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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] 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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PIONEER VARIABLE CONTRACTS TRUST
PIONEER AMERICA INCOME VCT PORTFOLIO PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO PIONEER FUND VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO PIONEER SWISS FRANC BOND VCT PORTFOLIO
PIONEER INTERNATIONAL GROWTH VCT
PORTFOLIO
60 State Street
Boston, Massachusetts 02109
1-800-225-6292
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR SEPTEMBER 11, 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 September 11, 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;
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.
8674-00-0600
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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 July 13, 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
July 24, 2000
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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.
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JOINT PROXY STATEMENT OF
PIONEER VARIABLE CONTRACTS TRUST
PIONEER AMERICA INCOME VCT PORTFOLIO PIONEER MID-CAP VALUE VCT PORTFOLIO
PIONEER BALANCED VCT PORTFOLIO PIONEER MONEY MARKET VCT PORTFOLIO
PIONEER EMERGING MARKETS VCT PORTFOLIO PIONEER FUND VCT PORTFOLIO
PIONEER EQUITY-INCOME VCT PORTFOLIO PIONEER REAL ESTATE GROWTH VCT PORTFOLIO
PIONEER EUROPE VCT PORTFOLIO PIONEER SCIENCE & TECHNOLOGY VCT PORTFOLIO
PIONEER GROWTH SHARES VCT PORTFOLIO PIONEER STRATEGIC INCOME VCT PORTFOLIO
PIONEER HIGH YIELD VCT PORTFOLIO PIONEER SWISS FRANC BOND VCT PORTFOLIO
PIONEER INTERNATIONAL GROWTH 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, the portfolios' transfer agent, 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 September 11, 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/voting instruction card are
being mailed to shareholders and contract owners on or about July 24, 2000.
Annual reports for the portfolios' fiscal year 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") and companies
controlled by 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 the investment adviser to each
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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 July
13, 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 controlling
owner of eight major Italian banks, UniCredito is Italy's largest banking group
based on market capitalization and the 18th largest in Europe in terms of total
assets. UniCredito 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.
UniCredito's asset management business is currently operated through two
subsidiaries, EuroPlus Research and Management in Dublin and EuroPlus SGR in
Milan, under the EuroPlus brand. They are among 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
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largest institutional account manager in Italy, the third largest mutual fund
manager in Italy and the fifth largest mutual fund manager in Europe.
As part of UniCredito's acquisition of PGI, UniCredito will be
restructuring the ownership of its current investment management operations.
UniCredito owns 65% of EuroPlus SGR and EuroPlus Research and Management. A
majority owned subsidiary of UniCredito, Rolo Banca, holds the remaining shares
of EuroPlus SGR. After acquiring PGI and as part of the Transaction, UniCredito
intends to establish a holding company that will own 100% of PGI and its other
investment management subsidiaries. UniCredito will own approximately 66.6% of
the holding company and Rolo Banca will own the remaining interest. This
arrangement will permit UniCredito efficiently to manage its investment advisory
operations by bringing them under a uniform ownership structure. The name of the
holding company will be Pioneer Global Asset Management, and it will have
combined assets under management of approximately $100 billion. Pioneer Global
Asset Management will conduct its asset management business through three
operational units: Pioneer Research and Management (currently EuroPlus Research
and Management), Pioneer SGR (currently EuroPlus SGR) and Pioneer U.S.
(currently PGI). Because of the timing of certain Italian legal requirements in
connection with the new holding company, the Transaction will take place in two
phases. UniCredito will acquire 100% of PGI as soon as possible, and the holding
company structure, with UniCredito directly owning only approximately 66.6%, is
expected to be completed in the first half of 2001. However, because the two
parts are elements of the same Transaction, your approval of the new management
contract would also constitute approval for the establishment of the holding
company.
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 Russian gold exploration, Russian timber harvesting, Russian real estate
and investment management and Polish and Eastern European real estate management
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 $700,000 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.
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The initial phase of 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. The second
stage in which Rolo Banca will acquire a minority interest in Pioneer Global
Asset Management is expected to occur in the first half of 2001.
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,
UniCredito's purchase of 100% of PGI 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 may 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 enhance 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> <C>
1. Approval of new management contract Each portfolio, 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 all the
other funds 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 June 13, 2000 and
July 11, 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
UniCredito's purchase of 100% of PGI.
Shareholders of each portfolio are being asked to approve the proposed
management contract between the trust, on behalf of the portfolio, and Pioneer.
UniCredito's purchase of 100% of PGI and the restructuring of UniCredito's
investment management business 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.
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The date that the existing management contracts were most recently submitted to
shareholders for approval and the purpose for such 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
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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.
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
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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.
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 UniCredito's purchase of 100% of PGI and will
continue in effect until December 31, 2001 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
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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.
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, Rolo Banca, 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 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, and 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
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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) assurances from
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), (6), (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),
(6), (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 UniCredito's
purchase of 100% of PGI, 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, and
(ii) for two years after UniCredito's purchase of 100% of PGI, UniCredito and
its affiliates will refrain from imposing, or agreeing to impose, an unfair
burden on any portfolio.
Trustees' recommendation
The independent trustees of the trust held meetings to consider the
proposed management contracts and the Transaction on May 25, 2000, June 8, 2000,
June 12, 2000
10
<PAGE>
and July 11, 2000, and the entire board of trustees considered the proposal at
meetings held on June 13, 2000 and July 11, 2000. Based on their evaluation of
the materials presented and assisted by the advice of independent counsel, the
trustees at the meetings held on June 13, 2000 and July 11, 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 customary charges made by others for
services of the same nature and quality. The trustees, by a unanimous vote cast
at the meetings, 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 purchase by UniCredito of 100%
of PGI is completed, 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 UniCredito's purchase of 100% of PGI is not
completed, 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. Approval of the proposed management contract will
constitute approval by shareholders of the adoption of the management contract
upon the acquisition of PGI by UniCredito and the continuance of the management
contract upon the subsequent transfer of a minority interest in Pioneer Global
Asset Management to Rolo Banca.
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.
11
<PAGE>
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 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
Principal occupation or First percentage of total
Name (age), position(s) employment and became a shares outstanding
with the trust and address trustee/directorships trustee on May 31, 2000 [dag]
---------------------------- ------------------------------------ ---------- --------------------
<S> <C> <C> <C>
John F. Cogan, Jr.* (74) President, Chief Executive Officer 1994 0
Chairman of the Board, and a Director of PGI; Chairman
President and Trustee and a Director of Pioneer, PFD,
60 State Street Closed Joint-Stock Company
Boston, MA 02109 "Forest-Starma" and Pioneer
Global 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).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Number of shares
owned and
Principal occupation or First percentage of total
Name (age), position(s) employment and became a shares outstanding
with the trust and address trustee/directorships trustee on May 31, 2000 [dag]
------------------------------ ------------------------------------ ---------- ---------------------
<S> <C> <C> <C>
Mary K. Bush [dag][dag] (52) President, Bush & Co. N/A 0
Trustee (international financial advisory
4201 Cathedral Ave., N.W. firm); Director and/or Trustee of
Washington, D.C. 20016 Mortgage Guaranty Insurance
Corporation, Hoover Institution,
March of Dimes, Texaco, Inc.,
R.J. Reynolds Tobacco Holdings,
Inc. and Brady Corporation;
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. (73) Alexander Graham Bell Professor 1995 0
Trustee of Health Care Entrepreneurship,
Boston University Boston University; Professor of
Healthcare Management, Boston University
Entrepreneurship Program School of Management;
53 Bay State Road Professor of Public Health,
Boston, MA 02215 Boston University School of
Public Health; 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 N/A 0
{dag][dag](53) Group, Inc. (consulting firm);
Trustee and Trustee of all of the Pioneer
The Keep mutual funds, except the trust.
P.O. Box 110
Little Deer Isle, ME 04650
Marguerite A. Piret (52) President, Newbury, Piret & 1995 343 (<0.01%) (1)
Trustee Company, Inc. (merchant 235 (<0.01%) (1)
One Boston Place banking firm); Trustee of Boston 489 (<0.01%) (1)
26th Floor Medical Center; Member of the 386 (<0.01%) (1)
Boston, MA 02108 Board of Governors of the
Investment Company Institute;
Director, Organogenesis Inc.
(tissue engineering company);
and Trustee of all of the Pioneer
mutual funds.
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
Number of shares
owned and
Principal occupation or First percentage of total
Name (age), position(s) employment and became a shares outstanding
with the trust and address trustee/directorships trustee on May 31, 2000 [dag]
---------------------------- ----------------------------------- ---------- --------------------
<S> <C> <C> <C>
David D. Tripple* (56) Executive Vice President and a 1995 0
Executive Vice President Director of PGI; President and a
and Trustee Director of Pioneer and PFD;
60 State Street Director of Pioneering Services
Boston, MA 02109 Corporation ("PSC"), PIntl,
PIOGlobal, Pioneer Omega, PMIL and the
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 (71) Of Counsel, Sullivan & Cromwell 1995 0
Trustee (law firm); Director, Dresdner
125 Broad Street RCM Global Strategic Income
New York, NY 10004 Fund, Inc. since May 1997 and
The Swiss Helvetia Fund, Inc.
since 1995 (investment
companies), AMVESCAP PLC
(investment managers) since
1997 and ING American
Insurance Holdings, Inc.; and
Trustee of all of the Pioneer
mutual funds.
John Winthrop President, John Winthrop & Co., N/A 0
[dag][dag] (64) Inc. (private investment firm);
Trustee Director of NUI Corp. (energy
One North Adgers Wharf sales, services and distribution);
Charleston, SC 29401 and Trustee of all of the Pioneer
mutual funds, except the trust.
</TABLE>
------------
* Messrs. Cogan and Tripple are "interested persons" of the trust and
Pioneer within the meaning of Section 2(a)(19) of the 1940 Act.
[dag] 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 class of any portfolio's outstanding shares.
[dag][dag] Mdmes. Bush and Graham and Mr. Winthrop are new nominees and do not
serve on the board of trustees of the trust.
(1) Pioneer Equity-Income VCT Portfolio, Pioneer Growth Shares VCT
Portfolio, Pioneer International Growth VCT Portfolio and Pioneer
Mid-Cap Value VCT Portfolio, respectively.
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
15
<PAGE>
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.
During the trust's most recently completed fiscal year, 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 3,623,002 shares (13.36%)
of the outstanding common stock of PGI. Mr. Cogan's beneficial holdings included
749,708 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 358,485 shares (1.24%) 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 trust 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 Vice President-Fund Accounting, Administration and
Treasurer Custody Services of Pioneer (Manager from September
1996 to February 1999); and Assistant Treasurer of all of the
Pioneer mutual funds since June 1999.
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
Name (age), and position with the trust Principal occupation(s)
----------------------------------------- -----------------------------------------------------
<S> <C>
Robert P. Nault (36), Assistant Senior Vice President of PGI since 1998; General
Secretary 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>
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
Aggregate the trust and other funds
compensation in the Pioneer Family of
Trustee from the trust (1) 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
====== ========
</TABLE>
------------
(1) Each portfolio bears a pro rata portion of the aggregate compensation paid
by the trust, based on 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 other 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.
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.
17
<PAGE>
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
UniCredito's purchase of 100% of PGI or the approval of the proposed management
contracts.
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
18
<PAGE>
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 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
19
<PAGE>
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 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.
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
20
<PAGE>
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.
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.
July 24, 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 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.
A-1
<PAGE>
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 Trust in accordance with Rule
12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation
of those Trustees of the Trust who are not affiliated with, or "interested
persons" of, the Manager, the Trust (other than as Trustees), The Pioneer Group,
Inc. or Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing
share certificates; 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 though 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
A-3
<PAGE>
other services for any other person, association, corporation, firm or other
entity pursuant to any contract or otherwise, and take any action or do any
thing in connection therewith or related thereto; and no such performance of
management or other services or taking of any such action or doing of any such
thing shall be in any manner restricted or otherwise affected by any aspect of
any relationship of the Manager to or with the Trust or deemed to violate or
give rise to any duty or obligation of the Manager to the Trust except as
otherwise imposed by law. The Trust recognizes that 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 December 31, 2001 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 Portfolio 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
Management Fee Rates
<TABLE>
<CAPTION>
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 0.80%
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
----------------------------
Management
fee waiver
and/or For 12 Most recent
expense For most months Net assets date of shareholder
Gross reimburse- recently ended as of approval of
management ment by completed March 31, December 31, existing management
Portfolio fees (1) Pioneer (1) fiscal year (1) 2000 1999 contract and purpose
------------------------------------ ------------- -------------- --------------- ------------- -------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
America Income VCT Portfolio $ 163,638 -- $ 163,638 $ 162,249 $ 29,778,914 2/15/95 (initial)
Balanced VCT Portfolio 461,190 -- 461,190 463,822 72,668,607 2/15/95 (initial)
Emerging Markets VCT Portfolio 27,206 $ (111,935) (84,729) (27,040) 9,678,724 10/30/98 (initial)
Equity-Income VCT Portfolio 1,459,899 -- 1,459,899 1,457,017 226,556,991 2/15/95 (initial
Europe VCT Portfolio 71,034 (74,559) (3,525) 62,680 12,734,688 10/30/98 (initial)
Growth Shares VCT Portfolio 878,440 -- 878,440 969,786 162,730,332 10/30/97 (initial)
High Yield VCT Portfolio -- -- -- -- -- 4/25/00 (initial)
International Growth VCT Portfolio 530,396 -- 530,396 596,065 69,192,043 2/15/95 (initial)
Mid-Cap Value VCT Portfolio 747,637 -- 747,637 763,160 120,526,223 2/15/95 (initial)
Money Market VCT Portfolio 140,152 (118) 140,034 152,232 37,346,671 2/15/95 (initial)
Pioneer Fund VCT Portfolio 961,059 -- 961,059 1,125,973 204,927,336 10/30/97 (initial)
Real Estate Growth VCT Portfolio 311,616 (46,643) 264,973 238,577 28,317,839 10/10/95 (prior
contract
assignment)
Science & Technology VCT Portfolio -- -- -- -- -- 4/25/00 (initial)
Strategic Income VCT Portfolio 2,530 (27,650) (25,120) (46,154) 1,243,704 7/29/99 (initial)
Swiss Franc Bond VCT Portfolio 277,553 -- 277,553 278,058 43,668,464 10/31/95 (initial)
</TABLE>
--------------
(1) Information is presented for the fiscal year ended December 31, 1999.
C-1
<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 27,356,022
shares of common stock of PGI, representing approximately 14.74% 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 of 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
PSC serves as each portfolio's transfer agent and shareholder servicing
agent. Under the terms of its contract with the trust, PSC's duties include: (i)
processing sales, redemptions and exchanges of shares of the portfolios; (ii)
distributing dividends and capital gains to shareholder accounts; and (iii)
maintaining certain account records and responding to routine shareholder
inquires. PSC will continue to provide these services 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 paid
to PSC (net of
Portfolio expense offsets)
------------------------------------ --------------------
<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
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>
PFD, an indirect wholly owned subsidiary of PGI, serves as the trust's
principal underwriter and will continue to serve as such after the approval by
shareholders of the proposed management contracts. None of the portfolios
compensate PFD for its services as principal underwriter. For the period
September 14, 1999 (commencement of operations) through December 31, 1999
Pioneer Equity-Income VCT Portfolio's Class II paid $101 in Rule 12b-1
distribution fees to PFD.
D-1
<PAGE>
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 paid
Portfolio to Pioneer
------------------------------------ --------------------
<S> <C>
America Income VCT Portfolio $30,887
Balanced VCT Portfolio 31,591
Emerging Markets VCT Portfolio 33,893
Equity-Income VCT Portfolio 45,919
Europe VCT Portfolio 30,525
Growth Shares VCT Portfolio 29,717
High Yield VCT Portfolio 0
International Growth VCT Portfolio 24,744
Mid-Cap Value VCT Portfolio 31,304
Money Market VCT Portfolio 31,297
Pioneer Fund VCT Portfolio 31,510
Real Estate Growth VCT Portfolio 31,609
Science & Technology VCT Portfolio 0
Strategic Income VCT Portfolio 13,694
Swiss Franc Bond VCT Portfolio 31,576
</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).
D-2
<PAGE>
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.
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.
D-3
<PAGE>
Similar funds
<TABLE>
<CAPTION>
Management fee
-------------------------------------------------------
Basic fee
-------------------------------------
Dollar amount
Net assets Fee as a of management
of similar percentage of fees waived or
fund(s) as of the fund's Annual expenses
December 31, average daily performance reimbursed for
Portfolio Similar fund(s) 1999 Assets net assets fee similar fund
------------------- -------------------- ----------------- --------------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
America Income Pioneer America $ 136,589,358 All 0.50% N/A $ (196,175)
VCT Portfolio Income Trust
Balanced VCT Pioneer Balanced 238,463,883 $0 to 1 billion 0.65% N/A --
Portfolio Fund $1 to 5 billion 0.60%
Over $5 billion 0.55%
Emerging Markets Pioneer Emerging 234,596,467 All 1.25% N/A --
VCT Portfolio Markets Fund
Equity-Income VCT Pioneer Equity- 984,966,986 $0 to 10 billion 0.60% N/A --
Portfolio Income Fund Over $10 billion 0.575%
Europe VCT Pioneer Europe 544,127,952 $0 to 300 million 1.00% N/A --
Portfolio Fund $300 to 500 million 0.85%
Over $500 million 0.75%
Growth Shares VCT Pioneer Growth 3,222,595,684 $0 to 500 million 0.70% [+/-] 0.10% --
Portfolio Shares $500 million to depending on Class A
$1 billion 0.65% performance vs.
Over $1 billion 0.625% Russell 1000 Index
High Yield VCT Pioneer High Yield N/A $0 to 500 million 0.70% N/A --
Portfolio Fund $500 to 1 billion 0.65%
Over $1 billion 0.60%
</TABLE>
D-4
<PAGE>
<TABLE>
<CAPTION>
Management fee
----------------------------------------------------------
Basic fee
------------------------------------
Dollar amount
Net assets Fee as a of management
of similar percentage of fees waived or
fund(s) as of the fund's Annual expenses
December 31, average daily performance reimbursed for
Portfolio Similar fund(s) 1999 Assets net assets fee similar fund
------------------- -------------------- ------------------ -------------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
International Pioneer $ 419,590,710 $0 to 300 million 1.00% N/A --
Growth VCT International $300 to
Portfolio Growth Fund $500 million 0.85%
Over $500 million 0.75%
Mid-Cap Value VCT Pioneer Mid-Cap 1,547,981,855 $0 to 500 million 0.70% [+/-] 0.10% --
Portfolio Value Fund $500 million to depending on Class
$1 billion 0.65% A performance vs.
Over $1 billion 0.625% Lipper Growth
Funds Index
Money Market VCT Pioneer Cash 371,278,402 All 0.40% N/A --
Portfolio Reserves Fund
Pioneer Fund VCT Pioneer Fund 7,400,362,084 All 0.60% [+/-] 0.10% --
Portfolio depending on Class
A performance vs.
Lipper Growth and
Income Funds
Index
Real Estate Growth Pioneer Real Estate 80,655,229 All 0.80% N/A $ (152,097)
VCT Portfolio Shares
Science & Pioneer Science & N/A All 1.00% N/A --
Technology VCT Technology Fund
Portfolio
</TABLE>
D-5
<PAGE>
<TABLE>
<CAPTION>
Management fee
-------------------------------------------------
Basic fee
-----------------------------------
Dollar amount
Net assets Fee as a of management
of similar percentage of fees waived or
fund(s) as of the fund's Annual expenses
December 31, average daily performance reimbursed for
Portfolio Similar fund(s) 1999 Assets net assets fee similar fund
------------------ ------------------- --------------- ------------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Strategic Income Pioneer Strategic $18,694,454 $0 to 100 million 0.75% N/A $ (128,594)
VCT Portfolio Income Fund $100 to
$500 million 0.70%
$500 million to
$1 billion 0.65%
Over $1 billion 0.60%
</TABLE>
D-6
<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 2,619,257.254
Balanced VCT Portfolio Class I 4,348,973.720
Emerging Markets VCT Portfolio Class I 1,114,523.716
Class II 12,462.222
Equity-Income VCT Portfolio Class I 9,324,005.178
Class II 151,759.760
Europe VCT Portfolio Class I 1,854,247.564
Growth Shares VCT Portfolio Class I 6,743,532.964
Class II 4,646.236
High Yield VCT Portfolio Class I 288,354.673
International Growth VCT Portfolio Class I 4,755,495.750
Mid-Cap Value VCT Portfolio Class I 6,961,185.311
Class II 85,980.554
Money Market VCT Portfolio Class I 30,057,883.650
Pioneer Fund VCT Portfolio Class I 9,304,686.336
Class II 12,936.396
Real Estate Growth VCT Portfolio Class I 2,235,636.983
Science & Technology VCT Portfolio Class I 385,641.233
Strategic Income VCT Portfolio Class I 279,648.618
Swiss Franc Bond VCT Portfolio Class I 3,329,399.199
</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 Percentage
Name and address Portfolio(s) shares owned of class (%)
------------------------------------ ---------------------------------- ---------------------- -------------
<S> <C> <C> <C>
Allmerica Financial Life Co. America Income VCT Portfolio 2,667,821 (Class I) 98.45
Accumulation Account Balanced VCT Portfolio 4,417,719 (Class I) 99.05
440 Lincoln Street Emerging Markets VCT Portfolio 1,124,085 (Class I) 97.57
Worcester, MA 01653-0002 Emerging Markets VCT Portfolio 3,328 (Class II) 96.77
Equity-Income VCT Portfolio 8,797,024 (Class I) 98.74
Europe VCT Portfolio 1,740,211 (Class I) 98.73
Growth Shares VCT Portfolio 6,326,049 Class I) 98.37
High Yield VCT Portfolio 157,216 (Class I) 75.79
International Growth VCT
Portfolio 4,763,513 (Class I) 98.58
Mid-Cap Value VCT Portfolio 6,018,536 (Class I) 90.67
Mid-Cap Value VCT Portfolio 53,977 (Class II) 99.78
Money Market VCT Portfolio 33,806,522 (Class I) 99.04
Pioneer Fund VCT Portfolio 9,055,761 (Class I) 98.30
Real Estate Growth VCT Portfolio 1,566,770 (Class I) 67.96
Science & Technology VCT
Portfolio 192,646 (Class I) 94.97
Strategic Income VCT Portfolio 207,534 (Class I) 80.00
Swiss Franc Bond VCT Portfolio 3,273,832 (Class I) 96.80
United of Omaha Life Insurance Co. Equity-Income VCT Portfolio 53,734 (Class II) 79.25
Corporate General Ledger Growth Shares VCT Portfolio 3,134 (Class II) 98.55
Mutual of Omaha Plaza Mid-Cap Value VCT Portfolio 506,660 (Class I) 7.63
Omaha, NE 68175-0001 Pioneer Fund VCT Portfolio 3,198 (Class II) 98.67
Real Estate Growth VCT Portfolio 718,114 (Class I) 31.15
</TABLE>
F-1
<PAGE>
<TABLE>
<CAPTION>
No. and class of Percentage
Name and address Portfolio(s) shares owned of class (%)
---------------------------------------- -------------------------------- ------------------- -------------
<S> <C> <C> <C>
Pioneer Funds High Yield VCT Portfolio 50,000 (Class I) 24.10
Distributor, Inc. High Yield VCT Portfolio 1 (Class II) 100.00
60 State Street Strategic Income VCT Portfolio 41,315 (Class I) 15.92
Boston, MA 02109-1800
Great-West Life & Annuity Client Plans Equity-Income VCT Portfolio 12,918 (Class II) 19.05
8515 East Orchard Road
Englewood, CO 80111
</TABLE>
F-2
<PAGE>
PROXY PROXY
PIONEER VARIABLE CONTRACTS TRUST PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 11, 2000
[triangle] Please fold and detach card at perforation before mailing. [triangle]
PIONEER __________ VCT PORTFOLIO
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 Special Meeting of Shareholders
of my (our) portfolio to be held on Monday, September 11, 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 portfolio 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.
Date ______________________, 2000
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(s)
<PAGE>
PLEASE SIGN, DATE AND RETURN THIS PROXY CARD
IN THE ENCLOSED ENVELOPE.
[triangle] Please fold and detach card at perforation before mailing. [triangle]
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:
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. To approve a new management contract between
the trust, on behalf of the portfolio, 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.
<CAPTION>
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(AS MARKED BELOW)
<S> <C> <C> <C>
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
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES, WRITE THE NAME(S)
OF THE NOMINEE(S) ON THE LINE BELOW:
-----------------------------------
</TABLE>
<PAGE>
[logo PIONEER VARIABLE CONTRACTS TRUST
PIONEER]
60 State Street
Boston, MA 02109-1820
July 2000
Dear Contract Owner,
VOTING YOUR I am writing with some exciting news. As you may know, on
SHARES BY MAIL May 15, 2000, The Pioneer Group, Inc. and UniCredito Italiano
IS QUICK AND S.p.A. announced an agreement under which UniCredito is expected
EASY. EVERY- to purchase all of the outstanding stock of Pioneer Group. In
THING YOU NEED connection with this transaction, a special meeting for
IS ENCLOSED. shareholders of the Pioneer Variable Contracts Trust portfolios
will be held on September 11, 2000. You are receiving this
letter because as a contract owner, you need to instruct your
insurance company how to vote portfolio shares.
The primary purpose of the special meeting is to permit each
portfolio's shareholders to consider a new management contract
with Pioneer Investment Management, Inc., each portfolio's
current investment adviser, as shareholder approval of each new
PLEASE VOTE. management contract is required by federal securities laws in
YOUR VOTE IS connection with the sale. The new management contract will take
EXTREMELY effect following the sale of Pioneer Group to UniCredito. NONE
IMPORTANT. OF THE PROPOSALS REQUESTS AN INCREASE IN THE RATE OF ANY
PORTFOLIO'S MANAGEMENT FEES. As a contract owner, you have the
opportunity to instruct your insurance company how to vote on
proposals relating to the sale.
This package contains information about the proposals, in
addition to a voting instruction card for use when voting.
Please take a moment to read the enclosed materials before
casting your vote.
Each of the proposals has been reviewed by the trust's Board of
Trustees, whose primary role is to protect shareholder
interests. In the Trustees' opinion, the proposals are fair and
reasonable. The Trustees recommend that you instruct your
insurance company to vote FOR each proposal.
HERE IS WHAT A FOR VOTE MEANS FOR EACH OF THE PROPOSALS BEING
CONSIDERED.
THE BOARD OF PROPOSAL 1:
TRUSTEES APPROVAL OF A NEW MANAGEMENT CONTRACT BETWEEN THE PORTFOLIO AND
RECOMMENDS THAT PIONEER INVESTMENT MANAGEMENT, INC. The new contract will take
YOU INSTRUCT effect only if the proposed acquisition of The Pioneer Group,
YOUR INSURANCE Inc., the parent of Pioneer Investment Management, Inc., each
COMPANY TO portfolio's investment adviser, by UniCredito Italiano S.p.A.
VOTE FOR EACH is consummated.
PROPOSAL.
PROPOSAL 2:
ELECT EIGHT TRUSTEES TO THE BOARD. The Trustees supervise
portfolio activities and review contractual arrangements with
companies that provide services to the portfolios. The proxy
statement includes detailed information about all nominees.
Please cast your vote today. Your vote is extremely important.
Sincerely,
/s/ John F. Cogan, Jr.
John F. Cogan, Jr.
Chairman and President
8739-00-0600
<PAGE>
VOTING INSTRUCTION FORM
[INSURANCE COMPANY NAME] FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 11, 2000
[triangle] Please fold and detach card at perforation before mailing. [triangle]
PIONEER __________ VCT PORTFOLIO
The undersigned, revoking all prior proxies, hereby instructs the above-
referenced Insurance Company (the "Company"), to vote all shares of the
above-referenced portfolio (the "Fund"), which are held in the account of the
undersigned in the Variable Account, at the Special Meeting of Shareholders of
the Fund to be held on Monday, September 11, 2000, at 2 p.m. (Boston time) at
the offices of Hale and Dorr LLP, counsel to the Fund, 60 State Street, 26th
Floor, Boston, Massachusetts 02109, and any adjourned session or sessions
thereof. The Company is hereby instructed to vote and act upon the following
matters (as more fully described in the accompanying proxy statement).
Date ______________________, 2000
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(s)
<PAGE>
PLEASE SIGN, DATE AND RETURN THIS VOTING INSTRUCTION FORM
IN THE ENCLOSED ENVELOPE.
[triangle] Please fold and detach card at perforation before mailing. [triangle]
THIS VOTING INSTRUCTION FORM IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
THE FUND AND SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED.
THE BOARD RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOLLOWING:
PLEASE VOTE BY FILLING IN THE BOXES BELOW.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. To approve a new management contract between
the Pioneer Variable Contracts Trust, on behalf of the
Fund, and Pioneer Investment Management, Inc.
("Pioneer"), the Fund'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.
<CAPTION>
FOR WITHHOLD FOR ALL
ALL ALL EXCEPT
(AS MARKED BELOW)
<S> <C> <C> <C>
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
TO WITHHOLD AUTHORITY TO VOTE FOR ONE OR MORE OF THE NOMINEES, WRITE THE NAME(S)
OF THE NOMINEE(S) ON THE LINE BELOW:
-----------------------------------
</TABLE>
