Transaction can best be
assured by approving the proposed management contract on behalf of each
portfolio. The trustees believe that the proposed management contract will
enable each portfolio to continue to enjoy high quality investment advisory
services at costs which they deem appropriate, reasonable and in the best
interests of each portfolio and its shareholders.
In evaluating the proposed management contracts, the trustees reviewed
materials furnished by Pioneer and UniCredito, including information regarding
Pioneer, UniCredito, their respective affiliates and their personnel, operations
and financial condition. The trustees also reviewed the terms of the Transaction
and its possible effects on the portfolios and their shareholders.
Representatives of Pioneer discussed with the trustees the anticipated effects
of the Transaction and, together with a representative of UniCredito, indicated
their belief that as a consequence of the proposed transaction, the operations
of the portfolios and the capabilities of Pioneer to provide advisory and other
services to the portfolios would not be adversely affected and should be
enhanced by the resources of UniCredito, though there could be no assurance as
to any particular benefits that may result. The trustees also reviewed
information regarding the investment performance of the portfolios on an
absolute basis and compared to investment companies with similar investment
objectives and policies (the "peer group"), the fees and expenses incurred by
the portfolios compared to their peer group and the profitability to Pioneer of
managing the portfolios.
The trustees also specifically considered the following as relevant to
their recommendations: (1) that the terms of the proposed management contracts
are substantially identical to those of the existing management contracts,
except for different execution dates, effective dates, termination dates and
certain non-material changes; (2) the favorable history, reputation,
qualification and background of Pioneer and UniCredito, as well as the
qualifications of their personnel and their respective financial conditions; (3)
that the fee and expense ratios of the portfolios are reasonable given the
quality of services expected to be provided and are comparable to the fee and
expense ratios of similar mutual funds; (4) the relative performance of the
portfolios since commencement of operations to comparable mutual funds and
unmanaged indices; (5) the commitment of PGI to pay the expenses of the
portfolios in connection with the Transaction so that shareholders of the
portfolios would not have to bear such expenses; (6) the possibility of benefits
that may be realized by the portfolios as a result of Pioneer's affiliation with
UniCredito, including any resources of UniCredito that would be available to
Pioneer; (7) the Transaction ensures continuity of management of the portfolios
and reduces vulnerability to changes in control of PGI that may be adverse to
the portfolios' interests; (8) assurance from
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UniCredito that UniCredito does not intend to make any material changes to
Pioneer's financial, human and other resources that would adversely impact
Pioneer's ability to provide the same quality of investment management and other
services that Pioneer has provided in the past; and (9) other factors deemed
relevant by the trustees. The trustees deemed the factors set forth in clauses
(1), (2), (3), (7) and (8) to be particularly persuasive in their decision to
recommend to each portfolio's shareholders that they approve the proposed
management contract. The trustees considered the other factors set forth above
to be relevant to a lesser extent than those set forth in clauses (1), (2), (3),
(7) and (8).
SECTION 15(F) OF THE 1940 ACT
Section 15(f) of the 1940 Act permits, in the context of a change in
control of an investment adviser to a registered investment company, the receipt
by such investment adviser (or any of its affiliated persons) of any amount or
benefit in connection with such sale, as long as two conditions are satisfied.
First, there may not be imposed an "unfair burden" on the investment company as
a result of the sale of such interest, or any express or implied terms,
conditions or understandings applicable thereto. The term "unfair burden," as
defined in the 1940 Act, includes any arrangement during the two-year period
after the transaction whereby the investment adviser (or predecessor or
successor adviser), or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services), or from any person in connection with
the purchase or sale of securities or other property to, from or on behalf of
the investment company (other than ordinary fees for bona fide principal
underwriting services).
The board of trustees has not been advised by Pioneer of any
circumstances arising from the Transaction that might result in the imposition
of an "unfair burden" being imposed on the portfolios. Moreover, UniCredito has
agreed in the Merger Agreement that (i) for a period of three years after the
consummation of the Transaction, UniCredito and its affiliates will use
reasonable efforts to assure that at least 75% of the trust's board of trustees
are not "interested persons" (as defined in the 1940 Act) of UniCredito or
Pioneer, (ii) for two years after the consummation of the Transaction,
UniCredito and its affiliates will refrain from imposing, or agreeing to impose,
an unfair burden on any portfolio and (iii) UniCredito and its affiliates will
use reasonable efforts to ensure that any vacancy on the trust's board of
trustees shall be filled by a person who is not an "interested person" of
UniCredito or Pioneer and who has been selected by the trust's independent
trustees.
TRUSTEES' RECOMMENDATION
The independent trustees of the trust held meetings to consider the
proposed management contracts and the Transaction on May 25, 2000 and June ___,
2000, and the entire board of trustees considered the proposal at a meeting held
on June ___, 2000. Based on their evaluation of the materials presented and
assisted by the advice of independent counsel, the trustees at the meeting held
on June ___, 2000, including all the trustees who are not "interested persons"
of the trust, Pioneer or UniCredito, unanimously concluded that the terms of the
proposed management contract for each portfolio are reasonable, fair and in the
best interests of such portfolio and its shareholders, and that the fees
provided therein are fair and reasonable in light of the usual and
10
<PAGE>
customary charges made by others for services of the same nature and
quality. The trustees, by a vote cast at the meeting, approved and voted to
recommend to the shareholders of each portfolio that they approve the proposed
management contract.
If the shareholders of a portfolio do not approve the proposed
management contract with respect to their portfolio and the Transaction is
consummated, the trustees of the trust would consider what further action to
take consistent with their fiduciary duties to the portfolio. Such actions may
include obtaining for the portfolio interim investment advisory services at cost
or at the current fee rate either from Pioneer or from another advisory
organization. Thereafter, the trustees of the trust would either negotiate a new
investment advisory agreement on behalf of the portfolio with an advisory
organization selected by the trustees or make other appropriate arrangements. In
the event the Transaction is not consummated, Pioneer would continue to serve as
investment adviser of the portfolios pursuant to the terms of the existing
management contracts.
REQUIRED VOTE
As provided under the 1940 Act, approval of each proposed management
contract will require the vote of a majority of the outstanding voting
securities of the applicable portfolio. In accordance with the 1940 Act and as
used in this Proposal 1, a "majority of the outstanding voting securities" of a
portfolio means the lesser of (1) 67% or more of the shares of the portfolio
present at a shareholder meeting if the owners of more than 50% of the shares of
the portfolio then outstanding are present in person or by proxy, or (2) more
than 50% of the outstanding shares of the portfolio entitled to vote at the
shareholder meeting.
However, in addition to the legal requirement under the 1940 Act, the
consummation of the Transaction is conditioned upon the approval of the proposed
management contracts by shareholders of the portfolios and approval of similar
new management contracts by shareholders of other funds in the Pioneer Family of
Funds, together representing at least 92.5% of the aggregate assets in the
Pioneer Family of Funds.
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES OF THE TRUST UNANIMOUSLY
RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOR OF THE PROPOSED MANAGEMENT CONTRACT.
PROPOSAL 2
ELECTION OF BOARD OF TRUSTEES
Shareholders of each portfolio are being asked to consider the election
of eight nominees to the board of trustees of the trust. Five of the nominees
for election to the trust's board of trustees currently serve as trustees for
the trust. The three new nominees, Ms. Bush, Ms. Graham and Mr. Winthrop,
currently serve as trustees of all of the funds in the Pioneer Family of Funds
except for the trust. None of the three new nominees are "interested persons,"
as defined in the 1940 Act, of the trust, Pioneer or UniCredito. Each trustee
will be elected to hold office until the next meeting of shareholders or until
his or her successor is elected and qualified. Each nominee has consented to
being named in this proxy statement and indicated his or her willingness to
serve if elected. If any nominee should be unable to serve, an event which is
not anticipated, the persons named as proxies may vote for such other person as
shall be designated by the trust's
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<PAGE>
board of trustees. The persons named on the accompanying proxy card intend
to vote at the meeting (unless otherwise directed) for the election of the
nominees named below as trustees of the trust.
The following table sets forth each nominee's position(s) with the
trust, if any, and his or her age, address, principal occupation and employment
during the past five years and any other directorship held. The table also
indicates the year during which he or she first became a trustee of the trust
for the five existing trustees and the number of shares of each portfolio
beneficially owned by each nominee, directly or indirectly, on May 31, 2000.
12
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
OWNED AND PERCENTAGE
PRINCIPAL OCCUPATION DATE FIRST OF TOTAL SHARES
NAME (AGE), POSITION(S) WITH OR EMPLOYMENT AND BECAME A OUTSTANDING ON MAY
THE TRUST AND ADDRESS TRUSTEE/DIRECTORSHIPS TRUSTEE 31, 2000++
--------------------- --------------------- ------- --------
<S> <C> <C> <C>
JOHN F. COGAN, JR.* (74) President, Chief Executive Officer and 1994 0.00 (0%)
CHAIRMAN OF THE BOARD, PRESIDENT a Director of PGI; Chairman and a Director
AND TRUSTEE of Pioneer, PFD, Closed Joint-Stock
60 State Street Company "Forest-Starma" and Pioneer Global
Boston, MA 02109 Funds Distributor, Ltd.; Director of Pioneer
Real Estate Advisors, Inc. ("PREA"),
Pioneer Forest, Inc., Pioneer Management
(Ireland) Limited ("PMIL"), Pioneer First
Investment Fund and PIOGlobal Corporation
("PIOGlobal"); President and Director of
Pioneer International Corporation ("PIntl"),
Pioneer First Russia, Inc. ("PFR") and
Pioneer Omega, Inc. ("Pioneer Omega"); Member
of the Supervisory Board of Pioneer Fonds
Marketing GmbH, Pioneer First Polish
Investment Fund Joint Stock Company ("Pioneer
First Polish"), Pioneer Czech Investment
Company, a.s. ("Pioneer Czech") and Pioneer
Universal Pension Fund Company; Chairman,
President and Trustee of all of the Pioneer
mutual funds; Director of Pioneer America
Fund Plc, Pioneer Diversified Income Fund
Plc, Pioneer Global Equity Fund Plc, Pioneer
Global Bond Fund Plc, Pioneer Euro Reserve
Fund Plc, Pioneer European Equity Fund Plc,
Pioneer Emerging Europe Fund Plc, Pioneer
Greater Asia Fund Plc, Pioneer U.S. Growth
Fund Plc and Pioneer US Real Estate Fund Plc,
(collectively, the "Irish Funds"); and Of
Counsel, Hale and Dorr LLP (counsel to PGI
and the trust).
13
<PAGE>
<CAPTION>
NUMBER OF SHARES
OWNED AND PERCENTAGE
PRINCIPAL OCCUPATION DATE FIRST OF TOTAL SHARES
NAME (AGE), POSITION(S) WITH OR EMPLOYMENT AND BECAME A OUTSTANDING ON MAY
THE TRUST AND ADDRESS TRUSTEE/DIRECTORSHIPS TRUSTEE 31, 2000++
--------------------- --------------------- ------- --------
<S> <C> <C> <C>
MARY K. BUSH+ President, Bush & Co. (international N/A 0.00 (0%)
(52) financing advisory firm); Director
TRUSTEE and/or Trustee of Mortgage Guaranty
4201 Cathedral Ave., N.W. Insurance Corporation, Hoover
Washington, D.C. 20016 Institution, March of Dimes, Texaco,
Inc., and R.J. Reynolds Tobacco
Holdings, Inc.; Advisory Board Member,
Washington Mutual Investors Fund
(registered investment company); and
Trustee of all of the Pioneer mutual
funds, except the trust.
RICHARD H. EGDAHL, M.D. Alexander Graham Bell Professor of 0.00 (0%)
(73) Health Care Entrepreneurship, Boston
TRUSTEE University; Professor of Management,
Boston University Healthcare Boston University School of Management;
Entrepreneurship Program Professor of Public Health, Boston
53 Bay State Road University School of Public Health;
Boston, MA 02215 Professor of Surgery, Boston University
School of Medicine; University Professor,
Boston University; Director, Boston
University Health Policy Institute,
University Program for Health Care
Entrepreneurship; Trustee, Boston Medical
Center; and Trustee of all of the Pioneer
mutual funds.
MARGARET B.W. GRAHAM+ Founding Director, The Winthrop Group, N/A 0.00 (0%)
(53) Inc. (consulting firm); and Trustee of
TRUSTEE all of the Pioneer mutual funds, except
The Keep the trust.
P.O.Box 110
Little Deer Isle, ME
04650
MARGUERITE A. PIRET President, Newbury, Piret & Company, 0.00 (0%)
(52) Inc. (merchant banking firm); Trustee
TRUSTEE of Boston Medical Center; Member of the
One Boston Place Board of Governors of the Investment
26th Floor Company Institute; Director,
Boston, MA 02108 Organogenesis Inc. (tissue engineering
company); and Trustee of all of the
Pioneer mutual funds.
14
<PAGE>
<CAPTION>
NUMBER OF SHARES
OWNED AND PERCENTAGE
PRINCIPAL OCCUPATION DATE FIRST OF TOTAL SHARES
NAME (AGE), POSITION(S) WITH OR EMPLOYMENT AND BECAME A OUTSTANDING ON MAY
THE TRUST AND ADDRESS TRUSTEE/DIRECTORSHIPS TRUSTEE 31, 2000++
--------------------- --------------------- ------- --------
<S> <C> <C> <C>+
DAVID D. TRIPPLE* Executive Vice President and a Director 1994 0.00 (0%)
(56) of PGI; President and a Director of
EXECUTIVE VICE PRESIDENT AND Pioneer and PFD; Director of Pioneering
TRUSTEE Services Corporation ("PSC"), PIntl,
60 State Street PIOGlobal, Pioneer Omega, PMIL and the
Boston, MA 02109 Irish Funds; Member of the Supervisory
Board of Pioneer First Polish, Pioneer
Czech and Pioneer Asset Management,
S.A.; and Executive Vice President and
Trustee of all of the Pioneer mutual
funds.
STEPHEN K. WEST Of Counsel, Sullivan & Cromwell (law 0.00 (0%)
(71) firm); Director, Dresdner RCM Global
TRUSTEE Strategic Income Fund, Inc. since May
125 Broad Street 1997 and The Swiss Helvetia Fund, Inc.
New York, NY 10004 since 1995 (investment companies),
AMVESCAP PLC (investment managers) since
1997 and ING American Insurance Holdings,
Inc.; Trustee, The Winthrop Focus Funds
(investment companies); and Trustee of all
of the Pioneer mutual funds.
JOHN WINTHROP+ President, John Winthrop & Co., Inc. N/A 0.00 (0%)
(64) (private investment firm); Director of
TRUSTEE NUI Corp. (energy sales, services and
One North Adgers Wharf distribution); and Trustee of all of
Charleston, SC 29401 the Pioneer mutual funds, except the
trust.
----------------
* Messrs. Cogan and Tripple are "interested persons" of the trust and Pioneer
within the meaning of Section 2(a)(19) of the 1940 Act.
+ Mdmes Bush and Graham and Mr. Winthrop are new nominees and do not serve on
the board of trustees of the trust.
++ As of May 31, 2000, the trustees and officers of the trust beneficially
owned, directly or indirectly, in the aggregate less than 1% of any
portfolio's outstanding shares.
</TABLE>
Ms. Piret and Mr. West serve on the audit committee of the board of
trustees. The functions of the audit committee include recommending independent
auditors to the trustees, monitoring the independent auditors' performance,
reviewing the results of audits and responding to certain other matters deemed
appropriate by the trustees. Ms. Piret serves on the nominating committee of the
board of trustees for the trust. The primary responsibility of the nominating
committee is the selection and nomination of candidates to serve as independent
trustees. The nominating committee will also consider nominees recommended by
shareholders to serve as trustees provided that shareholders submitting such
recommendations comply with all relevant provisions of Rule 14a-8 under the
Securities Exchange Act of 1934.
15
<PAGE>
During the trust's most recently completed fiscal year end, the board
of trustees held 12 meetings, the audit committee held 11 meetings and the
nominating committee did not hold any meetings. All of the current trustees and
committee members then serving attended at least 75% of the meetings of the
board of trustees and applicable committees, if any, held during the trust's
most recently completed fiscal year.
As of May 31, 2000, Mr. Cogan beneficially owned _____________ shares
(______%) of the outstanding common stock of PGI. Mr. Cogan's beneficial
holdings included _____________ shares held in trusts with respect to which he
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 he has the right to
acquire under outstanding options within 60 days of May 31, 2000. At such date,
David D. Tripple owned beneficially ____% of the outstanding common stock of
PGI. None of the other nominees own more than 1% of the outstanding common stock
of PGI.
OTHER EXECUTIVE OFFICERS
In addition to Messrs. Cogan and Tripple, who serve as executive
officers of the trust, the following table provides information with respect to
the other executive officers of the trust. Each executive officer is elected by
the board of trustees and serves until his successor is chosen and qualified or
until his resignation or removal by the board. The business address of all
officers of the trust is 60 State Street, Boston, Massachusetts 02109.
<TABLE>
<CAPTION>
NAME (AGE), AND POSITION WITH THE FUND PRINCIPAL OCCUPATION(S)
-------------------------------------- -----------------------
<S> <C>
ERIC W. RECKARD (44), Treasurer Executive Vice President, Chief Financial Officer and Treasurer of PGI
since June 1999; Treasurer of Pioneer, PFD, PSC, PIntl, PREA, PFR and
Pioneer Omega since June 1999; Vice President-Corporate Finance of PGI
from February 1999 to June 1999; Manager of Fund Accounting, Business
Planning and Internal Audit of PGI since September 1996; Manager of
Fund Accounting and Compliance of PGI from May 1995 to September 1996;
and Treasurer of all of the Pioneer mutual funds (Assistant Treasurer
prior to June 1999).
JOSEPH P. BARRI (53), Secretary Corporate Secretary of PGI and most of its subsidiaries; Secretary of
all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP.
VINCENT NAVE (55), Assistant Treasurer Vice President-Fund Accounting, Administration and Custody Services of
Pioneer (Manager from September 1996 to February 1999); and Assistant
Treasurer of all of the Pioneer mutual funds since June 1999.
ROBERT P. NAULT (36), Assistant Secretary Senior Vice President of PGI since 1998; General Counsel and Assistant
Secretary of PGI; Assistant Secretary of Pioneer, certain other PGI
subsidiaries and all of the Pioneer mutual funds; and Assistant Clerk
of PFD and PSC.
</TABLE>
16
<PAGE>
REMUNERATION OF TRUSTEES AND OFFICERS
The following table provides information regarding the compensation
paid by the trust and the other investment companies in the Pioneer family of
Funds to the trustees for their services as indicated below during the year
ended December 31, 1999. Compensation paid by the trust to Messrs. Cogan and
Tripple, who are interested persons of Pioneer, is reimbursed to the trust by
Pioneer. The trust does not pay any salary or other compensation to its
officers.
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM THE
AGGREGATE COMPENSATION TRUST AND OTHER FUNDS IN THE
TRUSTEE FROM THE TRUST^1 PIONEER FAMILY OF FUNDS^2
------ --------------- -----------------------
<S> <C> <C>
John F. Cogan, Jr. 750 $ 18,000^3
Mary K. Bush ---- 93,500
Richard H. Egdahl, M.D. 2,000 95,500
Margaret B.W. Graham ---- 102,000
Marguerite A. Piret 2,000 116,750
David D. Tripple 750 18,000^3
Stephen K. West 2,000 108,250
John Winthrop ---- 98,400
---- --------
Totals 7,500 $650,400
========
------------------
1 Each portfolio bears a pro rata portion of the aggregate compensation paid
by the trust, based on the portfolios' net assets.
2 For the calendar year ended December 31, 1999. The amounts paid to the
trustees differ due to (i) service by Dr. Egdahl, Ms. Piret and Mr. West as
trustees of the trust, (ii) membership on or chairing certain committees of
the boards of trustees and (iii) attendance at meetings. In addition to the
portfolios, there are 26 funds in the Pioneer Family of Funds.
3 Pioneer fully reimbursed the trust and the other mutual funds in the
Pioneer Family of Funds for compensation paid to Messrs. Cogan and Tripple.
</TABLE>
INVESTMENT ADVISER, ADMINISTRATOR AND PRINCIPAL UNDERWRITER
Pioneer and PFD, whose executive offices are located at 60 State
Street, Boston, Massachusetts 02109, serve as investment adviser and
administrator and principal underwriter, respectively, to each portfolio.
REQUIRED VOTE
In accordance with the trust's declaration of trust, the vote of a
plurality of all of the shares of the trust voted at the shareholder meeting is
sufficient to elect the nominees. This means that the eight nominees receiving
the greatest number of votes will be elected to the board. The election of
trustees is not contingent upon the consummation of the Transaction or the
approval of the proposed management contracts.
17
<PAGE>
RECOMMENDATION
FOR THE REASONS SET FORTH ABOVE, THE TRUSTEES OF THE TRUST UNANIMOUSLY
RECOMMEND THAT SHAREHOLDERS VOTE IN FAVOR OF EACH OF THE NOMINEES.
INFORMATION CONCERNING THE MEETING
OUTSTANDING SHARES AND QUORUM
See EXHIBIT E to this proxy statement for the number of shares of
beneficial interest of each portfolio that are outstanding as of the record
date. Only shareholders of record as of the record date are entitled to notice
of and to vote at the meeting. A majority of the outstanding shares of each
portfolio that are entitled to vote will be considered a quorum for the
transaction of business by that portfolio.
OWNERSHIP OF SHARES OF THE PORTFOLIOS
Each person that, to the knowledge of the trust, owned of record or
beneficially 5% or more of the outstanding shares of any of the portfolios as of
May 31, 2000 is listed in EXHIBIT F to this proxy statement.
SHAREHOLDER PROPOSALS
The trust is not required to hold annual meetings of shareholders and
does not currently intend to hold a meeting of shareholders in 2001. Shareholder
proposals to be presented at the next meeting of shareholders, whenever held,
must be received at the trust's offices, 60 State Street, Boston, Massachusetts
02109, at a reasonable time prior to the trustees' solicitation of proxies for
the meeting. The submission by a shareholder of a proposal for inclusion in a
proxy statement does not guarantee that it will be included. Shareholder
proposals are subject to certain regulations under the federal securities laws.
PROXIES, QUORUM AND VOTING AT THE MEETING
Any shareholder who has given his or her proxy to someone has the power
to revoke that proxy at any time prior to its exercise by executing a
superseding proxy or by submitting a notice of revocation to the secretary of
the trust. In addition, although mere attendance at the shareholder meeting will
not revoke a proxy, a shareholder present at the shareholder meeting may
withdraw his or her proxy and vote in person. All properly executed and
unrevoked proxies received in time for the shareholder 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 proposals described above and will use their best judgment in
connection with the transaction of such other business as may properly come
before the shareholder meeting or any adjournment thereof.
With respect to each portfolio, a majority of the shares entitled to
vote, present in person or represented by proxy, constitutes a quorum for the
transaction of business with respect to any proposal (unless otherwise noted in
the proxy statement). In the event that, at the time any session of the
shareholder meeting for a portfolio is called to order, a quorum is not present
in
18
<PAGE>
person or by proxy, the persons named as proxies may vote those proxies which
have been received to adjourn the shareholder meeting with respect to that
portfolio to a later date. In the event that a quorum is present but sufficient
votes in favor of any of the proposals, including the election of the nominees
to the board of trustees, have not been received, the persons named as proxies
may propose one or more adjournments of the shareholder meeting to permit
further solicitation of proxies with respect to such proposal. Any such
adjournment will require the affirmative vote of more than one half of the
shares of the applicable portfolio present in person or by proxy at the session
of the shareholder meeting to be adjourned. The persons named as proxies will
vote those proxies which they are entitled to vote in favor of any such proposal
in favor of such an adjournment and will vote those proxies required to be voted
against any such proposal against any such adjournment. A shareholder vote may
be taken on one or more of the proposals in the proxy statement prior to such
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate. Such vote will be considered final regardless of whether
the meeting is adjourned to permit additional solicitation with respect to any
other proposal.
Shares of each portfolio represented in person or by proxy, including
shares which abstain or do not vote with respect to a proposal, will be counted
for purposes of determining whether there is a quorum at the shareholder
meeting. Accordingly, an abstention from voting has the same effect as a vote
AGAINST a proposal. However, if a broker or nominee holding shares in "street
name" indicates on the proxy card that it does not have discretionary authority
to vote on a proposal, those shares will NOT be considered present and entitled
to vote on that proposal. Thus, a "broker non-vote" has no effect on the voting
in determining whether a proposal has been adopted by 67% or more of a
portfolio's shares present at the shareholder meeting, if more than 50% of the
outstanding shares (excluding the "broker non-votes") of that portfolio are
present or represented. However, for purposes of determining whether a proposal
has been adopted by more than 50% of the outstanding shares of a portfolio, a
"broker non-vote" has the same effect as a vote against that proposal because
shares represented by a "broker non-vote" are considered to be outstanding
shares.
The special shareholder meeting is scheduled as a joint meeting of the
portfolios' shareholders because the shareholders of each portfolio are expected
to consider and vote on similar matters. The board of trustees has determined
that the use of a joint proxy statement is in the best interest of the
shareholders of each portfolio. In the event that a shareholder of any portfolio
present at the shareholder meeting objects to the holding of a joint meeting and
moves for an adjournment of the meeting of such portfolio to a time immediately
after the shareholder meeting so that such portfolio's meeting may be held
separately, the persons named as proxies will vote in favor of the adjournment.
Shareholders of each portfolio will vote separately on each proposal relating to
their portfolio and, except as otherwise noted in this proxy statement, an
unfavorable vote on a proposal by the shareholders of one portfolio will not
affect the implementation of such proposal approved by the shareholders of
another portfolio.
VOTING BY CONTRACT OWNERS
Because the insurance company that issued your variable annuity or
variable life insurance contract is the owner of record of shares of the
portfolio, your vote will instruct the insurance company how to vote the shares
of the portfolio(s) which are attributable to your
19
<PAGE>
contract. The insurance company will vote all of the shares of any
portfolio which it holds which are not attributable to any contract in the same
proportion as the voting instructions received from its contract owners with
respect to that portfolio. The insurance company will also vote those shares for
which no timely voting instruction was received from the contract owner in the
same proportion as the voting instructions timely received from its other
contract owners with respect to that portfolio.
OTHER BUSINESS
While the shareholder meeting has been called to transact any business
that may properly come before it, the only matters that the trustees intend to
present are those matters stated in the attached notice of special meeting of
shareholders. However, if any additional matters properly come before the
shareholder meeting, and on all matters incidental to the conduct of the
meeting, it is the intention of the persons named in the enclosed proxy to vote
the proxy in accordance with their judgment on such matters unless instructed to
the contrary.
METHOD OF SOLICITATION AND EXPENSES
The cost of preparing, assembling and mailing this proxy statement and
the attached notice of special meeting of shareholders and the accompanying
proxy card will be borne by PGI. In addition to soliciting proxies by mail, PGI
may, at its expense, have one or more of the trust's officers, representatives
or compensated third-party agents, including Pioneer, PSC and PFD, and, with
respect to contract owners, one or more officers, agents or representatives of
the insurance companies issuing the contracts, aid in the solicitation of
proxies by personal interview or telephone and telegraph and may request
brokerage houses and other custodians, nominees and fiduciaries to forward proxy
soliciting material to the beneficial owners of the shares held of record by
such persons. PGI has retained [___________] to assist in the solicitation of
proxies. Shareholders who have not voted their proxies in a timely manner may
receive a telephone call from [______] in an effort to urge them to vote.
The trust may also arrange to have votes recorded by telephone, the
internet or other electronic means. The voting procedures used in connection
with such voting methods are designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly
recorded. If these procedures were subject to a successful legal challenge, such
votes would not be counted at the shareholder meeting. The trust is unaware of
any such challenge at this time. Shareholders would be called at the phone
number PSC has in its records for their accounts, and would be asked for their
Social Security number or other identifying information. The shareholders would
then be given an opportunity to authorize proxies to vote their shares at the
meeting in accordance with their instructions. To ensure that the shareholders'
instructions have been recorded correctly, they will also receive a confirmation
of their instructions in the mail. In the case of automated telephone and
internet voting, shareholders would be required to provide their Social Security
number or other identifying information and will receive a confirmation of their
instructions. A special toll-free number will be available in case the
information contained in the confirmation is incorrect.
20
<PAGE>
Persons holding shares as nominees will be reimbursed by PGI, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
June __, 2000
21
<PAGE>
EXHIBIT A
FORM OF PROPOSED MANAGEMENT CONTRACT
THIS AGREEMENT dated as of this ___ day of ______________, 2000 between
Pioneer Variable Contracts Trust, a Delaware business trust (the "Trust"), on
behalf of _______________ (the "Portfolio"), and Pioneer Investment Management,
Inc., a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, 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 for the purpose of registering its shares for public
offering under the Securities Act of 1933, as amended (the "1933 Act").
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust, on behalf of the Portfolio, and the Manager do
hereby agree as follows:
(1) 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 objective[s] 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
Certificate of Trust, Agreement and Declaration of Trust, By-Laws and its
registration statements under the 1940 Act and under the 1933 Act covering the
Trust's shares, as filed with the Commission, and to the investment
objective[s], 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 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 Portfolio 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.
(2) 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
A-1
<PAGE>
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 securities.
(3) The Manager will maintain all books and records with respect to the
Portfolio's securities transactions required by subparagraphs (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) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
(4) 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 Portfolio's affairs and
investments, and shall arrange, if desired by the Trust, for members of the
Manager's organization to serve as officers or agents of the Trust.
(5) 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" (as defined in the 1940 Act) of, the Manager and all officers of the
Trust as such; and (ii) all expenses not hereinafter specifically assumed by the
Trust where such expenses are incurred by the Manager or by the Trust in
connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Portfolio.
(6) The Trust, on behalf of the Portfolio, 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; (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 federal regulatory agencies,
state or blue sky securities agencies and foreign jurisdictions, including the
preparation of prospectuses and statements of additional information for filing
with such regulatory authorities; (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) any distribution fees paid by the Portfolio 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; and (xii) interest on borrowed money,
if any.
(7) In addition to the expenses described in Section 6 above, the Trust, on
behalf of the Portfolio, shall pay all brokers' and underwriting commissions
chargeable to the Trust in connection with securities transactions to which the
Portfolio is a party.
A-2
<PAGE>
(8) [For investment advisory fee information for each fund, please see
Exhibit B to the proxy statement.]
(9) 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 Section 8 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.
(10) 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
Portfolio 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.
(11) It is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") to provide investment advisory
services to the Portfolio by entering into a written agreement with each such
Subadviser; provided, that any such agreement first shall be approved by the
vote of a majority of the Trustees, including a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust, the Manager
or any such Subadviser, and otherwise approved in accordance with the
requirements of the 1940 Act or an exemption therefrom. The authority given to
the Manager in Sections 1 through 13 hereof may be delegated by it under any
such agreement; provided, that any Subadviser shall be subject to the same
restrictions and limitations on investments and brokerage discretion as the
Manager. The Trust agrees that the Manager shall not be accountable to the Trust
or the Portfolio or the Portfolio's shareholders for any loss or other liability
relating to specific investments directed by any Subadviser, even through the
Manager retains the right to reverse any such investment because, in the event a
Subadviser is retained, the Trust and the Manager will rely almost exclusively
on the expertise of such Subadviser for the selection and monitoring of specific
investments.
(12) The Manager will not be liable for any error of judgment or mistake of
law or for any loss sustained by reason of the adoption of any investment policy
or the purchase, sale, or retention of any security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust 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.
(13) 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 adviser 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
A-3
<PAGE>
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 the Manager, in
effecting transactions for its various accounts, may not always be able to take
or liquidate investment positions in the same security at the same time and at
the same price.
(14) In connection with purchases or sales of securities for the account of
the Trust, 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 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 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. In addition, subject to the Manager's
obligation to seek the most favorable execution and net price available, the
Manager may consider the sale of the Trust's shares in selecting brokers and
dealers.
(15) 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 may, to the extent permitted by applicable laws and regulations,
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.
(16) This Agreement shall become effective on the date hereof and shall
remain in force until ___________________, 2002 and from year to year
thereafter, but only so long as its continuance is approved in accordance with
the requirements of the 1940 Act or an exemption therefrom, subject to the right
of the Trust and the Manager to terminate this contract as provided in Section
17 hereof.
(17) Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of the outstanding voting securities" (as defined in the 1940 Act) of
the Trust or the Manager, as the case may be, and the giving of 60 days' written
notice to the other party.
A-4
<PAGE>
(18) 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.
(19) The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Portfolio, the name of the
Portfolio will be changed to one that does not contain the name "Pioneer" or
otherwise suggest an affiliation with the Manager.
(20) The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust.
(21) 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.
(22) This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
(23) 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.
(24) 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.
A-5
<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
------------------------------ ------------------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary Chairman and President
ATTEST: PIONEER INVESTMENT MANAGEMENT, INC.
------------------------------ ------------------------------------
Joseph P. Barri David D. Tripple
Secretary President
A-6
<PAGE>
EXHIBIT B
<TABLE>
<CAPTION>
MANAGEMENT FEE RATES
Fee as a percentage of the portfolio's
PORTFOLIO AVERAGE DAILY NET ASSETS
<S> <C>
America Income VCT Portfolio 0.55%
Balanced VCT Portfolio 0.65%
Emerging Markets VCT Portfolio 1.15%
Equity-Income VCT Portfolio 0.65%
Europe VCT Portfolio 1.00%
Growth Shares VCT Portfolio 0.70%
High Yield VCT Portfolio 0.65%
International Growth VCT Portfolio 1.00%
Mid-Cap Value VCT Portfolio 0.65%
Money Market VCT Portfolio 0.50%
Pioneer Fund VCT Portfolio 0.65%
Real Estate Growth VCT Portfolio 1.00%
Science & Technology VCT Portfolio 0.75%
Strategic Income VCT Portfolio 0.65%
Swiss Franc Bond VCT Portfolio 0.65%
</TABLE>
B-1
<PAGE>
EXHIBIT C
DOLLAR AMOUNT OF MANAGEMENT FEES PAID
<TABLE>
<CAPTION>
NET MANAGEMENT FEES^1 MOST RECENT DATE OF
MANAGEMENT FEE ----------------------------------- SHAREHOLDER APPROVAL
GROSS WAIVER AND/OR FOR MOST RECENTLY FOR 12 MONTHS OF EXISTING MANAGE-
MANAGEMENT EXPENSE REIMBURSE- COMPLETED FISCAL ENDED MARCH 31, NET ASSETS AS OF MENT CONTRACT AND
PORTFOLIO FEES^1 ENT BY PIONEER^1 YEAR^1 2000 DECEMBER 31, 1999 AND PURPOSE
--------- ---- ------------- ---- ---- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
America Income VCT $ 163,638 ---- $ 163,638 $ 162,249 $ 29,778,914
Portfolio
Balanced VCT Portfolio 461,190 ---- 461,190 463,822 72,668,607
Emerging Markets VCT 27,206 (111,935) (84,729) (24,040) 9,678,724
Portfolio
Equity-Income VCT 1,459,899 ---- 1,459,899 1,457,017 226,556,991
Portfolio
Europe VCT Portfolio 71,034 (74,559) (3,525) 62,680 12,734,688
Growth Shares VCT 878,440 ---- 878,440 969,786 162,730,332
Portfolio
High Yield VCT ---- ---- ---- ---- ----
Portfolio
International Growth 530,396 ---- 530,396 596,065 69,192,043
VCT Portfolio
Mid-Cap Value VCT 747,637 ---- 747,637 763,160 120,526,223
Portfolio
Money Market VCT 140,152 (118) 140,034 152,232 37,346,671
Portfolio
C-1
<PAGE>
<CAPTION>
NET MANAGEMENT FEES^1 MOST RECENT DATE OF
MANAGEMENT FEE ----------------------------------- SHAREHOLDER APPROVAL
GROSS WAIVER AND/OR FOR MOST RECENTLY FOR 12 MONTHS OF EXISTING MANAGE-
MANAGEMENT EXPENSE REIMBURSE- COMPLETED FISCAL ENDED MARCH 31, NET ASSETS AS OF MENT CONTRACT AND
PORTFOLIO FEES^1 ENT BY PIONEER^1 YEAR^1 2000 DECEMBER 31, 1999 AND PURPOSE
--------- ---- ------------- ---- ---- ----------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Pioneer Fund VCT $961,059 ---- $ 961,059 $1,125,973 $204,927,336
Portfolio
Real Estate Growth VCT 311,616 $(46,643) 264,973 238,577 28,317,839
Portfolio
Science & Technology ---- ---- ---- ---- ----
VCT Portfolio
Strategic Income VCT 2,530 (27,650) (25,120) (46,154) 1,243,704
Portfolio
Swiss Franc Bond VCT 277,553 ---- 277,553 278,058 43,668,464
Portfolio
--------------------------------------
1 Information is presented for the fiscal year ended December 31, 1999.
</TABLE>
C-2
<PAGE>
EXHIBIT D
ADDITIONAL INFORMATION PERTAINING TO PIONEER
Pioneer is a wholly owned subsidiary of PGI. As of May 31, 2000,
executive officers and directors of Pioneer beneficially owned an aggregate of
____________ shares of common stock of PGI, representing approximately ____% of
the outstanding common stock of PGI. During the period January 1, 2000 through
May 31, 2000, there were no transactions in PGI common stock by any officer,
director or trustee of the trust, PGI, Pioneer and/or PFD in an amount equal to
or exceeding 1% of the outstanding common stock of PGI. Messrs. Cogan and
Tripple are trustees and officers the trust and the directors of Pioneer. Mr.
Tripple is also the president (principal executive officer) of Pioneer. The
address of each of these persons is 60 State Street, Boston, Massachusetts
02109, and the principal occupation of each of these persons is as an employee
of PGI. Please see Proposal 2 for more detailed biographies of Messrs. Cogan and
Tripple.
SERVICES PROVIDED TO THE PORTFOLIOS BY AFFILIATES OF PIONEER
PFD, an indirect wholly owned subsidiary of PGI, serves as the Trust's
principal underwriter and will continue to serve as each portfolio's principal
underwriter after approval by shareholders of the proposed management contracts.
None of the portfolios compensate PFD for its services as principal underwriter.
The trust has entered into an administration agreement with Pioneer
pursuant to which certain accounting and legal services, which are expenses
payable by a portfolio under the existing management contract, are performed by
Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing
such services. Pioneer will continue to perform its services to each portfolio
under the administration agreement after the approval by shareholders of the
proposed management contracts. The fees shown below are for the fiscal year
ended December 31, 1999.
<TABLE>
<CAPTION>
AMOUNT OF FEES
PORTFOLIO PAID TO PIONEER
<S> <C>
America Income VCT Portfolio $724
Balanced VCT Portfolio 828
Emerging Markets VCT Portfolio 916
Equity-Income VCT Portfolio 906
Europe VCT Portfolio 842
Growth Shares VCT Portfolio 715
High Yield VCT Portfolio 0
International Growth VCT Portfolio 795
Mid-Cap Value VCT Portfolio 852
Money Market VCT Portfolio 756
D-1
<PAGE>
<CAPTION>
AMOUNT OF FEES
PORTFOLIO PAID TO PIONEER
<S> <C>
Pioneer Fund VCT Portfolio $792
Real Estate Growth VCT Portfolio 806
Science & Technology VCT Portfolio 0
Strategic Income VCT Portfolio 310
Swiss Franc Bond VCT Portfolio 774
</TABLE>
PIONEER'S PORTFOLIO TRANSACTION POLICY
All orders for the purchase or sale of portfolio securities are placed
on behalf of each portfolio by Pioneer pursuant to authority contained in the
existing and proposed management contracts. In selecting brokers or dealers,
Pioneer 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.
Pioneer may select broker-dealers which provide brokerage and/or
research services to a portfolio and/or other investment companies or
institutional or other accounts managed by Pioneer. Such research services must
be lawful and must provide appropriate assistance to Pioneer in the performance
of its investment decision-making responsibilities and could 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; providing stock quotation services, credit rating service
information and comparative fund statistics; furnishing analysis, electronic
information services, manuals and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy and performance of
accounts and particular investment decisions; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement).
In circumstances where two or more broker-dealers offer comparable
prices and executions, preference may be given to a broker-dealer which has sold
shares of the portfolios as well as shares of other investment companies managed
by Pioneer. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the portfolios. In
addition, if Pioneer determines in good faith that the amount of commissions
charged by a broker-dealer is reasonable in relation to the value of the
brokerage and research services provided by such broker-dealer, the portfolios
may pay commissions to such broker-dealer in an amount greater than the amount
another firm may charge. This information might be useful to Pioneer in
providing services to the portfolio as well as to other investment companies or
accounts managed by Pioneer, although not all of such research may be useful to
the portfolio generating the commission credits. Conversely, such information
provided to Pioneer by brokers and dealers through whom other clients of Pioneer
effect securities transactions might be useful to Pioneer in providing services
to the portfolio. The receipt of such research is not expected to reduce
Pioneer's normal independent research activities; however, it enables Pioneer to
avoid the additional expense which might otherwise be incurred if it were to
attempt to develop comparable information through its own staff.
D-2
<PAGE>
SIMILAR FUNDS
Pioneer serves as the investment adviser to each fund in the Pioneer
Family of Funds. The following table identifies other funds in the Pioneer
Family of Funds that have similar investment objectives to the portfolios and
provides other information regarding the similar funds.
<TABLE>
<CAPTION>
MANAGEMENT FEE
-----------------------------------------------------------------
BASIC FEE
NET ---------------------------------------------------- ------------
ASSETS OF SIMILAR FEE AS A PERCENTAGE ANNUAL
FUND(S) AS OF OF THE FUND'S AVERAGE PERFORMANCE
PORTFOLIO SIMILAR FUND(S) DECEMBER 31, 1999 ASSETS DAILY NET ASSETS FEE
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
<S> <C> <C> <C> <C> <C>
America Income VCT
Portfolio Pioneer America $136,589,358 All 0.50% N/A
Income Trust
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Balanced VCT Portfolio Pioneer Balanced 238,463,883 $0 to 1 billion 0.65% N/A
Fund $1 to 5 billion 0.60%
Over $5 billion 0.55%
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Emerging Markets VCT Pioneer Emerging 234,596,467 All 1.25% N/A
Portfolio Markets Fund
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Equity-Income VCT
Portfolio Pioneer Equity- 984,966,986 $0 to 10 billion 0.60% N/A
Income Fund Over $10 billion 0.575%
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Europe VCT Portfolio Pioneer Europe 544,127,952 $0 to 300 million 1.00% N/A
Fund $300 to 500 million 0.85%
Over $500 million 0.75%
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Growth Shares
VCT Portfolio Pioneer Growth 3,222,595,684 $0 to 500 million 0.70% +/-0.10% de-
Shares $500 million to $1 billion 0.65% pending on
0.625% Class A per-
formance
relative to
the Russell
1000 Index
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
High Yield VCT
Portfolio Pioneer High N/A $0 to 500 million 0.70% N/A
Yield Fund $500 to 1 billion 0.65%
Over $1 billion 0.60%
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
International Growth
VCT Portfolio Pioneer Inter- 419,590,710 $0 to 300 million 1.00% N/A
national Growth Fund $300 to $500 million 0.85%
Over $500 million 0.75%
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Mid-Cap Value VCT
Portfolio Pioneer Mid-Cap 1,547,981,855 All 1.10% N/A
Value Fund
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Money Market VCT
Portfolio Pioneer Cash 371,278,402 All 0.40% N/A
Reserves Fund
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Pioneer Fund VCT
Portfolio Pioneer Fund 7,400,362,084 All 0.60% +/-0.10% de-
pending on
Class A per-
formance
relative to
the Lipper
Growth and
Income Funds
Index
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Real Estate Growth Pioneer Real 80,655,229 All 1.00% N/A
VCT Portfolio Estate Shares
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Science & Technology Pioneer Science & N/A All 1.00% N/A
VCT Portfolio Technology Fund
---------------------- --------------------- --------------- ---------------------------- ----------------------- ------------
Strategic Income VCT Pioneer Strategic 18,694,454 $0 to 100 million 0.75% N/A
Portfolio Income Fund $100 to $500 million 0.70%
$500 million to 1 billion 0.65%
Over $1 billion 0.60%
---------------------- --------------------- ---------------- ---------------------------- ----------------------- -----------
<CAPTION>
DOLLAR AMOUNT OF
MANAGEMENT FEES
WAIVED OR EXPENSES
REIMBURSED FOR
SIMILAR FUND
------------
<S>
$(196,175) [America Income VCT Portfolio]
(152,097) [Real Estate Growth VCT Portfolio]
(128,594) [Strategic Income VCT Portfolio]
</TABLE>
<PAGE>
EXHIBIT E
As of the close of business on the record date, the shares outstanding
of each portfolio were as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
PORTFOLIO CLASS OUTSTANDING
<S> <C> <C>
America Income VCT Portfolio Class I
Balanced VCT Portfolio Class I
Emerging Markets VCT Portfolio Class I
Class II
Equity-Income VCT Portfolio Class I
Class II
Europe VCT Portfolio Class I
Pioneer Fund VCT Portfolio Class I
Class II
Growth Shares VCT Portfolio Class I
Class II
High Yield VCT Portfolio Class I
International Growth VCT Portfolio Class I
Mid-Cap Value VCT Portfolio Class I
Class II
Money Market VCT Portfolio Class I
Real Estate Growth VCT Portfolio Class I
[Class II]
Science & Technology VCT Portfolio Class I
Strategic Income VCT Portfolio Class I
Swiss Franc Bond VCT Portfolio Class I
</TABLE>
E-1
<PAGE>
EXHIBIT F
To the knowledge of the trust, as of May 31, 2000, the following
shareholders held beneficially or of record, 5% or more of any class of shares
of each portfolio:
<TABLE>
<CAPTION>
NO. AND CLASS OF
PORTFOLIO SHARES OWNED NAME AND ADDRESS PERCENTAGE OF CLASS
--------- ------------ ---------------- -------------------
<S> <C> <C> <C>
America Income VCT Portfolio
Balanced VCT Portfolio
Emerging Markets VCT Portfolio
Equity-Income VCT Portfolio
Europe VCT Portfolio
Growth Shares VCT Portfolio
High Yield VCT Portfolio
International Growth VCT Portfolio
Mid-Cap Value VCT Portfolio
Money Market VCT Portfolio
Pioneer Fund VCT Portfolio
Real Estate Growth VCT Portfolio
Science & Technology VCT Portfolio
Strategic Income VCT Portfolio
Swiss Franc Bond VCT Portfolio
------------
* This ownership is as nominee only and does not represent beneficial
ownership of such shares.
</TABLE>
F-1
<PAGE>
PROXY PROXY
[PIONEER AMERICA INCOME VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO
PIONEER INTERNATIONAL GROWTH VCT PORTFOLIO
PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER FUND VCT PORTFOLIO
PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER SWISS FRANC BOND VCT PORTFOLIO]
PROXY FOR THE MEETING OF SHAREHOLDERS
To be held August ___, 2000
CONTROL NUMBER:
I (we), having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint John F.
Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each of
them, my (our) attorneys (with full power of substitution in them and each of
them) for and in my (our) name(s) to attend the Meeting of Shareholders of my
(our) portfolio to be held on ______, August ___, 2000, at 2 p.m. (Boston time)
at the offices of Hale and Dorr LLP, counsel to the portfolio, 60 State Street,
26th Floor, Boston, Massachusetts 02109, 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 I (we) will be entitled to vote or act upon, with all the powers I
(we) would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
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
PROPOSALS.
NOTE: 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
-----------------------------------
Signature
-----------------------------------
Signature(s)
Date ___________________________,2000___
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF YOUR
PORTFOLIO AND SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED.
THE BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOLLOWING:
1. To approve a new management contract between the
fund and Pioneer Investment Management, Inc.
("Pioneer"), the portfolio's investment adviser.
This new contract will take effect only if the
proposed acquisition of The Pioneer Group, Inc., the
parent of Pioneer, by UniCredito Italiano S.p.A. is
consummated.
FOR AGAINST ABSTAIN
2. To elect Trustees. The nominees for Trustees
are:
01 M.K. Bush 02 J.F. Cogan, Jr.
03 Dr. R.H. Egdahl 04 M.B.W. Graham
05 M.A. Piret 06 D.D. Tripple
07 S.K. West 08 J. Winthrop
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(as marked below)
To withhold authority to vote for one or more or the nominees, write the name(s)
of the nominee(s) on the line below:
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