File No. 33-61869
File No. 811-7339
As Filed with the Securities and Exchange Commission
on November 1, 1995.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
----
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /_X_/
----
Pre-Effective Amendment No. 1 /_X_/
----
Post-Effective Amendment No. ___ /___/
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT ____
OF 1940 /_X_/
Amendment No. 1 /_X_/
(Check appropriate box or boxes)
PIONEER SMALL COMPANY FUND
(Exact name of registrant as specified in charter)
60 State Street, Boston, Massachusetts 02109
(Address of principal executive office) Zip Code
(617) 742-7825
(Registrant's Telephone Number, including Area Code)
Joseph P. Barri, Hale and Dorr, 60 State Street, Boston, MA 02109
(Name and address of agent for service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effectiveness of the registration under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
Page 1 of __ pages.
Exhibit Index is on Page __.
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effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
The Registrant has registered an indefinite number of shares pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant has
not yet completed its initial fiscal year and has therefore not filed a Rule
24f-2 Notice.
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PIONEER SMALL COMPANY FUND
Cross-Reference Sheet Showing Location in Prospectus and Statement
of Additional Information of Information Required by Items of
the Registration Form
Location in
Prospectus or
Statement of Additional
Form N-1A Item Number and Caption Information
1. Cover Page.....................................Prospectus - Cover Page
2. Synopsis.......................................Prospectus - Expense
Information
3. Condensed Financial Information................Not Applicable
4. General Description of Registrant..............Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to Sell
Fund Shares; How to
Exchange Fund Shares; The
Fund
5. Management of the Fund.........................Prospectus - Management of
the Fund
6. Capital Stock and Other Securities.............Prospectus - Investment
Objective and Policies;
Management of the Fund;
Fund Share Alternatives;
Share Price; How to Buy
Fund Shares; How to Sell
Fund Shares; How to
Exchange Fund Shares;
Dividends, Distributions
and Taxation; The Fund
<PAGE>
Location in
Prospectus or
Statement of Additional
Form N-1A Item Number and Caption Information
7. Purchase of Securities Being
Offered......................................Prospectus - Fund Share
Alternatives; Share Price;
How to Buy Fund Shares; How
to Sell Fund Shares; How to
Exchange Fund Shares;
Distribution Plans;
Shareholder Services; The
Fund
8. Redemption or Repurchase.......................Prospectus - Fund Share
Alternatives; Share Price;
How to Buy Fund Shares; How
to Sell Fund Shares; How to
Exchange Fund Shares;
Shareholder Services; The
Fund
9. Pending Legal Proceedings...................Not Applicable
10. Cover Page.....................................Statement of Additional
Information - Cover Page
11. Table of Contents..............................Statement of Additional
Information - Cover Page
12. General Information and History................Statement of Additional
Information - Description
of Shares
13. Investment Objectives and Policies.............Statement of Additional
Information - Investment
Policies and Restrictions
14. Management of the Fund.........................Statement of Additional
Information - Management of
the Fund; Investment
Adviser
<PAGE>
Location in
Prospectus or
Statement of Additional
Form N-1A Item Number and Caption Information
15. Control Persons and Principle Holders
of Securities................................Statement of Additional
Information - Management of
the Fund
16. Investment Advisory and Other
Services.....................................Statement of Additional
Information - Management of
the Fund; Investment
Adviser; Underwriting
Agreement and Distribution
Plans; Shareholder
Servicing/Transfer Agent;
Custodian; Principal
Underwriter; Independent
Public Accountants
17. Brokerage Allocation and Other
Practices....................................Statement of Additional
Information - Portfolio
Transactions
18. Capital Stock and Other Securities.............Statement of Additional
Information - Description
of Shares
19. Purchase, Redemption and Pricing of
Securities Being Offered.....................Statement of Additional
Information - Letter of
Intention; Systematic
Withdrawal Plan;
Determination of Net Asset
Value
20. Tax Status.....................................Statement of Additional
Information - Tax Status
and Dividends
<PAGE>
Location in
Prospectus or
Statement of Additional
Form N-1A Item Number and Caption Information
21. Underwriters...................................Statement of Additional
Information - Underwriting
Agreement and Distribution
Plans; Principal
Underwriter
22. Calculation of Performance Data................Statement of Additional
Information - Investment
Results
23. Financial Statements...........................Financial Statements
<PAGE>
[PIONEER LOGO]
Pioneer
Small Company
Fund
Class A and Class B Shares
Prospectus
November 1, 1995
Pioneer Small Company Fund (the "Fund") seeks capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks. Any current income generated from these securities is
incidental to the investment objective of the Fund.
In order to achieve its investment objective, the Fund will invest at least
65% of its total assets in common stocks and common stock equivalents (such
as convertible bonds and preferred stock) of companies with a market
capitalization of less than $1 billion. The Fund may invest a portion of its
assets in foreign securities. See "Investment Objective and Policies" in this
Prospectus. There is, of course, no assurance that the Fund will achieve its
investment objective.
Prospective investors should be aware that management reserves the right to
temporarily or permanently close the Fund to new investors or to restrict
investments by existing shareowners. A number of factors will be considered
in making such a decision including, but not limited to, total assets under
management and the flow of new investments into the Fund.
FUND RETURNS AND SHARE PRICES FLUCTUATE AND THE VALUE OF YOUR ACCOUNT UPON
REDEMPTION MAY BE MORE OR LESS THAN YOUR PURCHASE PRICE. SHARES IN THE FUND ARE
NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER
DEPOSITORY INSTITUTION, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. INVESTMENTS IN THE SECURITIES OF SMALL CAPITALIZATION ("CAP") COMPANIES
MAY OFFER GREATER CAPITAL APPRECIATION POTENTIAL THAN INVESTMENTS IN MID- TO
LARGE-CAP COMPANY SECURITIES, BUT MAY BE SUBJECT TO GREATER SHORT-TERM PRICE
FLUCTUATIONS. THE FUND IS INTENDED FOR INVESTORS WHO CAN ACCEPT THE RISKS
ASSOCIATED WITH ITS INVESTMENTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. SEE
"INVESTMENT OBJECTIVES AND POLICIES" FOR A DISCUSSION OF THESE RISKS.
This Prospectus (Part A of the Registration Statement) provides information
about the Fund that you should know before investing. Please read and retain
it for your future reference. More information about the Fund is included in
Part B, the Statement of Additional Information, also dated November 1, 1995,
which is incorporated into this Prospectus by reference. A copy of the
Statement of Additional Information may be obtained free of charge by calling
Shareowner Services at 1-800-225-6292 or by written request to the Fund at 60
State Street, Boston, Massachusetts 02109. Additional information about the
Fund has been filed with the Securities and Exchange Commission (the "SEC")
and is available upon request and without charge.
TABLE OF CONTENTS PAGE
- ----------------------------------------------------------------------
I. EXPENSE INFORMATION ............................. 2
II. INVESTMENT OBJECTIVE AND POLICIES ............... 2
Risk Factors ................................... 3
III. MANAGEMENT OF THE FUND .......................... 4
IV. FUND SHARE ALTERNATIVES ......................... 5
V. SHARE PRICE ..................................... 5
VI. HOW TO BUY FUND SHARES .......................... 5
Class A Shares ................................. 6
Class B Shares ................................. 7
VII. HOW TO SELL FUND SHARES ......................... 8
VIII. HOW TO EXCHANGE FUND SHARES ..................... 9
IX. DISTRIBUTION PLANS .............................. 10
X. DIVIDENDS, DISTRIBUTIONS AND TAXATION ........... 11
XI. SHAREOWNER SERVICES ............................. 11
Account and Confirmation Statements ............ 11
Additional Investments ......................... 11
Automatic Investment Plans ..................... 12
Financial Reports and Tax Information .......... 12
Distribution Options ........................... 12
Directed Dividends ............................. 12
Direct Deposit ................................. 12
Voluntary Tax Withholding ...................... 12
Telephone Transactions and Related Liabilities . 12
FactFone(SM) ................................... 12
Retirement Plans ............................... 12
Telecommunications Device for the Deaf (TDD) ... 13
Systematic Withdrawal Plans .................... 13
Reinstatement Privilege (Class A Only) ......... 13
XII. THE FUND ........................................ 13
XIII. INVESTMENT RESULTS .............................. 14
APPENDIX--CERTAIN INVESTMENT PRACTICES .......... 15
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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I. EXPENSE INFORMATION
This table is designed to help you understand the charges and expenses
that you, as a shareowner, will bear directly or indirectly when you invest
in the Fund. The table reflects annual operating expenses. Other expenses are
based on estimated amounts for the current fiscal year.
Class A Class B
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Shareowner Transaction Expenses:
Maximum Initial Sales Charge on Purchases
(as a percentage of offering price) 5.75%(1) None
Maximum Sales Charge on Reinvestment of
Dividends None None
Maximum Deferred Sales Charge None(1) 4.00%
Redemption Fee None(2) None
Exchange Fee None None
Annual Operating Expenses (As a Percentage of
Net Assets):
Management Fee(3) 0.85% 0.85%
12b-1 Fees 0.25%(4) 1.00%
Other Expenses (including accounting and
transfer agent fees, custodian fees and
printing expenses)(3) 0.30% 0.30%
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Total Operating Expenses:(3) 1.40% 2.15%
====== =======
(1) Purchases of $1,000,000 or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge as further described under "How to
Sell Fund Shares."
(2) Separate fees (currently $10 and $20, respectively) apply to domestic and
international wire transfers of redemption proceeds.
(3) Pioneering Management Corporation ("PMC"), has agreed not to impose a
portion of its management fee and to make other arrangements, if
necessary, to limit the operating expenses of the Class A shares of the
Fund to 1.75% of its average daily net assets; the portion of fund-wide
expenses attributable to Class B shares will be reduced only to the
extent they are reduced for Class A shares. This agreement is voluntary
and temporary and may be revised or terminated at any time. The agreement
is expected to remain in effect for the current fiscal year.
(4) This is the maximum annual fee and assumes that the Plan of Distribution
is in effect for an entire year; actual expenses are expected to be
lower.
Example:
You would pay the following dollar amounts on a $1,000 investment in the
Fund, assuming 5% annual return and redemption at the end of each time
period:
1 Year 3 Years
------- ---------
Class A Shares $74 $111
Class B Shares*
--Assuming complete
redemption at end of period $65 $111
--Assuming no redemption $25 $ 81
* Class B shares convert to Class A shares eight years after purchase.
The example above assumes the reinvestment of all dividends and
distributions and that the percentage amounts listed under "Annual Operating
Expenses" remain the same each year.
THE EXAMPLE IS DESIGNED FOR INFORMATION PURPOSES ONLY, AND SHOULD NOT BE
CONSIDERED A REPRESENTATION OF FUTURE EXPENSES OR RETURN. ACTUAL FUND EXPENSES
AND RETURN WILL VARY FROM YEAR TO YEAR AND MAY BE HIGHER OR LOWER THAN THOSE
SHOWN.
For further information regarding management fees, 12b-1 fees and other
expenses of the Fund, including information regarding the basis upon which
management fees and 12b-1 fees are paid, see "Management of the Fund,"
"Distribution Plans" and "How To Buy Fund Shares" in this Prospectus and
"Management of the Fund" and "Underwriting Agreement and Distribution Plans"
in the Statement of Additional Information. The Fund's imposition of a Rule
12b-1 fee may result in long-term shareholders paying more than the economic
equivalent of the maximum sales charge permitted under Rules of Fair Practice
of the National Association of Securities Dealers, Inc. ("NASD").
The maximum initial sales charge is reduced on purchases of specified
larger amounts of Class A shares and the value of shares owned in other
Pioneer mutual funds is taken into account in determining the applicable
initial sales charge. See "How to Buy Fund Shares." No sales charge is
applied to exchanges of shares of the Fund for shares of other publicly
available Pioneer mutual funds. See "How to Exchange Shares."
II. INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is to seek capital appreciation by
investing in a diversified portfolio of securities consisting primarily of
common stocks.
The Fund is managed in accordance with the value philosophy of PMC. This
approach consists of developing a diversified portfolio of securities
consistent with the Fund's investment objective and selected primarily on the
basis of PMC's judgment that the securities have an underlying value, or
potential value, which exceeds their current prices. The analysis and
quantification of the economic worth, or basic value, of individual companies
reflects PMC's assessment of a company's assets and the company's prospects
for earnings growth over the next 11/2-to-3 years. PMC relies primarily on the
knowledge, experience and judgment of its own research staff, but also
receives and uses information from a variety of outside sources, including
brokerage firms, electronic data bases, specialized research firms and
technical journals.
Under normal circumstances, at least 65% of the Fund's total assets are
invested in common stocks of companies with a market cap of less than $1
billion determined at the time the security is purchased. The Fund's
investments in common stock include common stock equivalents, that is,
securities with common stock characteristics such as convertible bonds and
preferred stocks. While small-cap company securities may offer a greater
capital appreciation potential than investments in mid- or large-cap company
securities, they may also present greater risks. Small cap company securities
tend to be more sensitive to changes in earnings expectations and have lower
trading volumes than mid-to large-cap company securities and, as a result,
they may experience more abrupt and erratic price movements.
A convertible security is a long-term debt obligation of the issuer
convertible at a stated exchange rate into common stock of the issuer.
Convertible securities rank senior to common
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<PAGE>
stocks in an issuer's capital structure and are consequently of higher
quality and entail less risk than the issuer's common stock. As with all debt
securities, the market values of convertible securities tend to increase when
interest rates decline and, conversely, tend to decline when interest rates
increase. The Fund may invest in investment grade debt securities, that is,
securities rated "BBB" or higher by Standard & Poor's Ratings Group or the
equivalent rating of other ranking agencies. If the rating of a security
falls below investment grade, management will consider whatever action is
appropriate consistent with the Fund's investment objectives and policies.
See the Statement of Additional Information for a discussion of rating
categories.
While there is no requirement to do so, the Fund intends to limit
investments in foreign securities to no more than 25% of its assets. Any
current income produced by a security is not a primary factor in the
selection of investments. The Fund's portfolio often includes a number of
securities which are owned by other equity mutual funds managed by PMC. See
"Investment Policies and Restrictions" in the Statement of Additional
Information for more information.
The Fund's fundamental investment objective and the fundamental investment
restrictions set forth in the Statement of Additional Information may not be
changed without shareowner approval. Certain other investment policies,
strategies and restrictions on investment are noted throughout the Prospectus
and are set forth in the Statement of Additional Information. These non-
fundamental investment policies, strategies and restrictions may be changed at
any time by a vote of the Board of Trustees.
It is the policy of the Fund not to engage in trading for short-term
profits. Nevertheless, changes in the portfolio will be made promptly when
determined to be advisable by reason of developments not foreseen at the time
of the initial investment decision, and usually without reference to the
length of time a security has been held. Accordingly, portfolio turnover rate
is not considered a limiting factor in the execution of investment decisions.
Portfolio turnover is not expected to exceed 200% in the coming year. A
high rate of portfolio turnover (100% or more) involves correspondingly
greater transaction costs which must be borne by the Fund and its
shareowners. Under certain circumstances, a high turnover rate may make it
more difficult for the Fund to qualify as a regulated investment
company under the Internal Revenue Code. See "Dividends,
Distributions and Taxation."
The Fund intends to be substantially fully invested at all times. If
suitable investments are not immediately available, the Fund may hold a
portion of its investments in cash and cash-equivalents. For temporary
defensive purposes, however, the Fund may invest up to 100% of its assets in
short-term investments. The Fund will assume a defensive posture only when
political and economic factors affect common stock markets to such an extent
that PMC believes there to be extraordinary risks in being substantially
invested in common stocks. A short-term investment is considered to be an
investment with a maturity of one year or less from the date of issuance.
Short-term investments will not normally represent more than 10% of the
Fund's assets.
The Fund may enter into repurchase agreements, not to exceed seven days,
with broker-dealers and any member bank of the Federal Reserve System. The
Board of Trustees of the Fund will review and monitor the creditworthiness of
any institution which enters into a repurchase agreement with the Fund. Such
repurchase agreements will be fully collateralized with United States
("U.S.") Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Collateral will be held by the
Fund's custodian in a segregated, safekeeping account for the benefit of the
Fund. Repurchase agreements afford the Fund an opportunity to earn income on
temporarily available cash at low risk. In the event that a repurchase
agreement is not fulfilled, the Fund could suffer a loss to the extent that
the value of the collateral falls below the repurchase price.
The Fund may lend portfolio securities to member firms of the New York
Stock Exchange (the "Exchange"). As with other extensions of credit, there
are risks of delay in recovery or even loss of rights in the collateral
should the borrower of the securities fail financially. The Fund will lend
portfolio securities only to firms which have been approved in advance by the
Board of Trustees, which will monitor the creditworthiness of any such firms.
At no time would the value of the securities loaned exceed 30% of the value
of the Fund's total assets. These investment strategies are also described in
the Statement of Additional Information.
In pursuit of its objective, the Fund may employ certain active investment
management techniques including forward foreign currency exchange contracts,
options and futures contracts on currencies, securities and securities
indices and options on such futures contracts. These techniques may be
employed in an attempt to hedge foreign currency risks and other risks
associated with the Fund's portfolio securities. See the Appendix to this
Prospectus and the Statement of Additional Information for a description of
these investment practices and associated risks.
Risk Factors
The Fund may invest in securities issued by companies located in foreign
countries. Investing in securities of foreign companies involves certain
considerations and risks which are not typically associated with investing in
securities of domestic companies. Foreign companies are not subject to
uniform accounting, auditing and financial standards and requirements
comparable to those applicable to U.S. companies. There may also be less
publicly available information about foreign companies compared to reports
and ratings published about U.S. companies. In addition, foreign securities
markets have substantially less volume than domestic markets and securities
of some foreign companies are less liquid and more volatile than securities
of comparable U.S. companies. There may also be less government supervision
and regulation of foreign securities exchanges, brokers and listed companies
than exists in the United States. Dividends or interest paid by foreign
issuers may be subject to withholding and other foreign taxes which will
decrease the net return on such investments as compared to dividends or
interest paid to the Fund by domestic companies. Finally, there may be the
possibility of expropriations, confiscatory taxation, political, economic or
social instability or diplo-
3
<PAGE>
matic developments which could adversely affect assets of the Fund held in
foreign countries.
The value of foreign securities may also be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. For example, the value
of a foreign security held by the Fund as measured in U.S. dollars will
decrease if the foreign currency in which the security is denominated
declines in value against the U.S. dollar. In such event, this will cause an
overall decline in the Fund's net asset value and may also reduce net
investment income and capital gains, if any, to be distributed in U.S.
dollars to shareholders of the Fund.
III. MANAGEMENT OF THE FUND
The Board of Trustees of the Fund has overall responsibility for
management and supervision of the Fund. There are currently eight Trustees,
six of whom are not "interested persons" of the Fund as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"). The Board meets
at least quarterly. By virtue of the functions performed by PMC as investment
adviser, the Fund requires no employees other than its executive officers,
all of whom receive their compensation from PMC or other sources. The
Statement of Additional Information contains the names and general business
and professional background of each Trustee and executive officer of the
Fund.
Investment advisory services are provided to the Fund by PMC pursuant to a
management contract between PMC and the Fund. PMC serves as investment
adviser to the Fund and is responsible for the overall management of the
Fund's business affairs, subject only to the authority of the Board of
Trustees. PMC is a wholly-owned subsidiary of The Pioneer Group, Inc.
("PGI"), a publicly-traded Delaware corporation. Pioneer Funds Distributor,
Inc. ("PFD"), an indirect subsidiary of PGI, is the principal underwriter of
the Fund.
Each domestic equity portfolio managed by PMC, including this Fund, is
overseen by an Equity Committee, which consists of PMC's most senior equity
professionals, and a Portfolio Management Committee, which consists of PMC's
domestic equity portfolio managers. Both committees are chaired by Mr. David
Tripple, PMC's President and Chief Investment Officer and Executive Vice
President of each of the Funds. Mr. Tripple Joined PMC in 1974 and has had
general responsibility for PMC's investment operations and specific portfolio
assignments for over five years.
Day-to-day management of the Fund's investments is the responsibility of
Warren J. Isabelle, Vice President of the Fund and Director of Research
and Vice President of PMC. Mr. Isabelle joined PMC in 1984.
In addition to the Fund, PMC also manages and serves as the investment
adviser for other mutual funds and is an investment adviser to certain other
institutional accounts. PMC's and PFD's executive offices are located at 60
State Street, Boston, Massachusetts 02109.
Under the terms of its contract with the Fund, PMC assists in the
management of the Fund and is authorized in its discretion to buy and sell
securities for the account of the Fund. PMC pays all the expenses, including
executive salaries and the rental of certain office space, related to its
services for the Fund, with the exception of the following which are to be
paid by the Fund: (a) charges and expenses for Fund accounting, pricing and
appraisal services and related overhead, including, to the extent such
services are performed by personnel of PMC or its affiliates, office space
and facilities and personnel compensation, training and benefits; (b) the
charges and expenses of auditors; (c) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and
registrar appointed by the Fund; (d) issue and transfer taxes, chargeable to
the Fund in connection with securities transactions to which the Fund is a
party; (e) insurance premiums, interest charges, dues and fees for membership
in trade associations, and all taxes and corporate fees payable by the Fund
to federal, state or other governmental agencies; (f) fees and expenses
involved in registering and maintaining registrations of the Fund and/or its
shares with the SEC, individual states or blue sky securities agencies,
territories and foreign countries, including the preparation of Prospectuses
and Statements of Additional Information for filing with the SEC; (g) all
expenses of shareholders' and Trustees' meetings and of preparing, printing
and distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (h) charges and expenses of legal
counsel to the Fund and the Trustees; (i) distribution fees paid by the Fund
in accordance with Rule 12b-1 promulgated by the SEC pursuant to the 1940
Act; (j) compensation of those Trustees of the Fund who are not affiliated
with or interested persons of PMC, the Fund (other than as Trustees), PGI or
PFD; (k) the cost of preparing and printing share certificates; and (l)
interest on borrowed money, if any. In addition to the expenses described
above, the Fund shall pay all brokers' and underwriting commissions
chargeable to the Fund in connection with securities transactions to which
the Fund is a party.
Orders for the Fund's portfolio securities transactions are placed by PMC,
which strives to obtain the best price and execution for each transaction. In
circumstances in which two or more broker-dealers are in a position to offer
comparable prices and execution, consideration may be given to whether the
broker-dealer provides investment research or brokerage services or sells
shares of any Pioneer mutual fund. See the Statement of Additional
Information for a further description of PMC's brokerage allocation
practices.
As compensation for its management services and certain expenses which PMC
incurs, PMC is entitled to a management fee equal to 0.85% per annum of the
Fund's average daily net assets. The management fee is higher than that paid by
most other funds, however, management believes the fee is comparable to the fees
of other equity funds in that it reflects the added complexity and expenses
associated with analyzing small capitalization company investments. The fee is
normally computed daily and paid monthly.
4
<PAGE>
John F. Cogan, Jr., Chairman and President of the Fund, Chairman of PFD,
President and a Director of PGI and Chairman and a Director of PMC, owned
approximately 15% of the outstanding capital stock of PGI as of the date of
this Prospectus.
IV. FUND SHARE ALTERNATIVES
The Fund continuously offers two Classes of shares designated as Class A
and Class B shares, as described more fully in "How to Buy Fund Shares." If
you do not specify in your instructions to the Fund which Class of shares you
wish to purchase, exchange or redeem, the Fund will assume that your
instructions apply to Class A shares.
Class A Shares. If you invest less than $1 million in Class A shares, you
will pay an initial sales charge. Certain purchases may qualify for reduced
initial sales charges. If you invest $1 million or more in Class A shares, no
sales charge will be imposed at the time of purchase, however, shares
redeemed within 12 months of purchase may be subject to a contingent deferred
sales charge ("CDSC"). Class A shares are subject to distribution and service
fees at a combined annual rate of up to 0.25% of the Fund's average daily net
assets attributable to Class A shares.
Class B Shares. If you plan to invest up to $250,000, Class B shares are
available to you. Class B shares are sold without an initial sales charge,
but are subject to a CDSC of up to 4% if redeemed within six years. Class B
shares are subject to distribution and service fees at a combined annual rate
of 1.00% of the Fund's average daily net assets attributable to Class B
shares. Your entire investment in Class B shares is available to work for you
from the time you make your investment, but the higher distribution fee paid
by Class B shares will cause your Class B shares (until conversion) to have a
higher expense ratio and to pay lower dividends, to the extent dividends are
paid, than Class A shares. Class B shares will automatically convert to Class
A shares, based on relative net asset value, eight years after the initial
purchase.
Purchasing Class A or Class B Shares. The decision as to which Class to
purchase depends on the amount you invest, the intended length of the
investment and your personal situation. If you are making an investment that
qualifies for reduced sales charges, you might consider Class A shares. If
you prefer not to pay an initial sales charge on an investment of $250,000 or
less and you plan to hold the investment for at least six years, you might
consider Class B shares.
Investment dealers or their representatives may receive different
compensation depending on which Class of shares they sell. Shares may be
exchanged only for shares of the same Class of another Pioneer fund and
shares acquired in the exchange will continue to be subject to any CDSC
applicable to the shares of the Fund originally purchased. Shares sold
outside the U.S. to persons who are not U.S. citizens may be subject to
different sales charges, CDSCs and dealer compensation arrangements in
accordance with local laws and business practices.
V. SHARE PRICE
Shares of the Fund are sold at the public offering price, which is the net
asset value per share plus the applicable sales charge. Net asset value per
share of a Class of the Fund is determined by dividing the value of its
assets, less liabilities attributable to that Class, by the number of shares
of that Class outstanding. The net asset value is computed once daily, on
each day the Exchange is open, as of the close of regular trading on the
Exchange.
Securities are valued at the last sale price on the principal exchange or
market where they are traded. Securities which have not traded on the date of
valuation or securities for which sales prices are not generally reported are
valued at the mean between the current bid and asked prices. Securities
quoted in foreign currencies are converted to U.S. dollars utilizing foreign
exchange rates employed by the Fund's independent pricing services.
Generally, trading in foreign securities is substantially completed each day
at various times prior to the close of the Exchange. The values of such
securities used in computing the net asset value of the Fund's shares are
determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the Exchange. Occasionally, events
which affect the values of such securities and such exchange rates may occur
between the times at which they are determined and the close of the Exchange
and will therefore not be reflected in the computation of the Fund's net
asset value. If events materially affecting the value of such securities
occur during such period, then these securities are valued at their fair
value as determined in good faith by the Trustees. All assets of the Fund for
which there is no other readily available valuation method are valued at
their fair value as determined in good faith by the Trustees.
VI. HOW TO BUY FUND SHARES
You may buy Fund shares, unless the purchase of Fund shares has been
restricted by management, at the public offering price from any securities
broker-dealer which has a sales agreement with PFD. If you do not have a
securities broker-dealer, please call 1-800-225-6292 for assistance.
The minimum initial investment is $1,000 for Class A and Class B shares
except as specified below. The minimum initial investment is $50 for Class A
accounts being established to utilize monthly bank drafts, government
allotments, payroll deduction and other similar automatic investment plans.
Separate minimum investment requirements apply to retirement plans and to
telephone and wire orders placed by broker-dealers; no sales charges or
minimum requirements apply to the reinvestment of dividends or capital gains
distributions. The minimum subsequent investment is $50 for Class A shares
and $500 for Class B shares except that the subsequent minimum investment
amount for Class B share accounts may be as little as $50 if an automatic
investment plan (see "Automatic Investment Plans") is established.
At this time, shares of the Fund may not be purchased by exchanging shares
of any other Pioneer mutual funds that you currently own. This policy will be
in effect through December 31, 1996, unless management decides that it is in
the best interest of the Fund to allow exchanges prior to that time.
Telephone Purchases. Your account is automatically authorized to have the
telephone purchase privilege unless
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you indicated otherwise on your Account Application or by writing to
Pioneering Services Corporation ("PSC"). The telephone purchase option may be
used to purchase additional shares for an existing fund account; it may not
be used to establish a new account. Proper account identification will be
required for each telephone purchase. A maximum of $25,000 per account may be
purchased by telephone each day. The telephone purchase privilege is
available to IRA accounts but may not be available to other types of
retirement plan accounts. Call PSC for more information.
You are strongly urged to consult with your financial representative prior
to requesting a telephone purchase. To purchase shares by telephone, you must
establish your bank account of record by completing the appropriate section
of your Account Application or an Account Options Form. PSC will
electronically debit the amount of each purchase from this predesignated bank
account. Telephone purchases may not be made for 30 days after the
establishment of your bank of record or any change to your bank information.
Telephone purchases will be priced at the net asset value plus any
applicable sales charge next determined after PSC's acceptance of a telephone
purchase instruction and receipt of good funds (usually three days after the
purchase instruction). You may always elect to deliver purchases to PSC by
mail. See "Telephone Transactions and Related Liabilities" for additional
information.
Class A Shares
You may buy Class A shares at the public offering price, that is, at the
net asset value per share next computed after receipt of a purchase order,
plus a sales charge as follows:
Sales Charge as a % of Dealer
---------------------- Allowance
Net as a % of
Offering Amount Offering
Amount of Purchase Price Invested Price
- ------------------------------ --------- --------- ---------
Less than $50,000 5.75% 6.10% 5.00%
$50,000 but less than $100,000 4.50 4.71 4.00
$100,000 but less than
$250,000 3.50 3.63 3.00
$250,000 but less than
$500,000 2.50 2.56 2.00
$500,000 but less than
$1,000,000 2.00 2.04 1.75
$1,000,000 or more -0- -0- see below
The schedule of sales charges above is applicable to purchases of Class A
shares of the Fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Section 401 or 408 of the Internal Revenue Code of 1986, as amended (the
"Code"), although more than one beneficiary is involved. The sales charges
applicable to a current purchase of Class A shares of the Fund by a person
listed above is determined by adding the value of shares to be purchased to
the aggregate value (at the then current offering price) of shares of any of
the other Pioneer mutual funds previously purchased and then owned, provided
PFD is notified by such person or his or her broker-dealer each time a purchase
is made which would qualify. Pioneer mutual funds include all mutual funds for
which PFD serves as principal underwriter. See the "Letter of Intention"
section of the Account Application.
From the Fund's inception through January 31, 1996, the dealer concession
will consist of the entire sales charge. The period during which this
additional concession is paid to dealers may be extended for any period up to
2 months. Broker-dealers receiving 90% or more of the sales charge may be
deemed to be underwriters under the federal securities laws.
No sales charge is payable at the time of purchase on investments of
$1,000,000 or more or for participants in certain group plans (described
below) subject to a CDSC of 1% which may be imposed in the event of a
redemption of Class A shares within 12 months of purchase. See "How to Sell
Fund Shares." PFD may, in its discretion, pay a commission to broker-dealers
who initiate and are responsible for such purchases as follows: 1% on the
first $5 million invested; 0.50% on the next $45 million; and 0.25% on the
excess over $50 million. These commissions will not be paid if the purchaser
is affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by 401(a) or 401(k) retirement plans with 1,000
or more eligible participants or with at least $10 million in plan assets
will be required to return any commission paid or a pro rata portion thereof
if the retirement plan redeems its shares within 12 months of purchase. See
also "How to Sell Fund Shares." In connection with PGI's acquisition of
Mutual of Omaha Fund Management Company and contingent upon the achievement
of certain sales objectives, PFD pays to Mutual of Omaha Investor Services,
Inc. 50% of PFD's retention of any sales commission on sales of the Fund's
Class A shares through such dealer.
Qualifying for a Reduced Sales Charge. Class A shares of the Fund may be
sold at a reduced or eliminated sales charge to certain group plans ("Group
Plans") under which a sponsoring organization makes recommendations to,
permits group solicitation of, or otherwise facilitates purchases by, its
employees, members or participants. Class A shares of a Fund may be sold at
net asset value per share without a sales charge to Optional Retirement
Program participants if (i) the employer has authorized a limited number of
investment company providers for the Program, (ii) all authorized investment
company providers offer their shares to Program participants at net asset
value, (iii) the employer has agreed in writing to actively promote the
authorized investment providers to Program participants and (iv) the Program
provides for a matching contribution for each participant
contribution.Information about such arrangements is available from PFD.
Class A shares of the Fund may also be sold at net asset value per share
without a sales charge to: (a) current or former Trustees and officers of the
Fund and partners and employees of its legal counsel; (b) current or former
directors, officers, employees or sales representatives of PGI or its
subsidiaries; (c) current or former directors, officers, employees or sales
representatives of any subadviser or predecessor investment adviser to any
investment company for which PMC serves as investment adviser, and the
subsidiar-
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ies or affiliates of such persons; (d) current or former officers, partners,
employees or registered representatives of broker- dealers which have entered
into sales agreements with PFD; (e) members of the immediate families of any
of the persons above; (f) any trust, custodian, pension, profit-sharing or
other benefit plan of the foregoing persons; (g) insurance company separate
accounts; (h) certain "wrap accounts" for the benefit of clients of financial
planners adhering to standards established by PFD; (i) other funds and
accounts for which PMC or any of its affiliates serves as investment adviser
or manager; and (j) certain unit investment trusts. Shares so purchased are
purchased for investment purposes and may not be resold except through
redemption or repurchase by or on behalf of the Fund. The availability of
this privilege is conditioned upon the receipt by PFD of written notification
of eligibility. Class A shares of the Fund may also be sold at net asset
value without a sales charge in connection with certain reorganization,
liquidation or acquisition transactions involving other investment companies
or personal holding companies.
Reduced sales charges for Class A shares are available through an
agreement to purchase a specified quantity of Fund shares over a designated
13-month period by completing the "Letter of Intention" section of the
Account Application. Information about the Letter of Intention procedure,
including its terms, is contained in the Statement of Additional Information.
Investors who are clients of a broker- dealer with a current sales agreement
with PFD may purchase Class A shares of the Fund at net asset value, without
a sales charge, to the extent that the purchase price is paid out of proceeds
from one or more redemptions by the investor of shares of certain other
mutual funds. In order for a purchase to qualify for this privilege, the
investor must document to the broker-dealer that the redemption occurred
within the 60 days immediately preceding the purchase of Class A shares; that
the client paid a sales charge on the original purchase of the shares
redeemed; and that the mutual fund whose shares were redeemed also offers net
asset value purchases to redeeming shareholders of any of the Pioneer funds.
Further details may be obtained from PFD.
Class B Shares
You may buy Class B shares at net asset value without the imposition of an
initial sales charge; however, Class B shares redeemed within six years of
purchase will be subject to a CDSC at the rates shown in the table below. The
charge will be assessed on the amount equal to the lesser of the current
market value or the original purchase cost of the shares being redeemed. No
CDSC will be imposed on increases in account value above the initial purchase
price, including shares derived from the reinvestment of dividends or capital
gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years
from the time of purchase until the time of redemption of Class B shares. For
the purpose of determining the number of years from the time of any purchase,
all payments during a quarter will be aggregated and deemed to have been made
on the first day of that quarter. In processing redemptions of Class B
shares, the Fund will first redeem shares not subject to any CDSC, and then
shares held longest during the six-year period. As a result, you will pay the
lowest possible CDSC.
Year Since CDSC as a Percentage of Dollar
Purchase Amount Subject to CDSC
----------------------- ---------------------------------
First 4.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter none
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to
the Fund in connection with the sale of Class B shares, including the payment
of compensation to broker-dealers.
Class B shares will automatically convert into Class A shares at the end
of the calendar quarter that is eight years after the purchase date, except
as noted below. Class B shares acquired by exchange from Class B shares of
another Pioneer fund will convert into Class A shares based on the date of
the initial purchase and the applicable CDSC. Class B shares acquired through
reinvestment of distributions will convert into Class A shares based on the
date of the initial purchase to which such shares relate. For this purpose,
Class B shares acquired through reinvestment of distributions will be
attributed to particular purchases of Class B shares in accordance with such
procedures as the Trustees may determine from time to time. The conversion of
Class B shares to Class A shares is subject to the continuing availability of
a ruling from the Internal Revenue Service ("IRS"), for which the Fund is
applying, or an opinion of counsel that such conversions will not constitute
taxable events for federal tax purposes. There can be no assurance that such
ruling will be available. The conversion of Class B shares to Class A shares
will not occur if such ruling is not available and, therefore, Class B shares
would continue to be subject to higher expenses than Class A shares for an
indeterminate period.
Waiver or Reduction of Contingent Deferred Sales Charge. The CDSC on Class
B shares and on any Class A shares subject to a CDSC may be waived or reduced
for non-retirement accounts if: (a) the redemption results from the death of
all registered owners of an account (in the case of UGMAs, UTMAs and trust
accounts, waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed
or (b) the redemption is made in connection with limited automatic
redemptions as set forth in "Systematic Withdrawal Plans" (limited in any
year to 10% of the value of the account in the Fund at the time the
withdrawal plan is established).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may
be waived or reduced for retirement plan accounts if: (a) the redemption
results from the death or a total and permanent disability (as defined in
Section 72 of the Code) occurring after the purchase of the shares being
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<PAGE>
redeemed of a shareowner or participant in an employer-sponsored retirement
plan; (b) the distribution is to a participant in an Individual Retirement
Account ("IRA"), 403(b) or employer-sponsored retirement plan, is part of a
series of substantially equal payments made over the life expectancy of the
participant or the joint life expectancy of the participant and his or her
beneficiary or as scheduled periodic payments to a participant (limited in
any year to 10% of the value of the participant's account at the time the
distribution amount is established; a required minimum distribution due to
the participant's attainment of age 701/2 may exceed the 10% limit only if the
distribution amount is based on plan assets held by Pioneer); (c) the
distribution is from a 401(a) or 401(k) retirement plan and is a return of
excess employee deferrals or employee contributions or a qualifying hardship
distribution as defined by the Code or results from a termination of
employment (limited with respect to a termination to 10% per year of the
value of the plan's assets in the Fund as of the later of the prior December
31 or the date the account was established unless the plan's assets are being
rolled over to or reinvested in the same class of shares of a Pioneer mutual
fund subject to the CDSC of the shares originally held); (d) the distribution
is from an IRA, 403(b) or employer-sponsored retirement plan and is to be
rolled over to or reinvested in the same class of shares in a Pioneer mutual
fund and which will be subject to the applicable CDSC upon redemption; (e)
the distribution is in the form of a loan to a participant in a plan which
permits loans (each repayment of the loan will constitute a new sale which
will be subject to the applicable CDSC upon redemption); or (f) the
distribution is from a qualified defined contribution plan and represents a
participant's directed transfer (provided that this privilege has been pre-
authorized through a prior agreement with PFD regarding participant directed
transfers).
The CDSC on Class B shares and on any Class A shares subject to a CDSC may
be waived or reduced for either non- retirement or retirement plan accounts
if: (a) the redemption is made by any state, county, or city, or any
instrumentality, department, authority, or agency thereof, which is
prohibited by applicable laws from paying a CDSC in connection with the
acquisition of shares of any registered investment management company; or (b)
the redemption is made pursuant to the Fund's right to liquidate or
involuntarily redeem shares in a shareowner's account.
Broker-Dealers. An order for either Class of Fund shares received by PFD
from a broker-dealer prior to the close of regular trading on the Exchange is
confirmed at the price appropriate for that Class as determined at the close
of regular trading on the Exchange on the day the order is received, provided
the order is received prior to PFD's close of business (usually, 5:30 p.m.
Eastern Time). It is the responsibility of broker-dealers to transmit orders
so that they will be received by PFD prior to its close of business.
General. The Fund reserves the right in its sole discretion to withdraw
all or any part of the offering of shares when, in the judgment of the Fund's
management, such withdrawal is in the best interest of the Fund. An order to
purchase shares is not binding on, and may be rejected by, PFD until it has
been confirmed in writing by PFD and payment has been received.
VII. HOW TO SELL FUND SHARES
You can arrange to sell (redeem) fund shares on any day the Exchange is
open by selling either some or all of your shares to the Fund.
You may sell your shares either through your broker-dealer or directly to
the Fund. Please note the following:
(bullet) If you are selling shares from a retirement account, you must
make your request in writing (except for exchanges to other Pioneer mutual
funds which can be requested by phone or in writing). Call 1-800-622-0176 for
more information.
(bullet) If you are selling shares from a non-retirement account, you may
use any of the methods described below.
Your shares will be sold at the share price next calculated after your
order is received and accepted less any applicable CDSC. Sale proceeds
generally will be sent to you in cash, normally within seven days after your
order is accepted. The Fund reserves the right to withhold payment of the
sale proceeds until checks received by the Fund in payment for the shares
being sold have cleared, which may take up to 15 calendar days from the
purchase date.
In Writing. You may sell your shares by delivering a written request,
signed by all registered owners, in good order to PSC, however, you must use
a written request, including a signature guarantee, to sell your shares if
any of the following situations applies:
(bullet) you wish to sell over $50,000 worth of shares,
(bullet) your account registration or address has changed within the last
30 days
(bullet) the check is not being mailed to the address on your account
(address of record),
(bullet) the check is not being made out to the account owners, or
(bullet) the sale proceeds are being transferred to a Pioneer account with
a different registration.
Your request should include your name, the Fund's name, your fund account
number, the Class of shares to be redeemed, the dollar amount or number of
shares to be redeemed, and any other applicable requirements as described
below. Unless instructed otherwise, Pioneer will send the proceeds of the sale
to the address of record. Fiduciaries or corporations are required to submit
additional documents. For more information, contact PSC at 1-800-225-6292.
Written requests will not be processed until they are received in good
order and accepted by PSC. Good order means that there are no outstanding
claims or requests to hold redemptions on the account, certificates are
endorsed by the record owner(s) exactly as the shares are registered and, if
required, the signature(s) are guaranteed by an eligible guarantor. You
should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under
8
<PAGE>
state law), securities exchange or association, clearing agency or savings
association. A notary public cannot provide a signature guarantee. Signature
guarantees are not accepted by facsimile ("fax"). For additional information
about the necessary documentation for redemption by mail, please contact PSC
at 1-800-225-6292.
By Telephone or by Fax. Your account is automatically authorized to have
the telephone redemption privilege unless you indicated otherwise on your
Account Application or by writing to PSC. Proper account identification will
be required for each telephone redemption. The telephone redemption option is
not available to retirement plan accounts. A maximum of $50,000 may be
redeemed by telephone or fax and the proceeds may be received by check or by
bank wire or electronic funds transfer. To receive the proceeds by check: the
check must be made payable exactly as the account is registered and the check
must be sent to the address of record which must not have changed in the last
30 days. To receive the proceeds by bank wire or by electronic funds
transfer: the proceeds must be sent to the bank address of record which must
have been properly pre-designated either on your Account Application or on an
Account Options Form and which must not have changed in the last 30 days. To
redeem by fax, send your redemption request to 1-800-225-4240. You may always
elect to deliver redemption instructions to PSC by mail. See "Telephone
Transactions and Related Liabilities" below. Telephone and fax redemptions
will be priced as described above. You are strongly urged to consult with
your financial representative prior to requesting a telephone redemption.
Selling Shares Through Your Broker-Dealer. The Fund has authorized PFD to
act as its agent in the repurchase of shares of the Fund from qualified
broker-dealers and reserves the right to terminate this procedure at any
time. Your broker-dealer must receive your request before the close of
business on the Exchange and transmit it to PFD before PFD's close of
business to receive that day's redemption price. Your broker-dealer is
responsible for providing all necessary documentation to PFD and may charge
you for its services.
Small Accounts. The minimum account value is $500. If you hold shares of
the Fund in an account with a net asset value of less than the minimum
required amount due to redemptions or exchanges, the Fund may redeem the
shares held in this account at net asset value if you have not increased the
net asset value of the account to at least the minimum required amount within
six months of notice by the Fund to you of the Fund's intention to redeem the
shares.
CDSC on Class A Shares. Purchases of Class A shares of $1,000,000 or more,
or by participants in a Group Plan which were not subject to an initial sales
charge, may be subject to a CDSC upon redemption. A CDSC is payable to PFD on
these investments in the event of a share redemption within 12 months
following the share purchase, at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. Shares subject to the CDSC
which are exchanged into another Pioneer fund will continue to be subject to
the CDSC until the original 12-month period expires. However, no CDSC is
payable with respect to purchases of Class A shares by 401(a) or 401(k)
retirement plans with 1,000 or more eligible participants or with at least
$10 million in plan assets.
General. Redemptions may be suspended or payment postponed during any
period in which any of the following conditions exist: the Exchange is closed
or trading on the Exchange is restricted; an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly
determine the value of the net assets of its portfolio; or the SEC, by order,
so permits.
Redemptions and repurchases are taxable transactions to shareholders. The
net asset value per share received upon redemption or repurchase may be more
or less than the cost of shares to an investor, depending on the market value
of the portfolio at the time of redemption or repurchase.
VIII. HOW TO EXCHANGE FUND SHARES
At this time, you may not open a new account in the Fund or purchase
shares of the Fund by exchanging shares from any other Pioneer mutual fund
that you already own (except shares of Pioneer Money Market Trust either
acquired by direct purchase after August 31, 1995 or exempt from sales
charges upon exchange). You may, however, take advantage of the exchange
privileges described below to exchange shares of the Fund for shares of other
Pioneer mutual funds. Such shares may be exchanged back to this Fund. This
policy will be in effect until December 31, 1996, unless a review by
management indicates that it would be in the best interests of the Fund to
allow exchanges into the Fund before that time. See "How to Buy Fund Shares."
Written Exchanges. You may exchange your shares by sending a letter of
instruction to PSC. Your letter should include your name, the name of the
Fund out of which you wish to exchange and the name of the Fund into which
you wish to exchange, your fund account number(s), the Class of shares to be
exchanged and the dollar amount or number of shares to be exchanged. Written
exchange requests must be signed by all record owner(s) exactly as the shares
are registered.
Telephone Exchanges. Your account is automatically authorized to have the
telephone exchange privilege unless you indicated otherwise on your Account
Application or by writing to PSC. Proper account identification will be
required for each telephone exchange. Telephone exchanges may not exceed
$500,000 per account per day. Each voice-requested or FactFone(SM) telephone
exchange request will be recorded. You are strongly urged to consult with
your financial representative prior to requesting a telephone exchange. See
"Telephone Transactions and Related Liabilities" below.
Automatic Exchanges. You may automatically exchange shares from one
Pioneer account for shares of the same Class in another Pioneer account on a
monthly or quarterly basis. The accounts must have identical registrations
and the originating account must have a minimum balance of $5,000. The
exchange will be effective on the 18th day of the month.
General. Exchanges must be at least $1,000. You may exchange your
investment from one Class of Fund shares at
9
<PAGE>
net asset value, without a sales charge, for shares of the same Class of any
other Pioneer mutual fund. Not all Pioneer mutual funds offer more than one
Class of shares. A new Pioneer account opened through an exchange must have a
registration identical to that on the original account.
Class A or Class B shares which would normally be subject to a CDSC upon
redemption will not be charged the applicable CDSC at the time of an
exchange. Shares acquired in an exchange will be subject to the CDSC of the
shares originally held. For purposes of determining the amount of any
applicable CDSC, the length of time you have owned Class B shares acquired by
exchange will be measured from the date you acquired the original shares and
will not be affected by any subsequent exchange.
Exchange requests received by PSC before 4:00 p.m. Eastern Time will be
effective on that day if the requirements above have been met, otherwise,
they will be effective on the next business day. PSC will process exchanges
only after receiving an exchange request in good order. There are currently
no fees or sales charges imposed at the time of an exchange. An exchange of
shares may be made only in states where legally permitted. For federal and
(generally) state income tax purposes, an exchange is considered to be a sale
of the shares of the Fund exchanged and a purchase of shares in another
Pioneer mutual fund. Therefore, an exchange could result in a gain or loss on
the shares sold, depending on the tax basis of these shares and the timing of
the transaction, and special tax rules may apply.
You should consider the differences in objectives and policies of the
Pioneer mutual funds, as described in each fund's current prospectus, before
making any exchange. For the protection of the Fund's performance and
shareholders, the Fund and PFD reserve the right to refuse any exchange
request or restrict, at any time without notice, the number and/or frequency
of exchanges to prevent abuses of the exchange privilege. Such abuses may
arise from frequent trading in response to short-term market fluctuations, a
pattern of trading by an individual or group that appears to be an attempt to
"time the market," or any other exchange request which, in the view of
management, will have a detrimental effect on the Fund's portfolio management
strategy or its operations. In addition, the Fund and PFD reserve the right
to charge a fee for exchanges or to modify, limit, suspend or discontinue the
exchange privilege with notice to shareholders as required by law.
IX. DISTRIBUTION PLANS
The Fund, has adopted a Plan of Distribution for both Class A shares
("Class A Plan") and Class B shares ("Class B Plan") in accordance with Rule
12b-1 under the 1940 Act pursuant to which certain distribution and service
fees are paid. Expenditures of the Fund for continuing service fees to
broker-dealers pursuant to the Class A Plan will be accrued daily beginning
July 1, 1996; other expenses pursuant to the Class A Plan will be paid as
accrued.
Pursuant to the Class A Plan, the Fund reimburses PFD for its actual
expenditures to finance any activity primarily intended to result in the sale
of Class A shares or to provide services to holders of Class A shares,
provided the categories of expenses for which reimbursement is made are
approved by the Fund's Board of Trustees. As of the date of this Prospectus,
the Board of Trustees has approved the following categories of expenses for
Class A shares of the Fund: (i) a service fee to be paid to qualified
broker-dealers in an amount not to exceed 0.25% per annum of the Fund's daily
net assets attributable to Class A shares; (ii) reimbursement to PFD for its
expenditures for broker-dealer commissions and employee compensation on
certain sales of the Fund's Class A shares with no initial sales charge (See
"How to Buy Fund Shares"); and (iii) reimbursement to PFD for expenses
incurred in providing services to Class A shareholders and supporting
broker-dealers and other organizations (such as banks and trust companies) in
their efforts to provide such services. Banks are currently prohibited under
the Glass-Steagall Act from providing certain underwriting or distribution
services. If a bank was prohibited from acting in any capacity or providing
any of the described services, management would consider what action, if any,
would be appropriate.
Expenditures of the Fund pursuant to the Class A Plan are accrued daily
and may not exceed 0.25% of the Fund's average daily net assets attributable
to Class A shares. Distribution expenses of PFD are expected to substantially
exceed the distribution fees paid by the Fund in a given year. The Class A
Plan does not provide for the carryover of reimbursable expenses beyond 12
months from the time the Fund is first invoiced for an expense. In the event
of termination or non-continuance of the Class A Plan, the Fund has 12 months
to reimburse any expense which it incurs prior to such event, provided that
payments by the Fund during such 12-month period shall not exceed 0.25% of
the Fund's average daily net assets during such period. The Class A Plan may
not be amended to increase materially the annual percentage limitation of
average net assets which may be spent for the services described therein
without approval of the shareholders of the Fund.
The Class B Plan provides that the Fund compensates PFD through the
payment of a distribution fee at the annual rate of 0.75% of the Fund's
average daily net assets attributable to Class B shares and a service fee at
the annual rate of 0.25% of the Fund's average daily net assets attributable
to Class B shares. The distribution fee is intended to compensate PFD for its
distribution services to the Fund. The service fee is intended to be
additional compensation for personal services and/or account maintenance
services with respect to Class B shares. PFD also receives the proceeds of
any CDSC imposed on the redemption of Class B shares.
Commissions of 4%, equal to 3.75% of the amount invested and a first
year's service fee equal to 0.25% of the amount invested in Class B shares,
are paid to broker-dealers who have selling agreements with PFD. PFD may
advance to dealers the first year service fee at a rate up to 0.25% of the
purchase price of such shares and, as compensation therefore, PFD may retain
the service fee paid by the Fund with respect to such shares for the first
year after purchase. Dealers will become eligible for additional service
10
<PAGE>
fees with respect to such shares commencing in the 13th month following the
purchase. Dealers may from time to time be required to meet certain criteria
in order to receive service fees. PFD or its affiliates are entitled to
retain all service fees payable under the Class B Plan for which there is no
dealer of record or for which qualification standards have not been met as
partial consideration for personal services and/or account maintenance
services performed by PFD or its affiliates for shareowner accounts.
X. DIVIDENDS, DISTRIBUTIONS AND TAXATION
The Fund intends to qualify each year as a "regulated investment company"
under Subchapter M of the Code, so that it will not pay federal income taxes
on income and capital gains distributed to shareholders at least annually.
Under the Code, the Fund will be subject to a nondeductible 4% federal
excise tax on a portion of its undistributed income and capital gains if it
fails to meet certain distribution requirements with respect to each calendar
year. The Fund intends to make distributions in a timely manner and
accordingly does not expect to be subject to the excise tax.
The Fund's policy is to pay to shareholders dividends from net investment
income, if any, and to make distributions from net long-term capital gains,
if any, in December. Distributions from net short-term capital gains, if any,
may be paid with such dividends; distributions from income and/or capital
gains may also be made at such times as may be necessary to avoid federal
income or excise tax. Dividends from the Fund's net investment income, net
short-term capital gains, and certain net foreign exchange gains are taxable
as ordinary income, and dividends from the Fund's net long-term capital gains
are taxable as long-term capital gains.
Unless shareholders specify otherwise, all distributions will be
automatically reinvested in additional full and fractional shares of the
Fund. For federal income tax purposes, all dividends are taxable as described
above whether a shareowner takes them in cash or reinvests them in additional
shares of the Fund. Information as to the federal tax status of dividends and
distributions will be provided annually. For further information on the
distribution options available to shareholders, see "Distribution Options"
and "Directed Dividends" below.
Distributions by the Fund of the dividend income it receives from U.S.
domestic corporations, if any, may qualify for the corporate
dividends-received deduction for corporate shareholders, subject to minimum
holding-period requirements and debt-financing restrictions under the Code.
The Fund anticipates that it will be subject to foreign withholding taxes
or other foreign taxes on income (possibly including capital gains) on
certain foreign investments, which will reduce the yield on those
investments. The Fund does not expect to qualify to pass such taxes and any
associated tax deductions or credits through to its shareholders.
Dividends and other distributions and the proceeds of redemptions,
exchanges or repurchases of Fund shares paid to individuals and other
non-exempt payees will be subject to a 31% backup withholding of federal
income tax if the Fund is not provided with the shareowner's correct taxpayer
identification number and certification that the number is correct and the
shareowner is not subject to backup withholding or if the Fund receives
notice from the IRS or a broker that such withholding applies. Please refer
to the Account Application for additional information.
The description above relates only to U.S. federal income tax consequences
for shareholders who are U.S. persons, i.e., U.S. citizens or residents or
U.S. corporations, partnerships, trusts or estates and who are subject to
U.S. federal income tax. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax treatment that is not described above.
Shareholders should consult their own tax advisers regarding state, local and
other applicable tax laws.
XI. SHAREOWNER SERVICES
PSC is the shareowner services and transfer agent for shares of the Fund.
PSC, a Massachusetts corporation, is a wholly-owned subsidiary of PGI. PSC's
offices are located at 60 State Street, Boston, Massachusetts 02109, and
inquiries to PSC should be mailed to Pioneering Services Corporation, P.O.
Box 9014, Boston, Massachusetts 02205-9014. Brown Brothers Harriman & Co.
(the "Custodian") serves as custodian of the Fund's portfolio securities and
other assets. The principal business address of the mutual fund division of
the Custodian is 40 Water Street, Boston, Massachusetts 02109.
Account and Confirmation Statements
PSC maintains an account for each shareowner and all transactions of the
shareowner are recorded in this account. Confirmation statements showing
details of transactions are sent to shareholders as transactions occur,
except Automatic Investment Plan transactions which are confirmed quarterly.
The Combined Account Statement, mailed quarterly, is available to
shareholders who have more than one Pioneer account.
Shareholders whose shares are held in the name of an investment
broker-dealer or other party will not normally have an account with the Fund
and might not be able to utilize some of the services available to
shareholders of record. Examples of services which might not be available are
investment or redemption of shares by mail, automatic reinvestment of
dividends and capital gains distributions, withdrawal plans, Letters of
Intention, Rights of Accumulation, telephone exchanges and redemptions, and
newsletters.
Additional Investments
You may add to your account by sending a check (minimum of $50 for Class A
shares and $500 for Class B shares) to PSC (account number and Class of
shares should be clearly indicated). The bottom portion of a confirmation
statement may be used as a remittance slip to make additional investments.
Additions to your account, whether by check or through a Pioneer
Investomatic Plan, are invested in full and fractional shares of the Fund at
the applicable offering price in effect as of the close of the Exchange on
the day of receipt.
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<PAGE>
Automatic Investment Plans
You may arrange for regular automatic investments of $50 or more through
government/military allotments, payroll deduction or through a Pioneer
Investomatic Plan. A Pioneer Investomatic Plan provides for a monthly or
quarterly investment by means of a pre-authorized draft drawn on a checking
account. Pioneer Investomatic Plan investments are voluntary, and you may
discontinue the Plan at any time without penalty upon 30 days' written notice
to PSC. PSC acts as agent for the purchaser, the broker-dealer and PFD in
maintaining these plans.
Financial Reports and Tax Information
As a shareowner, you will receive financial reports at least semiannually.
In January of each year, the Fund will mail you information about the tax
status of dividends and distributions.
Distribution Options
Dividends and capital gains distributions, if any, will automatically be
invested in additional shares of the Fund, at the applicable net asset value
per share, unless you indicate another option on the Account Application.
Two other options available are (a) dividends in cash and capital gains
distributions in additional shares; and (b) all dividends and capital gains
distributions in cash. These two options are not available, however, for
retirement plans or for an account with a net asset value of less than $500.
Changes in your distribution options may be made by written request to PSC.
Directed Dividends
You may elect (in writing) to have the dividends paid by one Pioneer fund
account invested in a second Pioneer fund account. The value of this second
account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II).
Invested dividends may be in any amount, and there are no fees or charges for
this service. Retirement plan shareholders may only direct dividends to
accounts with identical registrations, i.e., PGI IRA Cust for John Smith may
only go into another account registered PGI IRA Cust for John Smith.
Direct Deposit
If you have elected to take distributions, whether dividends or dividends
and capital gains, in cash, or have established a Systematic Withdrawal Plan,
you may choose to have those cash payments deposited directly into your
savings, checking or NOW bank account. You may establish this service by
completing the appropriate section on the Account Application when opening a
new account or the Account Options Form for an existing account.
Voluntary Tax Withholding
You may request (in writing) that PSC withhold 28% of the dividends and
capital gains distributions paid from your account (before any reinvestment)
and forward the amount withheld to the IRS as a credit against your federal
income taxes. This option is not available for retirement plan accounts or
for accounts subject to backup withholding.
Telephone Transactions and Related Liabilities
Your account is automatically authorized to have telephone transaction
privileges unless you indicate otherwise on your Account Application or by
writing to PSC. You may purchase, sell or exchange Fund shares by telephone.
For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 8:00 p.m.
Eastern time on weekdays. Computer-assisted transactions are available to
shareholders who have pre-recorded certain bank information (see
"FactFone(SM)"). You are strongly urged to consult with your financial
representative prior to requesting any telephone transaction. See "Share
Price" for more information. To confirm that each transaction instruction
received by telephone is genuine, the Fund will record each telephone
transaction, require the caller to provide the personal identification number
(PIN) for the account and send you a written confirmation of each telephone
transaction. Different procedures may apply to accounts that are registered
to non-U.S. citizens or that are held in the name of an institution or in the
name of an investment broker-dealer or other third-party. If reasonable
procedures, such as those described above, are not followed, the Fund may be
liable for any loss due to unauthorized or fraudulent instructions. The Fund
may implement other procedures from time to time. In all other cases, neither
the Fund, PSC or PFD will be responsible for the authenticity of instructions
received by telephone; therefore, you bear the risk of loss for unauthorized
or fraudulent telephone transactions.
During times of economic turmoil or market volatility or as a result of
severe weather or a natural disaster, it may be difficult to contact the Fund
by telephone to institute a redemption or exchange. You should communicate
with the Fund in writing if you are unable to reach the Fund by telephone.
FactFone(SM)
FactFone(SM) is an automated inquiry and telephone transaction system
available to Pioneer shareholders by dialing 1-800-225-4321. FactFone(SM)
allows you to obtain current information on your Pioneer accounts and to
inquire about the prices and yields of all publicly available Pioneer mutual
funds. In addition, you may use FactFone(SM) to make computer-assisted
telephone purchases, exchanges and redemptions from your Pioneer accounts if
you have activated your personal identification number ("PIN"). Telephone
purchases and redemptions require the establishment of a bank account of
record. You are strongly urged to consult with your financial representative
prior to requesting any telephone transaction. Shareholders whose accounts
are registered in the name of a broker-dealer or other third party may not be
able to use FactFone(SM). See "How to Buy Fund Shares," "How to Exchange Fund
Shares," "How to Sell Fund Shares" and "Telephone Transactions and Related
Liabilities." Call PSC for assistance.
Retirement Plans
You should contact the Retirement Plans Department of PSC at
1-800-622-0176 for information relating to retirement plans for businesses,
age-weighted profit sharing plans, Simplified Employee Pension Plans, IRAs,
and Section 403(b) retirement plans for employees of certain non-profit
organizations and public school systems, all of which are available in
conjunction with investments in the Fund. The Account Application
accompanying this Prospectus should not be used to establish any of these
plans. Separate applications are required.
12
<PAGE>
Telecommunications Device for the Deaf (TDD)
If you have a hearing disability and you own TDD keyboard equipment, you
can call our TDD number toll-free at 1-800-225-1997, weekdays from 8:30 a.m.
to 5:30 p.m. Eastern Time, to contact our telephone representatives with
questions about your account.
Systematic Withdrawal Plans
If your account has a total value of at least $10,000 you may establish a
Systematic Withdrawal Plan ("SWP") providing for fixed payments at regular
intervals. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the plan is implemented. See "Waiver or
Reduction of Contingent Deferred Sales Charge" for more information. Periodic
checks of $50 or more will be sent to you, or any person designated by you,
monthly or quarterly, and your periodic redemptions of shares may be taxable
to you. Payments can be made either by check or electronic transfer to a bank
account designated by you. If you direct that withdrawal checks be paid to
another person after you have opened your account, a signature guarantee must
accompany your instructions. Purchases of Class A shares of the Fund at a
time when you have a SWP in effect may result in the payment of unnecessary
sales charges and may therefore be disadvantageous.
You may obtain additional information by calling PSC at 1-800-225-6292 or
by referring to the Statement of Additional Information.
Reinstatement Privilege (Class A Shares Only)
If you redeem all or part of your Class A shares of the Fund, you may
reinvest all or part of the redemption proceeds without a sales charge in
Class A shares of the Fund if you send a written request to PSC not more than
90 days after your shares were redeemed. Your redemption proceeds will be
reinvested at the next determined net asset value of the Class A shares of
the Fund in effect immediately after receipt of the written request for
reinstatement. You may realize a gain or loss for federal income tax purposes
as a result of the redemption, and special tax rules may apply if a
reinvestment occurs. Subject to the provisions outlined under "How to
Exchange Fund Shares" above, you may also reinvest in Class A shares of other
Pioneer mutual funds; in this case you must meet the minimum investment
requirements for each fund you enter.
The 90-day reinstatement period may be extended by PFD for periods of up
to one year for shareholders living in areas that have experienced a natural
disaster, such as a flood, hurricane, tornado, or earthquake.
_______________
The options and services available to shareholders, including the terms of
the Exchange Privilege and the Pioneer Investomatic Plan, may be revised,
suspended or terminated at any time by PFD or by the Fund. You may establish
the services described in this section when you open your account. You may
also establish or revise many of them on an existing account by completing an
Account Options Form, which you may request by calling 1-800-225-6292.
XII. THE FUND
The Fund is a diversified open-end management investment company (commonly
referred to as a mutual fund) organized as a Delaware business trust on
August 8, 1995. The Fund has authorized an unlimited number of shares of
beneficial interest. As an open-end management investment company, the Fund
continuously offers its shares to the public and under normal conditions must
redeem its shares upon the demand of any shareowner at the then current net
asset value per share. See "How to Sell Fund Shares." The Fund is not
required, and does not intend, to hold annual shareowner meetings although
special meetings may be called for the purpose of electing or removing
Trustees, changing fundamental investment restrictions or approving a
management contract.
The Fund reserves the right to create and issue additional series of
shares. The Trustees have the authority, without further shareowner approval,
to classify and reclassify the shares of the Fund, or any additional series
of the Fund, into one or more classes. As of the date of this Prospectus, the
Trustees have authorized the issuance of two classes of shares, designated
Class A and Class B. The shares of each class represent an interest in the
same portfolio of investments of the Fund. Each class has equal rights as to
voting, redemption, dividends and liquidation, except that each class bears
different distribution and transfer agent fees and may bear other expenses
properly attributable to the particular class. Class A and Class B
shareholders have exclusive voting rights with respect to the Rule 12b-1
distribution plans adopted by holders of those shares in connection with the
distribution of shares.
In addition to the requirements under Delaware law, the Declaration of
Trust provides that a shareowner of the Fund may bring a derivative action on
behalf of the Fund only if the following conditions are met: (a) shareholders
eligible to bring such derivative action under Delaware law who hold at least
10% of the outstanding shares of the Fund, or 10% of the outstanding shares
of the series or class to which such action relates, shall join in the
request for the Trustees to commence such action; and (b) the Trustees must
be afforded a reasonable amount of time to consider such shareowner request
and investigate the basis of such claim. The Trustess shall be entitled to
retain counsel or other advisers in considering the merits of the request and
shall require an undertaking by the shareholders making such request to
reimburse the Fund for the expense of any such advisers in the event that the
Trustees determine not to bring such action.
When issued and paid for in accordance with the terms of the Prospectus
and Statement of Additional Information, shares of the Fund are fully-paid
and non-assessable. Shares will remain on deposit with the Fund's transfer
agent and certificates will not normally be issued. The Fund reserves the
right to charge a fee for the issuance of certificates. In order to supply
the Fund with capital, PGI beneficially owned 100% of the Fund's issued and
outstanding shares immediately prior to effectiveness of the Fund's
registration statement. The Fund expects to have significant assets in
comparision to
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<PAGE>
PGI's initial investment soon after effectiveness and therefore PGI may no
longer control the Fund.
XIII. INVESTMENT RESULTS
The average annual total return (for a designated period of time) on an
investment in the Fund may be included in advertisements, and furnished to
existing or prospective shareholders. The average annual total return for
each Class is computed in accordance with the SEC's standardized formula. The
calculation for all Classes assumes the reinvestment of all dividends and
distributions at net asset value and does not reflect the impact of federal
or state income taxes. In addition, for Class A shares the calculation
assumes the deduction of the maximum sales charge of 5.75%; for Class B
shares the calculation reflects the deduction of any applicable CDSC. The
periods illustrated would normally include one, five and ten years (or since
the commencement of the public offering of the shares of a Class, if shorter)
through the most recent calendar quarter.
One or more additional measures and assumptions, including but not limited
to historical total returns; distribution returns; results of actual or
hypothetical investments; changes in dividends, distributions or share
values; or any graphic illustration of such data may also be used. These data
may cover any period of the Fund's existence and may or may not include the
impact of sales charges, taxes or other factors.
Other investments or savings vehicles and/or unmanaged market indexes,
indicators of economic activity or averages of mutual fund results may be
cited or compared with the investment results of the Fund. Rankings or
listings by magazines, newspapers or independent statistical or rating
services, such as Lipper Analytical Services, Inc., may also be referenced.
The Fund's investment results will vary from time to time depending on
market conditions, the composition of the Fund's portfolio and operating
expenses of the Fund. All quoted investment results are historical and should
not be considered representative of what an investment in the Fund may earn
in any future period. For further information about the calculation methods
and uses of the Fund's investment results, see the Statement of Additional
Information.
14
<PAGE>
APPENDIX--CERTAIN INVESTMENT PRACTICES
This Appendix provides a brief description of certain
investment techniques that the Fund may employ. For a more complete
discussion of these and other practices, see "Investment Objective and
Policies" in this Prospectus and "Investment Policies and Restrictions" in
the Statement of Additional Information.
Options on Securities Indices
The Fund may purchase put and call options on indices that are based on
securities in which it may invest to manage cash flow and to manage its
exposure to foreign and domestic stocks or stock markets instead of, or in
addition to, buying and selling stock. The Fund may also purchase options in
order to hedge against risks of market-wide price fluctuations.
The Fund may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the
Fund's portfolio securities. If the Fund purchases a put option on a
securities index, the amount of the payment it would receive upon exercising
the option would depend on the extent of any decline in the level of the
securities index below the exercise price. Such payments would tend to offset
a decline in the value of the Fund's portfolio securities. However, if the
level of the securities index increases and remains above the exercise price
while the put option is outstanding, the Fund will not be able to profitably
exercise the option and will lose the amount of the premium and any
transaction costs. Such loss may be partially offset by an increase in the
value of the Fund's portfolio securities.
The Fund may purchase call options on securities indices in order to
remain fully invested in a particular stock market or to lock in a favorable
price on securities that it intends to buy in the future. If the Fund
purchases a call option on a securities index, the amount of the payment it
receives upon exercising the option depends on the extent of an increase in
the level of the securities index above the exercise price. Such payments
would in effect allow the Fund to benefit from securities market appreciation
even though it may not have had sufficient cash to purchase the underlying
securities. Such payments may also offset increases in the price of
securities that the Fund intends to purchase. If, however, the level of the
securities index declines and remains below the exercise price while the call
option is outstanding, the Fund will not be able to exercise the option
profitably and will lose the amount of the premium and transaction costs.
Such loss may be partially offset by a reduction in the price the Fund pays
to buy additional securities for its portfolio.
The Fund may sell an option it has purchased or a similar option prior to
the expiration of the purchased option in order to close out its position in
an option which it has purchased. The Fund may also allow options to expire
unexercised, which would result in the loss of the premium paid.
Forward Foreign Currency Exchange Contracts and Options on Foreign Currencies
The Fund has the ability to hold a portion of its assets in foreign
currencies and to enter into forward foreign currency contracts to facilitate
settlement of foreign securities transactions or to protect against changes
in foreign currency exchange rates. The Fund might sell a foreign currency on
either a spot or forward basis to hedge against an anticipated decline in the
dollar value of securities in its portfolio or securities it intends or has
contracted to sell or to preserve the U.S. dollar value of dividends,
interest or other amounts it expects to receive. Although this strategy could
minimize the risk of loss due to a decline in the value of the hedged foreign
currency, it could also limit any potential gain which might result from an
increase in the value of the currency. Alternatively, the Fund might purchase
a foreign currency or enter into a forward purchase contract for the currency
to preserve the U.S. dollar price of securities it is authorized to purchase
or has contracted to purchase.
The Fund may also engage in cross-hedging by using forward contracts in
one currency to hedge against fluctuations in the value of the securities
denominated in a different currency (including the U.S. dollar), if the
Fund's investment adviser determines that there is a pattern of correlation
between the two currencies. Cross-hedging may also include entering into a
forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the
other foreign currency if the investment adviser determines that there is a
pattern of correlation between the proxy currency and the U.S. dollar.
If the Fund enters into a forward contract to buy foreign currency, the
Fund will be required to place cash or high grade liquid securities in a
segregated account of the Fund maintained by the Fund's custodian in an
amount equal to the value of the Fund's total assets committed to the
consummation of the forward contract.
The Fund may purchase put and call options on foreign currencies for the
purpose of protecting against declines in the dollar value of foreign
portfolio securities and against increases in the U.S. dollar cost of foreign
securities to be acquired. The purchase of an option on a foreign currency
may constitute an effective hedge against exchange rate fluctuations.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices, currency exchange rates or
interest rates, the Fund may purchase and sell various kinds of futures
contracts, and purchase and write call and put options on any of such futures
contracts. The Fund may also enter into closing purchase and sale
transactions with respect to any of such contracts and options. The futures
contracts may be based on various stock and other securities indices, foreign
currencies and other financial instruments and indices. The Fund will engage
in futures and related options transactions for hedging purposes only. These
transactions involve brokerage costs, require margin deposits and, in the
case of contracts and options obligating the Fund to purchase currencies,
require the Fund to segregate assets to cover such contracts and options.
15
<PAGE>
Limitations and Risks Associated with Transactions in Options, Futures
Contracts and Forward Foreign Currency Exchange Contracts
Transactions involving options on securities and securities indices,
futures contracts and options on futures and forward foreign currency
exchange contracts involve (1) liquidity risk that contractual positions
cannot be easily closed out in the event of market changes or generally in
the absence of a liquid secondary market, (2) correlation risk that changes
in the value of hedging positions may not match the securities market and
foreign currency fluctuations intended to be hedged and (3) market risk that
an incorrect prediction of securities prices or exchange rates by the Fund's
investment adviser may cause the Fund to perform less favorably than if such
positions had not been entered. The Fund will purchase and sell options that
are traded only in a regulated market which is open to the public. Options,
futures contracts and forward foreign currency exchange contracts are highly
specialized activities which involve investment techniques and risks that are
different from those associated with ordinary portfolio transactions. The
Fund may not enter into futures contracts and options on futures contracts
for speculative purposes. All of the Fund's assets may be subject to futures
contracts and options on such contracts entered into for bona fide hedging
purposes or in forward foreign currency exchange contracts. The loss that may
be incurred by the Fund in entering into future contracts and written options
thereon and forward foreign currency exchange contracts is potentially
unlimited. The Fund may not invest more than 5% of its total assets in
financial instruments that are used for non-hedging purposes.
The Fund's transactions in options, forward foreign currency exchange
contracts, futures contracts and options on futures contracts may be limited
by the requirements for qualification of the Fund as a regulated investment
company for tax purposes. See "Tax Status" in the Statement of Additional
Information.
16
<PAGE>
Notes
-----
17
<PAGE>
Notes
-----
18
<PAGE>
THE PIONEER FAMILY OF MUTUAL FUNDS
International Growth Funds
Pioneer India Fund
Pioneer Emerging Markets Fund
Pioneer International Growth Fund
Pioneer Europe Fund
Growth Funds
Pioneer Gold Shares
Pioneer Growth Shares
Pioneer Capital Growth Fund
Growth and Income Funds
Pioneer Three
Pioneer II
Pioneer Fund
Pioneer Equity-Income Fund
Pioneer Real Estate Shares
Income Funds
Pioneer Income Fund
Pioneer Bond Fund
Pioneer America Income Trust
Pioneer Short-Term Income Trust
Tax-Free Income Funds
Pioneer California Double Tax-Free Fund*
Pioneer Massachusetts Double Tax-Free Fund*
Pioneer New York Triple Tax-Free Fund*
Pioneer Tax-Free Income Fund*
Pioneer Intermediate Tax-Free Fund*
Money Market Funds
Pioneer Tax-Free Money Fund*
Pioneer Cash Reserves Fund
Pioneer U.S. Government Money Fund
*Not suitable for retirement accounts.
19
<PAGE>
[Pioneer Logo]
Pioneer Small
Company Fund
60 State Street
Boston, Massachusetts 02109
OFFICERS
JOHN F. COGAN, JR., Chairman and President
DAVID D. TRIPPLE, Executive Vice President
WARREN J. ISABELLE, Vice President
WILLIAM H. KEOUGH, Treasurer
JOSEPH P. BARRI, Secretary
INVESTMENT ADVISER
PIONEERING MANAGEMENT CORPORATION
CUSTODIAN
BROWN BROTHERS HARRIMAN & CO.
INDEPENDENT PUBLIC ACCOUNTANTS
ARTHUR ANDERSEN LLP
LEGAL COUNSEL
HALE AND DORR
PRINCIPAL UNDERWRITER
PIONEER FUNDS DISTRIBUTOR, INC.
SHAREHOLDER SERVICES AND TRANSFER AGENT
PIONEERING SERVICES CORPORATION
60 State Street
Boston, Massachusetts 02109
Telephone: 1-800-225-6292
SERVICE INFORMATION
If you would like information on the following, please call:
Existing and new accounts, prospectuses,
applications, service forms
and telephone transactions ................................... 1-800-225-6292
FactFone(SM)
Automated fund yields and prices, account
information and computer transactions ....................... 1-800-225-4321
Retirement plans .............................................. 1-800-622-0176
Toll-free fax ................................................. 1-800-225-4240
Telecommunications Device for the Deaf (TDD) .................. 1-800-225-1997
1095-2857
(C)Pioneer Funds Distributor, Inc.
<PAGE>
PIONEER SMALL COMPANY FUND
60 State Street
Boston, Massachusetts 02109
STATEMENT OF ADDITIONAL INFORMATION
Class A and Class B Shares
November 1, 1995
This Statement of Additional Information (Part B of the Registration Statement)
is not a Prospectus, but should be read in conjunction with the Prospectus,
dated November 1, 1995. A copy of the Prospectus can be obtained free of charge
by calling Shareholder Services at 1- 800-225-6292 or by written request to
Pioneer Small Company Fund (the "Fund") at 60 State Street, Boston,
Massachusetts 02109.
TABLE OF CONTENTS
Page
1. Investment Policies and Restrictions..............................2
2. Management of the Fund...........................................11
3. Investment Adviser...............................................15
4. Underwriting Agreement and Distribution Plans....................16
5. Shareholder Servicing/Transfer Agent.............................18
6. Custodian........................................................18
7. Principal Underwriter............................................19
8. Independent Public Accountants...................................19
9. Portfolio Transactions...........................................19
10. Tax Status and Dividends.........................................21
11. Description of Shares............................................24
12. Certain Liabilities..............................................25
13. Letter of Intention..............................................26
14. Systematic Withdrawal Plan.......................................26
15. Determination of Net Asset Value.................................27
16. Investment Results...............................................28
17. Financial Statements.............................................30
Appendix A.......................................................A-31
Appendix B.......................................................B-36
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND
IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
<PAGE>
1. INVESTMENT POLICIES AND RESTRICTIONS
The Fund's current prospectus (the "Prospectus") presents the investment
objectives and the principal investment policies of the Fund. Additional
investment policies and a further description of some of the policies described
in the Prospectus appear below.
The following policies and restrictions supplement those discussed in the
Prospectus. Whenever an investment policy or restriction states a maximum
percentage of the Fund's assets that may be invested in any security or presents
a policy regarding quality standards, this standard or other restrictions shall
be determined immediately after and as a result of the Fund's investment.
Accordingly, any later increase or decrease resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with the Fund's investment objectives and policies.
Lending of Portfolio Securities
The Fund may lend portfolio securities to member firms of the New York Stock
Exchange, under agreements which would require that the loans be secured
continuously by collateral in cash, cash equivalents or United States (U.S.)
Treasury Bills maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The Fund would continue to receive the
equivalent of the interest or dividends paid by the issuer on the securities
loaned as well as the benefit of an increase in the market value of the
securities loaned and would also receive compensation based on investment of the
collateral. The Fund would not, however, have the right to vote any securities
having voting rights during the existence of the loan, but would call the loan
in anticipation of an important vote to be taken among holders of the securities
or of the giving or withholding of consent on a material matter affecting the
investment.
As with other extensions of credit there are risks of delay in recovery or even
loss of rights in the collateral should the borrower of the securities fail
financially. The Fund will lend portfolio securities only to firms which have
been approved in advance by the Board of Trustees, which will monitor the
creditworthiness of any such firms. At no time would the value of the securities
loaned exceed 30% of the value of the Fund's total assets.
Forward Foreign Currency Transactions
The Fund may engage in foreign currency transactions. These transactions may be
conducted on a spot, i.e., cash basis, at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market. The Fund also has
authority to deal in forward foreign currency exchange contracts involving
currencies of the different countries in which the Fund will invest as a hedge
against possible variations in the foreign exchange rate between these
currencies and the U.S. dollar. This is accomplished through contractual
agreements to purchase or sell a specified currency at a specified future date
and price set at the time of the contract. The Fund's dealings in forward
foreign currency contracts will be limited to hedging either specific
transactions or portfolio positions. Transaction hedging is the purchase or sale
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of forward foreign currency contracts with respect to specific receivables or
payables of the Fund, accrued in connection with the purchase and sale of their
portfolio securities denominated in foreign currencies. Portfolio hedging is the
use of forward foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. There is no guarantee that the
Fund will be engaged in hedging activities when adverse exchange rate movements
occur. The Fund will not attempt to hedge all of its foreign portfolio
positions, and the Fund will enter into such transactions only to the extent, if
any, deemed appropriate by the investment adviser. The Fund will not enter into
speculative forward foreign currency contracts.
If the Fund enters into a forward contract to purchase foreign currency, the
custodian bank will segregate cash or high grade liquid debt securities in a
separate account in an amount equal to the value of the total assets committed
to the consummation of such forward contract. Those assets will be valued at
market daily and if the value of the assets in the separate account declines,
additional cash or securities will be placed in the accounts so that the value
of the account will equal the amount of the Fund's commitment with respect to
such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the Fund to hedge against a devaluation that is so generally
anticipated that the Fund is not able to contract to sell the currency at a
price above the devaluation level they anticipate. The cost to the Fund of
engaging in foreign currency transactions varies with such factors as the
currency involved, the size of the contract, the length of the contract period
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The Fund may close out a forward position in a
currency by selling the forward contract or by entering into an offsetting
forward contract.
Options on Securities
The Fund may write (sell) covered call options on certain portfolio securities,
but options may not be written on more than 25% of the aggregate market value of
any single portfolio security (determined each time a call is sold as of the
date of such sale). The Fund does not intend to write covered call options on
portfolio securities with an aggregate market value exceeding 5% of the Fund's
total assets in the coming year. As the writer of a call option, the Fund
receives a premium less commission, and, in exchange, foregoes the opportunity
to profit from increases in the market value of the security covering the call
above the sum of the premium and the exercise price of the option during the
life of the option. The purchaser of such a call written by the Fund has the
option of purchasing the security from the Fund at the option price during the
life of the option. Portfolio securities on which options may be written are
purchased solely on the basis of investment considerations consistent with the
Fund's investment objectives. All call options written by the Fund are covered;
the Fund may cover a call option by owning the securities subject to the option
so long as the option is outstanding or using the other methods described below.
In addition, a written call option may be covered by purchasing an offsetting
option or any other option which, by virtue of its exercise price or otherwise,
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covers the Fund's net exposure on its written option position. The Fund does not
consider a security covered by a call option to be "pledged" as that term is
used in the Fund's policy which limits the pledging or mortgaging of its assets.
The Fund may purchase call options on securities for entering into a "closing
purchase transaction," i.e., a purchase of a call option on the same security
with the same exercise price and expiration date as a "covered" call already
written by the Fund. These closing sale transactions enable the Fund to
immediately realize gains or minimize losses on its options positions. There is
no assurance that the Fund will be able to effect such closing purchase
transactions at a favorable price. If the Fund cannot enter into such a
transaction it may be required to hold a security that it might otherwise have
sold. The Fund's portfolio turnover may increase through the exercise of options
if the market price of the underlying securities goes up and the Fund has not
entered into a closing purchase transaction. The commission on purchase or sale
of a call option is higher in relation to the premium than the commission in
relation to the price on purchase or sale of the underlying security.
Options on Securities Indices
The Fund may purchase call and put options on securities indices for the purpose
of hedging against the risk of unfavorable price movements adversely affecting
the value of the Fund's securities or securities which the Fund intends to buy.
Securities index options will not be used for speculative purposes.
The Fund may only purchase and sell options that are traded only in a regulated
market which is open to the public. Currently, options on stock indices are
traded only on national securities exchanges or over-the-counter, both in the
United States and in foreign countries. A securities index fluctuates with
changes in the market values of the securities included in the index. For
example, some stock index options are based on a broad market index such as the
S&P 500 or the Value Line Composite Index in the U.S., the Nikkei in Japan or
the FTSE 100 in the United Kingdom. Index options may also be based on a
narrower market index such as the S&P 100 or on an industry or market segment
such as the AMEX Oil and Gas Index or the Computer and Business Equipment Index.
The Fund may purchase put options in order to hedge against an anticipated
decline in securities prices that might adversely affect the value of the Fund's
portfolio securities. If the Fund purchases a put option on a securities index,
the amount of the payment it would receive upon exercising the option would
depend on the extent of any decline in the level of the securities index below
the exercise price. Such payments would tend to offset a decline in the value of
the Fund's portfolio securities. However, if the level of the securities index
increases and remains above the exercise price while the put option is
outstanding, the Fund will not be able to profitably exercise the option and
will lose the amount of the premium and any transaction costs. Such loss may be
partially offset by an increase in the value of the Fund's portfolio securities.
The Fund may purchase call options on securities indices in order to remain
fully invested in a particular foreign stock market or to lock in a favorable
price on securities that it intends to buy in the future. If the Fund purchases
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a call option on a securities index, the amount of the payment it receives upon
exercising the option depends on the extent of an increase in the level of other
securities indices above the exercise price. Such payments would in effect allow
the Fund to benefit from securities market appreciation even though it may not
have had sufficient cash to purchase the underlying securities. Such payments
may also offset increases in the price of securities that the Fund intends to
purchase. If, however, the level of the securities index declines and remains
below the exercise price while the call option is outstanding, the Fund will not
be able to exercise the option profitably and will lose the amount of the
premium and transaction costs. Such loss may be partially offset by a reduction
in the price the Fund pays to buy additional securities for its portfolio.
The Fund may sell the securities index option it has purchased or write a
similar offsetting securities index option in order to close out a position in a
securities index option which it has purchased. These closing sale transactions
enable the Fund to immediately realize gains or minimize losses on their
respective options positions. However, there is no assurance that a liquid
secondary market on an options exchange will exist for any particular option, or
at any particular time, and for some options no secondary market may exist. In
addition, securities index prices may be distorted by interruptions in the
trading of securities of certain companies or of issuers in certain industries,
or by restrictions that may be imposed by an exchange on opening or closing
transactions, or both, which would disrupt trading in options on such indices
and preclude the Fund from closing out its options positions. If the Fund is
unable to effect a closing sale transaction with respect to options that it has
purchased, it would have to exercise the options in order to realize any profit.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price and rate
movements can take place in the underlying markets that can not be reflected in
the options markets. The purchase of options is a highly specialized activity
which involves investment techniques and risks different from those associated
with ordinary portfolio securities transactions.
In addition to the risks of imperfect correlation between the Fund's respective
portfolio and the index underlying the option, the purchase of securities index
options involves the risk that the premium and transaction costs paid by the
Fund in purchasing an option will be lost. This could occur as a result of
unanticipated movements in prices of the securities comprising the securities
index on which the option is based.
Futures Contracts and Options on Futures Contracts
To hedge against changes in securities prices or currency exchange rates, the
Fund may purchase and sell various kinds of futures contracts, and purchase and
write (sell) call and put options on any of such futures contracts. The Fund may
also enter into closing purchase and sale transactions with respect to any of
such contracts and options. The futures contracts may be based on various
securities (such as U.S. Government securities), securities indices, foreign
currencies and other financial instruments and indices. The Fund will engage in
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futures and related options transactions for bona fide hedging and non-hedging
purposes as described below. All futures contracts entered into by the Fund are
traded on U.S. exchanges or boards of trade that are licensed and regulated by
the Commodity Futures Trading Commission (the "CFTC") or on foreign exchanges.
Futures Contracts. A futures contract may generally be described as an agreement
between two parties to buy and sell particular financial instruments for an
agreed price during a designated month (or to deliver the final cash settlement
price, in the case of a contract relating to an index or otherwise not calling
for physical delivery at the end of trading in the contract).
When interest rates are rising or securities prices are falling, the Fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the Fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
Fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The Fund can
purchase futures contracts on a foreign currency to establish the price in U.S.
dollars of a security denominated in such currency that the Fund has acquired or
expects to acquire.
Positions taken in the futures markets are not normally held to maturity but are
instead liquidated through offsetting transactions which may result in a profit
or a loss. While futures contracts on securities or currency will usually be
liquidated in this manner, the Fund may instead make, or take, delivery of the
underlying securities or currency whenever it appears economically advantageous
to do so. A clearing corporation associated with the exchange on which futures
on securities or currency are traded guarantees that, if still open, the sale or
purchase will be performed on the settlement date.
Hedging Strategies. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the Fund owns or proposes to
acquire. The Fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or foreign currency rates
that would adversely affect the value of the Fund's portfolio securities. Such
futures contracts may include contracts for the future delivery of securities
held by the Fund or securities with characteristics similar to those of the
Fund's portfolio securities. Similarly, the Fund may sell futures contracts in a
foreign currency in which its portfolio securities are denominated or in one
currency to hedge against fluctuations in the value of securities denominated in
a different currency if there is an established historical pattern of
correlation between the two currencies. If, in the opinion of Pioneering
Management Corporation ("PMC"), there is a sufficient degree of correlation
between price trends for the Fund's portfolio securities and futures contracts
based on other financial instruments, securities indices or other indices, the
Fund may also enter into such futures contracts as part of their hedging
strategies. Although under some circumstances prices of securities in the Fund's
portfolio may be more or less volatile than prices of such futures contracts,
PMC will attempt to estimate the extent of this volatility difference based on
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historical patterns and compensate for any such differential by having the Fund
enter into a greater or lesser number of futures contracts or by attempting to
achieve only a partial hedge against price changes affecting the Fund's
portfolio securities. When hedging of this character is successful, any
depreciation in the value of portfolio securities will be substantially offset
by appreciation in the value of the futures position. On the other hand, any
unanticipated appreciation in the value of the Fund's portfolio securities would
be substantially offset by a decline in the value of the futures position.
On other occasions, the Fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the Fund anticipates the
subsequent purchase of particular securities when it has the necessary cash, but
expects the prices or currency exchange rates then available in the applicable
market to be less favorable than prices or rates that are currently available.
Options on Futures Contracts. The acquisition of put and call options on futures
contracts will give the Fund the right (but not the obligation) for a specified
price to sell or to purchase, respectively, the underlying futures contract at
any time during the option period. As the purchaser of an option on a futures
contract, the Fund obtains the benefit of the futures position if prices move in
a favorable direction but limits its risk of loss in the event of an unfavorable
price movement to the loss of the premium and transaction costs.
The writing of a call option on a futures contract generates a premium which may
partially offset a decline in the value of the Fund's assets. By writing a call
option, the Fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the price
of securities that the Fund intends to purchase. However, the Fund becomes
obligated to purchase a futures contract (if the option is exercised) which may
have a value lower than the exercise price. Thus, the loss incurred by the Fund
in writing options on futures is potentially unlimited and may exceed the amount
of the premium received. The Fund will incur transaction costs in connection
with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series. There
is no guarantee that such closing transactions can be effected. The Fund's
ability to establish and close out positions on such options will be subject to
the development and maintenance of a liquid market.
The Fund may use options on futures contracts for bona fide hedging or
non-hedging purposes as discussed below.
Other Considerations. The Fund will engage in futures and related options
transactions only for bona fide hedging or non-hedging purposes in accordance
with CFTC regulations which permit principals of an investment company
registered under the Investment Company Act of 1940, as amended (the "1940 Act")
to engage in such transactions without registering as commodity pool operators.
The Fund is not permitted to engage in speculative futures trading. The Fund
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will determine that the price fluctuations in the futures contracts and options
on futures used for hedging purposes are substantially related to price
fluctuations in securities held by the Fund or which the Fund expects to
purchase. Except as stated below, the Fund's futures transactions will be
entered into for traditional hedging purposes -- i.e., futures contracts will be
sold to protect against a decline in the price of securities (or the currency in
which they are denominated) that the Fund owns, or futures contracts will be
purchased to protect the Fund against an increase in the price of securities (or
the currency in which they are denominated) it intends to purchase. As evidence
of this hedging intent, the Fund expects that on 75% or more of the occasions on
which it takes a long futures or option position (involving the purchase of
futures contracts), the Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities or assets denominated in
the related currency in the cash market at the time when the futures or option
position is closed out. However, in particular cases, when it is economically
advantageous for the Fund to do so, a long futures position may be terminated or
an option may expire without the corresponding purchase of securities or other
assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the Fund to elect to comply with a different test, under
which the sum of the amounts of initial margin deposits on the Fund's existing
non-hedging futures contracts and premiums paid for options on futures entered
into for non-hedging purposes (net of the amount the positions are "in the
money") would not exceed 5% of the market value of the Fund's total assets. The
Fund will engage in transactions in futures contracts and related options only
to the extent such transactions are consistent with the requirements of the
Internal Revenue Code of 1986, as amended (the "Code"), for maintaining its
qualifications as a regulated investment company for federal income tax
purposes.
Transaction costs associated with futures contracts and related options involve
brokerage costs, require margin deposits and, in the case of contracts and
options obligating the Fund to purchase securities or currencies, require the
Fund to segregate assets to cover such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the Fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the Fund than if it had not
entered into any futures contracts or options transactions. In the event of an
imperfect correlation between a futures position and a portfolio position which
is intended to be protected, the desired protection may not be obtained and the
Fund may be exposed to risk of loss. It is not possible to hedge fully or
perfectly against the effect of currency fluctuations on the value of foreign
securities because currency movements impact the value of different securities
in differing degrees.
Other Policies and Risks
It is the policy of the Fund not to concentrate its investments in securities of
companies in any particular industry. In the opinion of the staff of the
Securities and Exchange Commission (the "Commission"), investments are deemed to
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be concentrated in a particular industry if such investments constitute 25% or
more of the Fund's total assets. The 1940 Act provides that the policy of the
Fund with respect to concentration is a fundamental policy.
Investment Restrictions
Fundamental Investment Restrictions. The Fund has adopted certain additional
investment restrictions which may not be changed without the affirmative vote of
the holders of a "majority" (as defined in the 1940 Act) of the Fund's
outstanding voting securities. The Fund may not:
(1)......Issue senior securities, except as permitted by paragraphs
(2), (6) and (7) below. For purposes of this restriction, the issuance of shares
of beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign exchange contracts, repurchase agreements and
reverse repurchase agreements entered into in accordance with the Fund's
investment policy, and the pledge, mortgage or hypothecation of the Fund's
assets within the meaning of paragraph (3) below are not deemed to be senior
securities.
(2)......Borrow money, except from banks as a temporary measure to
facilitate the meeting of redemption requests or for extraordinary emergency
purposes and except pursuant to reverse repurchase agreements and then only in
amounts not to exceed 33 1/3% of the Fund's total assets (including the amount
borrowed) taken at market value. The Fund will not use leverage to attempt to
increase income. The Fund will not purchase securities while outstanding
borrowings (including reverse repurchase agreements) exceed 5% of the Fund's
total assets.
(3)......Pledge, mortgage, or hypothecate its assets, except to secure
indebtedness permitted by paragraph (2) above and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the Fund's total assets
taken at market value.
(4)......Act as an underwriter, except as it may deemed to be on
underwriter in a sale of restricted securities held in its portfolio.
(5)......Purchase or sell real estate, except that the Fund may (i)
lease office space for its own use, (ii) invest in securities of issuers that
invest in real estate or interests therein, (iii) invest in securities that are
secured by real estate or interests therein, (iv) purchase and sell
mortgage-related securities and (v) hold and sell real estate acquired by the
Fund as a result of the ownership of securities.
(6)......Make loans, except that the Fund may lend portfolio securities
in accordance with the Fund's investment policies and may purchase or invest in
repurchase agreements, bank certificates of deposit, a portion of an issue of
publicly distributed bonds, bank loan participation agreements, bankers'
acceptances, debentures or other securities, whether or not the purchase is made
upon the original issuance of the securities.
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(7)......Invest in commodities or commodity contracts or in puts,
calls, or combinations of both, except interest rate futures contracts, options
on securities, securities indices, currency and other financial instruments,
futures contracts on securities, securities indices, currency and other
financial instruments and options on such futures contracts, forward foreign
currency exchange contracts, forward commitments, securities index put or call
warrants and repurchase agreements entered into in accordance with the Fund's
investment policies.
(8)......With respect to 75% of its total assets, purchase securities
of an issuer (other than the U.S. Government, its agencies or
instrumentalities), if
(a) such purchase would cause more than 5% of the Fund's total
assets, taken at market value, to be invested in the securities of such
issuer, or
(b) such purchase would at the time result in more than 10% of
the outstanding voting securities of such issuer being held by the
Fund.
It is the fundamental policy of the Fund not to concentrate its investments in
securities of companies in any particular industry. In the opinion of the
Commission, investments are concentrated in a particular industry if such
investments aggregate 25% or more of the Fund's total assets. The Fund's policy
does not apply to investments in U.S. Government securities.
The Fund does not intend to enter into any reverse repurchase agreement, lend
portfolio securities or invest in securities index put and call warrants, as
described in fundamental investment restrictions (2), (6) and (7) above, during
the coming year.
Non-fundamental Investment Restrictions. The following restrictions have been
designated as non-fundamental and may be changed by a vote of the Fund's Board
of Trustees without approval of shareholders.
The Fund may not:
(1) purchase securities for the purpose of controlling management of
other companies;
(2) purchase or retain the securities of any company if officers of the
Fund or Trustees of the Fund, or officers and directors of its adviser or
principal underwriter, individually own more than one-half of 1% of the
securities of such company or collectively own more than 5% of the securities of
such company; or
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(3) invest in any security which is illiquid, including any repurchase
agreement maturing in more than seven days, and any securities of any enterprise
which has a business history of less than three years, including the operation
of any predecessor business to which it has succeeded if more than 15% of the
net assets of the Fund, taken at market value, would be invested in such
securities.
In order to register its shares in certain jurisdictions, the Fund has agreed to
adopt certain additional investment restrictions, which are non-fundamental and
which may be changed by a vote of the Fund's Board of Trustees. Pursuant to
these additional investment restrictions, the Fund may not (i) invest more than
2% of its assets in warrants, valued at the lower of cost or market, provided
that it may invest up to 5% of its total assets, as so valued, in warrants
listed on the New York or American Stock Exchanges, (ii) invest in interests in
oil, gas or other mineral exploration or development leases or programs, (iii)
invest in real estate investment trusts or real estate limited partnerships. The
Fund does not intend to borrow money during the coming year, and in any case
would do so only as a temporary measure for extraordinary purposes or to
facilitate redemptions.
2. MANAGEMENT OF THE FUND
The Fund's Board of Trustees provides broad supervision over the affairs of the
Fund. The executive officers of the Fund are responsible for the Fund's
operations, which is managed by PMC. The Trustees and executive officers of the
Fund are listed below, together with their principal occupations during the past
five years. An asterisk indicates those Trustees who are "interested persons" of
the Fund within the meaning of the 1940 Act.
JOHN F. COGAN, JR.,* President and Director of The Pioneer Group,
Chairman of the Board, Inc.("PGI");Chairman and a Director of
President and Trustee Pioneering Management Corporation ("PMC"),
Pioneer Funds Distributor, Inc. ("PFD");
Director of Pioneering Services Corporation
("PSC"), Pioneer Capital Corporation ("PCC") and
Forest-Starma ( a Russian corporation);
President and Director of Pioneer Plans
Corporation ("PPC"), Pioneer Investment Corp.
("PIC"), Pioneer Metals and Technology, Inc.
("PMT"), Pioneer International Corp. ("Pintl"),
Luscina, Inc. Pioneer First Russia, Inc. ("First
Russia"), Pioneer Omega, Inc. ("Omega") and
Theta Enterprises, Inc.; Chairman, President and
a Director of Pioneer Goldfields Limited
("PGL"); Chairman of the Supervisory Board of
Pioneer Fonds Marketing GMbH ("Pioneer GmbH");
Member of the Supervisory Board of Pioneer First
Polish Trust Fund Joint Stock Company ("PFPT");
Chairman and President of all the Pioneer Funds
and Chairman and Partner, Hale and Dorr (counsel
to the Fund).
RICHARD H. EGDAHL, M.D., Professor of Management, Boston University
Trustee School of Management, since 1988; Professor of
Boston University Public Health, Boston University School of
Health Policy Public Health; Professor of Surgery, Boston of
Institute University School Medicine and Boston University
53 Bay State Road Health Policy Institute; Director, Boston
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Boston, Massachusetts Executive Vice President and Vice Chairman of
the Board, University Hospital; Academic Vice
University Medical Center; President for Health
Affairs, Boston University; Director, Essex
Investment Management Company, Inc. (investment
adviser), Health Payment Review, Inc. (health
care containment software firm), Mediplex Group,
Inc. (nursing care facilities firm), Peer Review
Analysis, Inc. (health care utilization
management firm); Springer-Verlag New York, Inc.
(publisher); Honorary Trustee, Franciscan
Children's Hospital and Trustee of all the
Pioneer mutual funds.
MARGARET B.W. GRAHAM, Manager of Research Operations, Xerox Palo Alto
Trustee Research Center, since September 1991;
The Keep Professor of Operations Management and
Post Office Box 110 Management of Technology, Boston University
Little Deer Isle, Maine School of Management ("BUSM"), since 1989;
Associate Dean, BUSM, 1988 to 1990; previously,
Associate Professor, Department of Operations
Management, BUSM and Trustee of all the Pioneer
mutual funds, except Pioneer Variable Contracts
Trust.
JOHN W. KENDRICK, Professor Emeritus and Adjunct Scholar, George
Trustee Washington University; Economic Consultant
6363 Waterway Drive and Director, American Productivity and Quality
Falls Church, Virginia Center; American Enterprise Institute and
Trustee of all the Pioneer mutual funds, except
Pioneer Variable Contracts Trust.
MARGUERITE A. PIRET, President, Newbury, Piret & Company, Inc.
Trustee (a merchant banking firm); Trustee of all the
One Boston Place, Pioneer mutual funds.
Suite 2363
Boston, Massachusetts
DAVID D. TRIPPLE*, Executive Vice President and Director of PGI and
Trustee and Executive PWA since 1993; Director of PFD, since 1989;
Vice President Director of PCC, PIC, Pintl, and Corporation;
President (since 1993); Director, President and,
Chief Investment Officer of PMC and Trustee of
all the Pioneer mutual funds.
STEPHEN K. WEST, Partner, Sullivan & Cromwell (a law firm);
Trustee Trustee, The Winthrop Focus Funds (mutual funds)
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125 Broad Street and Trustee of all the Pioneer mutual funds.
New York, New York
JOHN WINTHROP, President, John Winthrop & Co., Inc. (a private
Trustee investment firm); Director of NUI Corp; Trustee
One North Adgers Wharf of Alliance Capital Reserves, Alliance
Charleston, South Carolina Government Reserves and Alliance Tax Exempt
Reserves and Trustee of all the Pioneer mutual
funds, except Pioneer Variable Contracts Trust.
WILLIAM H. KEOUGH, Senior Vice President, Chief Financial Officer
Treasurer and Treasurer of PGI; Treasurer of PFD, PMC,
PSC, PCC, PIC, PIntl, PMT, PGL, PWA and Pioneer
SBIC Corporation; Treasurer and Director of PPC
and Treasurer of all the Pioneer mutual funds..
JOSEPH P. BARRI, Secretary of PGI, PMC, PPC, PIC, PIntl, PMT,and
Secretary and PCC; Clerk of PFD and PSC; Partner, Hale and
Dorr (counsel to the Fund) and Secretary of all
the Pioneer mutual funds.
ERIC W. RECKARD, Manager of Fund Accounting and Compliance of PMC
Assistant Treasurer since May, 1994; Manager of Auditing and
Business Analysis of PGI prior to May 1994 and
Assistant Treasurer of all the Pioneer mutual
funds..
ROBERT P. NAULT, General Counsel of PGI since 1995; formerly of
Assistant Secretary Hale and Dorr (counsel to the Fund) where he
most recently served as a junior partner and
Assistant Secretary of all the Pioneer mutual
funds..
WARREN J. ISABELLE, Director of Research and Vice President of PMC.
Vice President
Each of the above (except Mr. Isabelle) is also an officer and/or Trustee or
Director of the Pioneer mutual funds listed below. The Fund's Agreement and
Declaration of Trust (the "Declaration of Trust") provides that the holders of
two-thirds of its outstanding shares may vote to remove a Trustee of the Fund at
any special meeting of shareholders. See "Description of Shares" below. The
business address of all officers is 60 State Street, Boston, Massachusetts
02109.
As of the date of this SAI, all of the outstanding capital stock of PMC and PSC
is owned by PGI, a publicly-owned Delaware corporation, and all of the
outstanding capital stock of PFD is indirectly owned by PGI. The table below
lists all the Pioneer mutual funds currently offered to the public and the
investment adviser and principal underwriter for each fund.
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Investment Principal
Fund Name Adviser Underwriter
Pioneer Fund PMC PFD
Pioneer II PMC PFD
Pioneer Three PMC PFD
Pioneer Growth Shares PMC PFD
Pioneer Capital Growth Fund PMC PFD
Pioneer Equity-Income Fund PMC PFD
Pioneer Gold Shares PMC PFD
Pioneer Real Estate Shares PMC PFD
Pioneer Europe Fund PMC PFD
Pioneer International Growth Fund PMC PFD
Pioneer Emerging Markets Fund PMC PFD
Pioneer India Fund PMC PFD
Pioneer Bond Fund PMC PFD
Pioneer America Income Trust PMC PFD
Pioneer Short-Term Income Fund PMC PFD
Pioneer Income Fund PMC PFD
Pioneer Tax-Free Income Fund PMC PFD
Pioneer Intermediate Tax-Free Fund PMC PFD
Pioneer California Double Tax-Free Fund PMC PFD
Pioneer New York Triple Tax-Free Fund PMC PFD
Pioneer Massachusetts Double Tax-Free Fund PMC PFD
Pioneer Cash Reserves Fund PMC PFD
Pioneer U.S. Government Money Fund PMC PFD
Pioneer Tax-Free Money Fund PMC PFD
Pioneer Interest Shares, Inc. PMC *
Pioneer Variable Contracts Trust PMC **
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* This fund is a closed-end fund.
** This is a series of seven separate portfolios designed to provide
investment vehicles for the variable annuity and variable life
insurance contracts of various insurance companies or for certain
qualified pension plans.
To the knowledge of the Fund, no officer or trustee of the Fund owned 5% or more
of the issued and outstanding shares of PGI on the date of this Statement of
Additional Information, except Mr. Cogan who then owned approximately 15% of
such shares.
Compensation of Officers and Trustees
The Fund pays no salaries or compensation to any of its officers. The Fund pays
an annual trustees' fee of $500 plus $120 per meeting attended to each Trustee
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who is not affiliated with PMC, PFD or PGI and pays an annual trustees' fee of
$500 plus expenses to each Trustee affiliated with PMC, PFD or PGI. Any such
fees and expenses paid to affiliates or interested persons of PMC, PFD or PGI
are reimbursed to the Fund under its Management Contract.
The following table sets forth certain information with respect to the estimated
compensation of each Trustee of the Fund for the fiscal year ending October 31,
1996:
Pension or
Retirement Total
Benefits Compensation
Compensation Accrued as from Fund and
Aggregate Part of Pioneer Family
Name of Trustee from the Fund* Fund's Expenses of Funds**
John F. Cogan, Jr. $ 500 $0 $11,500
Richard H. Egdahl, M.D. 1,940 0 $62,000
Margaret B.W. Graham 1,940 0 $60,000
John W. Kendrick 1,940 0 $60,000
Marguerite A. Piret 2,040 0 $74,000
David D. Tripple 500 0 $11,500
Stephen K. West 2,040 0 $68,000
John Winthrop 2,040 0 $66,000
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$12,940 0 $413,000
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* As of Fund's fiscal year end.
** Estimated as of December 31, 1995 (calendar year end for all Pioneer mutual
funds).
3. INVESTMENT ADVISER
The Fund has contracted with PMC, 60 State Street, Boston, Massachusetts, to act
as its investment adviser. A description of the services provided to the Fund
under its management contract and the expenses paid by the Fund under the
contract is set forth in the Prospectus under the caption "Management of the
Fund."
The term of the management contract is one year and is renewable annually by the
vote of a majority of the Board of Trustees of the Fund (including a majority of
the Board of Trustees who are not parties to the contract or interested persons
of any such parties). The vote must be cast in person at a meeting called for
the purpose of voting on such renewal. This contract terminates if assigned and
may be terminated without penalty by either party upon sixty days' written
notice by vote of the Board of Directors or Trustees or a majority of the
outstanding voting securities. Pursuant to the management contract, PMC 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 securities on the recommendation of PMC. PMC, however, is not
protected against liability 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 the respective management
contract.
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As compensation for its management services and expenses incurred, PMC is
entitled to a management fee from the Fund at the rate of 0.85% per annum of he
Fund's average daily net assets. The fee is normally computed and accrued daily
and paid monthly.
PMC has agreed not to impose any management fees and make other arrangements, if
necessary, to limit expenses for the Fund's Class A shares to not more than
1.75% of such Class's average net assets. The management fee attributable to the
fund's Class B shares will not be imposed to the same extent that it is not
imposed for Class A shares. This agreement is temporary and voluntary and may be
terminated at any time by PMC.
See "Expense Information" in the Prospectus.
The expense of organizing the Fund and initially registering its shares under
federal and state securities laws are being charged to the Fund's operations, as
an expense, over a period not to exceed 60 months from the Fund's inception date
If any of the original shares are redeemed by any holder thereof prior to the
end of the amortization period, the redemption proceeds will be decreased by the
pro rata share of the unamortized expenses as of the date of redemtption. The
pro rata shares derived by dividing the number of original shares redeemed by
the total number of orginal shares outstanding at thetime of redemption.
4. UNDERWRITING AGREEMENT AND DISTRIBUTION PLANS
The Fund entered into an Underwriting Agreement with PFD. The Underwriting
Agreement will continue from year to year if annually approved by the Trustees.
The Underwriting Agreement provides that PFD will bear expenses for the
distribution of the Fund's shares, except for expenses incurred by PFD for which
it is reimbursed by the Fund under the Plan. PFD bears all expenses it incurs in
providing services under the Underwriting Agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution related services performed for the Fund. PFD also pays certain
expenses in connection with the distribution of the Fund's shares, including the
cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The Fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
foreign countries. The Fund and PFD have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Under the Underwriting Agreement, PFD will use its best efforts in
rendering services to the Fund.
The Fund has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act with respect to its Class A shares (the "Class A Plan") and a plan of
distribution with respect to its Class B shares (the "Class B Plan") (together,
the "Plans").
Class A Plan
Pursuant to the Class A Plan the Fund may reimburse PFD for its expenditures in
financing any activity primarily intended to result in the sale of Fund shares.
Certain categories of such expenditures have been approved by the Board of
Trustees and are set forth in the Prospectus. See "Distribution Plans" in each
Prospectus. The expenses of the Fund pursuant to the Class A Plan are accrued on
a fiscal year basis and may not exceed, with respect to Class A shares, the
annual rate of 0.25% of the Fund's average annual net assets attributable to
Class A.
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Class B Plan
The Class B Plan provides that the Fund shall pay PFD, as the Fund's distributor
for its Class B shares, a daily distribution fee equal on an annual basis to
0.75% of the Fund's average daily net assets attributable to Class B shares and
will pay PFD a service fee equal to 0.25% of the Fund's average daily net assets
attributable to Class B shares (which PFD will in turn pay to securities dealers
which enter into a sales agreement with PFD at a rate of up to 0.25% of the
Fund's average daily net assets attributable to Class B shares owned by
investors for whom that securities dealer is the holder or dealer of record).
This service fee is intended to be in consideration of personal services and/or
account maintenance services rendered by the dealer with respect to Class B
shares. PFD will advance to dealers the first-year service fee at a rate equal
to 0.25% of the amount invested. As compensation therefor, PFD may retain the
service fee paid by the Fund with respect to such shares for the first year
after purchase. Dealers will become eligible for additional service fees with
respect to such shares commencing in the thirteenth month following purchase.
Dealers may from time to time be required to meet certain other criteria in
order to receive service fees. PFD or its affiliates are entitled to retain all
service fees payable under the Class B Plan for which there is no dealer of
record or for which qualification standards have not been met as partial
consideration for personal services and/or account maintenance services
performed by PFD or its affiliates for shareholder accounts.
The purpose of distribution payments to PFD under the Class B Plan is to
compensate PFD for its distribution services to the Fund. PFD pays commissions
to dealers as well as expenses of printing prospectuses and reports used for
sales purposes, expenses with respect to the preparation and printing of sales
literature and other distribution-related expenses, including, without
limitation, the cost necessary to provide distribution-related services, or
personnel, travel office expenses and equipment. The Class B Plan also provides
that PFD will receive all contingent deferred sales charges ("CDSCs")
attributable to Class B shares. (See "Distributions Plans" in the Prospectus.)
General
In accordance with the terms of the Plans, PFD provides to the Fund for review
by the Trustees a quarterly written report of the amounts expended under the
respective Plan and the purpose for which such expenditures were made. In the
Trustees' quarterly review of the Plans, they will consider the continued
appropriateness and the level of reimbursement or compensation the Plans
provide.
No interested person of the Fund, nor any Trustee of the Fund who is not an
interested person of the Fund, has any direct or indirect financial interest in
the operation of the Plans except to the extent that PFD and certain of its
employees may be deemed to have such an interest as a result of receiving a
portion of the amounts expended under the Plans by the Fund and except to the
extent certain officers may have an interest in PFD's ultimate parent, PGI.
The Plans were adopted by a majority vote of the Board of Trustees, including
all of the Trustees who are not, and were not at the time they voted, interested
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persons of the Fund, as defined in the 1940 Act (none of whom had or have any
direct or indirect financial interest in the operation of the Plans), cast in
person at a meeting called for the purpose of voting on the Plans. In approving
the Plans, the Trustees identified and considered a number of potential benefits
which the Plans may provide. The Board of Trustees believes that there is a
reasonable likelihood that the Plans will benefit each Fund and their current
and future shareholders. Under their terms, the Plans remain in effect from year
to year provided such continuance is approved annually by vote of the Trustees
in the manner described above. The Plans may not be amended to increase
materially the annual percentage limitation of average net assets which may be
spent for the services described therein without approval of the shareholders of
the Fund affected thereby, and material amendments of the Plans must also be
approved by the Trustees in the manner described above. A Plan may be terminated
at any time, without payment of any penalty, by vote of the majority of the
Trustees who are not interested persons of the Fund and have no direct or
indirect financial interest in the operations of the Plan, or by a vote of a
majority of the outstanding voting securities of the respective Class of the
Fund (as defined in the 1940 Act). A Plan will automatically terminate in the
event of its assignment (as defined in the 1940 Act).
5. SHAREHOLDER SERVICING/TRANSFER AGENT
The Fund has contracted with PSC, 60 State Street, Boston, Massachusetts, to act
as shareholder servicing and transfer agent for the Fund. This contract
terminates if assigned and may be terminated without penalty by either party
upon ninety days' written notice by vote of its Board of Directors or Trustees
or a majority of its outstanding voting securities.
Under the terms of its contract with the Fund, PSC services shareholder
accounts, and its duties include: (i) processing sales, redemptions and
exchanges of shares of the Fund; (ii)distributing dividends and capital gains
associated with Fund portfolio accounts; and (iii)maintaining account records
and responding to shareholder inquiries.
PSC receives an annual fee of $22.00 per each Class A and Class B shareholder
account from the Fund as compensation for the services described above. PSC is
also reimbursed by the Fund for its cash out-of-pocket expenditures. The annual
fee is set at an amount determined by vote of a majority of the Trustees
(including a majority of the Trustees who are not parties to the contract with
PSC or interested persons of any such parties) to be comparable to fees for such
services being paid by other investment companies.
6. CUSTODIAN
Brown Brothers Harriman & Co. (the "Custodian") is the custodian of the Fund's
assets. The Custodian's responsibilities include safekeeping and controlling the
Fund's cash and securities, handling the receipt and delivery of securities, and
collecting interest and dividends on the Fund's investments. The Custodian does
not determine the investment policies of the Fund or decide which securities the
Fund will buy or sell. The Fund may, however, invest in securities, including
repurchase agreements, issued by the Custodian and may deal with the Custodian
as a principal in securities transactions. Portfolio securities may be deposited
into the Federal Reserve-Treasury Department Book Entry System or the Depository
Trust Company.
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7. PRINCIPAL UNDERWRITER
PFD serves as the principal underwriter for the Fund in connection with the
continuous offering of the Class A and Class B shares of the Fund.
The Fund will not generally issue Fund shares for consideration other than cash.
At the Fund's sole discretion, however, it may issue Fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger, or other acquisition of portfolio securities (other than
municipal debt securities issued by state political subdivisions or their
agencies or instrumentalities) provided (i)the securities meet the investment
objectives and policies of the Fund; (ii)the securities are acquired by the Fund
for investment and not for resale; (iii)the securities are not restricted as to
transfer either by law or liquidity of market; and (iv)the securities have a
value which is readily ascertainable (and not established only by evaluation
procedures) as evidenced by a listing on the American Stock Exchange or the New
York Stock Exchange or the Nasdaq National Market.
8. INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP is the Fund's independent public accountants, providing
audit services, tax return review, and assistance and consultation with respect
to the preparation of filings with the Commission.
9. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on behalf
of the Fund by PMC pursuant to authority contained in the Fund's management
contract. In selecting brokers or dealers, PMC will consider various relevant
factors, including, but not limited to, the size and type of the transaction;
the nature and character of the markets for the security to be purchased or
sold; the execution efficiency, settlement capability, and financial condition
of the dealer; the dealer's execution services rendered on a continuing basis;
and the reasonableness of any dealer spreads.
PMC may select broker-dealers which provide brokerage and/or research services
to the Fund and/or other investment companies managed by PMC. In addition, if
PMC 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, the Fund may pay commissions to such
broker-dealer in an amount greater than the amount another firm may charge. Such
services may include advice concerning the value of securities; the advisability
of investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy and performance of accounts; and effecting securities
transactions and performing functions incidental thereto (such as clearance and
settlement). PMC maintains a listing of broker-dealers who provide such services
on a regular basis. However, because it is anticipated that many transactions on
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behalf of the Fund and other investment companies managed by PMC are placed with
broker-dealers (including broker-dealers on the listing) without regard to the
furnishing of such services, it is not possible to estimate the proportion of
such transactions directed to such dealers solely because such services were
provided.
The research received from broker-dealers may be useful to PMC in rendering
investment management services to the Fund as well as other investment companies
managed by PMC, although not all such research may be useful to the Fund.
Conversely, such information provided by brokers or dealers who have executed
transaction orders on behalf of such other PMC clients may be useful to PMC in
carrying out its obligations to the Fund. The receipt of such research has not
reduced PMC's normal independent research activities; however, it enables PMC to
avoid the additional expenses which might otherwise be incurred if it were to
attempt to develop comparable information through its own staff.
In circumstances where two or more broker-dealers offer comparable prices and
executions, preference may be given to a broker-dealer which has sold shares of
the Fund as well as shares of other investment companies or accounts managed by
PMC. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the Fund.
The Trustees periodically review PMC's performance of its responsibilities in
connection with the placement of portfolio transactions on behalf of the Fund.
In addition to the Fund, PMC acts as investment adviser to other Pioneer mutual
funds and certain private accounts with investment objectives similar to those
of the Fund. Securities frequently meet the investment objectives of the Fund,
such other funds and such private accounts. In such cases, the decision to
recommend a purchase to one fund or account rather than another is based on a
number of factors. The determining factors in most cases are the amount of
securities of the issuer then outstanding, the value of those securities and the
market for them. Other factors considered in the investment recommendations
include other investments which each fund or account presently has in a
particular industry and the availability of investment funds in each fund or
account.
It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in the
same issue may likewise vary. To the extent that the Fund, another mutual fund
in the Pioneer group or a private account managed by PMC may not be able to
acquire as large a position in such security as it desires, it may have to pay a
higher price for the security. Similarly, the Fund may not be able to obtain as
large an execution of an order to sell or as high a price for any particular
portfolio security if PMC decides to sell on behalf of another account the same
portfolio security at the same time. On the other hand, if the same securities
are bought or sold at the same time by more than one fund or account, the
resulting participation in volume transactions could produce better executions
for the Fund or the account. In the event more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
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be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each.
10. TAX STATUS AND DIVIDENDS
It is the Fund's policy to meet the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), for qualification as a regulated
investment company. These requirements relate to the sources of the Fund's
income, the diversification of its assets, and the timing of its distributions.
If the Fund meets all such requirements and distributes to its shareholders at
least annually all investment company taxable income and net capital gain, if
any, which it receives, the Fund will be relieved of the necessity of paying
federal income tax.
In order to qualify under Subchapter M, the Fund must, among other things,
derive at least 90% of its gross income for each taxable year from dividends,
interest, payments with respect to securities loans, gains from the sale or
other disposition of stock, securities or foreign currencies, or other income
(including gains from options, futures or forward contracts) derived with
respect to its business of investing in such stock, securities or currencies
(the "90% income test"), limit its gains from the sale of stock, securities and
certain other investments held for less than three months to less than 30% of
its annual gross income (the "30% test") and satisfy certain diversification and
income distribution requirements.
Dividends from investment company taxable income, which includes net investment
income, net short-term capital gain in excess of net long-term capital loss, and
certain net foreign exchange gains are taxable as ordinary income, whether
received in cash or in additional shares. Dividends from net long-term capital
gain in excess of net short-term capital loss, if any, whether received in cash
or additional shares, are taxable to the Fund's shareholders as long-term
capital gains for federal income tax purposes without regard to the length of
time shares of the Fund have been held. The federal income tax status of all
distributions will be reported to shareholders annually.
Any dividend declared by the Fund in October, November or December as of a
record date in such a month and paid during the following January will be
treated for federal income tax purposes as received by shareholders on December
31 of the calendar year in which it is declared.
Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, forward
foreign currency contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Any such transactions that are not directly related to the Fund's
investment in stock or securities may increase the amount of gain it is deemed
to recognize from the sale of certain investments held for less than 3 months
for purposes of the 30% test, and may under future Treasury regulations produce
income not among the types of "qualifying income" for purposes of the 90% income
test. If the net foreign exchange loss for a year were to exceed the Fund's
investment company taxable income (computed without regard to such loss) the
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resulting overall ordinary loss for such year would not be deductible by the
Fund or its shareholders in future years.
If the Fund acquires stock in certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest,
dividends, rents, royalties or capital gain) or hold at least 50% of their
assets in investments producing such passive income ("passive foreign investment
companies"), the Fund could be subject to Federal income tax and additional
interest charges on "excess distributions" received from such companies or gain
from the sale of stock in such companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections may, if available, ameliorate these adverse tax
consequences but any such election would require the Fund to recognize taxable
income or gain without the concurrent receipt of cash. The Fund may limit and/or
manage its holdings in passive foreign investment companies to minimize its tax
liability or maximize its return from these investments.
At the time of an investor's purchase of Fund shares, a portion of the purchase
price is often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently, subsequent
distributions from such appreciation or income may be taxable to such investor
even if the net asset value of the investor's shares is, as a result of the
distributions, reduced below the investor's cost for such shares and the
distributions in reality represent a return of a portion of the investment.
Any loss realized upon the redemption of shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain with respect to such
shares.
In addition, if Class A shares redeemed or exchanged have been held for less
than 91 days, (1)in the case of a reinvestment at net asset value, the sales
charge paid on such shares is not included in their tax basis under the Code and
(2)in the case of an exchange, all or a portion of the sales charge paid on such
shares is not included in their tax basis under the Code, to the extent a sales
charge that would otherwise apply to the shares received is educed pursuant to
the exchange privilege. In either case, the portion of the sales charge not
included in the tax basis of the shares redeemed or surrendered in an exchange
is included in the tax basis of the shares acquired in the reinvestment or
exchange. Losses on certain redemptions may be disallowed under "wash sale"
rules in the event of other investments in the same Fund within a period of 61
days beginning 30 days before and ending 30 days after a redemption or other
sale of shares.
For federal income tax purposes, the Fund is permitted to carry forward a net
capital loss in any year to offset net capital gains, if any, during the eight
years following the year of the loss. To the extent subsequent net capital gains
are offset by such losses, they would not result in federal income tax liability
to such Fund and are not expected to be distributed as such to shareholders.
Options written or purchased and futures contracts entered into by the Fund on
certain securities, securities indices and foreign currencies, as well as
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certain foreign currency forward contracts, may cause the Fund to recognize
gains or losses from marking-to-market at the end of its taxable year even
though such options may not have lapsed, been closed out, or exercised or such
futures or forward contracts may not have been closed out or disposed of and may
affect the characterization as long-term or short-term of some capital gains and
losses realized by the Fund. Certain options, futures and forward contracts on
foreign currency may be subject to Section 988, described above, and accordingly
produce ordinary income or loss. Losses on certain options, futures or forward
contracts and/or offsetting positions (portfolio securities or other positions
with respect to which the Fund's risk of loss is substantially diminished by one
or more options, futures or forward contracts) may also be deferred under the
tax straddle rules of the Code, which may also affect the characterization of
capital gains or losses from straddle positions and certain successor positions
as long-term or short-term. The tax rules applicable to options, futures,
forward contracts and straddles may affect the amount, timing and character of
the Fund's income and loss and hence of its distributions to shareholders.
Certain tax elections may be available that would enable the Fund to ameliorate
some adverse effects of the tax rules described in this paragraph.
For purposes of the 70% dividends-received deduction available to corporations,
dividends received by the Fund, if any, from U.S. domestic corporations in
respect of any share of stock with a tax holding period of at least 46 days (91
days in the case of certain preferred stock) held in an unleveraged position and
distributed and designated by the Fund may be treated as qualifying dividends.
Any corporate shareholder should consult its tax adviser regarding the
possibility that its tax basis in its shares may be reduced, for federal income
tax purposes, by reason of "extraordinary dividends" received with respect to
the shares. Corporate shareholders must meet the minimum holding period
requirement stated above (46 or 91 days), taking into account any holding-period
reductions from certain hedging or other transactions that diminish risk of
loss, with respect to their Fund shares in order to qualify for the deduction
and, if they borrow to acquire Fund shares, may be denied a portion of the
dividends-received deduction. The entire qualifying dividend, including the
otherwise deductible amount, will be included in determining the excess (if any)
of a corporation's adjusted current earnings over its alternative minimum
taxable income, which may increase a corporation's alternative minimum tax
liability.
The Fund may be subject to withholding and other taxes imposed by foreign
countries with respect to investments in those countries. Tax conventions
between certain countries and the U.S. may reduce or eliminate such taxes. The
Fund does not expect to satisfy the requirements for passing through to
shareholders their pro rata shares of foreign taxes paid by the Fund, with the
result that its shareholders will not include such taxes in their gross incomes
and will not be entitled to a tax deduction or credit for such taxes on their
own tax returns
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions, and certain
prohibited transactions is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
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The Fund is not subject to Massachusetts corporation franchise or excise taxes
and, provided that it qualifies as a regulated investment company under the
Code, also will not be required to pay any Massachusetts income tax.
Federal law requires that the Fund withhold (as "backup withholding") 31% of
reportable payments, including dividends, capital gain dividends, and the
proceeds of redemptions (including exchanges) and repurchases, to shareholders
who have not complied with Internal Revenue Service ("IRS") regulations. In
order to avoid this withholding requirement, shareholders must certify on their
Account Applications, or on separate W-9 Forms, that their Social Security or
other Taxpayer Identification Number is correct and that they are not currently
subject to backup withholding, or that they are exempt from backup withholding.
The Fund may nevertheless be required to withhold if it receives notice from the
IRS or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.
The description above relates only to U.S. federal income tax consequences for
shareholders who are U.S. persons, i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates, and who are subject to
U.S. federal income tax. The description does not address the special tax rules
applicable to particular types of investors, such as banks, insurance companies,
or tax-exempt entities. Shareholders should consult their own tax advisers on
these matters and on state, local and other applicable tax laws. Investors other
than U.S. persons may be subject to different U.S. tax treatment, including a
possible 30% U.S. withholding tax (or withholding tax at a lower treaty rate) on
amounts treated as ordinary dividends from the Fund and, unless an effective IRS
Form W-8 or authorized substitute is on file, to 31% backup withholding on
certain other payments from the Fund.
11. DESCRIPTION OF SHARES
The Fund's Declaration of Trust permits the Board of Trustees to authorize the
issuance of an unlimited number of full and fractional shares of beneficial
interest which may be divided into such separate series as the Trustees may
establish. Currently, the Fund consists of only one series. The Trustees may,
however, establish additional series of shares in the future, and may divide or
combine the shares into a greater or lesser number of shares without thereby
changing the proportionate beneficial interests in the Fund. The Declaration of
Trust further authorizes the Trustees to classify or reclassify any series of
the shares into one or more classes. Pursuant thereto, the Trustees have
authorized the issuance of two classes of shares of the Fund, designated as
Class A shares and Class B shares. Each share of a class of the Fund represents
an equal proportionate interest in the assets of the Fund allocable to that
class. Upon liquidation of the Fund, shareholders of each class of the Fund are
entitled to share pro rata in the Fund's net assets allocable to such class
available for distribution to shareholders. The Fund reserves the right to
create and issue additional series or classes of shares, in which case the
shares of each class of a series would participate equally in the earnings,
dividends and assets allocable to that class of the particular series.
-24-
<PAGE>
Shareholders are entitled to one vote for each share held and may vote in the
election of Trustees and on other matters submitted to a meeting of
shareholders. Although Trustees are not elected annually by the shareholders,
shareholders have, under certain circumstances, the right to remove one or more
Trustees.
The shares of the Fund are entitled to vote separately to approve investment
advisory agreements or changes in investment restrictions, but shareholders of
all series vote together in the election and selection of Trustees and
accountants. Shares of all series of the Fund vote together as a class on
matters that affect all series of the Fund in substantially the same manner. As
to matters affecting a single series or class, shares of such series or class
will vote separately. No amendment adversely affecting the rights of
shareholders may be made to the Fund's Declaration of Trust without the
affirmative vote of a majority of its shares. Shares have no preemptive or
conversion rights. Shares are fully paid and non-assessable by the Fund, except
as stated below.
12. CERTAIN LIABILITIES
As a Delaware business trust, the Fund's operations are governed by its
Declaration of Trust dated August 8, 1995. A copy of the fund's Certificate of
Trust, also dated August 8, 1995, is on file with the office of the Secretary of
State of Delaware. Generally, Delaware business trust shareholders are not
personally liable for obligations of the Delaware business trust under Delaware
law. The Delaware Business Trust Act (the "Delaware Act") provides that a
shareholder of a Delaware business trust shall be entitled to the same
limitation of liability extended to shareholders of private for-profit
corporations. The Fund's Declaration of Trust expressly provides that the Fund
is organized under the Delaware Act and that the Declaration of Trust is to be
governed by Delaware law. It is nevertheless possible that a Delaware business
trust, such as the fund, might become a party to an action in another state
whose courts refused to apply Delaware law, in which case the trust's
shareholders could become subject to personal liability.
To guard against this risk, the Declaration of Trust (I) contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
provides that notice of such disclaimer may be given in each agreement,
obligation or instrument entered into or executed by the Fund or its Trustees,
(ii) provides for the indemnification out of Fund property of any shareholders
held personally liable for any obligations of the Fund or any series of the Fund
and (iii) provides that the Fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which all of the following factors are present: (1)
a court refused to apply Delaware law; (2) the liability arose under tort law
or, if not, no contractual limitation of liability was in effect; and (3) the
Fund itself would be unable to meet its obligations. In light of Delaware law,
the nature of the Fund's business and the nature of its assets, the risk of
personal liability to a Fund shareholder is remote.
The Declaration of Trust further provides that the Fund shall indemnify each of
its Trustees and officers against liabilities and expenses reasonably incurred
by them, in connection with, or arising out of, any action, suit or proceeding,
-25-
<PAGE>
0threatened against or otherwise involving such Trustee or officer, directly or
indirectly, by reason of being or having been a Trustee or officer of the Fund.
The Declaration of Trust does not authorize the Fund to indemnify any Trustee or
officer against any liability to which he or she would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
13. LETTER OF INTENTION
Purchases in the Class A shares of the Fund of $50,000 or more (excluding any
reinvestments of dividends and capital gains distributions) made within a
13-month period pursuant to a Letter of Intention provided by PFD will qualify
for a reduced sales charge. Such reduced sales charge will be the charge that
would be applicable to the purchase of all Class A shares purchased during such
13-month period pursuant to a Letter of Intention had such shares been purchased
all at once. See "How to Buy Fund Shares" in each Prospectus. For example, a
person who signs a Letter of Intention providing for a total investment in Class
A shares of $50,000 over a 13-month period would be charged at the 4.50% sales
charge rate with respect to all purchases during that period. Should the amount
actually purchased during the 13-month period be more or less than that
indicated in the Letter, an adjustment in the sales charge will be made. A
purchase not made pursuant to a Letter of Intention may be included thereafter
if the Letter is filed within 90 days of such purchase. Any shareholder may also
obtain the reduced sales charge by including the value (at current offering
price) of all the shares of record he holds in the Fund and in all other Pioneer
mutual funds as of the date of the Letter of Intention as a credit toward
determining the applicable scale of sales charge for the Class A shares to be
purchased under the Letter of Intention.
The Letter of Intention authorizes PSC to escrow Class A shares having a
purchase price equal to 5% of the stated investment specified in the Letter of
Intention. A Letter of Intention is not a binding obligation upon the investor
to purchase, or the Fund to sell, the full amount indicated and the investor
should carefully read the provisions of the Letter of Intention set forth in the
Account Application before signing.
14. SYSTEMATIC WITHDRAWAL PLAN
The Systematic Withdrawal Plan ("SWP") is designed to provide a convenient
method of receiving fixed payments at regular intervals from Class A shares of
the Fund deposited by the applicant under this SWP. The applicant must deposit
or purchase for deposit with PSC shares of the Fund having a total value of not
less than $10,000. Periodic checks of $50 or more will be deposited monthly or
quarterly directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by him monthly or
quarterly. Withdrawals from Class B share accounts are limited to 10% of the
value of the account at the time the SWP is implemented.
Any income dividends or capital gains distributions on shares under the SWP will
be credited to the Plan account on the payment date in full and fractional
shares at the net asset value per share in effect on the record date.
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<PAGE>
SWP payments are made from the proceeds of the redemption of shares deposited
under the SWP in a SWP account. To the extent that such redemptions for periodic
withdrawals exceed dividend income reinvested in the SWP account, such
redemptions will reduce and may ultimately exhaust the number of shares
deposited in the Plan account. Redemptions are taxable transactions to
shareholders. In addition, the amounts received by a shareholder cannot be
considered as yield or income on his or her investment because part of such
payments may be a return of his or her investment.
The SWP may be terminated at any time (1)by written notice to PSC or from PSC to
the shareholder; (2)upon receipt by PSC of appropriate evidence of the
shareholder's death; or (3)when all shares under the Plan have been redeemed.
15. DETERMINATION OF NET ASSET VALUE
The net asset value per share of each class of the Fund is determined as of the
close of regular trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m., Eastern Time) on each day on which the Exchange is open
for trading. As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays:
New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share of
each class of the Fund is also determined on any other day in which the level of
trading in its portfolio securities is sufficiently high that the current net
asset value per share might be materially affected by changes in the value of
its portfolio securities. The Fund is not required to determine its net asset
value per share on any day in which no purchase orders for the shares of the
Fund become effective and no shares are tendered for redemption.
The net asset value per share of each class of the Fund is computed by taking
the value of all of the Fund's assets attributable to a class, less the Fund's
liabilities attributable to a class, and dividing it by the number of
outstanding shares of the class. For purposes of determining net asset value,
expenses of the classes of the Fund are accrued daily.
Securities that have not traded on the date of valuation or securities for which
sales prices are not generally reported are valued at the mean between the last
bid and asked prices. Securities for which no market quotations are readily
available (excluding those whose trading has been suspended) will be valued at
fair value as determined in good faith by the Board of Trustees, although the
actual computations may be made by persons acting pursuant to the direction of
the Board of Trustees.
The Fund's maximum offering price per Class A share is determined by adding the
maximum sales charge to the net asset value per Class A share. Class B shares
are offered at net asset value without the imposition of an initial sales
charge.
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<PAGE>
16. INVESTMENT RESULTS
Quotations, Comparisons, and General Information
From time to time, in advertisements, in sales literature, or in reports to
shareholders, the past performance of the Fund may be illustrated and/or
compared with that of other mutual funds with similar investment objectives, and
to stock or other relevant indices. For example, total return of the Fund's
classes may be compared to rankings prepared by Lipper Analytical Services,
Inc., a widely recognized independent service which monitors mutual fund
performance; the Standard & Poor's 500 Stock Index ("S&P 500"), an index of
unmanaged groups of common stock; the Dow Jones Industrial Average, a recognized
unmanaged index of common stocks of 30 industrial companies listed on the New
York Stock Exchange; or The Frank Russell Indexes ("Russell 1000," "2000,"
"2500," "3000,") or the Wilshire Total Market Value Index ("Wilshire 5000"), two
recognized unmanaged indexes of broad based common stocks.
In addition, the performance of the classes of the Fund may be compared to
alternative investment or savings vehicles and/or to indexes or indicators of
economic activity, e.g., inflation or interest rates. Performance rankings and
listings reported in newspapers or national business and financial publications,
such as Barron's, Business Week, Consumers Digest, Consumer Reports, Financial
World, Forbes, Fortune, Investors Business Daily, Kiplinger's Personal Finance
Magazine, Money Magazine, New York Times, Smart Money, USA Today, U.S. News and
World Report, The Wall Street Journal, and Worth may also be cited (if the Fund
is listed in any such publication) or used for comparison, as well as
performance listings and rankings from various other sources including Bloomberg
Financial Markets, CDA/Wiesenberger, Donoghue's Mutual Fund Almanac, Investment
Company Data, Inc., Johnson's Charts, Kanon Bloch Carre and Co., Lipper
Analytical Services, Inc., Micropal, Inc., Morningstar, Inc., Schabacker
Investment Management and Towers Data Systems, Inc.
In addition, from time to time quotations from articles from financial
publications such as those listed above may be used in advertisements in sales
literature, or in reports to shareholders of the Fund.
The Fund may also present, from time to time, historical information depicting
the value of a hypothetical account in one or more classes of the Fund since
such Fund's inception.
In presenting investment results, the Fund may also include references to
certain financial planning concepts, including (a) an investor's need to
evaluate his financial assets and obligations to determine how much to invest;
(b) his need to analyze the objectives of various investments to determine where
to invest; and (c) his need to analyze his time frame for future capital needs
to determine how long to invest. The investor controls these three factors, all
of which affect the use of investments in building assets.
One of the primary methods used to measure the performance of a class of the
Fund is "total return." "Total return" will normally represent the percentage
change in value of an account, or of a hypothetical investment in a class of the
Fund, over any period up to the lifetime of that class of the Fund. Total return
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<PAGE>
calculations will usually assume the reinvestment of all dividends and capital
gains distributions and will be expressed as a percentage increase or decrease
from an initial value, for the entire period or for one or more specified
periods within the entire period. Total return percentages for periods of less
than one year will usually be annualized; total return percentages for periods
longer than one year will usually be accompanied by total return percentages for
each year within the period and/or by the average annual compounded total return
for the period. The income and capital components of a given return may be
separated and portrayed in a variety of ways in order to illustrate their
relative significance. Performance may also be portrayed in terms of cash or
investment values, without percentages. Past performance cannot guarantee any
particular future result.
The Fund's average annual total return quotations for each of its classes as
that information may appear in the Fund's Prospectus, this Statement of
Additional Information or in advertising are calculated by standard methods
prescribed by the Commission.
Standardized Average Annual Total Return Quotations
Average annual total return quotations for Class A and Class B shares are
computed by finding the average annual compounded rates of return that would
cause a hypothetical investment in the class made on the first day of a
designated period (assuming all dividends and distributions are reinvested) to
equal the ending redeemable value of such hypothetical investment on the last
day of the designated period in accordance with the following formula:
P(1+T)n = ERV
Where: P = a hypothetical initial payment of $1,000, less the
maximum sales load of $57.50 for Class A shares
or the deduction of the CDSC for Class B shares at
the end of the period.
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1000
initial payment made at the beginning of the
designated period (or fractional portion thereof)
For purposes of the above computation, it is assumed that all dividends and
distributions made by the Fund are reinvested at net asset value during the
designated period. The average annual total return quotation is determined to
the nearest 1/100 of 1%.
In determining the average annual total return (calculated as provided above),
recurring fees, if any, that are charged to all shareholder accounts of a
particular class are taken into consideration. For any account fees that vary
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<PAGE>
with the size of the account, the account fee used for purposes of the above
computation is assumed to be the fee that would be charged to a class's mean
account size.
Automated Information Line
FactFoneSM, Pioneer's 24-hour automated information line, allows shareholders to
dial toll-free 1-800-225-4321 and hear recorded fund information, including:
o net asset value prices for all Pioneer mutual funds;
o annualized 30-day yields on Pioneer's fixed income funds;
o annualized 7-day yields and 7-day effective (compound) yields for
Pioneer's money market funds; and
o dividends and capital gains distributions on all Pioneer mutual funds.
Yields are calculated in accordance with Commission mandated standard formulas.
In addition, by using a personal identification number ("PIN"), shareholders may
enter purchases, exchanges and redemptions, access their account balance and
last three transactions and may order a duplicate statement. See "FactFoneSM" in
the Prospectus for more information.
All performance numbers communicated through FactFoneSM represent past
performance, and figures for all quoted bond funds include the maximum
applicable sales charge. A shareholder's actual yield and total return will vary
with changing market conditions. The value of Class A and Class B shares (except
for Pioneer money market funds, which seek a stable $1.00 share price) will also
vary, and such shares may be worth more or less at redemption than their
original cost.
17. FINANCIAL STATEMENTS
The Form of Balance Sheet and the Form of Report of Independent Public
Accountants included in this Statement of Additional Information have been
included in reliance upon the report of Arthur Andersen, independent public
accountants, as experts in accounting and auditing.
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<PAGE>
APPENDIX A
Description of Bond Ratings1
Moody's Investor's Service, Inc.2
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat bigger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
- ---------------------------------------------
1 The ratings indicated herein are believed to be the most recent ratings
available at the date of this Prospectus for the securities listed. Ratings are
generally given to securities at the time of issuance. While the rating agencies
may from time to time revise such ratings, they undertake no obligation to do
so, and the ratings indicated do not necessarily represent ratings which will be
given to these securities on the date of the Fund's fiscal year-end.
2 Rates bonds of issuers which have $600,000 or more of debt, except bonds of
educational institutions, projects under construction, enterprises without
established earnings records and situations where current financial data is
unavailable.
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<PAGE>
Standard & Poor's Ratings Group 3
AAA: Bonds rated AAA are highest grade obligations. This rating indicates an
extremely strong capacity to pay principal and interest.
AA: Bonds rated AA also qualify as high-quality obligations. Capacity to pay
principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A: Bonds rated A have a strong capacity to pay principal and interest, although
they are more susceptible to the adverse effects of changes in circumstances and
economic conditions.
BBB: Bonds rated BBB are regarded as having an adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in the A category.
- -------------------------------------------------
3 Rates all governmental bodies having $1,000,000 or more of debt outstanding,
unless adequate information is not available.
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<PAGE>
S&P 500
This index is a readily available, carefully constructed, market value weighted
benchmark of common stock performance. Currently, the S&P Composite Index
includes 500 of the largest stocks (in terms of stock market value) in the
United States; prior to March 1957 it consisted of 90 of the largest stocks.
DOW JONES INDUSTRIAL AVERAGE
This is a total return index based on the performance of 30 blue chip stocks.
SMALL CAPITALIZATION STOCKS
This index is a market value weighted index of the ninth and tenth deciles of
the New York Stock Exchange (NYSE), plus stocks listed on the American Stock
Exchange (AMEX) and over-the-counter (OTC) with the same or less capitalization
as the upper bound of the NYSE ninth decile.
INFLATION
The Consumer Price Index for All Urban Consumers (CPI-U), not seasonally
adjusted, is used to measure inflation, which is the rate of change of consumer
goods prices. Unfortunately, the inflation rate as derived by the CPI is not
measured over the same period as the other asset returns. All of the security
returns are measured from one month-end to the next month-end. CPI commodity
prices are collected during the month. Thus, measured inflation rates lag the
other series by about one-half month. Prior to January 1978, the CPI (as
compared with CPI-U) was used. Both inflation measures are constructed by the
U.S. Department of Labor, Bureau of Labor Statistics, Washington, DC.
S&P/BARRA INDEXES
"The S&P/BARRA Growth and Value Indexes are constructed by dividing the stocks
in the S&P 500 Index according to price-to-book ratios. The Growth Index
contains stocks with higher price-to-book ratios, and the Value Index contains
stocks with lower price-to-book ratios. Both indexes are market capitalization
weighted."
Source: Ibbotson Associates
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<TABLE>
<CAPTION>
Dow Jones U.S. Small S&P/BARRA S&P/BARRA
S&P500 Ind'l Avg Stock Index U.S. Inflation Growth Value
%TR %TR %TR %TR %TR %TR
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A
Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A
Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A
Dec 1931 -43.34 -49.03 -49.75 -9.52 N/A N/A
Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A
Dec 1933 53.99 73.71 142.87 0.51 N/A N/A
Dec 1934 -1.44 8.07 24.22 2.03 N/A N/A
Dec 1935 47.67 43.77 40.19 2.99 N/A N/A
Dec 1936 33.92 30.23 64.80 1.21 N/A N/A
Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A
Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A
Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A
Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A
Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A
Dec 1942 20.34 14.12 44.51 9.29 N/A N/A
Dec 1943 25.90 19.06 88.37 3.16 N/A N/A
Dec 1944 19.75 17.19 53.72 2.11 N/A N/A
Dec 1945 36.44 31.60 73.61 2.25 N/A N/A
Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A
Dec 1947 5.71 7.61 0.92 9.01 N/A N/A
Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A
Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A
Dec 1950 31.71 26.40 38.75 5.79 N/A N/A
Dec 1951 24.02 21.77 7.80 5.87 N/A N/A
Dec 1952 18.37 14.58 3.03 0.88 N/A N/A
Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A
Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A
Dec 1955 31.56 26.58 20.44 0.37 N/A N/A
Dec 1956 6.56 7.10 4.28 2.86 N/A N/A
Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A
Dec 1958 43.36 39.31 64.89 1.76 N/A N/A
Dec 1959 11.96 20.21 16.40 1.50 N/A N/A
Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A
Dec 1961 26.89 22.60 32.09 0.67 N/A N/A
Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A
Dec 1963 22.80 20.83 23.57 1.65 N/A N/A
Dec 1964 16.48 18.85 23.52 1.19 N/A N/A
Dec 1965 12.45 14.39 41.75 1.92 N/A N/A
Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A
Dec 1967 23.98 19.16 83.57 3.04 N/A N/A
Dec 1968 11.06 7.93 35.97 4.72 N/A N/A
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<PAGE>
Dow Jones U.S. Small S&P/BARRA S&P/BARRA
S&P500 Ind'l Avg Stock Index U.S. Inflation Growth Value
%TR %TR %TR %TR %TR %TR
- ----------------------------------------------------------------------------------------------------------------------------
Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A
Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A
Dec 1971 14.31 9.83 16.50 3.36 N/A N/A
Dec 1972 18.98 18.48 4.43 3.41 N/A N/A
Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A
Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A
Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38
Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93
Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57
Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16
Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16
Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59
Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02
Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04
Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89
Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52
Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68
Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67
Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68
Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67
Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13
Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85
Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56
Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53
Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60
Dec 1994 1.31 5.06 3.11 2.78 3.13 -0.64
</TABLE>
Source: Ibbotson Associates
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<PAGE>
APPENDIX B
OTHER PIONEER INFORMATION
The Pioneer family of mutual funds was established in 1928 with the creation of
Pioneer Fund. Pioneer is one of the oldest, most respected and successful money
managers in the United States.
As of December 31, 1994, PMC employed a professional investment staff of 46,
with a combined average of 14 years' experience in the financial services
industry.
At December 31, 1994, there were 591,192 non-retirement shareholder accounts and
337,577 retirement shareholder accounts in Pioneer's funds. Total assets for all
Pioneer funds as of December 31, 1994 were $10,038,000,000 representing a total
of 928,769 shareholder accounts.
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<PAGE>
Pioneer Small Company Fund
Notes to Balance Sheet
November 1, 1995
1. Pioneer Small Company Fund (the Fund), organized as a Delaware business trust
on August 8, 1995, is being registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 (the 1940 Act) as a
diversified, open-end management investment company. Since August 8, 1995, the
Fund's activities have been limited to organizational matters with no operating
activities. The Fund intends to qualify under Subchapter M of the Internal
Revenue Code of 1986, as amended. All of the initial Fund shares outstanding at
November 1, 1995 are owned by The Pioneer Group, Inc. (PGI).
2. As of November 1, 1995, the Fund deferred organization-related costs of
$93,914 which will be amortized on a straight-line basis over a period of up to
five years. Included in due to affiliates are $56,418 and $19,251 of such costs
payable to Pioneer Funds Distributor, Inc. (PFD) and Pioneering Management
Corporation (PMC), respectively.
3. The Board of Trustees has authorized the issuance of two classes of Fund
shares, designated as Class A and Class B shares. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemptions, dividends and liquidation, except that each
class of shares can bear different transfer agent and distribution fees and have
exclusive voting rights with respect to the distributions plans that have been
adopted by shareholders of Class A and Class B shares, respectively (see Note
6).
The Fund will record sales and repurchases of its trust shares on trade
date. Net losses, if any, as a result of cancellations will be absorbed by PFD,
the principal underwriter for the Fund and an indirect subsidiary of PGI.
4. PMC, the Fund's investment adviser, will manage the Fund's portfolio and is a
wholly owned subsidiary of PGI. Management fees will be calculated daily at the
annual rate of 0.85% of the Fund's average daily net assets.
PMC has agreed not impose a portion of its management fee and to assume
other operating expenses of the Fund to the extent necessary to limit the Fund's
expenses to 1.75% of the average daily net assets attributable to Class A
shares; the portion of Fund-wide expenses attributable to Class B shares will be
reduced only to the extent that such expenses are reduced for Class A shares.
PMC's agreement is voluntary and temporary and may be revised or terminated at
any time.
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<PAGE>
In addition, under the management agreement, certain other services and
costs, including accounting, regulatory reporting and insurance premiums, will
be paid by the Fund.
5. Pioneering Services Corporation, a wholly owned subsidiary of PGI, will
provide substantially all transfer agent and shareholder services to the Fund at
negotiated rates.
6. The Fund adopted a Plan of Distribution for Class A shares (Class A Plan) and
Class B shares (Class B Plan) in accordance with rule 12b-1 of the 1940 Act.
These plans allow for Class A shares and Class B shares to reimburse and
compensate, respectively, PFD for providing varying levels of distribution
services and other account maintenance services. The Class A Plan and Class B
Plan provide for reimbursement of PFD's distribution services in an amount up to
0.25% and 0.75%, respectively, of the daily average net assets of the respective
classes of shares. The Fund may also compensate PFD for additional services in
an amount up to 0.25% of the Fund's average daily net assets attributable to
Class B shares.
In addition, Class B shares that are redeemed within six years of
purchase will be subject to a contingent deferred sales charge (CDSC) at
declining rates beginning at 4.0% based on the lower of cost or market value of
shares being redeemed. Proceeds from the CDSC will be paid to PFD.
-38-
<PAGE>
Pioneer Small Company Fund
Balance Sheet
November 1, 1995
ASSETS:
Cash $ 100,000
Deferred organzation and other costs (Note 1) 93,914
----------------
Total assets $ 193,914
----------------
LIABILITIES:
Due to affiliates (Note 2) $ 75,669
Accrued expenses 18,245
----------------
Total liabilities $ 93,914
----------------
NET ASSETS:
Paid-in capital (Note 1) $ 100,000
================
NET ASSET VALUE PER SHARE:
Class A - based on $50,000/5,000 shares of $ 10.00
beneficial interest outstanding - unlimited ================
number of shares authorized
Class B - based on $50,000/5,000 shares of $ 10.00
beneficial interest outstanding - unlimited ================
number of shares authorized
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
- -----------------------------------------------------------------------
TO THE SHAREHOLDERS AND THE BOARD OF TRUSTEES OF PIONEER SMALL COMPANY FUND:
We have audited the accompanying balance sheet of Pioneer Small Company Fund as
of November 1, 1995. This balance sheet is the responsibility of the Fund's
management. Our responsibility is to express an opinion on this balance sheet
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the balance sheet is free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the balance sheet. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall balance sheet presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Pioneer Small Company Fund as of
November 1, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 1, 1995
-39-
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits.
(a) Financial Statements:
Statement of Assets and Liabilities* Report of Independent
Public Accountants*
(b) Exhibits:
1.1. Agreement and Declaration of Trust.1
1.2. Certificate of Trust.1
1.3. Certificate of Amendment of the Certificate of Trust.*
2. By-Laws.1
3. None.
4.1. Form of Class A Share Certificate.*
4.2. Form of Class B Share Certificate.*
5. Form of Management Contract between the Registrant and
Pioneering Management Corporation.1
6.1. Form of Underwriting Agreement between the Registrant and
Pioneer Funds Distributor, Inc.*
6.2. Form of Dealer Sales Agreement.*
7. None.
8. Form of Custodian Agreement between the Registrant and
Brown Brothers Harriman & Co.1
9. Form of Investment Company Service Agreement between the
Registrant and Pioneering Services Corporation.*
<PAGE>
10. Opinion and Consent of Counsel.*
11. Consent of Independent Public Accountants.*
12. None.
13. Share Purchase Agreement.*
14. None.
15.1. Form of Class A Shares Distribution Plan.*
15.2. Form of Class B Shares Distribution Plan.*
16. Not applicable.
17. Financial Data Schedule*
18. Form of 18f-3 Plan.*
19. Powers of Attorney.*
--------------
* Filed herewith.
1 Filed with the initial Registration Statement on August 16, 1995
and incorporated herein by reference.
Item 25. Persons Controlled By or Under
Common Control With Registrant.
Just prior to the effective date of this Registration Statement, it is
expected that The Pioneer Group, Inc., a publicly-traded Delaware corporation
("PGI"), will own all of the issued and outstanding shares of Pioneer Small Cap
Fund.
The Pioneer Group, Inc., a Delaware corporation ("PGI"), owns 100% of
the outstanding capital stock of Pioneering Management Corporation, a Delaware
corporation ("PMC"), Pioneering Services Corporation ("PSC"), Pioneer Funds
Distributor, Inc. ("PFD"), Pioneer Capital Corporation ("PCC"), Pioneer SBIC
Corp. ("SBIC"), Pioneer Associates, Inc., Pioneer International Corporation,
Pioneer Plans Corporation ("PPC"), Pioneer Goldfields Limited ("PGL"), and
Pioneer Investments Corporation ("PIC"), all Massachusetts corporations. PGI
also owns 100% of the outstanding capital stock of Pioneer Metals and
<PAGE>
Technology, Inc. ("PMT"), a Delaware corporation, Pioneer Fonds Marketing GmbH
("GmbH"), a German corporation and Pioneer First Polish Trust Fund Joint Stock
Company ("First Polish"), a Polish corporation. PGI owns 90% of the outstanding
shares of Teberebie Goldfields Limited ("TGL"). Pioneer Fund, Pioneer II,
Pioneer Three, Pioneer Bond Fund, Pioneer Intermediate Tax-Free Fund, Pioneer
Growth Trust, Pioneer Europe Fund, Pioneer International Growth Fund, Pioneer
Short-Term Income Trust, Pioneer Tax-Free State Series Trust and Pioneer America
Income Trust (each of the foregoing, a Massachusetts business trust), and
Pioneer Income Fund, Pioneer Tax-Free Income Fund, Pioneer Money Market Trust,
Pioneer Growth Shares, Pioneer Real Estate Shares, Pioneer India Fund, Pioneer
Emerging Markets Fund and the Registrant (each of the foregoing, a Delaware
business trust) and Pioneer Interest Shares, Inc. (a Nebraska corporation) are
all parties to management contracts with PMC. PCC owns 100% of the outstanding
capital stock of SBIC. SBIC is the sole general partner of Pioneer Ventures
Limited Partnership, a Massachusetts limited partnership. John F. Cogan, Jr.
owns approximately 15% of the outstanding shares of PGI. Mr. Cogan is Chairman
of the Board, President and Trustee of the Registrant and of each of the Pioneer
mutual funds; Director and President of PGI; President and Director of PPC, PIC,
Pioneer International Corporation and PMT; Director of PCC and PSC; Chairman of
the Board and Director of PMC, PFD and TGL; Chairman, President and Director of
PGL; Chairman of the Supervisory Board of GmbH; Chairman and Member of
Supervisory Board of First Polish; and Chairman and Partner, Hale and Dorr.
Item 26. Number of Holders of Securities.
Just prior to the effective date of this Registration Statement, it is
expected that there will be one record holder of Pioneer Small Cap Fund's shares
of beneficial interest.
Item 27. Indemnification.
Except for the Agreement and Declaration of Trust dated August 8, 1995,
establishing the Registrant as a Trust under Delaware law, there is no contract,
arrangement or statute under which any Trustee, officer, underwriter or
affiliated person of the Registrant is insured or indemnified. The Agreement and
Declaration of Trust provides that no Trustee or officer will be indemnified
against any liability to which the Registrant would otherwise be subject by
reason of or for willful misfeasance, bad faith, gross negligence or reckless
disregard of such person's duties.
<PAGE>
Insofar as indemnification for liability arising under the Securities
Act of 1933, as amended (the "Act"), may be available to Trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser.
All of the information required by this item is set forth in the Form
ADV, as amended, of Pioneering Management Corporation. The following sections of
such Form ADV are incorporated herein by reference:
(a) Items 1 and 2 of Part 2;
(b) Section 6, Business Background, of each Schedule D.
Item 29. Principal Underwriter
(a) See Item 25 above.
(b) Directors and Officers of PFD:
Name and Principal Positions and Offices Positions and Offices
Business Address* with Underwriter with Registrant
John F. Cogan, Jr. Director and Chairman Chairman of the Board,
President and Trustee
Robert L. Butler Director and President None
David D. Tripple Director Executive Vice
President
Steven M. Graziano Senior Vice President None
<PAGE>
Stephen W. Long Senior Vice President None
John W. Drachman Vice President None
Barry G. Knight Vice President None
William A. Misata Vice President None
Anne W. Patenaude Vice President None
Elizabeth B. Rice Vice President None
Constance D. Spiros Vice President None
Marcy L. Supovitz Vice President None
Gail A. Smyth Vice President None
Steven R. Berke Assistant None
Vice President
Mary Sue Hoban Assistant Vice None
President
William H. Keough Treasurer Treasurer
Roy P. Rossi Assistant Treasurer None
Joseph P. Barri Clerk Secretary
Robert P. Nault Assistant Clerk Assistant Secretary
- ---------------
* The principal business address of each is 60 State Street, Boston,
Massachusetts 02109.
(c) Not applicable.
Item 30. Location of Accounts and Records
The accounts and records are maintained at the Registrant's office at
60 State Street, Boston, Massachusetts; contact the Treasurer.
<PAGE>
Item 31. Management Services
The Registrant is not a party to any management-related service
contract, except as described in the Prospectus and the Statement of Additional
Information.
Item 32. Undertakings
(a) Not applicable.
(b) The Registrant undertakes to file a post-effective amendment, using
financial statements which need not be certified, within four to six months from
the later of the effective date of this Registration Statement or the
commencement of operations.
(c) The Registrant undertakes to deliver, or cause to be delivered with
the Prospectus, to each person to whom the Prospectus is sent or given a copy of
the Registrant's report to shareholders furnished pursuant to and meeting the
requirements of Rule 30d-1 from which the specified information is incorporated
by reference, unless such person currently holds securities of the Registrant
and otherwise has received a copy of such report, in which case the Registrant
shall state in the Prospectus that it will furnish, without charge, a copy of
such report on request, and the name, address and telephone number of the person
to whom such a request should be directed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Pre-
Effective Amendment No. 1 to its Registration Statement on Form N-1A to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston and Commonwealth of Massachusetts, on the 1st day of November, 1995.
PIONEER SMALL COMPANY FUND
By: /s/John F. Cogan, Jr.*
John F. Cogan, Jr., President
Pursuant to the requirements of the Securities Act of 1933, this Pre-
Effective Amendment No. 1 to the Registrant's Registration Statement on Form
N-1A has been signed below by the following persons in the capacities and on the
date indicated:
Signature Title
/s/John F. Cogan, Jr.* Chairman of the Board )
John F. Cogan, Jr. and President (Principal )
Executive Officer)
)
)
)
)
/s/William H. Keough* Treasurer (Principal )
William H. Keough Financial and Accounting )
Officer) )
Trustees:
/s/John F. Cogan, Jr.* )
John F. Cogan, Jr. Trustee )
)
/s/Richard H. Egdahl, M.D.* )
Richard H. Egdahl, M.D. Trustee )
)
/s/Margaret B.W. Graham* )
Margaret B.W. Graham Trustee )
)
/s/John W. Kendrick* )
John W. Kendrick Trustee )
/s/Marguerite A. Piret* )
Marguerite A. Piret Trustee )
)
/s/David D. Tripple* )
David D. Tripple Trustee )
)
/s/Stephen K. West* )
Stephen K. West Trustee )
)
/s/John Winthrop* )
John Winthrop Trustee )
*By:/s/ Joseph P. Barri Dated: November 1, 1995
Joseph P. Barri
Attorney-in-Fact
<PAGE>
Exhibit Index
Exhibit Page
Number Document Title Number
1.3. Certificate of Amendment to the Certificate of Trust.
4.1. Form of Class A Share Certificate.
4.2. Form of Class B Share Certificate.
6.1. Form of Underwriting Agreement between the Registrant and Pioneer
Funds Distrbutor, Inc.
6.2. Form of Dealer Sales Agreement.
9. Form of Investment Company Service Agreement between the Registrant
and Pioneering Services Corporation.
10. Opinion and Consent of Counsel
11. Consent of Independent Public Accountants.
13. Share Purchase Agreement.
15.1. Form of Class A Shares Distribution Plan.
15.2. Form of Class B Shares Distribution Plan.
17. Financial Data Schedule.
18. Form of 18f-3 Plan.
19. Powers of Attorney.
CERTIFICATE OF AMENDMENT
to
CERTIFICATE OF TRUST
of
PIONEER SMALL CAP FUND
THIS Certificate of Amendment, dated October 4, 1995, to the
Certificate of Trust dated August 8, 1995, of Pioneer Small Cap Fund (the
"Trust") is being duly executed and filed by John F. Cogan, Jr., as Trustee, to
amend the Certificate of Trust filed by the Trust on August 8, 1995 with the
office of the Secretary of State of the State of Delaware.
1. Amendment. Effective as of the date and time of filing of this
Certificate of Amendment, the name of the Trust is changed from "Pioneer Small
Cap Fund" to "Pioneer Small Company Fund."
IN WITNESS WHEREOF, the undersigned being a Trustee of the Trust has
executed this Certificate of Amendment as of the date first above-written.
/s/John F. Cogan, Jr.
John F. Cogan, Jr.
As Trustee and not individually
PIONEER SMALL COMPANY FUND
ORGANIZED AS A BUSINESS TRUST UNDER THE
LAWS OF THE STATE OF DELAWARE
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
This is to certify that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST, WITHOUT PAR
VALUE, OF THE TRUST OR SERIES OF THE TRUST IDENTIFIED ABOVE.
transferable only on the books of the Trust, by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The aforesaid holder is entitled to require the Trust to purchase all
or any part of the Shares represented by this Certificate at net asset value, as
more fully set forth on the reverse of this Certificate. This Certificate is not
valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the said Trust has caused this Certificate to be
signed by its duly authorized officers and its seal to be hereunto affixed.
Dated:
Countersigned:
PIONEERING SERVICES CORPORATION
Transfer Agent
Authorized Officer
Treasurer President
<PAGE>
REVERSE
THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE
RIGHTS, INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE ARTICLES OF
INCORPORATION AND BY-LAWS OF THE FUND, AS AMENDED, WHICH ARE INCORPORATED BY
REFERENCE HEREIN. IN PARTICULAR, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERABLE BY THE HOLDER, IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY, BUT
ONLY ON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED AND WHEN THE TRANSFER IS
MADE ON THE BOOKS OF THE FUND.
THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID ARTICLES OF
INCORPORATION AND BY-LAWS, AS AMENDED, SHALL NOT IN ANY WISE BE PERSONALLY
LIABLE FOR ANY DEBT, OBLIGATION OR ACT OF THE FUND.
ANY SHAREHOLDER DESIRING TO DISPOSE OF HIS SHARES MAY DEPOSIT HIS
CERTIFICATE, DULY ENDORSED IN BLANK OR ACCOMPANIED BY AN INSTRUMENT OF TRANSFER
EXECUTED IN BLANK, AT THE OFFICE OF PIONEERING SERVICES CORPORATION OR ANY
SUCCESSOR TRANSFER AGENT OF THE FUND, TOGETHER WITH AN IRREVOCABLE OFFER IN
WRITING TO SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF
AND THE FUND WILL THEREAFTER PURCHASE SAID SHARES FOR CASH AT NET ASSET VALUE.
THE COMPUTATION OF NET ASSET VALUE, THE LIMITATIONS UPON THE DATE OF PAYMENT AND
PROVISIONS DEALING WITH SUSPENSION OF THIS RIGHT IN CERTAIN EMERGENCIES ARE
FULLY DESCRIBED IN SAID ARTICLES OF INCORPORATION AND BY-LAWS, AS AMENDED.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURES MUST BE GUARANTEED IN ACCORDANCE WITH THE THEN CURRENT
PROSPECTUS OF THE FUND.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of survivorship UGMA/"state abbreviation"
- -- Uniform Gifts to Minors UTMA/"state abbreviation/age" -- Uniform Transfer to
Minors
Additional abbreviations that do not appear in the above list may also be used.
<PAGE>
For Value Received, ______________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
| |
| |
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated,
Owner
Signature of Co-Owner, if any
IMPORTANT: BEFORE SIGNING, READ AND COMPLY CAREFULLY WITH
NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
PIONEER SMALL COMPANY FUND
ORGANIZED AS A BUSINESS TRUST UNDER THE
LAWS OF THE STATE OF DELAWARE
SEE REVERSE SIDE FOR CERTAIN DEFINITIONS
This is to certify that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST, WITHOUT PAR
VALUE, OF THE TRUST OR SERIES OF THE TRUST IDENTIFIED ABOVE.
transferable only on the books of the Trust, by the holder hereof, in person or
by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The aforesaid holder is entitled to require the Trust to purchase all
or any part of the Shares represented by this Certificate at net asset value, as
more fully set forth on the reverse of this Certificate. This Certificate is not
valid until countersigned by the Transfer Agent.
IN WITNESS WHEREOF, the said Trust has caused this Certificate to be
signed by its duly authorized officers and its seal to be hereunto affixed.
Dated:
Countersigned:
PIONEERING SERVICES CORPORATION
Transfer Agent
Authorized Officer
Treasurer President
<PAGE>
REVERSE
THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE
RIGHTS, INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE ARTICLES OF
INCORPORATION AND BY-LAWS OF THE FUND, AS AMENDED, WHICH ARE INCORPORATED BY
REFERENCE HEREIN. IN PARTICULAR, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
TRANSFERABLE BY THE HOLDER, IN PERSON OR BY HIS DULY AUTHORIZED ATTORNEY, BUT
ONLY ON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED AND WHEN THE TRANSFER IS
MADE ON THE BOOKS OF THE FUND.
THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID ARTICLES OF
INCORPORATION AND BY-LAWS, AS AMENDED, SHALL NOT IN ANY WISE BE PERSONALLY
LIABLE FOR ANY DEBT, OBLIGATION OR ACT OF THE FUND.
ANY SHAREHOLDER DESIRING TO DISPOSE OF HIS SHARES MAY DEPOSIT HIS
CERTIFICATE, DULY ENDORSED IN BLANK OR ACCOMPANIED BY AN INSTRUMENT OF TRANSFER
EXECUTED IN BLANK, AT THE OFFICE OF PIONEERING SERVICES CORPORATION OR ANY
SUCCESSOR TRANSFER AGENT OF THE FUND, TOGETHER WITH AN IRREVOCABLE OFFER IN
WRITING TO SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF
AND THE FUND WILL THEREAFTER PURCHASE SAID SHARES FOR CASH AT NET ASSET VALUE.
THE COMPUTATION OF NET ASSET VALUE, THE LIMITATIONS UPON THE DATE OF PAYMENT AND
PROVISIONS DEALING WITH SUSPENSION OF THIS RIGHT IN CERTAIN EMERGENCIES ARE
FULLY DESCRIBED IN SAID ARTICLES OF INCORPORATION AND BY-LAWS, AS AMENDED.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURES MUST BE GUARANTEED IN ACCORDANCE WITH THE THEN CURRENT
PROSPECTUS OF THE FUND.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with rights of survivorship UGMA/"state abbreviation"
- -- Uniform Gifts to Minors UTMA/"state abbreviation/age" -- Uniform Transfer to
Minors
Additional abbreviations that do not appear in the above list may also be used.
<PAGE>
For Value Received, ______________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
| |
| |
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF
ASSIGNEE)
Shares represented by the within Certificate, and do hereby irrevocably
constitute and appoint
Attorney to transfer the said shares on the books of the within named Fund with
full power of substitution in the premises.
Dated,
Owner
Signature of Co-Owner, if any
IMPORTANT: BEFORE SIGNING, READ AND COMPLY CAREFULLY WITH
NOTICE PRINTED ABOVE.
Signature(s) guaranteed by:
UNDERWRITING AGREEMENT
THIS UNDERWRITING AGREEMENT, dated this ____ day of __________, 1995,
by and between Pioneer Small Cap Fund, a Delaware business trust ("Pioneer"),
and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the
"Underwriter").
W I T N E S S E T H
WHEREAS, Pioneer is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and has filed a registration statement (the "Registration
Statement") with the Securities and Exchange Commission (the "Commission") for
the purpose of registering shares of beneficial interest for public offering
under the Securities Act of 1933, as amended;
WHEREAS, the Underwriter engages in the purchase and sale of securities
both as a broker and a dealer and is registered as a broker-dealer with the
Commission and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD");
WHEREAS, the parties hereto deem it mutually advantageous that the
Underwriter should act as Principal Underwriter, as defined in the 1940 Act, for
the sale to the public of the shares of beneficial interest of the securities
portfolio of each series of Pioneer which the Trustees may establish from time
to time (individually, a "Portfolio" and collectively, the "Portfolios"); and
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, Pioneer and the Underwriter do hereby agree as follows:
1. Pioneer does hereby grant to the Underwriter the right and option to
purchase shares of beneficial interest of each class of each Portfolio of
Pioneer (the "Shares") for sale to investors either directly or indirectly
through other broker-dealers. The Underwriter is not required to purchase any
specified number of Shares, but will purchase from Pioneer only a sufficient
number of Shares as may be necessary to fill unconditional orders received from
time to time by the Underwriter from investors and dealers.
2. The Underwriter shall offer Shares to the public at an offering
price based upon the net asset value of the Shares, to be calculated for each
<PAGE>
class of shares as described in the Registration Statement, including the
Prospectus, filed with the Commission and in effect at the time of the offering,
plus sales charges as approved by the Underwriter and the Trustees of Pioneer
and as further outlined in Pioneer's Prospectus. The offering price shall be
subject to any provisions set forth in the Prospectus from time to time with
respect thereto, including, without limitation, rights of accumulation, letters
of intention, exchangeability of shares, reinstatement privileges, net asset
value purchases by certain persons and reinvestments of dividends and capital
gain distributions.
3. In the case of all Shares sold to investors through other
broker-dealers, a portion of applicable sales charges will be reallowed to such
broker-dealers who are members of the NASD or, in the case of certain sales by
banks or certain sales to foreign nationals, to brokers or dealers exempt from
registration with the Commission. The concession reallowed to broker-dealers
shall be set forth in a written sales agreement and shall be generally the same
for broker-dealers providing comparable levels of sales and service.
4. This Agreement shall terminate on any anniversary hereof if its
terms and renewal have not been approved by a majority vote of the Trustees of
Pioneer voting in person, including a majority of its Trustees who are not
"interested persons" of the Trust and who have no direct or indirect financial
interest in the operation of the Underwriting Agreement (the "Qualified
Trustees"), at a meeting of Trustees called for the purpose of voting on such
approval. This Agreement may also be terminated at any time, without payment of
any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the
Underwriter upon similar notice to Pioneer. This Agreement may also be
terminated by a party upon five (5) days' written notice to the other party in
the event that the Commission has issued an order or obtained an injunction or
other court order suspending effectiveness of the Registration Statement
covering these Shares of Pioneer. Finally, this Agreement may also be terminated
by Pioneer upon five (5) days' written notice to the Underwriter provided either
of the following events has occurred: (i) the NASD has expelled the Underwriter
or suspended its membership in that organization; or (ii) the qualification,
registration, license or right of the Underwriter to sell Shares in a particular
state has been suspended or cancelled in a state in which sales of the Shares of
Pioneer during the most recent 12 month period exceeded 10% of all Shares of
Pioneer sold by the Underwriter during such period.
5. The compensation for the services of the Underwriter as a principal
underwriter under this Agreement shall be (i) that part of the sales charge
which is retained by the Underwriter after allowance of discounts to dealers as
-2-
<PAGE>
set forth in the Registration Statement, including the Prospectus, filed with
the Commission and in effect at the time of the offering, as amended, and (ii)
those amounts payable to the Underwriter as reimbursement of expenses pursuant
to any distribution plan for Pioneer which may be in effect. Nothing contained
herein shall relieve Pioneer of any obligation under its management contract or
any other contract with any affiliate of the Underwriter.
6. The parties to this Agreement acknowledge and agree that all
liabilities arising hereunder, whether direct or indirect, of any nature
whatsoever, including without limitation, liabilities arising in connection with
any agreement of Pioneer or its Trustees as set forth herein to indemnify any
party to this Agreement or any other person, if any, shall be satisfied out of
the assets of Pioneer and that no Trustee, officer or holder of shares of
beneficial interest of Pioneer shall be personally liable for any of the
foregoing liabilities. Pioneer's Agreement and Declaration of Trust, as amended
from time to time, is on file in the Office of the Secretary of State of the
State of Delaware. The Declaration of Trust describes in detail the respective
responsibilities and limitations on liability of the Trustees, officers, and
holders of Shares of beneficial interest.
7. This Agreement shall automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
8. In the event of any dispute between the parties, this Agreement
shall be construed according to the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their duly authorized officers and their seal to be hereto
affixed as of the day and year first above written.
ATTEST: PIONEER SMALL CAP FUND
- ---------------------------- ---------------------------
Joseph P. Barri John F. Cogan, Jr.
Secretary President
ATTEST: PIONEER FUNDS DISTRIBUTOR, INC.
- --------------------------- ---------------------------
Joseph P. Barri Robert L. Butler
Clerk President
PIONEER FUNDS DISTRIBUTOR, INC.
60 State Street
Boston, MA 02109
(617) 742-7825
FORM OF SALES AGREEMENT
Gentlemen:
Pioneer Funds Distributor, Inc. (PFD), acts as principal underwriter, as
defined in the Investment Company Act of 1940, for the registered investment
companies (the "Funds") listed on Appendix A attached (as amended from time to
time by PFD.) Acting as a principal, PFD offers to sell shares of the Funds
subject to the conditions set forth in this agreement and subsequent amendments
thereto.
1. Shares purchased from PFD for sale to the public shall be offered and
sold at the price or prices, and on the terms and conditions, set forth in the
currently effective prospectus of the Funds, as amended or supplemented from
time to time (the "Prospectus" or "Prospectuses"). In the sale of such shares to
the public you shall act as dealer for your own account or as agent for your
customer and in no transaction shall you have any authority to act or hold
yourself out as agent for PFD, any of the Funds, the Funds' Custodians, the
Funds' Transfer agent, or any other party, and nothing in this agreement shall
constitute you a partner, employee or agent of ours or give you any authority to
act for PFD. Neither PFD nor the funds shall be liable for any of your acts or
obligations as a broker-dealer under this agreement. Nothing herein shall be
construed to prohibit your acting as agent for one or both customers in the sale
of shares by one customer to another and charging such customer(s) a reasonable
commission.
2. Shares purchased from PFD for sale to the public shall be purchased
only to cover orders previously received by you from your customers. Shares
purchased for your own bona fide investment shall not be reoffered or sold
except to the applicable Fund or to PFD. PFD also agrees to purchase shares only
for investment or to cover orders received.
3. If you purchase shares from your customers, you agree to pay such
customers not less than the redemption price in effect on the date of purchase,
as defined in the prospectus of the applicable Fund. Sales of shares at prices
reflecting a discount, concession, commission or other reallowance shall be made
only to registered broker-dealers which are members of the National Association
of Securities Dealers Inc. (NASD) and who also have entered into sales
agreements with PFD.
4. Only unconditional orders for a designated number of shares or dollar
amount of investment shall be accepted. Procedures relating to handling orders
shall be conveyed to you from time to time. All orders are subject to acceptance
or rejection by PFD in our sole discretion.
5. If any shares sold to or through you under the terms of this agreement
are repurchased by PFD or by the issuer or are tendered for redemption within
seven business days after the date of our confirmation of the original purchase
by you, we both agree to pay to the Fund all commissions on such shares.
6. Sales by you to the public shall earn a commission computed as a
percentage of the applicable offering price and which varies with the size and
nature of each such purchase. The terms and conditions affecting the applicable
offering prices on shares sold with a front-end sales charge , including
features such as combined purchase, rights of accumulation, Letters of Intention
and net asset value purchases, are described in the prospectuses. The schedules
of commissions generally payable with respect to sales of the Funds are outlined
on Appendix A to this agreement. Commission checks for less than $1 will not be
issued.
PFD may, from time to time, offer additional commissions or bonuses on
sales by you or your representatives without otherwise revising this agreement.
Any such additional commissions or bonuses shall take effect in accordance with
the terms and conditions contained in written notification to you.
7. Remittance of the net amount due for shares purchased from PFD shall
be made payable to Pioneering Services Corporation (PSC) Agent for the
Underwriter, in New York or Boston funds, within three days of our confirmation
of sale to you, or within such shorter time as specified by the rules of the
NASD or of a registered clearing agent through which the transaction is settled.
Payments made to PSC should be sent to Post Office Box 9014, Boston, MA 02205
(or wired to an account designated by PSC), along with your transfer
instructions on the appropriate copy of our confirmation of sale to you. If such
payment is not received by PSC, we reserve the right to liquidate the shares
purchased for your account and risk. Promptly upon receipt of payment, shares
sold to you shall be deposited by PSC to an account on the books of the Fund(s)
in accordance with your instructions. Certificates will not be issued unless
specifically requested and we reserve the right to levy a charge for issuance of
certificates.
8. You represent that you are and, at the time of purchasing any shares
of the Funds, will be registered as a broker-dealer with the US. Securities and
Exchange Commission (SEC) or are exempt from such registration; if required to
be registered as a broker-dealer you are a member in good standing of the NASD;
you are qualified to act as a broker-dealer in the states or jurisdictions in
which you intend to offer shares of the Funds; you will abide by all applicable
federal and state statutes and the rules of the NASD; and when making sales to
citizens or residents of foreign countries, that you will abide by all
applicable laws and regulations of that country. Expulsion or suspension from
the NASD or revocation or suspension of SEC registration shall act as an
immediate cancellation of this agreement.
9. No person is authorized to make any representations concerning shares
of any of the Funds except those contained in the then current Prospectus or
Statement of Additional Information for such Fund. In purchasing shares from PFD
you shall rely solely on the representations contained in such Prospectuses and
Statements of Additional Information.
10. Additional copies of the current prospectuses, Statements of
Additional Information (SAI), and other literature will be supplied in
reasonable quantities upon request.
<PAGE>
11. We reserve the right in our discretion to suspend sales or withdraw
the offering of shares of any Fund entirely. Either party hereto has the right
to cancel this agreement upon five days' written notice to the other party. We
reserve the right to amend this agreement at any time and you agree that an
order to purchase shares of any one of the Funds placed by you after notice of
such amendment has been sent to you shall constitute your agreement to any such
amendment.
12. All written communications to PFD should be sent to the above address.
All written communications to you will be sent to your address listed below.
13. This agreement shall become effective upon receipt by us of your
acceptance hereof and supersedes any prior agreement between us with respect to
the sales of Shares of any of the Funds.
14. This agreement shall be construed in accordance with the laws of
Massachusetts. The parties hereby agree that all disputes between us of whatever
subject matter, whether existing on the date hereof or arising hereafter, shall
be submitted to arbitration in accordance with the then current Code of
Arbitration Procedure of the NASD, the Uniform Arbitration Act or similar rules.
Arbitration shall take place in the city of Boston, Massachusetts. Any decision
that shall be made in such arbitration shall be final and binding and shall have
the same force and effect as a judgment made in a court of competent
jurisdiction.
15. You appoint the transfer agent for each Fund as your agent to execute
the purchase transactions of Shares of such Fund in accordance with the terms
and provisions of any account, program, plan or service established or used by
your customers and to confirm each purchase to your customers on your behalf,
except as modified in writing by the transfer agent, and you guarantee to us and
the Fund the legal capacity of your customers so purchasing such Shares and any
other person in whose name the Shares are to be registered.
PIONEER FUNDS DISTRIBUTOR, INC.
Date:
By:________________________________
William A. Misata
Vice President
The undersigned hereby accepts the offer set forth in above letter.
By:__________________________________________________ firm
address1
address2
Title:________________________________________________ address3
<PAGE>
<TABLE>
<CAPTION>
APPENDIX A
CLASS A
Schedule 1
<S> <C> <C>
Pioneer Fund Pioneer Three Pioneer Equity-Income Fund
Pioneer II Pioneer Gold Shares Pioneer Growth Shares
Pioneer International Growth Fund Pioneer Europe Fund Pioneer Winthrop Real Estate
Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Investment Fund
Pioneer India Fund
</TABLE>
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 5.75 5.00%
$ 50,000 - 99,999.......... 4.50 4.00
100,000 - 249,999.......... 3.50 3.00
250,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 2
Pioneer Bond Fund Pioneer America Income Trust Pioneer Tax-Free Income Fund
Pioneer Income Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $100,000.......... 4.50 4.00%
$100,000 - 249,999.......... 3.50 3.00
250,000 - 499,000......... 2.50 2.00
500,000 - 999,999......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 3
Pioneer Massachusetts Double Pioneer New York Triple Pioneer California Double
Tax-Free Fund Tax-Free Fund Tax-Free Fund
Pioneer Intermediate Tax-Free Fund
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 3.50 3.00%
$ 50,000 - 99,999......... 3.00 2.50
100,000 - 499,999.......... 2.50 2.00
500,000 - 999,999.......... 2.00 1.75
1,000,000 or more .......... none a) see below
Schedule 4
Pioneer Short-Term Income Trust
Sales Charge
as % of Public Broker/Dealer
Purchase Amount Offering Price Commission
Less than $ 50,000.......... 2.50 2.00%
$ 50,000 - 99,999......... 2.00 1.75
100,000 - 249,999.......... 1.50 1.25
250,000 - 999,999.......... 1.00 1.00
1,000,000 or more .......... none a) see below
a) Purchases of $1 million or more, and certain group plans, are not subject to
an initial sales charge. PFD may pay a commission to broker-dealers who initiate
and are responsible for such purchases at the following rate: for funds listed
on schedules 3 and 4 above, .50 of 1% on purchases of $1 million to $5 million
and .10 of 1% on the excess over $5 million. For funds listed on shedules 1 and
2, the rate is as follows: 1% on the first $1 million invested, .50 of 1% on the
next $4 million and .10 of 1% on the excess over 5 million. A one-year prepaid
service fee is included in this commission. These commissions shall not be
payable if the purchaser is affiliated with the broker-dealer or if the purchase
represents the reinvestment of a redemption made during the previous 12 calendar
months. A contingent deferred sales charge will be payable on these investments
in the event of share redemption within 12 months following the share purchase,
at the rate of 1% on funds in schedules 1 and 2 ; and .50 of 1% on funds in
schedules 3 and 4, of the lesser of the value of the shares redeemed (exclusive
of reinvested dividend and capital gain distributions) or the total cost of such
shares. For additional information about the broker-dealer commission and
contingent deferred sales charge applicable to these transactions, refer to the
Fund's prospectus.
PLEASE RETAIN THIS COPY
<PAGE>
<TABLE>
<CAPTION>
Schedule 5
<S> <C> <C>
Pioneer Cash Reserves Fund Pioneer U.S. Government Money Fund Pioneer Tax-Free Money Fund
</TABLE>
No Load
CLASS B
Schedule 1 Schedule 2 Schedule 3
---------- ---------- ----------
Pioneer Equity Income Fund Pioneer Intermediate Pioneer Short-Term
Pioneer Bond Fund Tax-Free Fund Income Trust
Pioneer Capital Growth Fund
Pioneer Europe Fund
Pioneer Gold Share
Pioneer America Income Trust
Pioneer Emerging Markets Fund
Pioneer India Fund
Pioneer Cash Reserves Fund
Pioneer Growth Shares*
Pioneer Income Fund*
Pioneer Tax-Free Income Fund*
Broker/Dealer
Commission 4.00% 3.00% 2.00%
- ----------
Year Since
Purchase CDSC% CDSC% CDSC%
First 4.0 3.0 2.0
Second 4.0 3.0 2.0
Third 3.0 2.0 1.0
Fourth 3.0 1.0 none
Fifth 2.0 none none
Sixth 1.0 none To A Class
Seventh none To A Class
Eigth none
Ninth To A Class
b)Dealer Commission includes a first year service fee equal to 0.25% of the
amount invested in all Class B shares.
*Available May 1, 1995
INVESTMENT COMPANY SERVICE AGREEMENT
__________ __, 1995
Pioneer Small Cap Fund, a Delaware business trust with its
principal place of business at 60 State Street, Boston, Massachusetts 02109
("Customer") and Pioneering Services Corporation, a Massachusetts corporation
("PSC"), hereby agree as follows:
1. SERVICES TO BE PROVIDED BY PSC. During the term of this Agreement,
PSC will provide to each series of shares of beneficial interest (the "Series")
of Customer, which may be established, from time to time (the "Account"), with
the services described in Exhibits A, B, C and D (collectively, the "Exhibits")
that are attached hereto and incorporated herein by reference. It is understood
that PSC may subcontract any of such services to one or more firms designated by
PSC, provided that PSC (i) shall be solely responsible for all compensation
payable to any such firm and (ii) shall be liable to Customer for the acts or
omissions of any such firm to the same extent as PSC would be liable to Customer
with respect to any such act or omission hereunder.
2. EFFECTIVE DATE. This Agreement shall become effective on the date
hereof (the "Effective Date") and shall continue in effect until it is
terminated in accordance with Section 11 below.
3. DELIVERY, VERIFICATION AND RECEIPT FOR DATA AND ASSETS. Prior to the
Effective Date, Customer agrees to deliver to PSC all such documentation, data
and materials as PSC may reasonably prescribe to enable it to perform the
services contemplated by this Agreement. If PSC so requests, Customer agrees to
confirm the accuracy of any starting records of Customer's assets and accounts
produced from PSC's computer or held in other recording systems. In the event
Customer does not, prior to the Effective Date, comply fully with any of the
foregoing provisions of this Section 3, the date for commencement of PSC's
services hereunder may be postponed by PSC until such compliance has taken
place.
Customer shall, from time to time, while this Agreement is in
effect deliver all such materials and data as may be necessary or desirable to
enable PSC to perform its services hereunder, including without limitation,
those described in Section 12 hereof.
4. REPORTS AND MAINTENANCE OF RECORDS BY PSC. PSC will furnish to
Customer and to properly authorized auditors, examiners, distributors, dealers,
underwriters, salesmen, insurance companies, investors, and others designated by
Customer in writing, such books, any and all records and reports at such times
as are prescribed for each service in the Exhibits attached hereto. Customer
agrees to examine or to ask any other authorized recipient to examine each such
report or copy promptly and will report or cause to be reported any errors or
discrepancies therein of which Customer then has any knowledge. PSC may at its
option at any time, and shall forthwith upon Customer's demand, turn over to
Customer and cease to retain in PSC's files, any and all records and documents
created and maintained by PSC pursuant to this Agreement which are no longer
needed by PSC in the performance of its services or for its protection.
If not so turned over to Customer, such documents and reports
will be retained by PSC for six years from the year of creation, during the
first two of which the same will be in readily accessible form. At the end of
six years, such records and documents will be turned over to Customer by PSC
unless Customer authorizes their destruction.
5. PSC'S DUTY OF CARE. PSC shall at all time use reasonable care and
act in good faith in performing its duties hereunder. PSC shall incur no
liability to Customer in connection with its performance of services hereunder
except to the extent that it does not comply with the foregoing standards.
PSC shall at all times adhere to various procedures and
systems consistent with industry standards in order to safeguard Customer's
checks, records and other data from loss or damage attributable to fire or
theft. PSC shall maintain insurance adequate to protect against the costs of
reconstructing checks, records and other data in the event of such loss and
shall notify Customer in the event of a material adverse change in such
insurance coverage. In the event of damage or loss occurring to Customer's
records or data such that PSC is unable to meet the terms of this Agreement, PSC
shall transfer all records and data to a transfer agent of Customer's choosing
upon Customer's written authorization to do so.
Without limiting the generality of the foregoing, PSC shall
not be liable or responsible for delays or errors occurring by reason of
circumstances beyond its control including acts of civil, military or banking
authority, national emergencies, labor difficulties, fire, flood or other
catastrophes, acts of God, insurrection, war, riots, failure of transportation,
communication or power supply.
6. CONFIDENTIALITY. PSC will keep confidential all records and
information provided by Customer or by the shareholders of the Account to PSC,
except to the extent disclosures are required by this Agreement, are required by
the Customer's Prospectus and Statement of Additional Information, or are
required by a valid subpoena or warrant issued by a court of competent
jurisdiction or by a state or federal agency or governmental authority.
7. CUSTOMER INSPECTION. Upon reasonable notice, in writing signed by
Customer, PSC shall make available, during regular business hours, all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by Customer or Customer's agents, including reasonable
visitation by Customer or Customer's agents, including inspecting PSC's
operation facilities. PSC shall not be liable for injury to or responsible in
any way for the safety of any individual visiting PSC's facilities under the
authority of this section. Customer will keep confidential and will cause to
keep confidential all confidential information obtained by its employees or
agents or any other individual representing Customer while on PSC's premises.
Confidential information shall include (1) any information of whatever nature
regarding PSC's operations, security procedures, and data processing
capabilities, (2) financial information regarding PSC, its affiliates, or
subsidiaries, and (3) any information of whatever kind or description regarding
any customer of PSC, its affiliates or subsidiaries.
8. RELIANCE BY PSC ON INSTRUCTIONS AND ADVICE; INDEMNITY. PSC shall be
entitled to seek advice of Customer's legal counsel with respect to PSC's
responsibilities and duties hereunder and shall in no event be liable to
Customer for any action taken pursuant to such advice, except to the extent that
Customer's legal counsel determines in its sole discretion that the rendering of
advice to PSC would result in a conflict of interest.
Whenever PSC is authorized to take action hereunder pursuant
to proper instructions from Customer, PSC shall be entitled to rely upon any
certificate, letter or other instrument or telephone call reasonably believed by
PSC to be genuine and to have been properly made or signed by an officer or
other authorized agent of Customer, and shall be entitled to receive as
conclusive proof of any fact or matter required to be ascertained by it
hereunder a certificate signed by an officer of Customer or any other person
authorized by Customer's Board of Trustees.
Subject to the provisions of Section 13 of this Agreement,
Customer agrees to indemnify and hold PSC, its employees, agents and nominees
harmless from any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to PSC's action or non-action
upon information, instructions or requests given or made to PSC by Customer with
respect to the Account.
Notwithstanding the above, whenever Customer may be asked to
indemnify or hold PSC harmless, Customer shall be advised of all pertinent facts
arising from the situation in question. Additionally, PSC will use reasonable
care to identify and notify Customer promptly concerning any situation which
presents, actually or potentially, a claim for indemnification against Customer.
Customer shall have the option to defend PSC against any claim for which PSC is
entitled to indemnification from Customer under the terms hereof, and in the
event Customer so elects, it will notify PSC and, thereupon, Customer shall take
over complete defense of the claim and PSC shall sustain no further legal or
other expenses in such a situation for which indemnification shall be sought or
entitled. PSC may in no event confess any claim or make any compromise in any
case in which Customer will be asked to indemnify PSC except with Customer's
prior written consent.
9. MAINTENANCE OF DEPOSIT ACCOUNTS. PSC shall maintain on behalf of
Customer such deposit accounts as are necessary or desirable from time to time
to enable PSC to carry out the provisions of this Agreement.
10. COMPENSATION AND REIMBURSEMENT TO PSC. For the services rendered by
PSC under this Agreement, Customer agrees to pay an annual fee of $22.00 per
account to PSC, such fee to be payable in equal monthly installments. In
addition, Customer shall reimburse PSC monthly for out-of-pocket expenses such
as postage, forms, envelopes, checks, "outside" mailings, telephone line and
other charges, mailgrams, mail insurance on certificates and data processing
file recovery insurance.
11. TERMINATION. Either PSC or Customer may at any time terminate this
Agreement by giving 90 days' prior written notice to the other.
After the date of termination, for so long as PSC in fact
continues to perform any one or more of the services contemplated by this
Agreement or any exhibit hereto, the provisions of this Agreement, including
without limitation the provisions of Section 8 dealing with indemnification,
shall where applicable continue in full force and effect.
12. REQUIRED DOCUMENTS. Customer agrees to furnish to PSC prior to the
Effective Date the following (to the extent not previously provided):
A. Two (2) copies of the Agreement and Declaration of Trust of Customer,
and of any amendments thereto, certified by an officer of the
Customer.
B. Two (2) copies of the following documents, currently certified by the
Secretary of Customer:
a. Customer's By-laws and any amendment thereto.
b. Certified copies of resolutions of Customer's Board of Trustees
covering the following matters.
(1) Approval of this Agreement.
(2) Authorization of specified officers of Customer to instruct
PSC hereunder (if different from other officers of Customer
previously specified by Customer as to other Customer
accounts being serviced by PSC).
C. List of all officers of Customer together with specimen signatures of
those officers who are authorized to sign share certificates and to
instruct PSC in all other matters.
D. Two (2) copies of the following:
a. Prospectus
b. Statement of Additional Information
c. Management Agreement
d. Registration Statement
E. Opinion of counsel for Customer as to the due authorization by and
binding effect of this Agreement on Customer, the applicability of the
Securities Act of 1933, as amended, and the Investment Company Act of
1940, as amended, and the approval by such public authorities as may
be prerequisite to lawful sale and delivery in the various states.
F. Amendments to, and changes in, any of the foregoing forthwith upon
such amendments and changes being available, but in no case later than
the effective date.
13. INDEMNIFICATION. The parties to this Agreement acknowledge and
agree that all liabilities arising, directly or indirectly, under this
Agreement, of any and every nature whatsoever, including without limitation,
liabilities arising in connection with any agreement of Customer or its Trustees
set forth herein to indemnify any party to this Agreement or any other person,
shall be satisfied out of the assets of the Account first and then of Customer
and that no Trustee, officer or holder of shares of beneficial interest of
Customer shall be personally liable for any of the foregoing liabilities.
Customer's Agreement and Declaration of Trust, dated August 8, 1995, describes
in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of shares of beneficial interest of Customer.
14. LIMITATIONS ON EXCHANGES. PSC acknowledges that shareholders of
other Pioneer mutual funds may not open new accounts with Customer or purchase
shares of Customer by exchanging shares from other Pioneer mutual funds.
Shareholders of Customer may exchange their shares of Customer for shares of
other Pioneer mutual funds. Such shares, however, may not be exchanged back into
Customer. The foregoing exchange restriction shall be in effect until December
31, 1996, unless Customer notifies PSC otherwise.
15. MISCELLANEOUS. In connection with the operation of this Agreement,
PSC and Customer may agree from time to time on such provisions interpretive of
or in addition to the provisions of this Agreement as may in their joint opinion
be consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions are to be signed by both parties and annexed hereto, but
no such provision shall contravene any applicable Federal and state law or
regulation, and no such provision shall be deemed to be an amendment of this
Agreement.
This Agreement shall be construed in accordance with the laws
of The Commonwealth of Massachusetts.
<PAGE>
IN WITNESS WHEREOF, Customer and PSC have caused this
Agreement to be executed in their respective names by their respective officers
thereunto duly authorized as of the date first written above.
ATTEST: PIONEERING SERVICES CORPORATION
- -------------------------- -----------------------------
Joseph P. Barri, Clerk William H. Smith, Jr.
President
PIONEER SMALL CAP FUND
- -------------------------- -----------------------------
Joseph P. Barri, Secretary John F. Cogan, Jr.
President
<PAGE>
EXHIBIT A - TO INVESTMENT COMPANY SERVICE AGREEMENT
Shareholder Account Service:
As Servicing Agent for fund accounts and in accordance with the provisions of
the standard fund application and Customer's prospectus, PSC will:
1. Open, maintain and close accounts.
2. Purchase shares for the shareholder.
3. Out of the money received in payment for sales of Customer's
shares pay to the Customer's custodian the net asset value per
share and pay to the underwriter and to the dealer their
commission, if any, on a bimonthly basis.
4.Redeem shares by systematic withdrawal orders. (See Exhibit B)
5. Issue share certificates, upon instruction, resulting from
withdrawals from share accounts (It is the policy of PSC to issue
share certificates only upon request of the shareholder).
Maintain records showing name, address, certificate numbers and
number of shares.
6. Deposit certificates to shareholder accounts when furnished with
such documents as PSC deems necessary to authorize the deposit.
7. Reinvest or disburse dividends and other distributions upon
direction of shareholder.
8. Establish the proper registration of ownership of shares.
9. Pass upon the adequacy of documents submitted by a shareholder or
his legal representative to substantiate the transfer of
ownership of shares from the registered owner to transferees.
10. Make transfers from time to time upon the books of the Customer
in accordance with properly executed transfer instructions
furnished to PSC.
11. Upon receiving appropriate detailed instructions and written
materials prepared by Customer and, where applicable, proxy
<PAGE>
proofs checked by Customer, mail shareholder reports, proxies and
related materials of suitable design for automatic enclosing,
receive and tabulate executed proxies, and furnish an annual
meeting list of shareholders when required.
12. Respond to shareholder inquiries in a timely manner.
13. Maintain dealer and salesperson records.
14. Maintain and furnish to Customer such shareholder information as
Customer may reasonably request for the purpose of compliance by
Customer with the applicable tax and securities law of various
jurisdictions.
15. Mail confirmations of transactions to shareholders in a timely
fashion (confirmations of Automatic Investment Plan transactions
will be mailed quarterly).
16. Provide Customer with such information regarding correspondence
as well as enable Customer to comply with related N-SAR
requirements.
17. Maintain continuous proof of the outstanding shares of Customer.
18. Solicit taxpayer identification numbers.
19. Provide data to enable Customer to file abandoned property
reports for those accounts that have been indicated by the Post
Office to be not at the address of record with no forwarding
address.
20. Maintain bank accounts and reconcile same on a monthly basis.
21. Provide management information reports on a quarterly basis to
Customer's Board of Trustees/Directors outlining the level of
service provided.
22. Provide sale/statistical reporting for purposes of providing fund
management with information to maximizing the return to
shareholders.
<PAGE>
EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT
Redemption Service:
In accordance with the provisions of the Customer's Prospectus, as servicing
agent for the redemptions, PSC will:
1. Where applicable, establish accounts payable based on information
furnished to PSC on behalf of Customer (i.e., copies of trade
confirmations and other documents deemed necessary or desirable
by PSC on the first business day following the trade date).
2. Receive for redemption either:
a. Share certificates, supported by appropriate documentation;
or
b. Written or telephone authorization (where no share
certificates are issued).
3. Verify there are sufficient available shares in an account to
cover redemption requests.
4. Transfer the redeemed or repurchased shares to Customer's
treasury share account or, if applicable, cancel such shares for
retirement.
5. Pay the applicable redemption or repurchase price to the
shareholder in accordance with Customer's Prospectus and
Declaration of Trust on or before the seventh calendar day
succeeding any receipt of certificates or requests for redemption
or repurchase in "good order" as defined in the Prospectus.
6. Notify Customer and the underwriter on behalf of Customer of the
total number of shares presented and covered by such requests
within a reasonable period of time following receipt.
7. Promptly notify the shareholder if any such certificate or
request for redemption or repurchase is not in "good order"
together with notice of the documents required to comply with the
good order standards. Upon receipt of the necessary documents PSC
shall effect such redemption at the net asset value applicable at
the date and time of receipt of such documents.
8. Produce periodic reports of unsettled items, if any.
9. Adjust unsettled items, if any, relative to dividends and
distributions.
10. Report to Customer any late redemptions which must be included in
Customer's N-SAR.
<PAGE>
EXHIBIT C - TO INVESTMENT COMPANY SERVICE AGREEMENT
Exchange Service:
1. Receive and process exchanges in accordance with a duly executed
exchange authorization. PSC will redeem existing shares and use
the proceeds to purchase new shares. Shares of Customer purchased
directly or acquired through reinvestment of dividends on such
shares may be exchanged for shares of other Pioneer funds (which
funds have sales charges) only by payment of the applicable sales
charge, if any, as described in Customer's Prospectus. Shares of
Customer acquired by exchange and through reinvestment of
dividends on such shares may be re-exchanged to another Pioneer
fund at their respective net asset values.
2. Make authorized deductions of fees, if any.
3. Register new shares identically with the shares surrendered for
exchange. Mail new shares certificates, if requested, or an
account statement confirming the exchange by first class mail to
the address of record.
4. Maintain a record of unprocessed exchanges and produce a periodic
report.
<PAGE>
EXHIBIT D - TO INVESTMENT COMPANY SERVICE AGREEMENT
Income Accrual and Disbursing Service:
1. Distribute income dividends and/or capital gain distributions,
either through reinvestment or in cash, in accordance with
shareholder instructions.
2. On the mailing date, Customer shall make available to PSC
collected funds to make such distribution.
3. Adjust unsettled items relative to dividends and distribution.
4. Reconcile dividends and/or distributions with Customer.
5. Prepare and file annual Federal and State information returns of
distributions and, in the case of Federal returns, mail
information copies to shareholders and report and pay Federal
income taxes withheld from distributions made to non-resident
aliens.
October 30, 1995
Pioneer Small Company Fund
60 State Street
Boston, Massachusetts 02109
Re: Pioneer Small Company Fund
Ladies and Gentlemen:
We have acted as special Delaware counsel to Pioneer Small Company
Fund (formerly named Pioneer Small Cap Fund), a Delaware business trust (the
"Trust"), in connection with certain matters relating to the issuance of Shares
of beneficial interest in the Trust. Capitalized terms used herein and not
otherwise herein defined are used as defined in the Agreement and Declaration of
Trust of the Trust dated August 8, 1995 (the "Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents, each in the form provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "Recording Office") on August 8, 1995 (the "Certificate"), as amended by a
Certificate of Amendment to Certificate of Trust as filed in the Recording
Office on October 10, 1995; the Governing Instrument; the By-laws of the Trust;
certain resolutions of the Trustees of the Trust; the Trust's Notification of
Registration Filed Pursuant to Section 8(a) of the Investment Company Act of
1940 on Form N-8A as filed with the Securities and Exchange Commission on August
16, 1995; the Trust's Registration Statement on Form N-1A as filed with the
Securities and Exchange Commission on August 16, 1995 (the "Registration
Statement"); and a certification of good standing of the Trust obtained as of a
recent date from the Recording Office. In such examinations, we have assumed the
genuineness of all signatures, the conformity to original documents of all
documents submitted to us as copies or drafts of documents to be executed, and
the legal capacity of natural persons to complete the execution of documents. We
have further assumed for the purpose of this opinion: (i) the due authorization,
<PAGE>
Pioneer Small Company Fund
October 30, 1995
Page 2
execution and delivery by, or on behalf of, each of the parties thereto of the
above-referenced instruments, certificates and other documents, and of all
documents contemplated by the Governing Instrument, the By-laws and applicable
resolutions of the Trustees to be executed by investors desiring to become
Shareholders; (ii) the payment of consideration for Shares, and the application
of such consideration, as provided in the Governing Instrument, and compliance
with the other terms, conditions and restrictions set forth in the Governing
Instrument and all applicable resolutions of the Trustees of the Trust in
connection with the issuance of Shares (including, without limitation, the
taking of all appropriate action by the Trustees to designate Series of Shares
and the rights and preferences attributable thereto as contemplated by the
Governing Instrument); (iii) that appropriate notation of the names and
addresses of, the number of Shares held by, and the consideration paid by,
Shareholders will be maintained in the appropriate registers and other books and
records of the Trust in connection with the issuance, redemption or transfer of
Shares; (iv) that no event has occurred subsequent to the filing of the
Certificate that would cause a termination or reorganization of the Trust under
Section 4 or Section 5 of Article IX of the Governing Instrument; (v) that the
activities of the Trust have been and will be conducted in accordance with the
terms of the Governing Instrument and the Delaware Business Trust Act, 12 Del.
C. ss.ss. 3801 et seq. (the "Delaware Act"); and (vi) that each of the documents
examined by us is in full force and effect and has not been modified,
supplemented or otherwise amended. No opinion is expressed herein with respect
to the requirements of, or compliance with, federal or state securities or blue
sky laws. Further, we express no opinion on the sufficiency or accuracy of any
registration or offering documentation relating to the Trust or the Shares. As
to any facts material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects
to matters of Delaware law, it is our opinion that:
1. The Trust is a duly organized and validly existing business trust
in good standing under the laws of the State of Delaware.
2. The Shares, when issued to Shareholders in accordance with the
terms, conditions, requirements and procedures set forth in the Governing
Instrument, will constitute legally issued, fully paid and non-assessable Shares
of beneficial interest in the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each Shareholder of the Trust, in such capacity, will be entitled to the same
<PAGE>
Pioneer Small Company Fund
October 30, 1995
Page 3
limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the general corporation law of
the State of Delaware; provided, however, that we express no opinion with
respect to the liability of any Shareholder who is, was or may become a named
Trustee of the Trust. Neither the existence nor exercise of the voting rights
granted to Shareholders under the Governing Instrument will, of itself, cause a
Shareholder to be deemed a trustee of the Trust under the Delaware Act.
Notwithstanding the foregoing or the opinion expressed in paragraph 2 above, we
note that, pursuant to Section 2 of Article VIII of the Governing Instrument,
the Trustees have the power to cause Shareholders, or Shareholders of a
particular Series, to pay certain custodian, transfer, servicing or similar
agent charges by setting off the same against declared but unpaid dividends or
by reducing Share ownership (or by both means).
We understand that the Trust is currently in the process of
registering or qualifying Shares in various states, and we hereby consent to the
filing of a copy of this opinion with the securities administrators of such
states and with the Securities and Exchange Commission as part of a
pre-effective amendment to the Trust's Registration Statement. In giving this
consent, we do not thereby admit that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder. Except as provided in this paragraph, the opinion set forth above is
expressed solely for the benefit of the addressee hereof and may not be relied
upon by, or filed with, any other person or entity for any purpose without our
prior written consent.
Sincerely,
/S/MORRIS, NICHOLS, ARSHT & TUNNELL
MORRIS, NICHOLS, ARSHT & TUNNELL
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated November 1, 1995 (and to all references to our firm) included in or made a
part of the Pioneer Small Company Fund Pre-Effective Amendment No. 1 to
Registration Statement File No. 33-61869 and Amendment No. 1 to Registration
Statement File No. 811-7339.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 1, 1995
FORM OF SHARE PURCHASE AGREEMENT
This Agreement is made as of the _____ day of , 1995 between The
Pioneer Group, Inc., a Delaware corporation ("PGI"), and Pioneer Small Cap Fund,
a Delaware business trust (the "Fund").
WHEREAS, the Fund wishes to sell to PGI, and PGI wishes to purchase
from the Fund, $100,000 of shares of beneficial interest of the Fund ( shares)
at a purchase price of $ per share (collectively, the "Shares"); and
WHEREAS, PGI is purchasing the Shares for the purpose of providing the
initial capitalization of the Fund as required by the Investment Company Act of
1940;
NOW, THEREFORE, the parties hereto agree as follows:
1. Simultaneously with the execution of this Agreement, PGI is
delivering to the Fund a check in the amount of $100,000 in full payment for the
Shares.
2. PGI agrees that it is purchasing the Shares for investment and has
no present intention of redeeming or reselling the Shares.
3. PGI further agrees that it may not withdraw the Shares from the Fund
at a rate, which at any time during the Fund's first five years of operations,
exceeds in the aggregate $1,666.67 per month.
Executed as of the date first set forth above.
THE PIONEER GROUP, INC.
John F. Cogan, Jr.
President
PIONEER SMALL CAP FUND
Joseph P. Barri
Secretary
CLASS A SHARES DISTRIBUTION PLAN
PIONEER SMALL CAP FUND
CLASS A SHARES DISTRIBUTION PLAN, dated as of ____ __, 1995, of PIONEER
SMALL CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class A Shares") of each series of the Trust ("Portfolio") in accordance
with Rule 12b-1 promulgated by the Securities and Exchange Commission under the
1940 Act ("Rule 12b-1"), and desires to adopt this Class A distribution plan
(the "Class A Plan") as a plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Funds Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class A Shares in connection with the Class A Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
A Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class A Shares in connection with the
offering of Class A Shares, (b) PFD may compensate any Dealer that sells Class A
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class A
Shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class A Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class A Plan, has evaluated such
information as it deemed necessary to an informed determination whether this
Class A Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class A Plan will
benefit the Trust and its Class A shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class A Plan for the Trust as a plan of distribution of Class A Shares in
accordance with Rule 12b-1, on the following terms and conditions:
1. The Trust may expend pursuant to this Class A Plan amounts not to
exceed 0.25% of the average daily net assets attributable to Class A Shares of
each Portfolio per annum.
2. Subject to the limit in paragraph 1, the Trust shall reimburse PFD
for amounts expended by PFD to finance any activity which is primarily intended
to result in the sale of Class A Shares of the Trust or the provision of
services to Class A shareholders of the Trust, including but not limited to
commissions or other payments to Dealers and salaries and other expenses of PFD
relating to selling or servicing efforts, provided, that the Board of Trustees
of the Trust shall approve categories of expenses for which reimbursement shall
be made pursuant to this paragraph 2 and, without limiting the generality of the
foregoing, the initial categories of such expenses shall be (i) a service fee to
be paid to qualified broker-dealers in an amount not to exceed 0.25% per annum
of each Portfolio's daily net assets attributable to Class A Shares; (ii)
reimbursement to PFD for its expenditures for broker-dealer commissions and
employee compensation on certain sales of the Trust's Class A Shares with no
initial sales charge; and (iii) reimbursement to PFD for expenses incurred in
providing services to Class A shareholders and supporting broker-dealers and
other organizations, such as banks and trust companies, in their efforts to
provide such services (any addition of such categories shall be subject to the
approval of the Qualified Trustees, as defined below, of the Trust). Such
reimbursement shall be paid ten (10) days after the end of the month or quarter,
as the case may be, in which such expenses are incurred. The Trust acknowledges
that PFD will charge an initial sales load or a contingent sales load in
connection with certain sales of Class A Shares of the Trust and that PFD will
reallow to Dealers all or a portion of such sales loads, as described in the
Trust's Prospectus from time to time. Nothing contained herein is intended to
have any effect whatsoever on PFD's ability to charge any such sales loads or to
reallow all or any portion thereof to Dealers.
3. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class A
Shares and the provision of services to Class A shareholders of the Trust.
Nothing in this Class A Plan shall be construed as requiring the Trust to make
any payment to any Dealer or to have any obligations to any Dealer in connection
with services as a dealer of the Class A Shares. PFD shall agree and undertake
that any agreement entered into between PFD and any Dealer shall provide that
such Dealer shall look solely to PFD for compensation for its services
thereunder and that in no event shall such Dealer seek any payment from the
Trust.
4. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust or By-Laws or any
applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of the
responsibility for and control of the conduct of the affairs of the Trust.
5. This Class A Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class A of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class A Plan or in any agreement
related to the Class A Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class A Plan.
6. This Class A Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class A Plan shall
expire on _______ __, 199_. This Class A Plan shall automatically terminate upon
assignment. In the event of termination or non-continuance of this Class A Plan,
each Portfolio has twelve months to reimburse any expense which it incurs prior
to such termination or non-continuance, provided that payments by such Portfolio
during such twelve-month period shall not exceed 0.25% of each Portfolio's
average daily net assets attributable to Class A Shares during such period.
7. This Class A Plan may be amended at any time by the Board of
Trustees, provided that this Class A Plan may not be amended to increase
materially the limitation on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class A of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. Any amendment of this Class A Plan to increase or modify the
expense categories initially designated by the Trustees in paragraph 2 above
shall only require approval of a majority of the Trustees and the Qualified
Trustees if such amendment does not include an increase in the expense
limitation set forth in paragraph 1 above. This Class A Plan may be terminated
at any time by a vote of a majority of the Qualified Trustees or by a vote of
the holders of a "majority of the outstanding voting securities" of the Trust.
8. In the event of termination or expiration of this Class A Plan, the
Trust may nevertheless, within twelve months of such termination or expiration
reimburse any expense which it incurs prior to such termination or expiration,
provided that payments by the Trust during such twelve-month period shall not
exceed 0.25% of the Trust's average daily net assets attributable to Class A
Shares during such period and provided further that such payments are
specifically approved by the Board of Trustees, including a majority of the
Qualified Trustees.
9. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class A Plan and the purposes for which such
expenditures were made.
10. While this Class A Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.
11. For the purposes of this Class A Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
12. The Trust shall preserve copies of this Class A Plan, and each
agreement related hereto and each report referred to in paragraph 9 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
13. This Class A Plan shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts and the applicable provisions
of the 1940 Act.
14. If any provision of this Class A Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Plan shall
not be affected thereby.
CLASS B SHARES DISTRIBUTION PLAN
PIONEER SMALL CAP FUND
CLASS B SHARES DISTRIBUTION PLAN, dated as of _______, 1995 of PIONEER
SMALL CAP FUND, a Delaware business trust (the "Trust").
WITNESSETH
WHEREAS, the Trust is engaged in business as an open-end, diversified,
management investment company and is registered under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder, the "1940 Act");
WHEREAS, the Trust intends to distribute shares of beneficial interest
(the "Class B Shares") of the Trust in accordance with Rule 12b-1 promulgated by
the Securities and Exchange Commission under the 1940 Act ("Rule 12b-1"), and
desires to adopt this Class B Shares distribution plan (the "Class B Plan") as a
plan of distribution pursuant to such Rule;
WHEREAS, the Trust desires that Pioneer Trusts Distributor, Inc., a
Massachusetts corporation ("PFD"), provide certain distribution services for the
Trust's Class B Shares in connection with the Class B Plan;
WHEREAS, the Trust has entered into an underwriting agreement (in a
form approved by the Trust's Board of Trustees in a manner specified in such
Rule 12b-1) with PFD, whereby PFD provides facilities and personnel and renders
services to the Trust in connection with the offering and distribution of Class
B Shares (the "Underwriting Agreement");
WHEREAS, the Trust also recognizes and agrees that (a) PFD may retain
the services of firms or individuals to act as dealers or wholesalers
(collectively, the "Dealers") of the Class B Shares in connection with the
offering of Class B Shares, (b) PFD may compensate any Dealer that sells Class B
Shares in the manner and at the rate or rates to be set forth in an agreement
between PFD and such Dealer and (c) PFD may make such payments to the Dealers
for distribution services out of the fee paid to PFD hereunder, any deferred
sales charges imposed by PFD in connection with the repurchase of Class B
shares, its profits or any other source available to it;
WHEREAS, the Trust recognizes and agrees that PFD may impose certain
deferred sales charges in connection with the repurchase of Class B Shares by
the Trust, and PFD may retain (or receive from the Trust, as the case may be)
all such deferred sales charges; and
WHEREAS, the Board of Trustees of the Trust, in considering whether the
Trust should adopt and implement this Class B Plan, has evaluated such
<PAGE>
information as it deemed necessary to an informed determination whether this
Class B Plan should be adopted and implemented and has considered such pertinent
factors as it deemed necessary to form the basis for a decision to use assets of
the Trust for such purposes, and has determined that there is a reasonable
likelihood that the adoption and implementation of this Class B Plan will
benefit the Trust and its Class B shareholders;
NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this
Class B Plan for the Trust as a plan of distribution of Class B Shares in
accordance with Rule 12b-1, on the following terms and conditions:
1. (a) The Trust is authorized to compensate PFD for (1) distribution
services and (2) personal and account maintenance services performed
and expenses incurred by PFD in connection with the Trust's Class B
Shares. Such compensation shall be calculated and accrued daily and
paid monthly or at such other intervals as the Board of Trustees may
determine.
(b) The amount of compensation paid during any one year for
distribution services with respect to Class B Shares shall be .75% of
the Trust's average daily net assets attributable to Class B Shares
for such year.
(c) Distribution services and expenses for which PFD may be
compensated pursuant to this Plan include, without limitation:
compensation to and expenses (including allocable overhead, travel and
telephone expenses) of (i) Dealers, brokers and other dealers who are
members of the National Association of Securities Dealers, Inc.
("NASD") or their officers, sales representatives and employees, (ii)
PFD and any of its affiliates and any of their respective officers,
sales representatives and employees, (iii) banks and their officers,
sales representatives and employees, who engage in or support
distribution of the Trust's Class B Shares; printing of reports and
prospectuses for other than existing shareholders; and preparation,
printing and distribution of sales literature and advertising
materials.
(d) The amount of compensation paid during any one year for
personal and account maintenance services and expenses shall be .25%
of the Trust's average daily net assets attributable to Class B Shares
for such year. As partial consideration for personal services and/or
account maintenance services provided by PFD to the Class B Shares,
PFD shall be entitled to be paid any fees payable under this clause
(d) with respect to Class B Shares for which no dealer of record
<PAGE>
exists, where less than all consideration has been paid to a dealer of
record or where qualification standards have not been met.
(e) Personal and account maintenance services for which PFD or
any of its affiliates, banks or Dealers may be compensated pursuant to
this Plan include, without limitation: payments made to or on account
of PFD or any of its affiliates, banks, other brokers and dealers who
are members of the NASD, or their officers, sales representatives and
employees, who respond to inquiries of, and furnish assistance to,
shareholders regarding their ownership of Class B Shares or their
accounts or who provide similar services not otherwise provided by or
on behalf of the Trust.
(f) PFD may impose certain deferred sales charges in connection
with the repurchase of Class B Shares by the Trust and PFD may retain
(or receive from the Trust as the case may be) all such deferred sales
charges.
(g) Appropriate adjustments to payments made pursuant to clauses
(b) and (d) of this paragraph 1 shall be made whenever necessary to
ensure that no payment is made by the Trust in excess of the
applicable maximum cap imposed on asset based, front-end and deferred
sales charges by subsection (d) of Section 26 of Article III of the
Rules of Fair Practice of the NASD.
2. The Trust understands that agreements between PFD and Dealers may
provide for payment of fees to Dealers in connection with the sale of Class B
Shares and the provision of services to shareholders of the Trust. Nothing in
this Class B Plan shall be construed as requiring the Trust to make any payment
to any Dealer or to have any obligations to any Dealer in connection with
services as a dealer of the Class B Shares. PFD shall agree and undertake that
any agreement entered into between PFD and any Dealer shall provide that such
Dealer shall look solely to PFD for compensation for its services thereunder and
that in no event shall such Dealer seek any payment from the Trust.
3. Nothing herein contained shall be deemed to require the Trust to
take any action contrary to its Declaration of Trust, as it may be amended or
restated from time to time, or By-Laws or any applicable statutory or regulatory
requirement to which it is subject or by which it is bound, or to relieve or
deprive the Trust's Board of Trustees of the responsibility for and control of
the conduct of the affairs of the Trust.
4. This Class B Plan shall become effective upon approval by (i) a
"majority of the outstanding voting securities" of Class B of the Trust, (ii) a
vote of the Board of Trustees, and (iii) a vote of a majority of the Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Class B Plan or in any agreements
related to the Class B Plan (the "Qualified Trustees"), such votes with respect
to (ii) and (iii) above to be cast in person at a meeting called for the purpose
of voting on this Class B Plan.
5. This Class B Plan will remain in effect indefinitely, provided that
such continuance is "specifically approved at least annually" by a vote of both
a majority of the Trustees of the Trust and a majority of the Qualified
Trustees. If such annual approval is not obtained, this Class B Plan shall
expire on ________ __, 199_.
6. This Class B Plan may be amended at any time by the Board of
Trustees, provided that this Class B Plan may not be amended to increase
materially the limitations on the annual percentage of average net assets which
may be expended hereunder without the approval of holders of a "majority of the
outstanding voting securities" of Class B of the Trust and may not be materially
amended in any case without a vote of a majority of both the Trustees and the
Qualified Trustees. This Class B Plan may be terminated at any time by a vote of
a majority of the Qualified Trustees or by a vote of the holders of a "majority
of the outstanding voting securities" of Class B of the Trust.
7. The Trust and PFD shall provide to the Trust's Board of Trustees,
and the Board of Trustees shall review, at least quarterly, a written report of
the amounts expended under this Class B Plan and the purposes for which such
expenditures were made.
8. While this Class B Plan is in effect, the selection and nomination
of Qualified Trustees shall be committed to the discretion of the Trustees who
are not "interested persons" of the Trust.
9. For the purposes of this Class B Plan, the terms "assignment,"
"interested persons," "majority of the outstanding voting securities" and
"specifically approved at least annually" are used as defined in the 1940 Act.
10. The Trust shall preserve copies of this Class B Plan, and each
agreement related hereto and each report referred to in Paragraph 7 hereof
(collectively, the "Records"), for a period of not less than six (6) years from
the end of the fiscal year in which such Records were made and, for a period of
two (2) years, each of such Records shall be kept in an easily accessible place.
11. This Class B Plan shall be construed in accordance with the laws of
The Commonwealth of Massachusetts and the applicable provisions of the 1940 Act.
12. If any provision of this Class B Plan shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the Class B
Plan shall not be affected thereby.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000949275
<NAME> Pioneer Small Company Fund
<SERIES>
<NUMBER> 001
<NAME> none
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<CURRENCY> U. S .Dollars
<PERIOD-TYPE> other
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> NOV-01-1995
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 193,914
<TOTAL-ASSETS> 193,914
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 93,914
<TOTAL-LIABILITIES> 93,914
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100,000
<SHARES-COMMON-STOCK> 5,000
<SHARES-COMMON-PRIOR> 0
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<DIVIDEND-INCOME> 0
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<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB-NII-PRIOR> 0
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<PER-SHARE-NAV-BEGIN> 0
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<CIK> 0000949275
<NAME> Pioneer Small Company Fund
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<NAME> none
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Pioneer Small Company Fund
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares and Class B Shares
, 1995
Each class of shares of Pioneer Small Company Fund (the "Fund") will have
the same relative rights and privileges and be subject to the same sales
charges, fees and expenses, except as set forth below. The Board of Trustees may
determine in the future that other distribution arrangements, allocations of
expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Plan accordingly without the
approval of shareholders of any class. Except as set forth in the Fund's
prospectus, shares may be exchanged only for shares of the same class of another
Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value and subject to the initial sales
charge schedule or contingent deferred sales charge ("CDSC") and minimum
purchase requirements as set forth in the Fund's prospectus. Class A Shares
shall be entitled to the shareholder services set forth from time to time in the
Fund's prospectus with respect to Class A Shares. Class A Shares are subject to
fees calculated as a stated percentage of the net assets attributable to Class A
Shares under the Fund's Class A Rule 12b-1 Distribution Plan as set forth in
such Distribution Plan. The Class A Shareholders have exclusive voting rights,
if any, with respect to the Class A Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class A Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the
Internal Revenue Service ("IRS") relating to the issuance of multiple classes of
shares. Class A Shares shall bear the costs and expenses associated with
conducting a shareholder meeting for matters relating to Class A Shares.
Article II. Class B Shares
Class B Shares are sold at net asset value per share without the imposition
of an initial sales charge. However, Class B Shares redeemed within a specified
number of years of purchase will be subject to a CDSC as set forth in the Fund's
prospectus. Class B Shares are sold subject to the minimum purchase requirements
<PAGE>
set forth in the Fund's prospectus. Class B Shares shall be entitled to the
shareholder services set forth from time to time in the Fund's prospectus with
respect to Class B Shares. Class B Shares are subject to fees calculated as a
stated percentage of the net assets attributable to Class B shares under the
Class B Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The
Class B Shareholders of the Fund have exclusive voting rights, if any, with
respect to the Fund's Class B Rule 12b-1 Distribution Plan. Transfer agency fees
are allocated to Class B Shares on a per account basis except to the extent, if
any, such an allocation would cause the Fund to fail to satisfy any requirement
necessary to obtain or rely on a private letter ruling from the IRS relating to
the issuance of multiple classes of shares. Class B Shares shall bear the costs
and expenses associated with conducting a shareholder meeting for matters
relating to Class B Shares.
Class B Shares will automatically convert to Class A Shares of the Fund at
the end of a specified number of years after the initial purchase date of Class
B Shares, except as provided in the Fund's prospectus. Such conversion will
occur at the relative net asset value per share of each class without the
imposition of any sales charge, fee or other charge. The conversion of Class B
Shares to Class A Shares may be suspended if it is determined that the
conversion constitutes or is likely to constitute a taxable event under federal
income tax law.
The initial purchase date for Class B Shares acquired through (i)
reinvestment of dividends on Class B Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class B
Shares were purchased.
Article III. Approval by Board of Trustees
This Plan shall not take effect until it has been approved by the vote of a
majority (or whatever greater percentage may, from time to time, be required
under Rule 18f-3 under the Investment Company Act of 1940, as amended (the
"Act")) of (a) all of the Trustees of the Fund, and (b) those of the Trustees
who are not "interested persons" of the Fund, as such term may be from time to
time defined under the Act.
Article IV. Amendments
No material amendment to the Plan shall be effective unless it is approved
by the Board of Trustees in the same manner as is provided for approval of this
Plan in Article III.
POWER OF ATTORNEY
We, the undersigned Trustees of Pioneer Small Cap Fund, a Delaware
business trust, do hereby severally constitute and appoint John F. Cogan, Jr.,
David D. Tripple, and Joseph P. Barri, and each of them acting singly, to be our
true, sufficient and lawful attorneys, with full power to each of them, and each
of them acting singly, to sign for each of us, in the name of each of us and in
the capacity as trustee, any and all amendments to the Registration Statement on
Form N-1A to be filed by Pioneer Small Cap Fund under the Investment Company Act
of 1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), with respect to the offering of its shares of
beneficial interest and any and all other documents and papers relating thereto,
and generally to do all such things in the name of each of us and on behalf of
each of us in the capacity as trustee to enable Pioneer Small Cap Fund to comply
with the 1940 Act and the 1933 Act, and all requirements of the Securities and
Exchange Commission thereunder, hereby ratifying and confirming the signature of
each of us as it may be signed by said attorneys or each of them to any and all
amendments to said Registration Statement.
IN WITNESS WHEREOF, we have hereunder set our hands on this Instrument
the ____ day of September, 1995.
- ------------------------------ ----------------------------
John W. Kendrick, Trustee Marguerite A. Piret, Trustee
- ------------------------------ ----------------------------
Richard H. Egdahl, M.D., Stephen K. West, Trustee
Trustee
- ------------------------------ ----------------------------
Margaret B.W. Graham, Trustee John Winthrop, Trustee
<PAGE>
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer Small Cap Fund, a
Delaware business trust, does hereby severally constitute and appoint David D.
Tripple and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Small Cap Fund under the Investment Company Act of 1940, as
amended (the "1940 Act"), and under the Securities Act of 1933, as amended (the
"1933 Act"), with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to do
all such things in my name and on my behalf in the capacities indicated to
enable Pioneer Small Cap Fund to comply with the 1940 Act and the 1933 Act, and
all requirements of the Securities and Exchange Commission thereunder, hereby
ratifying and confirming my signature as it may be signed by said attorneys or
each of them to any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of September, 1995.
John F. Cogan, Jr.,
Chairman, Trustee and President
<PAGE>
POWER OF ATTORNEY
The undersigned officer and Trustee of Pioneer Small Cap Fund, a
Delaware business trust, does hereby severally constitute and appoint John F.
Cogan, Jr. and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Small Cap Fund under the Investment Company Act of 1940, as
amended (the "1940 Act"), and under the Securities Act of 1933, as amended (the
"1933 Act"), with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to do
all such things in my name and on my behalf in the capacities indicated to
enable Pioneer Small Cap Fund to comply with the 1940 Act and the 1933 Act, and
all requirements of the Securities and Exchange Commission thereunder, hereby
ratifying and confirming my signature as it may be signed by said attorneys or
each of them to any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
____ day of September, 1995.
David D. Tripple, Trustee
and Executive Vice President
<PAGE>
POWER OF ATTORNEY
The undersigned officer of Pioneer Small Cap Fund, a Delaware business
trust, does hereby severally constitute and appoint John F. Cogan, Jr., David D.
Tripple and Joseph P. Barri, and each of them acting singly, to be my true,
sufficient and lawful attorneys, with full power to each of them, and each of
them acting singly, to sign for me, in my name and in the capacities indicated
below, any and all amendments to the Registration Statement on Form N-1A to be
filed by Pioneer Small Cap Fund under the Investment Company Act of 1940, as
amended (the "1940 Act"), and under the Securities Act of 1933, as amended (the
"1933 Act"), with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to do
all such things in my name and on my behalf in the capacities indicated to
enable Pioneer Small Cap Fund to comply with the 1940 Act and the 1933 Act, and
all requirements of the Securities and Exchange Commission thereunder, hereby
ratifying and confirming my signature as it may be signed by said attorneys or
each of them to any and all amendments to said Registration Statement.
IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument the
15th day of September, 1995.
/s/ William H. Keough
William H. Keough
Treasurer
