-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B4/sfVVHl6ogEUbLLzetIJOpVAC9EJD+rAL/Vtts4Gys3GU3F+MakYcSyzmVeNZ3 QS8wMAsvgZGUAAEy2r1Tqw== 0000276776-99-000013.txt : 19990517 0000276776-99-000013.hdr.sgml : 19990517 ACCESSION NUMBER: 0000276776-99-000013 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 20 FILED AS OF DATE: 19990514 EFFECTIVENESS DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER BOND FUND /MA/ CENTRAL INDEX KEY: 0000276776 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042652279 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 002-62436 FILM NUMBER: 99622078 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: SEC FILE NUMBER: 811-02864 FILM NUMBER: 99622079 BUSINESS ADDRESS: STREET 1: 60 STATE ST 19TH FL CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6177427825 MAIL ADDRESS: STREET 1: 60 STATE ST STREET 2: 19TH FLOOR CITY: BOSTON STATE: MA ZIP: 02109-1820 485BPOS 1 PIONEER BOND FUND File Nos. 2-62436 811-02864 As Filed with the Securities and Exchange Commission on May 14, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X / Pre-Effective Amendment No. ___ /____/ Post-Effective Amendment No. 28 / X / and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X / Amendment No. 27 / X / (Check appropriate box or boxes) PIONEER BOND FUND (Exact name of registrant as specified in charter) 60 State Street, Boston, Massachusetts 02109 (Address of principal executive office) Zip Code Registrant's Telephone Number, including Area Code: (617) 742-7825 Joseph P. Barri, Hale and Dorr LLP, 60 State Street, Boston, MA 02109 (Name and address of agent for service) It is proposed that this filing will become effective (check appropriate box) ___ immediately upon filing pursuant to paragraph (b) _X_ on May 17, 1999 pursuant to paragraph (b) ___ 60 days after filing pursuant to paragraph (a)(1) ___ on [date] pursuant to paragraph (a)(1) ___ 75 days after filing pursuant to paragraph (a)(2) ___ on [date] pursuant to paragraph (a)(2) EXPLANATORY NOTE This Post-Effective Amendment No. 28 (the "Amendment") to the Registration Statement on Form N-1A (File Nos. 2-62436 and 811-02864) (the "Registration Statement") of Pioneer Bond Fund, a Massachusetts business trust (the "Massachusetts Trust"), is being filed by Pioneer Bond Fund, a Delaware business trust (the "Delaware Trust"), pursuant to Rule 414(d) and Rule 485(b) under the Securities Act of 1933, as amended, for the purpose of the Delaware Trust's adoption of the Registration Statement of the Massachusetts Trust. The Delaware Trust is requesting that the Amendment become effective on May 17, 1999, which is the same day that the Massachusetts Trust's reorganization into the Delaware Trust becomes effective. The reorganization was approved by the shareholders of the Massachusetts Trust at a special meeting of shareholders held on May 4, 1999. The Delaware Trust hereby affirmatively adopts the Registration Statement of the Massachusetts Trust, effective as of May 17, 1999. [Pioneer logo] Pioneer Bond Fund Class A, Class B and Class C Shares Prospectus, May 17, 1999 Neither the Securities and Exchange Commission nor any state securities agency has approved the fund's shares as an investment or determined whether this prospectus is accurate or complete. Any representation to the contrary is a crime. Table of contents Basic information about the fund 1 Management 7 Buying, exchanging and selling shares 9 Dividends, capital gains and taxes 27 Financial highlights 28 BASIC INFORMATION ABOUT THE FUND INVESTMENT OBJECTIVE To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. INVESTMENT STRATEGIES The fund invests primarily in: [square bullet] debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, [square bullet] debt securities, including convertible debt securities, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, [square bullet] cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, zero coupon, contingent, deferred and payment in kind and auction rate features. The fund may invest and has in the past invested in securities with a broad range of maturities and maintains an average portfolio maturity which varies based upon the judgement of Pioneer. [BEGIN SIDEBAR] [GRAPHIC - MAGNIFYING GLASS] - -------------------------------------------------------------------------------- INVESTMENT GRADE DEBT SECURITIES - -------------------------------------------------------------------------------- A debt security is considered investment grade if it is: o rated BBB or higher at the time of purchase by Standard & Poor's Ratings Group o rated the equivalent rating by a nationally recognized securities rating organization or o determined to be of equivalent credit quality by Pioneer. - -------------------------------------------------------------------------------- [END SIDEBAR] The fund may invest a substantial portion of its assets in mortgage-related securities, which represent interests in pools of mortgage loans assembled for sale to investors by various U.S. governmental agencies, government-related organizations and private issuers. These investments may include mortgage-related derivative securities such as collateralized mortgage obligations (CMOs). The holder of an interest in a collateralized mortgage obligation is entitled to receive specified cash flows from a pool of mortgages. Depending upon the category of collateralized mortgage obligation purchased, the holder may be entitled to payment before the cash flow from the pool is used to fund other collateralized mortgage obligations or, alternatively, the holder may be paid only after the cash flow has been used to fund other collateralized mortgage obligations first. Pioneer Investment Management, Inc., the fund's investment adviser, considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the fund's investment objective. In assessing the appropriate maturity, rating and sector weighting of the fund's portfolio, Pioneer considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy and the relative value of the U.S. dollar compared to other currencies. Once Pioneer determines the preferable portfolio characteristics, Pioneer selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issuers), liquidity - -------------------------------------------------------------------------------- An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. - -------------------------------------------------------------------------------- Contact your investment professional to discuss how the fund fits into your portfolio. - -------------------------------------------------------------------------------- 1 and rating, sector and issuer diversification. Pioneer also employs fundamental research and due diligence to assess an issuer's credit quality, taking into account financial condition and profitability, future capital needs, potential for change in rating, industry outlook, the competitive environment and management ability. In making these portfolio decisions, Pioneer relies on the knowledge, experience and judgment of its own staff who have access to a wide variety of research. PRINCIPAL RISKS OF INVESTING IN THE FUND Even though the fund seeks to provide current income, you could lose money on your investment, or the fund could fail to generate current income, if: [square bullet] Interest rates go up, causing the value of the fund's investments to decline. [square bullet] The issuer of a security owned by the fund defaults on its obligation to pay principal and/or interest or has its credit rating downgraded. [square bullet} During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk. [square bullet] During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration and reduce the value of the security. This is known as extension risk. [square bullet] Pioneer's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investement strategy proves to be incorrect. To the extent the fund invests significantly in mortgage-backed securities, its exposure to prepayment and extension risks may be greater than if it invested in other fixed income securities. 2 BASIC INFORMATION ABOUT THE FUND THE FUND'S PAST PERFORMANCE The bar chart and table below indicate the risks of investing in the fund by showing how the fund has performed in the past. The fund's performance varies from year to year. The fund's past performance does not necessarily indicate how it will perform in the future. As a shareowner, you may lose or make money on your investment. FUND PERFORMANCE The chart shows the performance of the fund's Class A shares for each of the past 10 calendar years. Class B and Class C shares have different performance. The chart does not reflect any Class A sales charges you may pay when you buy or sell fund shares. Any sales charge will reduce your return. The fund's highest calendar quarterly return was 6.47% (3/31/89 to 6/30/89) The fund's lowest calendar quarterly return was -3.03% (12/31/93 to 3/31/94) For the calendar quarter ended 3/31/99, the fund's total return was -0.96%. Annual return Class A shares [Year ended December 31] [BAR CHART} '89 '89 '91 '92 '93 '94 '95 '96 '97 '98 11.61 7.30 15.54 7.89 11.43 -4.20 18.16 1.96 9.16 7.69 COMPARISON WITH LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX The table shows the average annual total returns for each class of the fund over time and compares these returns to the returns of the Lehman Brothers Government/Corporate Bond Index. The index is a widely recognized composite index of the U.S. bond market. Unlike the fund, the index is not managed and does not incur expenses. The table: [square bullet] Reflects sales charges applicable to the class [square bullet] Assumes that you sell your shares at the end of the period [square bullet] Assumes that you reinvest all of your dividends and distributions
- --------------------------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (%) (FOR PERIODS ENDED DECEMBER 31, 1998) - ------------------ ----------------- -------------- ---------- ----------------- --------------- 1 Year 5 Years 10 Years Since Inception Inception Date - ------------------ --------------- -------------- ------------ ----------------- --------------- Class A 2.85 5.32 7.98 8.85 10/31/78 - ------------------ --------------- -------------- ------------ ----------------- --------------- Class B 2.81 n/a n/a 6.41 4/4/94 - ------------------ --------------- -------------- ------------ ----------------- --------------- Class C 6.87 n/a n/a 5.38 1/31/96 - ------------------ --------------- -------------- ------------ ----------------- --------------- LB Govt/Corp Bond Index 9.47 7.31 9.34 10.07* -- - ------------------ --------------- -------------- ------------ ----------------- ---------------
*Reflects the return of the index since the inception of Class A shares. The return of the index since inception of the Class B shares is 8.77%% and Class C shares is 7.32%. 3 FEES AND EXPENSES These are the fees and expenses, based on the fund's latest fiscal year, you may pay if you invest in the fund. SHAREOWNER FEES CLASS A CLASS B CLASS C PAID DIRECTLY FROM YOUR INVESTMENT - ------------------------------------------- ----------- ------------ ----------- Maximum sales charge when you buy shares 4.50% None None as a percentage of offering price Maximum deferred sales charge as a None1 4% 1% percentage of offering price or the amount you receive when you sell shares, whichever is less ANNUAL FUND OPERATING EXPENSE CLASS A CLASS B CLASS C PAID FROM THE ASSETS OF THE FUND as a percentage of average daily net assets - ------------------------------------------- ----------- ------------ ----------- Management Fee 0.50% 0.50% 0.50% Distribution and Service (12b-1) Fee 0.25% 1.00% 1.00% Other Expenses 0.43% 0.48% 0.40% Total Annual Fund Operating Expenses 1.18% 1.98% 1.90% - ------------------------------------------- ----------- ------------ ----------- 1 Purchases of $1 million 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. See "Buying, exchanging and selling shares." EXAMPLE This example helps you compare the costs of investing in the fund with the cost of investing in other mutual funds. It assumes that: a) you invest $10,000 in the fund for the time periods shown, b) you reinvest all dividends and distributions, c) your investment has a 5% return each year and d) the fund's operating expenses remain the same. Although your actual costs may be higher or lower, under these assumptions your costs would be: If you sell your shares If you do not sell your shares Number of years you own your shares 1 3 5 10 1 3 5 10 Class A $560 $810 $1,070 $1,820 $560 $810 $1,070 $1,820 Class B $600 $920 $1,270 $2,100 $200 $620 $1,070 $2,100 Class C $290 $600 $1,030 $2,220 $190 $600 $1,030 $2,220 4 BASIC INFORMATION ABOUT THE FUND OTHER INVESTMENT STRATEGIES As discussed, the fund invests primarily in a broad range of investment grade debt securities to provide current income with due regard for preservation of capital and prudent investment risk. This section describes additional investments that the fund may make or strategies that it may pursue to a lesser degree to achieve the fund's goal. Some of the fund's secondary investment policies also entail risks. To learn more about these investments and risks, you should obtain and read the statement of additional information (SAI). MORE INFORMATION ABOUT THE FUND'S INVESTMENTS IN DEBT SECURITIES U.S. government securities include U.S. Treasury obligations, such as bills, bonds and notes, and obligations issued or guaranteed by U.S. government agencies or instrumentalities. These obligations may be supported by: [square bullet] the full faith and credit of the U.S. Treasury, such as securities issued by the Government National Mortgage Association (GNMA); [square bullet] the authority of the U.S. government to purchase certain obligations of the issuer, such as securities issued by the Federal National Mortgage Association (FNMA), [square bullet] the limited authority of the issuer to borrow from the U.S. Treasury, such as securities issued by the Student Loan Marketing Association; or [square bullet] only the credit of the issuer. Certain debt instruments may only pay principal at maturity or may only represent the right to receive payments of principal or payments of interest on underlying pools of mortgage or government securities, but not both. The value of these types of instruments may change more drastically than debt securities that pay both principal and interest during periods of changing interest rates. Principal only mortgage-backed securities generally increase in value if interest rates decline, but are also subject to the risk of prepayment. Interest only instruments generally increase in value in a rising interest rate environment when fewer of the underlying mortgages are prepaid. For mortgage derivatives and structured securities that have imbedded leverage features, small changes in interest or prepayment rates may cause large and sudden price movements. Mortgage derivatives can also become illiquid and hard to value in declining markets. For purposes of the fund's credit quality policies, if a security receives different ratings from nationally recognized rating organizations, the fund will use the highest rate assigned to that security. If a rating organization downgrades the quality rating assigned to one or more of the fund's portfolio securities, Pioneer will consider what actions, if any, are appropriate including selling the downgraded security or purchasing additional investment grade securities as soon as it is prudent to do so. INVESTMENTS IN BELOW INVESTMENT GRADE SECURITIES The fund may invest up to 20% of its total assets in debt securities rated below investment grade of any quality or, if unrated, of equivalent quality as determined by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities. INVESTMENTS IN NON-U.S. SECURITIES The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. The fund may invest up to 15% of its total assets (at the time of purchase) in equity and debt securities of non-U.S. issuers. The fund will not invest more than 5% of its total assets (at the time of purchase) in the securities of emerging markets issuers. The fund invests in non-U.S. securities to diversify its portfolio when they offer similar or greater potential to provide income and capital gains compared to U.S. securities. Investing in Canadian and non-U.S. issuers may involve unique risks compared to investing in securities of U.S. issuers. These risks may include: 5 [Square bullet] Less information about non-U.S. issuers or markets may be available due to less rigorous disclosure and accounting standards or regulatory practices [Square bullet] Many non-U.S. markets are smaller, less liquid and more volatile. In a changing market, Pioneer may not be able to sell the fund's portfolio securities in amounts and at prices it considers reasonable [Square bullet] Adverse effect of currency exchange rates or controls on the value of the fund's investments [Square bullet] Political, economic and social developments that adversely affect the securities markets [Square bullet] Withholding and other non-U.S. taxes may decrease the fund's return TEMPORARY INVESTMENTS Normally, the fund invests substantially all of its assets to meet its investment objective. The fund may invest the remainder of its assets in securities with a remaining maturity of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, the fund may depart from its principal investment strategies and invest part or all of its assets in these securities. During these periods, the fund may not be able to achieve its investment objective. The fund intends to adopt a defensive strategy only when Pioneer believes debt securities in which the fund normally invests in have extraordinary risks due to political or economic factors. SHORT-TERM TRADING The fund usually does not trade for short-term profits. The fund will sell an investment, however, even if it has only been held for a short time, if it no longer meets the fund's investment criteria. If the fund does a lot of trading, it may incur additional operating expenses, which would reduce performance, and could cause shareowners to incur a higher level of taxable income or capital gains. DERIVATIVES The fund may use futures, options and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The fund does not use derivatives as a primary investment technique and generally limits their use to hedging. However, the fund may use derivatives for a variety of purposes, including: [Square bullet] As a hedge against adverse changes in interest rates or currency exchange rates [Square bullet] As a substitute for purchasing or selling securities [Square bullet] To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on the fund's exposure to interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. 6 MANAGEMENT PIONEER, THE FUND'S INVESTMENT ADVISER, selects the fund's investments and oversees the fund's operations. PIONEER GROUP The Pioneer Group, Inc. and its subsidiaries are engaged in financial services businesses in the United States and many foreign countries. As of December 31, 1998, the firm had more than $23 billion in assets under management worldwide including more than $22 billion in U.S. mutual funds. The firm's U.S. mutual fund investment history includes creating in 1928 one of the first mutual funds. John F. Cogan, chairman of the board and president of The Pioneer Group, Inc. owns approximately 14% of the firm. He is also an officer and director of each of the Pioneer mutual funds. INVESTMENT ADVISER Pioneer manages a family of U.S. and international stock funds, bond funds and money market funds. Pioneer is a subsidiary of The Pioneer Group, Inc. Its main office is at 60 State Street, Boston, Massachusetts 02109. PORTFOLIO MANAGER Day-to-day management of the fund's portfolio is the responsibility of a team of fixed income portfolio managers and analysts supervised by Sherman B. Russ and Kenneth J. Taubes. Mr. Russ and Mr. Taubes are jointly responsible for overseeing Pioneer's U.S. and global fixed income team. Mr. Russ is a senior vice president of Pioneer. He joined Pioneer in 1983 as an assistant portfolio manager and has been an investment professional since 1962. Mr. Taubes joined Pioneer as a senior vice president in September 1998 and has been an investment professional since 1986. Prior to joining Pioneer, Mr. Taubes had served since 1991 as a senior vice president and senior portfolio manager for several Putnam Investments institutional accounts and mutual funds. Mr. Russ, Mr. Taubes and their team operate under the supervision of Theresa A. Hamacher. Ms. Hamacher is chief investment officer of Pioneer. She joined Pioneer in 1997 and has been an investment professional since 1984; most recently as chief investment officer at another investment adviser. 7 MANAGEMENT FEE The fund pays Pioneer a fee for managing the fund and to cover the cost of providing certain services to the fund. Pioneer's annual fee is equal to 0.50% of the fund's average daily net assets. The fee is normally computed daily and paid monthly. DISTRIBUTOR AND TRANSFER AGENT Pioneer Funds Distributor, Inc. is the fund's distributor. Pioneering Services Corporation is the fund's transfer agent. The fund compensates the distributor and transfer agent for their services. The distributor and the transfer agent are subsidiaries of The Pioneer Group, Inc. YEAR 2000 Information technology experts are concerned about computer and other electronic systems' ability to process date-related information on and after January 1, 2000. This scenario, commonly referred to as the "Year 2000 problem," could have an adverse impact on the fund and the provision of services to its shareowners. Pioneer is addressing the Year 2000 problem with respect to its systems and those used by the distributor and transfer agent. During 1999, Pioneer expects to finish addressing all material Year 2000 issues and to participate in industry-wide testing. The fund has obtained assurances from its other service providers that they are taking appropriate Year 2000 measures and Pioneer is monitoring their efforts. Although the fund does not expect the Year 2000 problem to adversely impact it, the fund cannot guarantee that its, or the fund's service providers', efforts will be successful. 8 Buying, exchanging and selling shares [begin sidebar text] - --------------------- [GRAPHIC - MAGNIFYING GLASS] Share price The net asset value per share calculated on the day of your transaction, adjusted for any applicable sales charge, is often referred to as the share price. - --------------------- [end sidebar text] Net asset value The fund's net asset value is the value of its portfolio of securities plus any other assets minus its operating expenses and any other liabilities. The fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time). The fund generally values its portfolio securities based on market prices or quotations. When market prices are not available or are considered by Pioneer to be unreliable, the fund may use an asset's fair value. Fair value is determined in accordance with procedures approved by the fund's trustees. International securities markets may be open on days when the U.S. markets are closed. For this reason, the values of any international securities owned by the fund could change on a day when you cannot buy or sell shares of the fund. You buy or sell shares at the net asset value per share calculated on the day of your transaction, adjusted for any applicable sales charge. When you buy Class A shares, you pay an initial sales charge. When you sell Class B or Class C shares, you may pay a contingent deferred sales charge depending on how long you have owned your shares. Choosing a class of shares The fund offers three classes of shares through this prospectus. Each class has different sales charges and expenses, allowing you to choose the class that best meets your needs. Factors you should consider include: [square bullet] How long you expect to own the shares [square bullet] The expenses paid by each class [square bullet] Whether you qualify for any reduction or waiver of sales charges Your investment professional can help you determine which class meets your goals. Your investment firm may receive different compensation depending upon which class you choose. If you are not a U.S. citizen and are purchasing shares outside the U.S., you may pay different sales charges under local laws and business practices. Distribution plans The fund has adopted a distribution plan for each class of shares offered through this prospectus in accordance with Rule 12b-1 under the Investment Company Act of 1940. Under each plan the fund pays distribution and service fees to the distributor. Because these fees are an ongoing expense, over time they increase the cost of your investment and your shares may cost more than shares that are not subject to a distribution fee. 9 Comparing classes of shares
Class A Class B Class C - ------------------------------------------------------------------------------------------------------------------------------ Why you might Class A shares may be You may prefer Class B shares You may prefer Class C shares prefer each class your best alternative if you do not want to pay if you do not wish to pay an if you prefer to pay an initial sales charge, initial sales charge and an initial sales or if you plan to hold you would rather pay higher charge and have lower your investment for at least annual expenses over time. annual expenses, or if six years. Class B shares are you qualify for any not recommended if you are reduction or waiver of investing $250,000 or more. the initial sales charge. - ------------------------------------------------------------------------------------------------------------------------------ Initial sales charge Up to 4.50% of the None None offering price, which is reduced or waived for large purchases and certain types of investors. At the time of your purchase, your investment firm may receive a commission from the distributor of up to 4%, declining as the size of your investment increases. - ------------------------------------------------------------------------------------------------------------------------------ Contingent deferred None, except in Up to 4% is charged if you sell A 1% charge if you sell your shares sales charges certain circumstances your shares. The charge is reduced within one year of purchase. Your when the initial sales over time and not charged after six investment firm may receive a charge is waived. years. Your investment firm may commission from the distributor at receive a commission from the the time of your purchase of up to distributor at the time of your 1%. purchase of up to 4%. - ------------------------------------------------------------------------------------------------------------------------------ Distribution and Up to 0.25% of average Up to 1% of average daily Up to 1% of average daily service fees daily net assets. net assets. net assets. - ------------------------------------------------------------------------------------------------------------------------------ Annual expenses Lower than Class B or Higher than Class A shares; Class B Higher than Class A shares; Class C (including Class C. shares convert to Class A shares shares do not convert to any other distribution and after eight years. class of shares. You continue to pay service fees) higher annual expenses. - ------------------------------------------------------------------------------------------------------------------------------ Exchange privilege Class A shares of Class B shares of other Pioneer Class C shares of other Pioneer other Pioneer mutual mutual funds. mutual funds. funds.
10 Buying, exchanging and selling shares [begin sidebar text] - --------------------- [GRAPHIC - MAGNIFYING GLASS] Offering price The net asset value per share plus any initial sales charge. - --------------------- [end sidebar text] Sales charges: Class A shares You pay the offering price when you buy Class A shares unless you qualify to purchase shares at net asset value. You pay a lower sales charge as the size of your investment increases. You do not pay a sales charge when you reinvest dividends or distributions paid by the fund. Investments of $1 million or more You do not pay a sales charge when you purchase Class A shares if you are investing $1 million or more, or you are a participant in certain group plans. However, you pay a deferred sales charge if you sell your Class A shares within one year of purchase. The sales charge is equal to 1% of your investment or your sales proceeds, whichever is less. Reduced sales charges You may qualify for a reduced Class A sales charge if you own or are purchasing shares of Pioneer mutual funds. If you or your investment professional notifies the distributor of your eligibility for a reduced sales charge at the time of your purchase, the distributor will credit you with the combined value (at the current offering price) of all your Pioneer mutual fund shares and the shares of your spouse and the shares of any children under 21. Certain trustees and fiduciaries may also qualify for a reduced sales charge. For this purpose, Pioneer mutual funds include any fund for which the distributor is principal underwriter and, at the distributor's discretion, may include funds organized outside the U.S. managed by Pioneer. See "Qualifying for a reduced sales charge" for more information. Sales charges for Class A shares
Sales charge as % of - -------------------------------------------------------------------- Offering Net amount Amount of purchase price invested - -------------------------------------------------------------------- Less than $100,000 4.50 4.00 - -------------------------------------------------------------------- $100,000 but less than $250,000 3.50 3.00 - -------------------------------------------------------------------- $250,000 but less than $500,000 2.50 2.00 - -------------------------------------------------------------------- $500,000 but less than $1 million 2.00 1.75 - -------------------------------------------------------------------- $1 million or more -0- -0- - --------------------------------------------------------------------
10 Sales charges: Class B shares You buy Class B shares at net asset value per share without paying an initial sales charge. However, you will pay a contingent deferred sales charge to the distributor if you sell your Class B shares within six years of purchase. The contingent deferred sales charge decreases as the number of years since your purchase increases.
Contingent deferred sales charge - ------------------------------------------- On shares sold As a % of before the dollar amount subject end of year to the sales charge - ------------------------------------------- 1 4 - ------------------------------------------- 2 4 - ------------------------------------------- 3 3 - ------------------------------------------- 4 3 - ------------------------------------------- 5 2 - ------------------------------------------- 6 1 - ------------------------------------------- 7+ -0- - -------------------------------------------
Conversion to Class A shares Class B shares automatically convert into Class A shares. This helps you because Class A shares pay lower expenses. Your Class B shares will convert to Class A shares at the beginning of the calendar month (calendar quarter for shares purchased before October 1, 1998) that is eight years after the date of purchase except that: [square bullet] Shares bought by reinvesting dividends and capital gains will convert to Class A shares at the same time as shares on which the dividend or distribution was paid [square bullet] Shares purchased by exchanging shares from another fund will convert on the date that the shares originally acquired would have converted into Class A shares Currently, the Internal Revenue Service permits the conversion of shares to take place without imposing a federal tax. Conversion may not occur if the Internal Revenue Service deems it a taxable event for federal tax purposes. [begin sidebar text] - -------------------- [GRAPHIC - MAGNIFYING GLASS] Contingent deferred sales charge A sales charge that may be deducted from your sale proceeds. - -------------------- [end sidebar text] - -------------------------------------------------------------------------------- Paying the contingent deferred sales charge (CDSC) Several rules apply for Class B shares so that you pay the lowest possible CDSC. [square bullet] The CDSC is calculated on the current market value, or the original cost, of the shares you are selling, whichever is less [square bullet] You do not pay a CDSC on reinvested dividends or distributions [square bullet] In determining the number of years since your purchase, all purchases are considered to have been made on the first day of that month (quarter for shares purchased before October 1, 1998) [square bullet] If you sell only some of your shares, the transfer agent will first sell your shares that are not subject to any CDSC and then the shares that you have owned the longest [square bullet] You may qualify for a waiver of the CDSC normally charged. See "Qualifying for a reduced sales charge" - -------------------------------------------------------------------------------- 12 Buying, exchanging and selling shares [begin sidebar text] - -------------------- [GRAPHIC - MAGNIFYING GLASS] Contingent deferred sales charge A sales charge that may be deducted from your sale proceeds. - -------------------- [end sidebar text] Sales charges: Class C shares You buy Class C shares at net asset value per share without paying an initial sales charge. However, if you sell your Class C shares within one year of purchase, you will pay to the distributor a contingent deferred sales charge of 1% of the current market value, or the original cost, of the shares you are selling, whichever is less. - -------------------------------------------------------------------------------- Paying the contingent deferred sales charge (CDSC) Several rules apply for Class C shares which result in your paying the lowest CDSC. [square bullet] The CDSC is calculated on the current market value, or the original cost, of the shares you are selling, whichever is less [square bullet] You do not pay a CDSC on reinvested dividends or distributions [square bullet] In determining the number of years since your purchase, all purchases are considered to have been made on the first day of that month (quarter for shares purchased before October 1, 1998) [square bullet] If you sell only some of your shares, the transfer agent will first sell your shares that are not subject to any CDSC and then the shares that you bought most recently [square bullet] You may qualify for a waiver of the CDSC normally charged. See "Qualifying for a reduced sales charge" - -------------------------------------------------------------------------------- 13 Qualifying for a reduced sales charge Initial Class A sales charge waivers You may purchase Class A shares at net asset value (without a sales charge) or with a reduced initial sales charge as follows. If you believe you qualify for any of the waivers discussed below, contact the distributor. You are required to provide written confirmation of your eligibility. You may not resell these shares except to or on behalf of the fund. Class A purchases at net asset value are available to: [square bullet] Current or former trustees and officers of the fund; [square bullet] Current or former partners and employees of legal counsel to the fund; [square bullet] Current or former directors, officers, employees or sales representatives of The Pioneer Group, Inc. and its affiliates; [square bullet] Current or former directors, officers, employees or sales representatives of any subadviser or a predecessor adviser (or their affiliates) to any investment company for which Pioneer serves as investment adviser; [square bullet] Current or former officers, partners, employees or registered representatives of broker-dealers which have entered into sales agreements with the distributor; [square bullet] Members of the immediate families of any of the persons above; [square bullet] Any trust, custodian, pension, profit sharing or other benefit plan of the foregoing persons; [square bullet] Insurance company separate accounts; [square bullet] Certain "wrap accounts" for the benefit of clients of financial planners adhering to standards established by the distributor; [square bullet] Other funds and accounts for which Pioneer or any of its affiliates serve as investment adviser or manager; [square bullet] In connection with certain reorganization, liquidation or acquisition transactions involving other investment companies or personal holding companies; [square bullet] Certain unit investment trusts; [square bullet] Employer-sponsored retirement plans with 100 or more eligible employees or at least $500,000 in plan assets; [square bullet] Participants in Optional Retirement Programs if (i) your employer has authorized a limited number of mutual funds to participate in the program, (ii) all participating mutual funds sell shares to program participants at net asset value, (iii) your employer has agreed in writing to actively promote Pioneer mutual funds to program participants and (iv) the program provides for a matching contribution for each participant contribution. 14 Buying, exchanging and selling shares Class A purchases at a reduced initial sales charge or net asset value are also available to: Group Plans if the sponsoring organization [square bullet] recommends purchases of Pioneer mutual funds to, [square bullet] permits solicitation of, or [square bullet] facilitates purchases by its employees, members or participants. Letter of intent (Class A) You can use a letter of intent to qualify for reduced sales charges in two situations: [square bullet] If you plan to invest at least $50,000 (excluding any reinvestment of dividends and capital gain distributions) in the fund's Class A shares during the next 13 months [square bullet] If you include in your letter of intent the value - at the current offering price - of all of your Class A shares of the fund and all other Pioneer mutual fund shares held of record in the amount used to determine the applicable sales charge for the fund shares you plan to buy. Completing a letter of intent does not obligate you to purchase additional shares, but if you do not buy enough shares to qualify for the projected level of sales charges by the end of the 13-month period (or when you sell your shares, if earlier), the distributor will recalculate your sales charge. You must pay the additional sales charge within 20 days after you are notified of the recalculation or it will be deducted from your account (or your sale proceeds). For more information regarding letters of intent, please contact your investment professional or obtain and read the statement of additional information. Reinvestment (Class A) If you sold shares of another mutual fund within the past 60 days, you may be able to reinvest the sale proceeds from that fund in Class A shares of the fund at net asset value without a sales charge. To qualify: [square bullet] Your investment firm must have a sales agreement with the distributor; [square bullet] You must demonstrate that the amount invested is from the proceeds of the sale of shares from another mutual fund that occurred within 60 days immediately preceding your purchase; [square bullet] You paid a sales charge on the original purchase of the shares sold; and [square bullet] The mutual fund whose shares were sold also offers net asset value purchases to shareowners that sell shares of a Pioneer mutual fund. 15 Waiver or reduction of contingent deferred sales charges (CDSC) Class A shares that are subject to a CDSC Purchases of Class A shares of $1 million 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 the distributor 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. However, the CDSC is waived for redemptions of Class A shares purchased by an employer-sponsored retirement plan qualified under Section 401 of the Internal Revenue Code that has 1,000 or more eligible employees or at least $10 million in plan assets. Class A, Class B and Class C shares The distributor may waive or reduce the CDSC for Class A shares that are subject to a CDSC or for Class B or Class C shares if: [square bullet] The distribution results from the death of all registered account owners or a participant in an employer-sponsored plan. For UGMAs, UTMAs and trust accounts, the waiver applies only upon the death of all beneficial owners; [square bullet] The distribution results from a total and permanent disability (as defined by Section 72 of the Internal Revenue Code) occurring after the purchase of the shares being sold. For UGMAs, UTMAs and trust accounts, the waiver only applies upon the disability of all beneficial owners; [square bullet] The distribution is made in connection with limited automatic redemptions as described 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); [square bullet] The distribution is from any type of IRA, 403(b) or employer-sponsored plan and one of the following applies: - It is part of a series of substantially equal periodic payments made over the life expectancy of the participant or the joint life expectancy of the participant and his or her beneficiary (limited in any year to 10% of the value of the participant's account at the time the distribution amount is established); - It is a required minimum distribution due to the attainment of age 70-1/2 , in which case the distribution amount may exceed 10% (based solely on plan assets held in Pioneer mutual funds); 16 Buying, exchanging and selling shares - It is rolled over to or reinvested in another Pioneer fund in the same class of shares, which will be subject to the CDSC of the shares originally held; - It is in the form of a loan to a participant in a plan that permits loans (each repayment will be subject to a CDSC as though a new purchase); [square bullet] The distribution is to a participant in an employer-sponsored retirement plan qualified under section 401 of the Internal Revenue Code and is: - A return of excess employee deferrals or contributions; - A qualifying hardship distribution as defined by the Internal Revenue Code. For Class B shares, waiver is granted only on payments of up to 10% of total plan assets held by Pioneer for all participants, reduced by the total of any prior distributions made in that calendar year; - Due to retirement or termination of employment. For Class B shares, waiver is granted only on payments of up to 10% of total plan assets held in a Pioneer mutual fund for all participants, reduced by the total of any prior distributions made in the same calendar year; - From a qualified defined contribution plan and represents a participant's directed transfer, provided that this privilege has been preauthorized through a prior agreement with the distributor regarding participant directed transfers (not available to Class B shares); [square bullet] The distribution is made pursuant to the fund's right to liquidate or involuntarily redeem shares in a shareholder's account; [square bullet] The selling broker elects, with the distributor's approval, to waive receipt of the commission normally paid at the time of the sale. 17 Opening your account If your shares are held in your investment firm's name, the options and services available to you may be different from those discussed in this prospectus. Ask your investment professional for more information. Account options Use your account application to select options and privileges for your account. You can change your selections at any time by sending a completed account options form to the transfer agent. You may be required to obtain a signature guarantee to make certain changes to an existing account. Call or write to the fund's transfer agent for account applications, account options forms and other account information: Pioneering Services Corporation P.O. Box 9014 Boston, Massachusetts 02205-9014 Telephone 1-800-225-6292 Telephone transaction privileges If your account is registered in your name, you can buy, exchange or sell fund shares by telephone. If you do not want your account to have telephone transaction privileges, you must indicate that choice on your account application or by writing to the transfer agent. When you request a telephone transaction the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide the personal identification number for the account and sends you a written confirmation. The fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. [begin sidebar text] - --------------------- [telephone logo] By phone If you want to place your telephone transaction by speaking to a shareowner services representative, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern time on any weekday that the New York Stock Exchange is open. You may use FactFone(SM) at any time. - --------------------- [end sidebar text] 18 Buying, exchanging and selling shares [begin sidebar text] - --------------------- [GRAPHIC - QUESTION MARK] Consult your investment professional to learn more about buying, exchanging or selling fund shares. - -------------------- [end sidebar text] General rules on buying, exchanging and selling your fund shares Share price If you place an order with your investment firm before the New York Stock Exchange closes and your investment firm submits the order to the distributor prior to the distributor's close of business (usually 5:30 p.m. Eastern time), your share price will be calculated that day. Otherwise, your price per share will be calculated at the close of the New York Stock Exchange after the distributor receives your order. Your investment firm is responsible for submitting your order to the distributor. Buying You may buy fund shares from any investment firm that has a sales agreement with the distributor. If you do not have an investment firm, please call 1-800-225-6292 for information on how to locate an investment professional in your area. You can buy fund shares at the offering price. The distributor may reject any order until it has confirmed the order in writing and received payment. The fund reserves the right to stop offering any class of shares. Minimum investment amounts Your initial investment must be at least $1,000. Additional investments must be at least $50 for Class A shares and $500 for Class B or Class C shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. - -------------------------------------------------------------------------------- Retirement plan accounts You can purchase fund shares through tax-deferred retirement plans for individuals, businesses and tax-exempt organizations. Your initial investment for most types of retirement plan accounts must be at least $250. Additional investments for most types of retirement plans must be at least $100. You may not use the account application accompanying this prospectus to establish a Pioneer retirement plan. You can obtain retirement plan applications from your investment firm or by calling the Retirement Plans Department at 1-800-622-0176. - -------------------------------------------------------------------------------- 19 Exchanging You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000 unless the fund you are exchanging into has a different minimum. The fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. Before you request an exchange, consider each fund's investment objective and policies as described in the fund's prospectus. Selling Your shares will be sold at net asset value per share next calculated after the fund receives your request in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. The fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you recently sent a check to purchase the shares being sold, the fund may delay payment of the sale proceeds until your check has cleared. This may take up to 15 calendar days from the purchase date. If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing. [begin sidebar text] [GRAPHIC - COLUMN] - -------------------- You may have to pay federal income taxes on a sale or an exchange. - -------------------- [end sidebar text] - -------------------------------------------------------------------------------- Good order means that: [square bullet] You have provided adequate instructions [square bullet] There are no outstanding claims against your account [square bullet] There are no transaction limitations on your account [square bullet] If you have any fund share certificates, you submit them and they are signed by each record owner exactly as the shares are registered [square bullet] Your request includes a signature guarantee if you: - Are selling over $100,000 or exchanging over $500,000 worth of shares - Changed your account registration or address within the last 30 days - Instruct the transfer agent to mail the check to an address different from the one on your account - Want the check paid to someone other than the account owner(s) - Are transferring the sale proceeds to a Pioneer mutual fund account with a different registration - -------------------------------------------------------------------------------- 20 Buying, exchanging and selling shares
Buying shares Exchanging shares Through your Normally, your investment firm will send your Normally, your investment firm will send your investment firm purchase request to the fund's transfer agent. exchange request to the fund's transfer agent. Consult your investment professional for more Consult your investment professional for more information. Your investment firm may receive a information about exchanging your shares. commission from the distributor for your purchase of fund shares. The distributor or its affiliates may pay additional compensation, out of their own assets, to certain investment firms or their affiliates based on objective criteria established by the distributor. ------------------------------------------------------------------------------------------------------ By phone You can use the telephone purchase privilege if you After you establish your fund account, you can have an existing non-retirement account or certain exchange fund shares by phone if: IRAs. You can purchase additional fund shares by phone if: [square bullet] You are using the exchange to establish a new account, [square bullet] You established your bank account provided the new account has a of record at least 30 days ago registration identical to the original account [square bullet] Your bank information has not changed for at least 30 days [square bullet] The fund into which you are exchanging offers the same [square bullet] You are not purchasing more than class of shares $25,000 worth of shares per account per day [square bullet] You are not exchanging more than $500,000 worth of shares [square bullet] You can provide the proper per account per day account identification information [square bullet] You can provide the proper account identification information When you request a telephone purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase fund shares for the amount of the debit at the offering price determined after the transfer agent receives your telephone purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment. -------------------------------------------------------------------------------------------------------- In writing, You can purchase fund shares for an existing fund You can exchange fund shares by mailing or faxing by mail account by mailing a check to the transfer agent. a letter of instruction to the transfer agent. You or by fax Make your check payable to the fund. Neither can exchange fund shares directly through the fund initial nor subsequent investments should be made only if your account is registered in your name. by third party check. Your check must be in U.S. However, you may not fax an exchange request for dollars and drawn on a U.S. bank. Include in your more than $500,000. Include in your letter: purchase request the fund's name, the account number and the name or names in the account [square bullet] The names, social security number registration. and signatures of all registered owners [square bullet] A signature guarantee for each registered owner if the amount of the exchange is more than $500,000 [square bullet] The name of the fund out of which you are exchanging and the name of the fund into which you are exchanging [square bullet] The class of shares you are exchanging [square bullet] The dollar amount or number of shares you are exchanging
21 Selling shares Normally, your investment firm will send your request to sell shares to the fund's transfer agent. Consult your investment professional for more information. The fund has authorized the distributor to act as its agent in the repurchase of fund shares from qualified investment firms. The fund reserves the right to terminate this procedure at any time. - -------------------------------------------------------------------------------- You may sell up to $100,000 per account per day. You may sell fund shares held in a retirement plan account by phone only if your account is an IRA. You may not sell your shares by phone if you have changed your address (for checks) or your bank information (for wires and transfers) in the last 30 days. You may receive your sale proceeds: [square bullet] By check, provided the check is made payable exactly as your account is registered [square bullet] By bank wire or by electronic funds transfer, provided the sale proceeds are being sent to your bank address of record - -------------------------------------------------------------------------------- You can sell some or all of your fund shares by writing directly to the fund only if your account is registered in your name. Include in your request your name, the fund's name, your social security number, your fund account number, the class of shares to be sold, the dollar amount or number of shares to be sold and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. The transfer agent will not process your request until it is received in good order. You may not sell more than $100,000 per account per day by fax. - -------------------------------------------------------------------------------- How to contact us By phone [telephone logo] For information or to request a telephone transaction between 8:00 a.m. and 9:00 p.m. (Eastern time) by speaking with a shareholder services representative call 1-800-225-6292 To request a transaction using FactFone(SM) call 1-800-225-4321 Telecommunications Device for the Deaf (TDD) 1-800-225-1997 By mail [envelope logo] Send your written instructions to: Pioneering Services Corporation P.O.Box 9014 Boston, Massachusetts 02205-9014 By fax [fax logo] Fax your exchange and sale requests to: 1-800-225-4240 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Exchange privilege The fund and the distributor 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. Abuses include frequent trading in response to short-term market fluctuations and a pattern of trading that appears to be an attempt to "time the market." In addition, the fund and the distributor reserve the right, at any time and without notice, to charge a fee for exchanges or to modify, limit or suspend the exchange privilege. The fund will provide 60 days notice of material amendments to or termination of the privilege. - -------------------------------------------------------------------------------- 22 Buying, exchanging and selling shares Account options See the account application form for more details on each of the following options. Automatic investment plans You can make regular periodic investments in the fund by setting up monthly bank drafts, government allotments, payroll deduction, a Pioneer Investomatic Plan and other similar automatic investment plans. You may use an automatic investment plan to establish a Class A share account with a small initial investment. If you have a Class B or Class C share account and your balance is at least $1,000, you may establish an automatic investment plan. Pioneer Investomatic Plan If you establish a Pioneer Investomatic Plan, the transfer agent will make a periodic investment in fund shares by means of a preauthorized electronic funds transfer from your bank account. Your plan investments are voluntary. You may discontinue your plan at any time or change the plan's dollar amount, frequency or investment date by calling or writing to the transfer agent. You should allow up to 30 days for the transfer agent to establish your plan. Automatic exchanges You can automatically exchange your fund shares for shares of the same class of another Pioneer mutual fund. The automatic exchange will begin on the day you select when you complete the appropriate section of your account application or an account options form. In order to use automatic exchange: [square bullet] You must select exchanges on a monthly or quarterly basis [square bullet] Both the originating and receiving accounts must have identical registrations [square bullet] The originating account has a minimum balance of $5,000 Distribution options The fund offers three distribution options. Any fund shares you buy by reinvesting distributions will be priced at the applicable net asset value per share. (1) Unless you indicate another option on your account application, any dividends and capital gain distributions paid to you by the fund will automatically be invested in additional fund shares. (2) You may elect to have the amount of any dividends paid to you in cash and any capital gain distributions reinvested in additional shares. (3) You may elect to have the full amount of any dividends and/or capital gain distributions paid to you in cash. Options (2) or (3) are not available to retirement plan accounts or accounts with a current value of less than $500. If your distribution check is returned to the transfer agent or you do not cash the check for six months or more, the transfer agent may reinvest the amount of the check in your account and automatically change the distribution option on your account to option (1) until you request a different option in writing. These additional shares will be purchased at the then current net asset value. 23 Directed dividends You can invest the dividends paid by one of your Pioneer mutual fund accounts in a second Pioneer mutual fund account. The value of your second account must be at least $1,000 ($500 for Pioneer Fund or Pioneer II). You may direct the investment of any amount of dividends. There are no fees or charges for directed dividends. If you have a retirement plan account, you may only direct dividends to accounts with identical registrations. Systematic withdrawal plans When you establish a systematic withdrawal plan for your account, the transfer agent will sell the number of fund shares you specify on a periodic basis and the proceeds will be paid to you or to any person you select. You must obtain a signature guarantee to direct payments to another person after you have established your systematic withdrawal plan. Payments can be made either by check or by electronic transfer to a bank account you designate. To establish a systematic withdrawal plan: [square bullet] Your account must have a total value of at least $10,000 when you establish your plan [square bullet] You must request a periodic withdrawal of at least $50 [square bullet] You may not request a periodic withdrawal of more than 10% of the value of any Class B or Class C share account (valued at the time the plan is implemented) Systematic sales of fund shares may be taxable transactions for you. If you purchase Class A shares while you are making systematic withdrawals from your account, you may pay unnecessary sales charges. Direct deposit If you elect to take dividends or dividends and capital gain distributions in cash, or if you establish a systematic withdrawal plan, you may choose to have those cash payments deposited directly into your savings, checking or NOW bank account. Voluntary tax withholding You may have the transfer agent withhold 28% of the dividends and capital gain distributions paid from your fund account (before any reinvestment) and forward the amount withheld to the Internal Revenue Service as a credit against your federal income taxes. Voluntary tax withholding is not available for retirement plan accounts or for accounts subject to backup withholding. Reinstatement privilege for Class A shares You may qualify for the reinstatement privilege if you recently sold all or part of your Class A shares. 24 Buying, exchanging and selling shares Shareowner services FactFone(SM) 1-800-225-4321 You can use FactFone(SM) to: [square bullet] Obtain current information on your Pioneer mutual fund accounts [square bullet] Inquire about the prices and yields of all publicly available Pioneer mutual funds [square bullet] Make computer-assisted telephone purchases, exchanges and redemptions for your fund accounts [square bullet] Request account statements If you plan to use FactFone(SM) to make telephone purchases and redemptions, first you must activate your personal identification number and establish your bank account of record. If your account is registered in the name of a broker-dealer or other third party, you may not be able to use FactFone(SM). Confirmation statements The transfer agent maintains an account for each investment firm or individual shareowner and records all account transactions. You will be sent confirmation statements showing the details of your transactions as they occur, except automatic investment plan transactions, which are confirmed quarterly. If you have more than one Pioneer mutual fund account registered in your name, the Pioneer combined account statement will be mailed to you each quarter. Tax information In January of each year, the fund will mail you information about the tax status of the dividends and distributions paid to you by the fund. Pioneer website www.pioneerfunds.com The website includes a full selection of information on mutual fund investing. You can also use the website to get: [square bullet] Your current account information [square bullet] Prices, returns and yields of all publicly available Pioneer mutual funds [square bullet] Prospectuses for all the Pioneer funds TDD 1-800-225-1997 If you have a hearing disability and access to TDD keyboard equipment, you can contact our telephone representatives with questions about your account by calling our TDD number between 8:30 a.m. and 5:30 p.m. Eastern time any weekday that the New York Stock Exchange is open. 25 Shareowner account policies Signature guarantees and other requirements You are required to obtain a signature guarantee when you are: [square bullet] Requesting certain types of exchanges or sales of fund shares [square bullet] Redeeming shares for which you hold a share certificate [square bullet] Requesting certain types of changes for your existing account You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public. Fiduciaries and corporations are required to submit additional documents to sell fund shares. Minimum account size The fund requires that you maintain a minimum account value of $500. If you hold less than the minimum in your account because you have sold or exchanged some of your shares, the fund will notify you of its intent to sell your shares and close your account. You may avoid this by increasing the value of your account to at least the minimum within six months of the notice from the fund. Telephone access You may have difficulty contacting the fund by telephone during times of market volatility or disruption in telephone service. If you are unable to reach the fund by telephone, you should communicate with the fund in writing. Share certificates Normally, your shares will remain on deposit with the transfer agent and certificates will not be issued. If you are legally required to obtain a certificate, you may request one for your Class A shares only. A fee may be charged for this service. Other policies The fund may suspend transactions in shares when trading on the New York Stock Exchange is closed or restricted, when an emrgency exists that makes it impracticable for the fund to sell or value its portfolio securities or with the permission of the Securities and Exchange Commission. The fund or the distributor may revise, suspend or terminate the account options and services available to shareowners at any time. The fund reserves the right to redeem in kind by delivering portfolio securities to a redeeming shareowner provided that the fund must pay redemptions in cash if a shareowner's aggregate redemptions in a 90 day period are less than $250,000 or 1% of the fund's net assets 26 Dividends, capital gains and taxes [begin sidebar text] - -------------------- [GRAPHIC - COLUMN] Sales and exchanges may be taxable transactions to shareowners. - -------------------- [end sidebar text] Dividends and capital gains The fund declares a dividend daily. The dividend consists of substantially all of the fund's net income. You begin to earn dividends on the first business day following receipt of payment for shares. You continue to earn dividends up to the date of sale. Dividends are normally paid on the last business day of each month. The fund makes distributions from long-term capital gains, if any, annually, generally in November. The fund may also pay dividends and distributions at other times if necessary for the fund to avoid federal income or excise tax. If you invest in the fund close to the time that the fund makes a capital gains distribution, generally you will pay a higher price per share and you will pay taxes on the amount of the capital gains distribution whether you reinvest the distribution or receive it as cash. Taxes For federal income tax purposes, your distributions from the fund's net long-term capital gains are considered long-term capital gains and may be taxable to you at different maximum rates depending upon their source and other factors. Dividends and short-term captial gains distributions are taxable as ordinary income. Dividends and distributions are taxable, whether you take payment in cash or reinvest them to buy additional fund shares. You may also have tax consequences (generally, a capital gain or loss) when you sell or exchange fund shares. Each year the fund will mail to you information about your dividends and distributions for, and the shares you sold in, the previous calendar year. You must provide your social security number or other taxpayer identification number to the fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the fund will withhold 31% "backup withholding" tax from your dividends and distributions, sales proceeds and any other payments to you. You should ask your own tax adviser about any federal or state tax considerations, including possible additional withholding taxes for non-U.S. shareholders. You may also consult the fund's statement of additional information for a more detailed discussion of federal income tax considerations that may affect the fund and its shareowners. 27 Financial highlights The financial highlights table helps you understand the fund's financial performance for the past five years. Certain information reflects financial results for a single fund share. The total returns in the table represent the rate that you would have earned on an investment in the fund (assuming reinvestment of all dividends and distributions). This information has been audited by Arthur Andersen LLP, whose reports are included in the fund's annual and semiannual reports along with the fund's financial statements. The annual and semiannual reports are available upon request. Pioneer Bond Fund Class A shares
Six Months For the Year Ended June 30, Ended ------------------------------------------------------ --------- December 31, 1998 1998 1997 1996 1995 1994 ----------- ------------ ------------ ------------ ------------ ---------- Net asset value, beginning of period ............................. $ 9.37 $ 9.07 $ 9.08 $ 9.35 $ 9.04 $ 9.81 ------- ------- ------- ------- ------- ------- Increase (decrease) from investment operations: Net investment income .............. $ 0.29 $ 0.59 $ 0.63 $ 0.64 $ 0.68 $ 0.67 Net realized and unrealized gain (loss) on investments ............. 0.09 0.30 (0.01) (0.27) 0.31 (0.77) ------- ------- ------- ------- ------- ------- Net increase (decrease) from investment operations ............ $ 0.38 $ 0.89 $ 0.62 $ 0.37 $ 0.99 $ (0.10) Distributions to shareholders: Net investment income .............. $ (0.29) (0.59) (0.63) (0.64) (0.68) (0.67) ------- ------- ------- ------- -------- -------- Net increase (decrease) in net asset value ........................ $ 0.09 $ 0.30 $ (0.01) $ (0.27) $ 0.31 $ (0.77) ------- ------- ------- ------- -------- ------- Net asset value, end of period ...... $ 9.46 $ 9.37 $ 9.07 $ 9.08 $ 9.35 $ 9.04 ======= ======= ======= ======= ======== ======= Total return* ....................... 4.12% 10.04% 7.09% 4.02% 11.48% (1.26)% Ratio of net expenses to average net assets ......................... 0.95%**+ 1.18%+ 1.14%+ 1.19%+ 1.14% 1.05% Ratios/Supplemental Data Ratio of net investment income to average net assets ................. 6.09%**+ 6.34%+ 6.97%+ 6.80%+ 7.55% 6.93% Portfolio turnover rate ............. 35%** 44% 48% 39% 37% 39% Net assets, end of period (in thousands) ..................... $132,809 $114,326 $98,310 $101,957 $110,158 $106,659 Ratios assuming reduction for fees paid indirectly: Net expenses ....................... 0.92%** 1.17% 1.12% 1.18% -- -- Net investment income (loss) ....... 6.12%** 6.35% 6.99% 6.81% -- --
- ----------------------- *Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. **Annualized. +Ratio assuming no reduction for fees paid indirectly. 28 Pioneer Bond Fund Class B Shares
Six Months For the Year Ended June 30, April 4, 1994 Ended ------------------------------------------------- through December 31, 1998 1998 1997 1996 1995 June 30, 1994 --------- ------------ ------------ ------------ ---------- ------------- Net asset value, beginning of period ................... $ 9.33 $ 9.03 $ 9.02 $ 9.31 $ 9.02 $ 9.23 ------- ------- ------- ------ ------ -------- Increase (decrease) from investment operations: Net investment income ................................. $ 0.25 $ 0.51 $ 0.56 $ 0.57 $ 0.60 $ 0.14 Net realized and unrealized gain (loss) on investments 0.09 0.31 (0.01) (0.28) 0.31 (0.21) ------- ------- ------- ------ ------ -------- Net increase (decrease) from investment operations ... $ 0.34 $ 0.82 $ 0.55 $ 0.29 $ 0.91 $ (0.07) Distributions to shareholders: Net investment income ................................. (0.25) (0.52) (0.54) (0.57) (0.62) (0.14) In excess of net investment income .................... -- -- -- (0.01) -- -- ------- ------- ------- ------- ------- ------- Net increase (decrease) in net asset value ............. $ 0.09 $ 0.30 $ 0.01 $ (0.29) $ 0.29 $ (0.21) ------- ------- ------- ------- ------- -------- Net asset value, end of period ......................... $ 9.42 $ 9.33 $ 9.03 $ 9.02 $ 9.31 $ 9.02 ======= ======= ======= ======= ======= ======== Total return* .......................................... 3.70% 9.21% 6.24% 3.15% 10.57% (0.73)% Ratios/Supplemental Data Ratio of net expenses to average net assets ............ 1.71%**+ 1.98%+ 1.97%+ 1.96%+ 1.97% 1.92%** Ratio of net investment income to average net assets ... 5.31%**+ 5.52%+ 6.12%+ 6.01%+ 6.60% 6.09%** Portfolio turnover rate ................................ 35%** 44% 48% 39% 37% 39% Net assets, end of period (in thousands) ............... $ 45,982 $30,888 $20,104 $14,843 $ 7,338 $ 1,212 Ratios assuming reduction for fees paid indirectly: Net expenses .......................................... 1.67%** 1.97% 1.96% 1.94% -- -- Net investment income (loss) .......................... 5.35%** 5.53% 6.13% 6.03% -- --
- --------------- *Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. **Annualized. +Ratio assuming no reduction for fees paid indirectly. 29 Pioneer Bond Fund Class C Shares
Six Months For the Year Ended June 30, January 31, 1996 Ended --------------------------- Through December 31, 1998 1998 1997 June 30, 1996 ------------ ------------ ----------------- Net asset value, beginning of period ............................$ 9.31 $ 9.02 $ 9.02 $ 9.54 ------- ------ ------ ------ Increase (decrease) from investment operations: Net investment income ..........................................$ 0.26 $ 0.52 $ 0.54 $ 0.23 Net realized and unrealized gain (loss) on investments ......... 0.09 0.29 -- (0.52) ------- ------ ------ ------ Net increase (decrease) from investment operations ............$ 0.35 $ 0.81 $ 0.54 (0.29) Distributions to shareholders: Net investment income .......................................... (0.26) (0.52) (0.54) (0.22) In excess of net investment income ............................. -- -- -- (0.01) ------- ------ ------ ------ Net increase (decrease) in net asset value ......................$ 0.09 $ 0.29 $ -- $(0.52) ------- ------ ------ ------ Net asset value, end of period ..................................$ 9.40 $ 9.31 $ 9.02 $ 9.02 ======= ====== ====== ====== Total return* ................................................... 3.74% 9.12% 6.13% (3.00)% Ratios/Supplemental Data Ratio of net expenses to average net assets ..................... 1.69**+ 1.90%+ 2.05%+ 2.18%**+ Ratio of net investment income to average net assets ............ 5.31%**+ 5.58%+ 5.83%+ 5.79%**+ Portfolio turnover rate ......................................... 35%** 44% 48% 39% Net assets, end of period (in thousands) ........................$ 13,299 $8,515 $4,588 $ 343 Ratios assuming a reduction for fees paid indirectly: Net expenses ................................................... 1.66%** 1.89% 1.92% 2.13%** Net investment income (loss) ................................... 5.34%** 5.59% 5.96% 5.84%**
- ------------------------------------------------ *Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charges. Total return would be reduced if sales charges were taken into account. **Annualized. +Ratio assuming no reduction for fees paid indirectly. 30 Pioneer Bond Fund You can obtain more free information about the fund from your investment firm or by writing to Pioneering Services Corporation, 60 State Street, Boston, Massachusetts 02109. You may also call 1-800-225-6292. Shareowner reports Annual and semiannual reports to shareowners provide information about the fund's investments. The annual report discusses market conditions and investment strategies that significantly affected the fund's performance during its last fiscal year. Statement of additional information The statement of additional information provides more detailed information about the fund. It is incorporated by reference into this prospectus. Visit our website www.pioneerfunds.com You can also review the fund's shareowner reports, prospectus and statement of additional information at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. or by calling 1-800-SEC-0330 to request a copy. The Commission charges a fee for this service. You can get the same information free from the Commission's Internet website (http://www.sec.gov). (Investment Company Act file no. 811-02864) [Pioneer Logo] Pioneer Funds Distributor, Inc. 60 State Street Boston, MA 02109 0599-6250 www.pioneerfunds.com (C)Pioneer Funds Distributor, Inc. PIONEER BOND FUND 60 State Street Boston, Massachusetts 02109 STATEMENT OF ADDITIONAL INFORMATION CLASS A, CLASS B AND CLASS C SHARES MAY 17, 1999 This statement of additional information is not a prospectus. It should be read in conjunction with the fund's Class A, Class B and Class C shares prospectus dated May 17, 1999, as supplemented or revised from time to time. 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 the fund at 60 State Street, Boston, Massachusetts 02109. You can also obtain a copy of the fund's prospectus from our website at: www.pioneerfunds.com. The fund's financial statements for the six months ended December 31, 1998 and for the fiscal year ended June 30, 1998 are incorporated into this statement of additional information by reference. The most recent semiannual and annual reports to shareholders are attached to this statement of additional information and are incorporated in this statement of additional information by reference. TABLE OF CONTENTS PAGE 1. Fund History.........................................................2 2. Investment Policies, Risks and Restrictions..........................2 3. Management of the Fund..............................................23 4. Investment Adviser..................................................27 5. Principal Underwriter and Distribution Plans........................28 6. Shareholder Servicing/Transfer Agent................................33 7. Custodian...........................................................34 8. Independent Public Accountants......................................35 9. Portfolio Transactions..............................................35 10. Description of Shares...............................................36 11. Sales Charges.......................................................37 12. Redeeming Shares....................................................40 13. Telephone Transactions..............................................41 14. Pricing of Shares...................................................42 15. Tax Status..........................................................43 16. Investment Results..................................................47 17. Financial Statements................................................50 18. Appendix A - Annual Fee, Expense and Other Information..............51 19. Appendix B - Description of Short-term Debt, Corporate Bond and Preferred Stock Ratings.............................................54 20. Appendix C - Performance Statistics.................................61 21. Appendix D - Other Pioneer Information..............................73 1. FUND HISTORY The fund is a diversified open-end management investment company. The fund was originally organized as a Massachusetts corporation on August 16, 1978, reorganized as a Massachusetts business trust on December 31, 1985 and reorganized as a Delaware business trust on May 17, 1999. 2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS The prospectus presents the investment objective and the principal investment strategies and risks of the fund. This section supplements the disclosure in the fund's prospectus and provides additional information on the fund's investment policies or restrictions. Restrictions or policies stated as a maximum percentage of the fund's assets are only applied immediately after a portfolio investment to which the policy or restriction is applicable. 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 restrictions and policies. PRIMARY INVESTMENTS Under normal circumstances, at least 80% of the fund's total assets must be invested in (a) debt securities issued or guaranteed by the U.S. government or its agencies or instrumentalities, (b) debt securities, including convertible securities, of corporate and other issuers rated at least investment grade at the time of investment, and (c) cash and cash equivalents, such as certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. DEBT SECURITIES RATING CRITERIA Investment grade debt securities are those rated "BBB" or higher by Standard & Poor's Ratings Group ("Standard & Poor's"), the equivalent rating of other national statistical rating organizations or determined to be of equivalent credit quality by Pioneer Investment Management, Inc. ("Pioneer"). Debt securities rated BBB are considered medium grade obligations with speculative characteristics, and adverse economic conditions or changing circumstances may weaken the issuer's ability to pay interest and repay principal. If the rating of an investment security falls below investment grade, Pioneer will consider if any action is appropriate in light of the fund's investment objective and policies. The fund may invest up to 20% of its total assets in below investment grade debt securities. Below investment grade debt securities are those rated "BB" and below by Standard & Poor's or the equivalent rating of other national statistical rating organizations or are determined by Pioneer to be of equivalent credit quality. See Appendix B for a description of rating categories. Below investment grade debt securities or comparable unrated securities are commonly referred to as "junk bonds" and are considered predominantly speculative and may be questionable as to principal and interest payments. Changes in economic conditions are more likely to lead to a weakened capacity to make principal payments and interest payments. The amount of junk bond securities outstanding has proliferated as an increasing number of issuers have used junk bonds for corporate financing. An economic downturn could severely affect the ability of highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. Factors having an adverse impact on the market value of lower quality securities will have an adverse effect on the fund's net asset value to the extent that it invests in such securities. In addition, the fund may incur additional expenses to the extent it is required to seek recovery upon a default in payment of principal or interest on its portfolio holdings. 2 The secondary market for junk bond securities, which is concentrated in relatively few market makers, may not be as liquid as the secondary market for more highly rated securities, a factor which may have an adverse effect on the fund's ability to dispose of a particular security when necessary to meet its liquidity needs. Under adverse market or economic conditions, the secondary market for junk bond securities could contract further, independent of any specific adverse changes in the condition of a particular issuer. As a result, the fund could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating the fund's net asset value. Since investors generally perceive that there are greater risks associated with lower quality debt securities of the type in which the fund may invest a portion of its assets, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the debt securities market, changes in perceptions of issuers' creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the debt securities market, resulting in greater yield and price volatility. Lower rated and comparable unrated debt securities tend to offer higher yields than higher rated securities with the same maturities because the historical financial condition of the issuers of such securities may not have been as strong as that of other issuers. However, lower rated securities generally involve greater risks of loss of income and principal than higher rated securities. Pioneer will attempt to reduce these risks through portfolio diversification and by analysis of each issuer and its ability to make timely payments of income and principal, as well as broad economic trends and corporate developments U.S. GOVERNMENT SECURITIES U.S. government securities in which the fund invests include debt obligations of varying maturities issued by the U.S. Treasury or issued or guaranteed by an agency or instrumentality of the U.S. government, including the Federal Housing Administration, Federal Financing Bank, Farmers Home Administration, Export-Import Bank of the U.S., Small Business Administration, Government National Mortgage Association ("GNMA"), General Services Administration, Central Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation ("FHLMC"), Federal National Mortgage Association ("FNMA"), Maritime Administration, Tennessee Valley Authority, District of Columbia Armory Board, Student Loan Marketing Association, Resolution Trust Corporation and various institutions that previously were or currently are part of the Farm Credit System (which has been undergoing reorganization since 1987). Some U.S. government securities, such as U.S. Treasury bills, Treasury notes and Treasury bonds, which differ only in their interest rates, maturities and times of issuance, are supported by the full faith and credit of the United States. Others are supported by: (i) the right of the issuer to borrow from the U.S. Treasury, such as securities of the Federal Home Loan Banks; (ii) the discretionary authority of the U.S. Government to purchase the agency's obligations, such as securities of the FNMA; or (iii) only the credit of the issuer, such as securities of the Student Loan Marketing Association. No assurance can be given that the U.S. government will provide financial support in the future to U.S. government agencies, authorities or instrumentalities that are not supported by the full faith and credit of the United States. Securities guaranteed as to principal and interest by the U.S. government, its agencies, authorities or instrumentalities include: (i) securities for which the payment of principal and interest is backed by an irrevocable letter of credit issued by the U.S. government or any of its agencies, authorities or instrumentalities; and (ii) participations in loans made to foreign governments or other entities that are so guaranteed. The secondary market for certain of these participations is limited and, therefore, may be regarded as illiquid. 3 U.S. government securities may include zero coupon securities that may be purchased when yields are attractive and/or to enhance portfolio liquidity. Zero coupon U.S. government securities are debt obligations that are issued or purchased at a significant discount from face value. The discount approximates the total amount of interest the security will accrue and compound over the period until maturity or the particular interest payment date at a rate of interest reflecting the market rate of the security at the time of issuance. Zero coupon U.S. government securities do not require the periodic payment of interest. These investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a higher rate of return to attract investors who are willing to defer receipt of cash. These investments may experience greater volatility in market value than U.S. government securities that make regular payments of interest. The fund accrues income on these investments for tax and accounting purposes, which is distributable to shareholders and which, because no cash is received at the time of accrual, may require the liquidation of other portfolio securities to satisfy the fund's distribution obligations, in which case the fund will forego the purchase of additional income producing assets with these funds. Zero coupon U.S. government securities include STRIPS and CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury bonds and represent scheduled interest and principal payments on the bonds. MUNICIPAL OBLIGATIONS The term "municipal obligations" generally is understood to include debt obligations issued by municipalities to obtain funds for various public purposes, the interest on which is, in the opinion of bond counsel to the issuer, excluded from gross income for federal income tax purposes. In addition, if the proceeds from private activity bonds are used for the construction, repair or improvement of privately operated industrial or commercial facilities, the interest paid on such bonds may be excluded from gross income for federal income tax purposes, although current federal tax laws place substantial limitations on the size of these issues. The fund's distributions of any interest it earns on municipal obligations will be taxable to shareholders as ordinary income. The two principal classifications of municipal obligations are "general obligation" and "revenue" bonds. General obligation bonds are secured by the issuer's pledge of its faith, credit, and taxing power for the payment of principal and interest. Revenue bonds are payable from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other specific revenue source, but not from the general taxing power. Sizable investments in these obligations could involve an increased risk to the fund should any of the related facilities experience financial difficulties. Private activity bonds are in most cases revenue bonds and do not generally carry the pledge of the credit of the issuing municipality. There are, of course, variations in the security of municipal obligations, both within a particular classification and between classifications. 4 MORTGAGE-BACKED SECURITIES The fund may invest in mortgage pass-through certificates and multiple-class pass-through securities, such as real estate mortgage investment conduits ("REMIC") pass-through certificates, collateralized mortgage obligations ("CMOs") and stripped mortgage-backed securities ("SMBS"), and other types of "mortgage-backed securities" that may be available in the future. A mortgage-backed security is an obligation of the issuer backed by a mortgage or pool of mortgages or a direct interest in an underlying pool of mortgages. Some mortgage-backed securities, such as CMOs, make payments of both principal and interest at a variety of intervals; others make semiannual interest payments at a predetermined rate and repay principal at maturity (like a typical bond). Mortgage-backed securities are based on different types of mortgages including those on commercial real estate or residential properties. Mortgage-backed securities often have stated maturities of up to thirty years when they are issued, depending upon the length of the mortgages underlying the securities. In practice, however, unscheduled or early payments of principal and interest on the underlying mortgages may make the securities' effective maturity shorter than this, and the prevailing interest rates may be higher or lower than the current yield of the fund's portfolio at the time the fund receives the payments for reinvestment. Mortgage-backed securities may have less potential for capital appreciation than comparable fixed income securities, due to the likelihood of increased prepayments of mortgages as interest rates decline. If the fund buys mortgage-backed securities at a premium, mortgage foreclosures and prepayments of principal by mortgagors (which may be made at any time without penalty) may result in some loss of the fund's principal investment to the extent of the premium paid. The value of mortgage-backed securities may also change due to shifts in the market's perception of issuers. In addition, regulatory or tax changes may adversely affect the mortgage securities markets as a whole. Non-governmental mortgage-backed securities may offer higher yields than those issued by government entities, but also may be subject to greater price changes than governmental issues. GUARANTEED MORTGAGE PASS-THROUGH SECURITIES. Guaranteed mortgage pass-through securities represent participation interests in pools of residential mortgage loans and are issued by U.S. Governmental or private lenders and guaranteed by the U.S. Government or one of its agencies or instrumentalities, including but not limited to GNMA, FNMA and FHLMC. GNMA certificates are guaranteed by the full faith and credit of the U.S. government for timely payment of principal and interest on the certificates. FNMA certificates are guaranteed by FNMA, a federally chartered and privately owned corporation, for full and timely payment of principal and interest on the certificates. FHLMC certificates are guaranteed by FHLMC, a corporate instrumentality of the U.S. government, for timely payment of interest and the ultimate collection of all principal of the related mortgage loans. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Such issuers may, in addition, be the originators and/or servicers of the underlying mortgage loans as well as the guarantors of the mortgage-related securities. Because there are no direct or indirect government or agency guarantees of payments in pools created by such non-governmental issuers, they generally offer a higher rate of interest than government and government-related pools. Timely payment of interest and principal of these pools may be supported by insurance or guarantees, including individual loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by governmental entities, private insurers and the mortgage poolers. There can be no assurance that the private insurers or guarantors can meet their obligations under the insurance policies or guarantee arrangements. 5 Mortgage-related securities without insurance or guarantees may be purchased if Pioneer determines that the securities meet the fund's quality standards. Mortgage-related securities issued by certain private organizations may not be readily marketable. MULTIPLE-CLASS PASS-THROUGH SECURITIES AND COLLATERALIZED MORTGAGE OBLIGATIONS. CMOs and REMIC pass-through or participation certificates may be issued by, among others, U.S. government agencies and instrumentalities as well as private issuers. REMICs are CMO vehicles that qualify for special tax treatment under the Internal Revenue Code of 1986, as amended (the "Code") and invest in mortgages principally secured by interests in real property and other investments permitted by the Code. CMOs and REMIC certificates are issued in multiple classes and the principal of and interest on the mortgage assets may be allocated among the several classes of CMOs or REMIC certificates in various ways. Each class of CMOs or REMIC certificates, often referred to as a "tranche," is issued at a specific adjustable or fixed interest rate and must be fully retired no later than its final distribution date. Generally, interest is paid or accrues on all classes of CMOs or REMIC certificates on a monthly basis. Typically, CMOs are collateralized by GNMA, FNMA or FHLMC certificates but also may be collateralized by other mortgage assets such as whole loans or private mortgage pass-through securities. Debt service on CMOs is provided from payments of principal and interest on collateral of mortgaged assets and any reinvestment income thereon. STRIPPED MORTGAGE-BACKED SECURITIES. SMBS are multiple-class mortgage-backed securities that are created when a U.S. government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The fund only invests SMBS that are usually structured with two classes that receive different proportions of interest and principal distributions on a pool of mortgage assets. A typical SMBS will have one class receiving some of the interest and most of the principal, while the other class will receive most of the interest and the remaining principal. The holder of the "principal-only" security (PO) receives the principal payments made by the underlying mortgage-backed security, while the holder of the "interest-only" security (IO) receives interest payments from the same underlying security. The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect. Although the market for these securities is increasingly liquid, Pioneer may determine that certain stripped mortgage-backed securities issued by the U.S. government, its agencies or instrumentalities are not readily marketable. If so, these securities, together with privately-issued stripped mortgage-backed securities, will be considered illiquid for purposes of the fund's limitation on investments in illiquid securities. The yields and market risk of interest only and principal only SMBS, respectively, may be more volatile than those of other fixed income securities. The fund also may invest in planned amortization class ("PAC") and target amortization class ("TAC") CMO bonds which involve less exposure to prepayment, extension and interest rate risks than other mortgage-backed securities, provided that prepayment rates remain within expected prepayment ranges or "collars." To the extent that the prepayment rates remain within these prepayment ranges, the residual or support tranches of PAC and TAC CMOs assume the extra prepayment, extension and interest rate risks associated with the underlying mortgage assets. RISK FACTORS ASSOCIATED WITH MORTGAGE-BACKED SECURITIES. Investing in mortgage-backed securities involves certain risks, including the failure of a counterparty to meet its commitments, adverse interest rate changes and the effects of prepayments on mortgage cash flows. In addition, investing in the lowest 6 tranche of CMOs and REMIC certificates involves risks similar to those associated with investing in equity securities. However, due to adverse tax consequences under current tax laws, the fund does not intend to acquire "residual" interests in REMICs. Further, the yield characteristics of mortgage-backed securities differ from those of traditional fixed income securities. The major differences typically include more frequent interest and principal payments (usually monthly), the adjustability of interest rates of the underlying instrument, and the possibility that prepayments of principal may be made substantially earlier than their final distribution dates. Prepayment rates are influenced by changes in current interest rates and a variety of economic, geographic, social and other factors and cannot be predicted with certainty. Both adjustable rate mortgage loans and fixed rate mortgage loans may be subject to a greater rate of principal prepayments in a declining interest rate environment and to a lesser rate of principal prepayments in an increasing interest rate environment. Under certain interest rate and prepayment rate scenarios, the fund may fail to recoup fully its investment in mortgage-backed securities notwithstanding any direct or indirect governmental, agency or other guarantee. When the fund reinvests amounts representing payments and unscheduled prepayments of principal, it may obtain a rate of interest that is lower than the rate on existing adjustable rate mortgage pass-through securities. Thus, mortgage-backed securities, and adjustable rate mortgage pass-through securities in particular, may be less effective than other types of U.S. government securities as a means of "locking in" interest rates. WHEN-ISSUED AND DELAYED DELIVERY SECURITIES The fund may purchase securities, including U.S. government securities, on a when-issued basis or may purchase or sell securities for delayed delivery. In such transactions, delivery of the securities occurs beyond the normal settlement period, but no payment or delivery is made by the fund prior to the actual delivery or payment by the other party to the transaction. The fund will not earn income on these securities until delivered. The purchase of securities on a when-issued or delayed delivery basis involves the risk that the value of the securities purchased will decline prior to the settlement date. The sale of securities for delayed delivery involves the risk that the prices available in the market on the delivery date may be greater than those obtained in the sale transaction. When-issued and delayed delivery transactions will be fully collateralized by segregated liquid assets. See "Asset Segregation." WARRANTS The fund may invest in warrants, which are securities permitting, but not obligating, their holder to subscribe for other securities. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holders to purchase, and they do not represent any rights in the assets of the issuer. As a result, an investment in warrants may be considered more speculative than certain other types of investments. In addition, the value of a warrant does not necessarily change with the value of the underlying securities, and a warrant expires worthless if it is not exercised on or prior to its expiration date. INVESTMENTS IN EQUITY SECURITIES The fund may invest up to 5% of its total assets in equity securities. Equity securities, such as common stock, generally represent an ownership interest in a company. While equity securities have historically generated higher average returns than fixed income securities, equity securities have also experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress the value of a particular equity security held by the fund. Also, the price of equity securities, 7 particularly common stocks, are sensitive to general movements in the stock market. A drop in the stock market may depress the price of equity securities held by the fund. PREFERRED SHARES The fund may invest in preferred shares of beneficial interest of trust instruments. Preferred shares are equity securities, but they have many characteristics of fixed income securities, such as a fixed dividend payment rate and/or a liquidity preference over the issuer's common shares. However, because preferred shares are equity securities, they may be more susceptible to risks traditionally associated with equity investments than the fund's fixed income securities. ILLIQUID SECURITIES The fund will not invest more than 15% of its net assets in illiquid and other securities that are not readily marketable. Repurchase agreements maturing in more than seven days will be included for purposes of the foregoing limit. Securities subject to restrictions on resale under the Securities Act of 1933, as amended (the "1933 Act"), are considered illiquid unless they are eligible for resale pursuant to Rule 144A or another exemption from the registration requirements of the 1933 Act and are determined to be liquid by Pioneer. Pioneer determines the liquidity of Rule 144A and other restricted securities according to procedures adopted by the Board of Trustees. The Board of Trustees monitors Pioneer's application of these guidelines and procedures. The inability of the fund to dispose of illiquid investments readily or at reasonable prices could impair the fund's ability to raise cash for redemptions or other purposes. If the fund sold restricted securities other than pursuant to an exception from registration under the 1933 Act such as Rule 144A, it may be deemed to be acting as an underwriter and subject to liability under the 1933 Act. REAL ESTATE INVESTMENT TRUSTS ("REITS") AND ASSOCIATED RISK FACTORS REITs are pooled investment vehicles which invest primarily in income producing real estate or real estate related loans or interests. REITs are generally classified as equity REITs, mortgage REITs or a combination of equity and mortgage REITs. Equity REITs invest the majority of their assets directly in real property and derive income primarily from the collection of rents. Equity REITs can also realize capital gains by selling properties that have appreciated in value. Mortgage REITs invest the majority of their assets in real estate mortgages and derive income from the collection of interest payments. REITs are not taxed on income distributed to shareholders provided they comply with the applicable requirements of the Code. Debt securities issued by REITs, for the most part, are general and unsecured obligations and are subject to risks associated with REITs. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. An equity REIT may be affected by changes in the value of the underlying properties owned by the REIT. A mortgage REIT may be affected by changes in interest rates and the ability of the issuers of its portfolio mortgages to repay their obligations. REITs are dependent upon the skills of their managers and are not diversified. REITs are generally dependent upon maintaining cash flows to repay borrowings and to make distributions to shareholders and are subject to the risk of default by lessees or borrowers. REITs whose underlying assets are concentrated in properties used by a particular industry, such as health care, are also subject to risks associated with such industry. REITs (especially mortgage REITs) are also subject to interest rate risks. When interest rates decline, the value of a REIT's investment in fixed rate obligations can be expected to rise. Conversely, when interest 8 rates rise, the value of a REIT's investment in fixed rate obligations can be expected to decline. If the REIT invests in adjustable rate mortgage loans the interest rates on which are reset periodically, yields on a REIT's investments in such loans will gradually align themselves to reflect changes in market interest rates. This causes the value of such investments to fluctuate less dramatically in response to interest rate fluctuations than would investments in fixed rate obligations. REITs may have limited financial resources, may trade less frequently and in a limited volume and may be subject to more abrupt or erratic price movements than larger company securities. Historically REITs have been more volatile in price than the larger capitalization stocks included in Standard & Poor's 500 Stock Index (the "S&P 500"). REPURCHASE AGREEMENTS The fund may enter into repurchase agreements with broker-dealers, member banks of the Federal Reserve System and other financial institutions. Repurchase agreements are arrangements under which the fund purchases securities and the seller agrees to repurchase the securities within a specific time and at a specific price. The repurchase price is generally higher than the fund's purchase price, with the difference being income to the fund. The Board of Trustees reviews and monitors the creditworthiness of any institution which enters into a repurchase agreement with the fund. The counterparty's obligations under the repurchase agreement are collateralized with U.S. Treasury and/or agency obligations with a market value of not less than 100% of the obligations, valued daily. Collateral is 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 of commencement of bankruptcy or insolvency proceedings with respect to the seller of the security before repurchase of the security under a repurchase agreement, the fund may encounter delay and incur costs before being able to sell the security. Such a delay may involve loss of interest or a decline in price of the security. If the court characterizes the transaction as a loan and the fund has not perfected a security interest in the security, the fund may be required to return the security to the seller's estate and be treated as an unsecured creditor of the seller. As an unsecured creditor, the fund would be at risk of losing some or all of the principal and interest involved in the transaction. DEBT OBLIGATIONS OF FOREIGN GOVERNMENTS An investment in debt obligations of foreign governments and their political subdivisions (sovereign debt) involve special risks that are not present in corporate debt obligations. The foreign issuer of the sovereign debt or the foreign governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and a fund may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices of sovereign debt may be more volatile than prices of debt obligations of U.S. issues. In the past, certain foreign countries have encountered difficulties in servicing their debt obligations, withheld payments of principal and interest and declared moratoria on the payment of principal and interest on their sovereign debt. A sovereign debtor's willingness or ability to repay principal and pay interest in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign currency reserves, the availability of sufficient foreign exchange, the relative size of the debt service burden, the sovereign debtor's policy toward its principal international lenders and local political constraints. Sovereign debtors may also be dependent on expected disbursements from foreign governments, multilateral agencies and other entities to reduce principal and interest arrearages on their debt. The failure of a sovereign debtor to implement economic reforms, achieve specified levels of economic performance or repay principal or 9 interest when due may result in the cancellation of third-party commitments to lend funds to the sovereign debtor, which may further impair such debtor's ability or willingness to service its debts. EURODOLLAR INSTRUMENTS AND SAMURAI AND YANKEE BONDS. The fund may invest in Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are bonds of corporate and government issuers that pay interest and principal in U.S. dollars but are issued in markets outside the United States, primarily in Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-Japanese issuers. Yankee bonds are U.S. dollar denominated bonds typically issued in the U.S. by foreign governments and their agencies and foreign banks and corporations. The fund may also invest in Eurodollar Certificates of Deposit ("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit ("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued by foreign branches of domestic banks; ETDs are U.S. dollar-denominated deposits in a foreign branch of a U.S. bank or in a foreign bank; and Yankee CDs are U.S. dollar-denominated certificates of deposit issued by a U.S. branch of a foreign bank and held in the U.S. These investments involve risks that are different from investments in securities issued by U.S. issuers, including potential unfavorable political and economic developments, foreign withholding or other taxes, seizure of foreign deposits, currency controls, interest limitations or other governmental restrictions which might affect payment of principal or interest. RISKS OF NON-U.S. INVESTMENTS To the extent that the fund invests in the securities of non-U.S. issuers, those investments involve considerations and risks not typically associated with investing in the securities of issuers in the U.S. These risks are heightened with respect to investments in countries with emerging markets and economies. The risks of investing in securities of non-U.S. issuers or issuers with significant exposure to non-U.S. markets may be related, among other things, to (i) differences in size, liquidity and volatility of, and the degree and manner of regulation of, the securities markets of certain non-U.S. markets compared to the securities markets in the U.S.; (ii) economic, political and social factors; and (iii) foreign exchange matters, such as restrictions on the repatriation of capital, fluctuations in exchange rates between the U.S. dollar and the currencies in which the fund's portfolio securities are quoted or denominated, exchange control regulations and costs associated with currency exchange. The political and economic structures in certain non-U.S. countries, particularly emerging markets, are expected to undergo significant evolution and rapid development, and such countries may lack the social, political and economic stability characteristic of more developed countries. Unanticipated political or social developments may affect the values of the fund's investments in such countries. The economies and securities and currency markets of many emerging markets have experienced significant disruption and declines. There can be no assurances that these economic and market disruptions will not continue. FOREIGN SECURITIES MARKETS AND REGULATIONS. There may be less publicly available information about non-U.S. markets and issuers than is available with respect to U.S. securities and issuers. Non-U.S. companies generally are not subject to accounting, auditing and financial reporting standards, practices and requirements comparable to those applicable to U.S. companies. The trading markets for most non-U.S. securities are generally less liquid and subject to greater price volatility than the markets for comparable securities in the U.S. The markets for securities in certain emerging markets are in the earliest stages of their development. Even the markets for relatively widely traded securities in certain non-U.S. markets, including emerging countries, may not be able to absorb, without price disruptions, a significant increase in trading volume or trades of a size customarily undertaken by institutional investors in the U.S. Additionally, market making and arbitrage activities are generally less extensive in such markets, which may contribute to increased volatility and reduced liquidity. The less liquid a market, the more difficult it 10 may be for the fund to accurately price its portfolio securities or to dispose of such securities at the times determined by Pioneer to be appropriate. The risks associated with reduced liquidity may be particularly acute in situations in which the fund's operations require cash, such as in order to meet redemptions and to pay its expenses. ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain non-U.S. countries, including emerging markets, may be subject to a greater degree of economic, political and social instability than is the case in the U.S. and Western European countries. Such instability may result from, among other things: (i) authoritarian governments or military involvement in political and economic decision making; (ii) popular unrest associated with demands for improved economic, political and social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and (v) ethnic, religious and racial disaffection and conflict. Such economic, political and social instability could significantly disrupt the financial markets in such countries and the ability of the issuers in such countries to repay their obligations. Investing in emerging countries also involves the risk of expropriation, nationalization, confiscation of assets and property or the imposition of restrictions on foreign investments and on repatriation of capital invested. In the event of such expropriation, nationalization or other confiscation in any emerging country, the fund could lose its entire investment in that country. Certain emerging market countries restrict or control foreign investment in their securities markets to varying degrees. These restrictions may limit the fund's investment in those markets and may increase the expenses of the fund. In addition, the repatriation of both investment income and capital from certain markets in the region is subject to restrictions such as the need for certain governmental consents. Even where this is no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects of the fund's operation. Economies in individual non-U.S. countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, currency valuation, capital reinvestment, resource self-sufficiency and balance of payments positions. Many non-U.S. countries have experienced substantial, and in some cases extremely high, rates of inflation for many years. Inflation and rapid fluctuations in inflation rates have had, and may continue to have, very negative effects on the economies and securities markets of certain emerging countries. Economies in emerging countries generally are dependent heavily upon international trade and, accordingly, have been and may continue to be affected adversely by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been, and may continue to be, affected adversely by economic conditions in the countries with which they trade. CURRENCY RISKS. The value of the securities quoted or denominated in international currencies may be adversely affected by fluctuations in the relative currency exchange rates and by exchange control regulations. The fund's investment performance may be negatively affected by a devaluation of a currency in which the fund's investments are quoted or denominated. Further, the fund's investment performance may be affected, either positively or negatively, by currency exchange rates because the U.S. dollar value of securities quoted or denominated in another currency will increase or decrease in response to changes in the value of such currency in relation to the U.S. dollar. CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the U.S. Such markets have settlement and clearance procedures that differ from those in the U.S. In certain markets there have 11 been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the fund to make intended securities purchases due to settlement problems could cause the fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result either in losses to the fund due to a subsequent decline in value of the portfolio security or could result in possible liability to the fund. In addition, security settlement and clearance procedures in some emerging countries may not fully protect the fund against loss or theft of its assets. WITHHOLDING AND OTHER TAXES. The fund will be subject to taxes, including withholding taxes, on income (possibly including, in some cases, capital gains) that are or may be imposed by certain non-U.S. countries with respect to the fund's investments in such countries. These taxes will reduce the return achieved by the fund. Treaties between the U.S. and such countries may not be available to reduce the otherwise applicable tax rates. ECONOMIC MONETARY UNION (EMU). On January 1, 1999, 11 European countries adopted a single currency - the Euro. The conversion to the Euro is being phased in over a three-year period. During this time, valuation, systems and other operational problems may occur in connection with the fund's investment quoted in the Euro. For participating countries, EMU will mean sharing a single currency and single official interest rate and adhering to agreed upon limits on government borrowing. Budgetary decisions will remain in the hands of each participating country, but will be subject to each country's commitment to avoid "excessive deficits" and other more specific budgetary criteria. A European Central Bank is responsible for setting the official interest rate to maintain price stability within the Euro zone. EMU is driven by the expectation of a number of economic benefits, including lower transaction cost, reduced exchange risk, greater competition, and a broadening and depending of European financial markets. However, there are a number of significant risks associated with EMU. Monetary and economic union on this scale has never been attempted before. There is a significant degree of uncertainty as to whether participating countries will remain committed to EMU in the face of changing economic conditions. This uncertainty may increase the volatility of European markets. OPTIONS ON SECURITIES AND SECURITIES INDICES The fund may purchase put and call options on any security in which it may invest or options on any securities index based on securities in which it may invest. The fund would also be able to enter into closing sale transactions in order to realize gains or minimize losses on options it has purchased. WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund obligates the fund to sell specified securities to the holder of the option at a specified price if the option is exercised at any time before the expiration date. All call options written by the fund are covered, which means that the fund will own the securities subject to the options as long as the options are outstanding, or the fund will use the other methods described below. The fund's purpose in writing covered call options is to realize greater income than would be realized on portfolio securities transactions alone. However, the fund may forego the opportunity to profit from an increase in the market price of the underlying security. A put option written by the fund would obligate the fund to purchase specified securities from the option holder at a specified price if the option is exercised at any time before the expiration date. All put options written by the fund would be covered, which means that the fund would have segregated assets with a value at least equal to the exercise price of the put option. The purpose of writing such options is to generate additional income for the fund. However, in return for the option premium, the fund accepts the 12 risk that it may be required to purchase the underlying security at a price in excess of its market value at the time of purchase. Call and put options written by the fund will also be considered to be covered to the extent that the fund's liabilities under such options are wholly or partially offset by its rights under call and put options purchased by the fund. In addition, a written call option or put may be covered by entering into an offsetting forward contract and/or by purchasing an offsetting option or any other option which, by virtue of its exercise price or otherwise, reduces the fund's net exposure on its written option position. WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write (sell) covered call and put options on any securities index composed of securities in which it may invest. Options on securities indices are similar to options on securities, except that the exercise of securities index options requires cash payments and does not involve the actual purchase or sale of securities. In addition, securities index options are designed to reflect price fluctuations in a group of securities or segments of the securities market rather than price fluctuations in a single security. The fund may cover call options on a securities index by owning securities whose price changes are expected to be similar to those of the underlying index, or by having an absolute and immediate right to acquire such securities without additional cash consideration (or for additional consideration if cash in such amount is segregated) upon conversion or exchange of other securities in its portfolio. The fund may cover call and put options on a securities index by segregated assets with a value equal to the exercise price. PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options in anticipation of an increase in the market value of securities of the type in which it may invest. The purchase of a call option would entitle the fund, in return for the premium paid, to purchase specified securities at a specified price during the option period. The fund would ordinarily realize a gain if, during the option period, the value of such securities exceeded the sum of the exercise price, the premium paid and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the call option. The fund would normally purchase put options in anticipation of a decline in the market value of securities in its portfolio ("protective puts") or in securities in which it may invest. The purchase of a put option would entitle the fund, in exchange for the premium paid, to sell specified securities at a specified price during the option period. The purchase of protective puts is designed to offset or hedge against a decline in the market value of the fund's securities. Put options may also be purchased by the fund for the purpose of affirmatively benefiting from a decline in the price of securities which it does not own. The fund would ordinarily realize a gain if, during the option period, the value of the underlying securities decreased below the exercise price sufficiently to more than cover the premium and transaction costs; otherwise the fund would realize either no gain or a loss on the purchase of the put option. Gains and losses on the purchase of protective put options would tend to be offset by countervailing changes in the value of the underlying portfolio securities. RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market on an options exchange will exist for any particular exchange-traded option, or at any particular time. If the fund is unable to effect a closing purchase transaction with respect to covered options it has written, the fund will not be able to sell the underlying securities or dispose of its segregated assets until the options expire or are exercised. Similarly, if the fund is unable to effect a closing sale transaction with respect to options it has purchased, it will have to exercise the options in order to realize any profit and will incur transaction costs upon the purchase or sale of underlying securities. 13 Reasons for the absence of a liquid secondary market on an exchange include the following: (i) there may be insufficient trading interest in certain options; (ii) restrictions may be imposed by an exchange on opening or closing transactions or both; (iii) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options; (iv) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (v) the facilities of an exchange or the Options Clearing Corporation (the "OCC") may not at all times be adequate to handle current trading volume; or (vi) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the secondary market on that exchange (or in that class or series of options) would cease to exist, although outstanding options on that exchange, if any, that had been issued by the OCC as a result of trades on that exchange would continue to be exercisable in accordance with their terms. The fund may terminate its obligations under an exchange-traded call or put option by purchasing an option identical to the one it has written. Obligations under over-the-counter options may be terminated only by entering into an offsetting transaction with the counterparty to such option. Such purchases are referred to as "closing purchase transactions." The fund may purchase and sell both options that are traded on U.S. and foreign exchanges and options traded over the counter with broker-dealers who make markets in these options. The ability to terminate over-the-counter options is more limited than with exchange-traded options and may involve the risk that broker-dealers participating in such transactions will not fulfill their obligations. Until such time as the staff of the Securities and Exchange Commission (the "SEC") changes its position, the fund will treat purchased over-the-counter options and all assets used to cover written over-the-counter options as illiquid securities, except that with respect to options written with primary dealers in U.S. Government securities pursuant to an agreement requiring a closing purchase transaction at a formula price, the amount of illiquid securities may be calculated with reference to the formula. Transactions by the fund in options on securities and indices will be subject to limitations established by each of the exchanges, boards of trade or other trading facilities governing the maximum number of options in each class which may be written or purchased by a single investor or group of investors acting in concert. Thus, the number of options which the fund may write or purchase may be affected by options written or purchased by other investment advisory clients of Pioneer. An exchange, board of trade or other trading facility may order the liquidations of positions found to be in excess of these limits, and it may impose certain other sanctions. The writing and purchase of options is a highly specialized activity which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. The successful use of protective puts for hedging purposes depends in part on Pioneer's ability to predict future price fluctuations and the degree of correlation between the options and securities markets. 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 movements can take place in the underlying markets that cannot be reflected in the options markets. In addition to the risks of imperfect correlation between the fund's 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 the price of the securities comprising the securities index on which the option is based. 14 FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS To hedge against changes in securities prices or currency exchange rates or to seek to increase total return, 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 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 Pioneer, 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 its hedging strategies. Although under some circumstances prices of securities in the fund's portfolio may be more or less volatile than prices of such 15 futures contracts, Pioneer will attempt to estimate the extent of this volatility difference based on 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. 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 1940 Act to engage in such transactions without registering as commodity pool operators. The fund 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 16 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 Code for maintaining its qualification as a regulated investment company for federal income tax purposes. 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. FOREIGN CURRENCY TRANSACTIONS The fund may engage in foreign currency transactions. These transactions may be conducted at the prevailing spot rate for purchasing or selling currency in the foreign exchange market. The fund also has authority to enter into forward foreign currency exchange contracts involving currencies of the different countries in which the fund invests as a hedge against possible variations in the foreign exchange rates 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. Transaction hedging is the purchase or sale of forward foreign currency contracts with respect to specific receivables or payables of the fund, accrued in connection with the purchase and sale of its portfolio securities quoted 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 will enter into such transactions only to the extent, if any, deemed appropriate by Pioneer. 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 it anticipates. 17 The fund may also engage in cross-hedging by using forward contracts in one currency to hedge against fluctuations in the value of securities denominated in a different currency, if Pioneer 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 Pioneer determines that there is a pattern of correlation between the proxy currency and the U.S. dollar. 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, differences in interest rates between the two currencies 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. The precise matching of the forward contract amounts and the value of the securities involved will not generally be possible because the future value of such securities in foreign currencies will change as a consequence of market movements in the value of those securities between the date on which the contract is entered into and the date it matures. Using forward contracts to protect the value of the fund's portfolio securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange which the fund can achieve at some future point in time. The precise projection of short-term currency market movements is not possible, and short-term hedging provides a means of fixing the U.S. dollar value of only a portion of the fund's foreign assets. While the fund will enter into forward contracts to reduce currency exchange rate risks, transactions in such contracts involve certain other risks. While the fund may benefit from such transactions, unanticipated changes in currency prices may result in a poorer overall performance for the fund than if it had not engaged in any such transactions. Moreover, there may be imperfect correlation between the fund's portfolio holdings of securities quoted or denominated in a particular currency and forward contracts entered into by the fund. Such imperfect correlation may cause the fund to sustain losses which will prevent the fund from achieving a complete hedge or expose the fund to risk of foreign exchange loss. Over-the-counter markets for trading foreign forward currency contracts offer less protection against defaults than is available when trading in currency instruments on an exchange. Since a forward foreign currency exchange contract is not guaranteed by an exchange or clearinghouse, a default on the contract would deprive the fund of unrealized profits or force the fund to cover its commitments for purchase or resale, if any, at the current market price. If the fund enters into a forward contract to purchase foreign currency, the custodian or Pioneer will segregate liquid assets. See "Asset Segregation." OPTIONS ON FOREIGN CURRENCIES The fund may purchase and write options on foreign currencies for hedging purposes in a manner similar to that of transactions in forward contracts. For example, a decline in the dollar value of a foreign currency in which portfolio securities are quoted or denominated will reduce the dollar value of such securities, even if their value in the foreign currency remains constant. In an attempt to protect against such decreases in the value of portfolio securities, the fund may purchase put options on the foreign 18 currency. If the value of the currency declines, the fund will have the right to sell such currency for a fixed amount of dollars which exceeds the market value of such currency. This would result in a gain that may offset, in whole or in part, the negative effect of currency depreciation on the value of the fund's securities quoted or denominated in that currency. Conversely, if a rise in the dollar value of a currency is projected for those securities to be acquired, thereby increasing the cost of such securities, the fund may purchase call options on such currency. If the value of such currency increases, the purchase of such call options would enable the fund to purchase currency for a fixed amount of dollars which is less than the market value of such currency. Such a purchase would result in a gain that may offset, at least partially, the effect of any currency related increase in the price of securities the fund intends to acquire. As in the case of other types of options transactions, however, the benefit the fund derives from purchasing foreign currency options will be reduced by the amount of the premium and related transaction costs. In addition, if currency exchange rates do not move in the direction or to the extent anticipated, the fund could sustain losses on transactions in foreign currency options which would deprive it of a portion or all of the benefits of advantageous changes in such rates. The fund may also write options on foreign currencies for hedging purposes. For example, if the fund anticipated a decline in the dollar value of securities quoted or denominated in a foreign currency because of declining exchange rates, it could, instead of purchasing a put option, write a covered call option on the relevant currency. If the expected decline occurs, the option will most likely not be exercised, and the decrease in value of portfolio securities will be partially offset by the amount of the premium received by the fund. Similarly, the fund could write a put option on the relevant currency, instead of purchasing a call option, to hedge against an anticipated increase in the dollar cost of securities to be acquired. If exchange rates move in the manner projected, the put option will expire unexercised and allow the fund to offset such increased cost up to the amount of the premium. However, as in the case of other types of options transactions, the writing of a foreign currency option will constitute only a partial hedge up to the amount of the premium, only if rates move in the expected direction. If unanticipated exchange rate fluctuations occur, the option may be exercised and the fund would be required to purchase or sell the underlying currency at a loss which may not be fully offset by the amount of the premium. As a result of writing options on foreign currencies, the fund also may be required to forego all or a portion of the benefits which might otherwise have been obtained from favorable movements in currency exchange rates. A call option written on foreign currency by the fund is "covered" if the fund owns the underlying foreign currency subject to the call, or if it has an absolute and immediate right to acquire that foreign currency without additional cash consideration. A call option is also covered if the fund holds a call on the same foreign currency for the same principal amount as the call written where the exercise price of the call held is (a) equal to or less than the exercise price of the call written or (b) greater than the exercise price of the call written if the amount of the difference is maintained by the fund in cash or liquid securities. See "Asset Segregation." The fund may close out its position in a currency option by either selling the option it has purchased or entering into an offsetting option. An exchange-traded options position may be closed out only on an options exchange which provides a secondary market for an option of the same series. Although the fund will generally purchase or write only those options for which there appears to be an active secondary market, there is no assurance that a liquid secondary market on an exchange will exist for any particular option, or at any particular time. For some options no secondary market on an exchange may exist. 19 In such event, it might not be possible to effect closing transactions in particular options, with the result that the fund would have to exercise its options in order to realize any profit and would incur transaction costs upon the sale of underlying currencies pursuant to the exercise of put options. If the fund as a covered call option writer is unable to effect a closing purchase transaction in a secondary market, it will not be able to sell the underlying currency (or security quoted or denominated in that currency) until the option expires or it delivers the underlying currency upon exercise. The fund may also use options on currencies to cross-hedge, which involves writing or purchasing options on one currency to hedge against changes in exchange rates of a different currency with a pattern of correlation. Cross hedging may also include using a foreign currency as a proxy for the U.S. dollar, if Pioneer determines that there is a pattern of correlation between that currency and the U.S. dollar. The fund may purchase and write over-the-counter options to the extent consistent with its limitation on investments in illiquid securities. Trading in over-the-counter options is subject to the risk that the other party will be unable or unwilling to close out options purchased or written by the fund. LENDING OF PORTFOLIO SECURITIES The fund may lend portfolio securities to member firms of the New York Stock Exchange (the "Exchange") under agreements which require that the loans be secured continuously by collateral in cash, cash equivalents or 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 continues 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 and the detriment of any decrease 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 that 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. MONEY MARKET INSTRUMENTS. The fund may invest in short term money market instruments including commercial bank obligations and commercial paper. These instruments may be denominated in both U.S. and, to a limited extent, non-U.S. currency. The fund's investment in commercial bank obligations include certificates of deposit ("CDs"), time deposits ("TDs") and bankers' acceptances. Obligations of foreign branches of U.S. banks and of foreign banks may be general obligations of the parent bank in addition to the issuing bank, or may be limited by the terms of a specific obligation and by government regulation. As with investment in non-U.S. securities in general, investments in the obligations of foreign branches of U.S. banks and of foreign banks may subject the fund to investment risks that are different in some respects from those of investments in obligations of domestic issuers. The fund's investments in commercial paper consist of short-term (usually from 1 to 270 days) unsecured promissory notes issued by corporations in order to finance their current operations. The fund may also invest in variable amount master demand notes (which is a type of commercial paper) which represents a 20 direct borrowing arrangement involving periodically fluctuating rates of interest under a letter agreement between a commercial paper issuer and an institutional lender, pursuant to which the lender may determine to invest varying amounts. Transfer of such notes is usually restricted by the issuer, and there is no secondary trading market for such notes. To the extent the fund invests in master demand notes, these investments will be included in the fund's limitation on illiquid securities. ASSET SEGREGATION The 1940 Act requires that the fund segregate assets in connection with certain types of transactions that may have the effect of leveraging the fund's portfolio. If the fund enters into a transaction requiring segregation, such as a forward commitment, the custodian or Pioneer will segregate liquid assets in an amount required to comply with the 1940 Act. Such segregated assets will be valued at market daily. If the aggregate value of such segregated assets declines below the aggregate value required to satisfy the 1940 Act, additional liquid assets will be segregated. PORTFOLIO TURNOVER It is the policy of the fund not to engage in trading for short-term profits although portfolio turnover rate is not considered a limiting factor in the execution of investment decisions for the fund. INVESTMENT RESTRICTIONS FUNDAMENTAL INVESTMENT RESTRICTIONS. The fund has adopted certain fundamental investment restrictions which may not be changed without the affirmative vote of the holders of a majority of the fund's outstanding voting securities. As used in the prospectus and this SAI, such approval means the approval of the lesser of (i) the holders of 67% or more of the shares represented at a meeting if the holders of more than 50% of the outstanding shares are present in person or by proxy, or (ii) the holders of more than 50% of the outstanding shares. The fund may not: (1) Make any investment inconsistent with the fund's status as a diversified investment company under the 1940 Act. (2) Invest 25% or more of its total assets in the securities of one or more issuers (excluding the U.S. government or its agencies or instrumentalities) conducting their principal business activities in the same industry. For purposes of this restriction the electric utility, natural gas utility, and telephone industries shall be considered separate industries. (3) Invest in real estate, except that the fund may invest in securities of issuers that invest in real estate or interests therein, securities that are secured by real estate or interests therein, securities of real estate investment trusts and mortgage-backed securities. (4) Invest in commodities or commodity contracts, except that the fund may invest in currency instruments and contracts and financial instruments and contracts that might be deemed to be commodities and commodity contracts. (5) Act as an underwriter, except as it may be deemed to be an underwriter in a sale of restricted securities held in its portfolio. 21 (6) Make loans, except by the purchase of debt obligations, by entering into repurchase agreements or through the lending of portfolio securities. (7) Borrow money, except the fund may: (a) borrow from banks or through reverse repurchase agreements in an amount up to 33 1/3% of the fund's total assets (including the amount borrowed); (b) to the extent permitted by applicable law, borrow up to an additional 5% of the fund's assets for temporary purposes; (c) obtain such short-term credits as are necessary for the clearance of portfolio transactions; (d) purchase securities on margin to the extent permitted by applicable law; and (e) engage in transactions in mortgage dollar rolls that are accounted for as financings. NON-FUNDAMENTAL INVESTMENT RESTRICTIONS. The following restriction has 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: (a) invest in companies for the purpose of exercising control or management; (b) purchase securities while borrowings are in excess of 5% of total assets. 3. MANAGEMENT OF THE FUND The fund's Board of Trustees provides broad supervision over the affairs of the fund. The officers of the fund are responsible for the fund's operations. 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.*, CHAIRMAN OF THE BOARD, PRESIDENT AND TRUSTEE, DOB: JUNE 1926 President, Chief Executive Officer and a Director of The Pioneer Group, Inc. ("PGI"); Chairman and a Director of Pioneer Pioneer Funds Distributor, Inc. ("PFD"); Pioneer Goldfields Limited; Teberebie Goldfields Limited; Closed Joint-Stock Company "Amgun-Forest," Closed Joint-Stock Company "Udinskoye," and Closed Joint-Stock Company "Tas-Yurjah" Mining Company; Director of Pioneering Services Corporation ("PSC"), Pioneer Real Estate Advisors, Inc., Pioneer Forest, Inc., Pioneer Explorer, Inc., Pioneer Management (Ireland) Ltd. ("PMIL") and Closed Joint Stock Company "Forest-Starma"; President and Director of Pioneer Metals and Technology, Inc. , Pioneer International Corp. ("PIntl"), Pioneer First Russia, Inc. and Pioneer Omega, Inc. ("Pioneer Omega"); Chairman of the Supervisory Board of Pioneer Fonds Marketing, GmbH, Pioneer First Polish Investment Fund Joint Stock Company, S.A. ("Pioneer First Polish") and Pioneer Czech Investment Company, A.S. ("Pioneer Czech"); Member of the Supervisory Board of Pioneer Universal Pension Fund Company; Chairman, President and Trustee of all of the Pioneer mutual funds; Director of Pioneer Global Equity Fund Plc, Pioneer Global Bond Fund Plc, Pioneer Euro Reserve Fund Plc, Pioneer European Equity Fund Plc, Pioneer Emerging Europe Fund Plc, Pioneer US Real Estate Fund Plc and Pioneer U.S. Growth Fund Plc (collectively, the "Irish Funds"); and Partner, Hale and Dorr LLP (counsel to PGI and the fund). MARY K. BUSH, TRUSTEE, DOB: APRIL 1948 4201 CATHEDRAL AVENUE, NW, WASHINGTON, DC 20016 President, Bush & Co. (international financial advisory firm); Director and/or Trustee of Mortgage Guaranty Insurance Corporation, Novecon Management Company, Hoover Institution, Folger 22 Shakespeare Library, March of Dimes, Project 2000, Inc. (not-for-profit educational organization), Wilberforce University and Texaco, Inc.; Advisory Board Member, Washington Mutual Investors Fund (registered investment company); and Trustee of all the Pioneer mutual funds, except Pioneer Variable Contracts Trust. RICHARD H. EGDAHL, M.D., TRUSTEE, DOB: DECEMBER 1926 BOSTON UNIVERSITY HEALTH POLICY INSTITUTE, 53 BAY STATE ROAD, BOSTON, MA 02215 Alexander Graham Bell Professor of Health Care Entrepreneurship, Boston University; Professor of Management, Boston University School of Management; Professor of Public Health, Boston University School of Public Health; Professor of Surgery, Boston University School of Medicine; University Professor, Boston University; Director, Boston University Health Policy Institute, Boston University Program for Health Care Entrepreneurship, CORE (management of workers' compensation and disability costs - Nasdaq National Market), and WellSpace (provider of complementary health care); Trustee, Boston Medical Center; Honorary Trustee, Franciscan Children's Hospital; and Trustee of all of the Pioneer mutual funds. MARGARET B.W. GRAHAM, TRUSTEE, DOB: MAY 1947 THE KEEP, P.O. BOX 110, LITTLE DEER ISLE, ME 04650 Founding Director, The Winthrop Group, Inc. (consulting firm); Manager of Research Operations, Xerox Palo Alto Research Center, from 1991 to 1994; Professor of Operations Management and Management of Technology and Associate Dean, Boston University School of Management, from 1989 to 1993; and Trustee of all the Pioneer mutual funds, except Pioneer Variable Contracts Trust. JOHN W. KENDRICK, TRUSTEE, DOB: JULY 1917 6363 WATERWAY DRIVE, FALLS CHURCH, VA 22044 Professor Emeritus, George Washington University; Director, American Productivity and Quality Center; Adjunct Scholar, American Enterprise Institute; Economic Consultant; and Trustee of all of the Pioneer mutual funds, except Pioneer Variable Contracts Trust. MARGUERITE A. PIRET, TRUSTEE, DOB: MAY 1948 ONE BOSTON PLACE, 26TH FLOOR, BOSTON, MA 02108 President, Newbury, Piret & Company, Inc. (merchant banking firm); Trustee of Boston Medical Center; Member of the Board of Governors of the Investment Company Institute; Director, Organogenesis Inc. (tissue engineering company); and Trustee of all of the Pioneer mutual funds. DAVID D. TRIPPLE*, TRUSTEE AND EXECUTIVE VICE PRESIDENT, DOB: FEBRUARY 1944 Executive Vice President and a Director of PGI; President and a Director of Pioneer and PFD; Director of PIntl, PREA, Pioneer Omega, PMIL, Pioneer First Investment Fund and the Irish Funds; Member of the Supervisory Board of Pioneer First Polish and Pioneer Czech; and Executive Vice President and Trustee of all of the Pioneer mutual funds. STEPHEN K. WEST, TRUSTEE, DOB: SEPTEMBER 1928 125 BROAD STREET, NEW YORK, NY 10004 Of Counsel, Sullivan & Cromwell (law firm); Director, Kleinwort Benson Australian Income Fund, Inc. since May 1997 and The Swiss Helvetia Fund, Inc. since 1995 (mutual funds), AMVESCAP PLC (investment managers) since 1997 and American Insurance Holdings, Inc; Trustee, The Winthrop Focus Funds (mutual funds); and Trustee of all of the Pioneer mutual funds. 23 JOHN WINTHROP, TRUSTEE, DOB: JUNE 1936 ONE NORTH ADGERS WHARF, CHARLESTON, SC 29401 President, John Winthrop & Co., Inc. (private investment firm); Director of NUI Corp. (energy sales, services and distribution); and Trustee of all of the Pioneer mutual funds, except Pioneer Variable Contracts Trust. JOHN A. BOYNTON, TREASURER, DOB: JANUARY 1954 Executive Vice President, Treasurer and Chief Financial Officer of PGI; Treasurer of Pioneer, PFD, PSC Pintl, PREA, Pioneer Omega and of all of the Pioneer mutual funds. Prior to joining PGI in November 1998, Mr. Boynton was a Senior Vice President of The Quaker Oats Company. JOSEPH P. BARRI, SECRETARY, DOB: AUGUST 1946 Corporate Secretary of PGI and most of its subsidiaries; Secretary of all of the Pioneer mutual funds; and Partner, Hale and Dorr LLP. ERIC W. RECKARD, ASSISTANT TREASURER, DOB: JUNE 1956 Vice President-Corporate Finance of PGI since February 1999; Manager of Business Planning and Internal Audit of PGI since September 1996; Manager of Fund Accounting of Pioneer since May 1994; Manager of Auditing, Compliance and Business Analysis for PGI prior to May 1994; and Assistant Treasurer of all of the Pioneer mutual funds. ROBERT P. NAULT, ASSISTANT SECRETARY, DOB: MARCH 1964 Senior Vice President, General Counsel and Assistant Secretary of PGI since 1995; Assistant Secretary of Pioneer, certain other PGI subsidiaries and all of the Pioneer mutual funds; Assistant Clerk of PFD and PSC; and junior partner of Hale and Dorr LLP prior to 1995. SHERMAN B. RUSS, VICE PRESIDENT, DOB: JULY 1937 Senior Vice President of Pioneer Investments; Vice President of Pioneer Money Market Trust, Pioneer America Income Trust and Pioneer Interest Shares. The business address of all officers is 60 State Street, Boston, Massachusetts 02109. All of the outstanding capital stock of PFD, Pioneer and PSC is owned, directly or indirectly, by PGI, a publicly owned Delaware corporation. Pioneer, the fund's investment adviser, serves as the investment adviser for the Pioneer mutual funds and manages the investments of certain institutional accounts. The table below lists all of the U.S.-registered Pioneer mutual funds currently offered to the public and the investment adviser and principal underwriter for each fund. INVESTMENT ADVISER PRINCIPAL FUND NAME UNDERWRITER Pioneer International Growth Fund Pioneer PFD Pioneer Europe Fund Pioneer PFD Pioneer World Equity Fund Pioneer PFD Pioneer Emerging Markets Fund Pioneer PFD Pioneer Indo-Asia Fund Pioneer PFD Pioneer Capital Growth Fund Pioneer PFD Pioneer Mid-Cap Fund Pioneer PFD Pioneer Growth Shares Pioneer PFD 24 Pioneer Small Company Fund Pioneer PFD Pioneer Independence Fund Pioneer Note 1 Pioneer Micro-Cap Fund Pioneer PFD Pioneer Gold Shares Pioneer PFD Pioneer Balanced Fund Pioneer PFD Pioneer Equity-Income Fund Pioneer PFD Pioneer Fund Pioneer PFD Pioneer II Pioneer PFD Pioneer Real Estate Shares Pioneer PFD Pioneer Short-Term Income Trust Pioneer PFD Pioneer America Income Trust Pioneer PFD Pioneer Bond Fund Pioneer PFD Pioneer Tax-Free Income Fund Pioneer PFD Pioneer Strategic Income Fund Pioneer PFD Pioneer Cash Reserves Fund Pioneer PFD Pioneer Interest Shares Pioneer Note 2 Pioneer Variable Contracts Trust Pioneer Note 3 Note 1 This fund is available to the general public only through Pioneer Independence Plans, a systematic investment plan sponsored by PFD. Note 2 This fund is a closed-end fund. Note 3 This is a series of 12 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. SHARE OWNERSHIP See Appendix A for annual information on the ownership of fund shares by the Trustees, the fund's officers and owners in excess of 5% of any class of shares of the fund. COMPENSATION OF OFFICERS AND TRUSTEES The fund pays no salaries or compensation to any of its officers. The fund compensates each Trustee who is not affiliated with PGI, Pioneer, PFD or PSC with a base fee, a variable fee calculated on the basis of average net assets of the fund, per meeting fees, and annual committee participation fees for each committee member or chairperson that are based on percentages of his or her aggregate annual fee. See the fee table in Appendix A. SALES LOADS. Current and former Trustees and officers of the fund and other qualifying persons may purchase the fund's Class A shares without an initial sales charge. 4. INVESTMENT ADVISER The fund has contracted with Pioneer to act as its investment adviser. Pioneer is a wholly owned subsidiary of PGI. PGI is engaged in the financial services business in the U.S. and other countries. Certain Trustees or officers of the fund are also directors and/or officers of PGI and its subsidiaries (see management biographies above). 25 As the fund's investment adviser, Pioneer provides the fund with investment research, advice and supervision and furnishes an investment program for the fund consistent with the fund's investment objective and policies, subject to the supervision of the fund's Trustees. Pioneer determines what portfolio securities will be purchased or sold, arranges for the placing of orders for the purchase or sale of portfolio securities, selects brokers or dealers to place those orders, maintains books and records with respect to the fund's securities transactions, and reports to the Trustees on the fund's investments and performance. Under the terms of its contract with the fund, Pioneer pays all the operating expenses, including executive salaries and the rental of office space, relating 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 Pioneer, 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, state or blue sky securities agencies 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) any 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 Pioneer, 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 brokers' and underwriting commissions chargeable to the fund in connection with securities transactions to which the fund is a party. The Trustees' approval of and the terms, continuance and termination of the management contract are governed by the 1940 Act and the Investment Advisers Act of 1940, as applicable. Pursuant to the management contract, Pioneer will not be liable for any error of judgment or mistake of law or for any loss sustained by reason of the adoption of any investment policy or the purchase, sale or retention of any securities on the recommendation of Pioneer. Pioneer, 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 management contract. ADVISORY FEE. As compensation for its management services the fund pays Pioneer at the annual rate of 0.50% of the fund's average daily net assets. This fee is computed and accrued daily and paid monthly. ADMINISTRATION AGREEMENT. The fund has entered into an administration agreement with Pioneer pursuant to which certain accounting and legal services which are expenses payable by the fund under the management contract are performed by Pioneer and pursuant to which Pioneer is reimbursed for its costs of providing such services. POTENTIAL CONFLICT OF INTEREST. The fund is managed by Pioneer which also serves as investment adviser to other Pioneer mutual funds and private accounts with investment objectives identical or similar to those of the fund. Securities frequently meet the investment objectives of the fund, the other Pioneer 26 mutual 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 more than one of the Pioneer mutual funds or a private account managed by Pioneer seeks to acquire the same security at about the same time, the fund may not be able to acquire as large a position in such security as it desires or 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 Pioneer 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. In the event more than one account purchases or sells the same security on a given date, the purchases and sales will normally be made as nearly as practicable on a pro rata basis in proportion to the amounts desired to be purchased or sold by each account. Although the other Pioneer mutual funds may have the same or similar investment objectives and policies as the fund, their portfolios do not generally consist of the same investments as the fund or each other, and their performance results are likely to differ from those of the fund. PERSONAL SECURITIES TRANSACTIONS. In an effort to avoid conflicts of interest with the fund, the fund and Pioneer have adopted a code of ethics that is designed to maintain a high standard of personal conduct by directing that all personnel defer to the interests of the fund and its shareholders in making personal securities transactions. 5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLANS PRINCIPAL UNDERWRITER PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter for the fund in connection with the continuous offering of its shares. PFD is an indirect wholly owned subsidiary of PGI. The fund entered into an underwriting agreement with PFD which 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 or compensated by the fund under the distribution plans (discussed below). 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. Under the underwriting agreement, PFD will use its best efforts in rendering services to the fund. 27 See "Class A Share Sales Charges" for the schedule of initial sales charge reallowed to dealers as a percentage of the offering price of the fund's Class A shares. See the tables in Appendix A for commissions retained by PFD and reallowed to dealers in connection with PFD's offering of the fund's Class A shares during recently completed fiscal years. 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. The redemption price of shares of beneficial interest of the fund may, at Pioneer's discretion, be paid in cash or portfolio securities. The fund has, however, elected to be governed by Rule 18f-1 under the 1940 Act pursuant to which the fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the fund's net asset value during any 90-day period for any one shareholder. Should the amount of redemptions by any shareholder exceed such limitation, the fund will have the option of redeeming the excess in cash or portfolio securities. In the latter case, the securities are taken at their value employed in determining the fund's net asset value. A shareholder whose shares are redeemed in-kind may incur brokerage charges in selling the securities received in-kind. The selection of such securities will be made in such manner as the Board of Trustees deems fair and reasonable. DISTRIBUTION PLANS 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") and a plan of distribution with respect to its Class C shares (the "Class C Plan") (together, the "Plans"), pursuant to which certain distribution and service fees are paid to PFD. Because of the Plans, long-term shareholders may pay more than the economic equivalent of the maximum sales charge permitted by the National Association of Securities Dealers, Inc. (the "NASD") regarding investment companies. CLASS A PLAN. 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 Board of Trustees. The Board of Trustees has approved the following categories of expenses that may be reimbursed under the Class A Plan: (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; 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 is prohibited from acting in any capacity or providing any of the described services, management will consider what action, if any, would be appropriate. The expenses of the fund pursuant to the Class A Plan are accrued daily at a rate which may not exceed the annual rate of 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. 28 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. The limited carryover provision in the Class A Plan may result in an expense invoiced to the fund in one fiscal year being paid in the subsequent fiscal year and thus being treated for purposes of calculating the maximum expenditures of the fund as having been incurred in the subsequent fiscal year. 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 termination or non-continuance, provided that payments by the fund during such 12-month period shall not exceed 0.25% of the fund's average daily net assets attributable to Class A shares during such period. See Appendix A for the amount, if any, of carryover of distribution expenses as of the end of the most recent calendar year. CLASS B PLAN. Commissions on the sale of Class B shares equal to 4.00% of the amount invested are paid to broker-dealers who have sales agreements with PFD. PFD may also advance to dealers the first-year service fee payable under the Class B Plan at a rate up to 0.25% of the purchase price of such shares. As compensation for such advance of the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. 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. Commencing in the 13th month following the purchase of Class B shares, dealers will become eligible for additional annual service fees of up to 0.25% of the net asset value of such shares. 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 with respect to Class B shares of 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. When a broker-dealer sells Class B shares and elects, with PFD's approval, to waive its right to receive the commission normally paid at the time of the sale, PFD may cause all or a portion of the distribution fees described above to be paid to the broker-dealer. The Class B Plan and underwriting agreement permit PFD to sell its right to receive distribution fees under the Class B Plan and CDSCs to third parties. PFD enters into such transactions to finance the payment of commissions to brokers at the time of sale and other distribution-related expenses. In connection with such amendments, the fund has agreed that the distribution fee will not be terminated or modified (including a modification by change in the rules relating to the conversion of Class B shares into Class A shares) with respect to Class B shares (a) issued prior to the date of any termination or modification or (b) attributable to Class B shares issued through one or a series of exchanges of shares of 29 another investment company for which PFD acts as principal underwriter which were initially issued prior to the date of such termination or modification or (c) issued as a dividend or distribution upon Class B shares initially issued or attributable to Class B shares issued prior to the date of any such termination or modification except: (i) to the extent required by a change in the 1940 Act, the rules or regulations under the 1940 Act, the Conduct Rules of the NASD or an order of any court or governmental agency; (ii) in connection with a Complete Termination (as defined in the Class B Plan); or (iii) on a basis, determined by the Board of Trustees acting in good faith, so long as from and after the effective date of such modification or termination: neither the fund, the adviser nor certain affiliates pay, directly or indirectly, a fee to any person for the provision of personal and account maintenance services (as such terms are used in the Conduct Rules of the NASD) to the holders of Class B shares of the fund and the termination or modification of the distribution fee applies with equal effect to all Class B shares outstanding from time to time. The Class B Plan also provides that PFD shall be deemed to have performed all services required to be performed in order to be entitled to receive the distribution fee, if any, payable with respect to Class B shares sold through PFD upon the settlement date of the sale of such Class B shares or in the case of Class B shares issued through one or a series of exchanges of shares of another investment company for which PFD acts as principal underwriter or issued as a dividend or distribution upon Class B shares, on the settlement date of the first sale on a commission basis of a Class B share from which such Class B share was derived. In the amendments to the underwriting agreement, the fund agreed that subsequent to the issuance of a Class B share, it would not take any action to waive or change any CDSC (including a change in the rules applicable to conversion of Class B shares into another class) in respect of such Class B shares, except (i) as provided in the fund's prospectus or statement of additional information, or (ii) as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of the NASD or any order of any court or governmental agency. CLASS C PLAN. Commissions on the sale of Class C shares of up to 0.75% of the amount invested in Class C shares are paid to broker-dealers who have sales agreements with PFD. PFD may also advance to dealers the first-year service fee payable under the Class C Plan at a rate up to 0.25% of the purchase price of such shares. As compensation for such advance of the service fee, PFD may retain the service fee paid by the fund with respect to such shares for the first year after purchase. The Class C Plan provides that the fund will pay PFD, as the fund's distributor for its Class C shares, a distribution fee accrued daily and paid quarterly, equal on an annual basis to 0.75% of the fund's average daily net assets attributable to Class C shares and will pay PFD a service fee equal to 0.25% of the fund's average daily net assets attributable to Class C shares. PFD will in turn pay to securities dealers which enter into a sales agreement with PFD a distribution fee and a service fee at rates of up to 0.75% and 0.25%, respectively, of the fund's average daily net assets attributable to Class C shares owned by investors for whom that securities dealer is the holder or dealer of record. The service fee is intended to be in consideration of personal services and/or account maintenance services rendered by the dealer with respect to Class C 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. Commencing in the 13th month following the 30 purchase of Class C shares, dealers will become eligible for additional annual distribution fees and service fees of up to 0.75% and 0.25%, respectively, of the net asset value of such shares. 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 C 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 C Plan is to compensate PFD for its distribution services with respect to Class C shares of 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 C Plan also provides that PFD will receive all CDSCs attributable to Class C shares. When a broker-dealer sells Class C shares and elects, with PFD's approval, to waive its right to receive the commission normally paid at the time of the sale, PFD may cause all or a portion of the distribution fees described above to be paid to the broker-dealer. GENERAL In accordance with the terms of each Plan, PFD provides to the fund for review by the Trustees a quarterly written report of the amounts expended under the Plan and the purposes 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. Each Plan's adoption, terms, continuance and termination are governed by Rule 12b-1 under the 1940 Act. The Board of Trustees believes that there is a reasonable likelihood that the Plans will benefit the fund and its current and future shareholders. 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 as provided in Rule 12b-1. See Appendix A for fund expenses under the Class A Plan, Class B Plan and Class C Plan and CDSCs paid to PFD for the most recently completed fiscal year. Upon redemption, Class A shares may be subject to a 1% CDSC, Class B shares are subject to a CDSC at a rate declining from a maximum 4% of the lower of the cost or market value of the shares and Class C shares may be subject to a 1% CDSC. 6. SHAREHOLDER SERVICING/TRANSFER AGENT The fund has contracted with PSC, 60 State Street, Boston, Massachusetts 02109, to act as shareholder servicing and transfer agent for the fund. 31 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 the fund's portfolio; and (iii) maintaining account records and responding to shareholder inquiries. PSC receives an annual fee of $33.00 for each Class A, Class B and Class C 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 fund may compensate entities which have agreed to provide certain sub-accounting services such as specific transaction processing and recordkeeping services. Any such payments by the fund would be in lieu of the per account fee which would otherwise be paid by the fund to PSC. 7. CUSTODIAN Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109, 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. 8. INDEPENDENT PUBLIC ACCOUNTANTS Arthur Andersen LLP, 225 Franklin Street, Boston, Massachusetts 02110, 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 SEC. 9. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by Pioneer pursuant to authority contained in the fund's management contract. Pioneer seeks to obtain the best execution on portfolio trades. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer considers 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. Transactions in foreign equity securities are executed by broker-dealers in foreign countries in which commission rates are fixed and, therefore, are not negotiable (as such rates are in the U.S.). Pioneer may select broker-dealers that provide brokerage and/or research services to the fund and/or other investment companies or other accounts managed by Pioneer. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended, if Pioneer determines in good faith that the amount of commissions charged by a broker-dealer is reasonable in relation to the value of the brokerage and research services provided by such broker, 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; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting 32 securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer maintains a listing of broker-dealers who provide such services on a regular basis. However, because many transactions on behalf of the fund and other investment companies or accounts managed by Pioneer 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. Pioneer believes that no exact dollar value can be calculated for such services. The research received from broker-dealers may be useful to Pioneer in rendering investment management services to the fund as well as other investment companies or other accounts managed by Pioneer, 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 accounts may be useful to Pioneer in carrying out its obligations to the fund. The receipt of such research has not reduced Pioneer's normal independent research activities; however, it enables Pioneer 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 managed by Pioneer. This policy does not imply a commitment to execute all portfolio transactions through all broker-dealers that sell shares of the fund. The Pioneer funds have entered into third-party brokerage and/or expense offset arrangements to reduce the funds' total operating expenses. Pursuant to third-party brokerage arrangements, certain of the funds that invest primarily in U.S. equity securities may incur lower custody fees by directing brokerage to third-party broker-dealers. Pursuant to expense offset arrangements, the funds incur lower transfer agency expenses by maintaining their cash balances with the custodian. See "Financial highlights" in the prospectus. See the table in Appendix A for aggregate brokerage and underwriting commissions paid by the fund in connection with its portfolio transactions during recently completed fiscal years. The Board of Trustees periodically reviews Pioneer's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund. 10. DESCRIPTION OF SHARES 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 shareholder at the next determined net asset value per share less any applicable CDSC. See "Sales Charges." 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 Class A share certificates; certificates will not be issued for Class B or Class C shares. The fund's Agreement and Declaration of Trust, dated as of January 5, 1999 (the "Declaration"), 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 and may divide or combine the shares into a greater or lesser number 33 of shares without thereby changing the proportionate beneficial interests in the fund. The Declaration 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 four classes of shares of the fund, designated as Class A shares, Class B shares, Class C shares and Class Y shares. Class Y shares have not been issued as of the date of this SAI. 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. 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, Class B and Class C shareholders have exclusive voting rights with respect to the Rule 12b-1 Plans adopted by holders of those shares in connection with the distribution of shares. 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 fund is not required, and does not intend, to hold annual shareholder 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 shares of each series 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 Declaration without the affirmative vote of a majority of the fund's shares. Shares have no preemptive or conversion rights except that under certain circumstances Class B shares may convert to Class A shares. As a Delaware business trust, the fund's operations are governed by the Declaration. 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 Declaration expressly provides that the fund is organized under the Delaware Act and that the Declaration is to be governed by Delaware law. There is nevertheless a possibility 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 fund's shareholders could become subject to personal liability. To guard against this risk, the Declaration (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 34 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. In addition to the requirements under Delaware law, the Declaration provides that a shareholder 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 shareholder request and investigate the basis of such claim. The Trustees 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. The Declaration 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, threatened 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 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. The Declaration provides that any Trustees who is not an "interested person" of Pioneer shall be considered to be independent for purposes of Delaware law notwithstanding the fact that such trustees receive compensation for serving as a trustee of the fund or other investment companies for which Pioneer acts as investment adviser. 11. SALES CHARGES The fund continuously offers three classes of shares designated as Class A, Class B, and Class C as described in the prospectus. 35 CLASS A SHARE SALES CHARGES You may buy Class A shares at the public offering price, including a sales charge, as follows: SALES CHARGE AS A % OF ---------------------- OFFERING NET AMOUNT DEALER AMOUNT OF PURCHASE......... PRICE INVESTED REALLOWANCE 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......... 0.00 0.00 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 Sections 401 or 408 of 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. At the sole discretion of PFD, holdings of funds domiciled outside the U.S., but which are managed by affiliates of Pioneer, may be included for this purpose. No sales charge is payable at the time of purchase on investments of $1 million or more, or for purchases by 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. 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 invested; and 0.25% on the excess over $50 million invested. 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. 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 commissions paid or a pro rata portion thereof if the retirement plan redeems its shares within 12 months of purchase. Contingent upon the achievement of certain sales objectives, PFD may pay 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. From time to time, PFD may elect to reallow the entire initial sales charge to participating dealers for all Class A sales with respect to which orders are placed during a particular period. Dealers to whom substantially the entire sales charge is reallowed may be deemed to be underwriters under the federal securities laws. LETTER OF INTENT ("LOI"). Reduced sales charges are available for purchases of $50,000 or more of Class A shares (excluding any reinvestments of dividends and capital gains distributions) made within a 13-month period pursuant to an LOI which may be established by completing the Letter of Intent section of the Account Application. The reduced sales charge will be the charge that would be applicable to the purchase of the specified amount of Class A shares as if the shares had all been purchased at the same time. A purchase not made pursuant to an LOI may be included if the LOI is submitted to PSC within 36 90 days of such purchase. You may also obtain the reduced sales charge by including the value (at current offering price) of all your Class A shares in the fund and all other Pioneer mutual funds held of record as of the date of your LOI in the amount used to determine the applicable sales charge for the Class A shares to be purchased under the LOI. Five percent of your total intended purchase amount will be held in escrow by PSC, registered in your name, until the terms of the LOI are fulfilled. When you sign the Account Application, you agree to irrevocably appoint PSC your attorney-in-fact to surrender for redemption any or all shares held in escrow with full power of substitution. An LOI is not a binding obligation upon the investor to purchase, or the fund to sell, the amount specified in the LOI. If the total purchases, less redemptions, exceed the amount specified under the LOI and are in an amount which would qualify for a further quantity discount, all transactions will be recomputed on the expiration date of the LOI to effect the lower sales charge. Any difference in the sales charge resulting from such recomputation will be either delivered to you in cash or invested in additional shares at the lower sales charge. The dealer, by signing the Account Application, agrees to return to PFD, as part of such retroactive adjustment, the excess of the commission previously reallowed or paid to the dealer over that which is applicable to the actual amount of the total purchases under the LOI. If the total purchases, less redemptions, are less than the amount specified under the LOI, you must remit to PFD any difference between the sales charge on the amount actually purchased and the amount originally specified in the LOI. When the difference is paid, the shares held in escrow will be deposited to your account. If you do not pay the difference in sales charge within 20 days after written request from PFD or your dealer, PSC, after receiving instructions from PFD, will redeem the appropriate number of shares held in escrow to realize the difference and release any excess. CLASS B SHARES You may buy Class B shares at the net asset value per share next computed after receipt of a purchase order 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 month will be aggregated and deemed to have been made on the first day of that month. 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. The CDSC for Class B shares subject to a CDSC upon redemption will be determined as follows: CDSC AS A % OF DOLLAR YEAR SINCE PURCHASE AMOUNT SUBJECT TO CDSC First ......... 4.0 Second ......... 4.0 Third ......... 3.0 Fourth ......... 3.0 37 Fifth ......... 2.0 Sixth ......... 1.0 Seventh and thereafter 0.0 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 beginning of the calendar month that is five years after the purchase date, except as noted below. Class B shares acquired by exchange from Class B shares of another Pioneer mutual 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 (the "IRS") or an opinion of counsel that such conversions will not constitute taxable events for federal tax purposes. The conversion of Class B shares to Class A shares will not occur if such ruling or opinion is not available and, therefore, Class B shares would continue to be subject to higher expenses than Class A shares for an indeterminate period. CLASS C SHARES You may buy Class C shares at net asset value per share next computed after receipt of a purchase order without the imposition of an initial sales charge; however, Class C shares redeemed within one year of purchase will be subject to a CDSC of 1%. 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. Class C shares do not convert to any other class of fund shares. For the purpose of determining the time of any purchase, all payments during a month will be aggregated and deemed to have been made on the first day of that month. In processing redemptions of Class C shares, the fund will first redeem shares not subject to any CDSC and then shares held for the shortest period of time during the one-year period. As a result, you will pay the lowest possible CDSC. 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 C shares, including the payment of compensation to broker-dealers. 12. REDEEMING SHARES 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 for shareholders that are subject to U.S. federal income tax. The net asset value per share received upon redemption or repurchase may be more or less 38 than the cost of shares to an investor, depending on the market value of the portfolio at the time of redemption or repurchase. SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP"). A SWP is designed to provide a convenient method of receiving fixed payments at regular intervals from fund share accounts having a total value of not less than $10,000. You must also be reinvesting all dividends and capital gains distributions to use the SWP option. Periodic payments of $50 or more will be deposited monthly, quarterly, semiannually or annually directly into a bank account designated by the applicant or will be sent by check to the applicant, or any person designated by the applicant. Payments can be made either by check or electronic funds transfer to a bank account designated by you. Class B accounts must meet the minimum initial investment requirement prior to establishing a SWP. Withdrawals from Class B and Class C share accounts are limited to 10% of the value of the account at the time the SWP is established. See "Qualifying for a reduced sales charge" in the prospectus. If you direct that withdrawal payments be paid to another person, want to change the bank where payments are sent or designate an address that is different from the account's address of record after you have opened your account, a signature guarantee must accompany your instructions. Withdrawals under the SWP are redemptions that may have tax consequences for you. 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. SWP redemptions reduce and may ultimately exhaust the number of shares in your account. 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. A 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 in the shareholder's account have been redeemed. You may obtain additional information by calling PSC at 1-800-225-6292. REINSTATEMENT PRIVILEGE (CLASS A SHARES). 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 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 reinstatement occurs. For example, if a redemption resulted in a loss and an investment is made in shares of the fund within 30 days before or after the redemption, you may not be able to recognize the loss for federal income tax purposes. Subject to the provisions outlined in the prospectus, 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. 38 13. TELEPHONE TRANSACTIONS You may purchase, exchange or sell Class A, Class B or Class C shares by telephone. See the prospectus for more information. For personal assistance, call 1-800-225-6292 between 8:00 a.m. and 9:00 p.m. Eastern time on weekdays. Computer-assisted transactions may be available to shareholders who have prerecorded certain bank information (see "FactFoneSM"). YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE TRANSACTION. 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 nor 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 purchase, exchange or redemption. You should communicate with the fund in writing if you are unable to reach the fund by telephone. FACTFONESM. FactFoneSM is an automated inquiry and telephone transaction system available to Pioneer mutual fund shareholders by dialing 1-800-225-4321. FactFoneSM allows shareholder access to current information on Pioneer mutual fund accounts and to the prices and yields of all publicly available Pioneer mutual funds. In addition, you may use FactFoneSM to make computer-assisted telephone purchases, exchanges or redemptions from your Pioneer mutual fund accounts, access your account balances and last three transactions and order a duplicate statement if you have activated your PIN. Telephone purchases or redemptions require the establishment of a bank account of record. Computer-assisted Class Y share telephone purchases, exchanges and redemptions and certain other FactFoneSM features for Class Y shareholders are not currently available through FactFoneSM. YOU ARE STRONGLY URGED TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL 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 FactFoneSM. Call PSC for assistance. FactFoneSM allows shareholders to hear the following recorded fund information: 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 fund; and o dividends and capital gains distributions on all Pioneer mutual funds. Yields are calculated in accordance with SEC mandated standard formulas. All performance numbers communicated through FactFoneSM represent past performance, and figures include the maximum applicable sales charge. A shareholder's actual yield and total return will vary 40 with changing market conditions. The value of Class A, Class B, Class C and Class Y shares (except for Pioneer Cash Reserves Fund, which seeks to maintain a stable $1.00 share price) will also vary, and such shares may be worth more or less at redemption than their original cost. 14. PRICING OF SHARES The net asset value per share of each class of the fund is determined as of the close of regular trading on the Exchange (normally 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, Martin Luther King, Jr. 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 on 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 on which no purchase orders in good order for fund shares are received and no shares are tendered and accepted for redemption. 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 regular trading on 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 regular trading on 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 regular trading on 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 may be 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, although the actual computations may be made by persons acting pursuant to the direction of the Board of Trustees. 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 that class, and dividing the result by the number of outstanding shares of that class. For purposes of determining net asset value, expenses of the classes of the fund are accrued daily and taken into account. 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, and Class C shares are offered at net asset value without the imposition of an initial sales charge (Class B and Class C shares may be subject to a CDSC). 15. TAX STATUS The fund intends to elect to be treated and to qualify each year as a "regulated investment company" under Subchapter M of the Code so that it will not pay federal income tax on income and capital gains distributed to shareholders as required under the Code. If the fund did not qualify as a regulated investment company, it would be treated as a U.S. corporation subject to federal income tax. Under the Code, the fund will be subject to a nondeductible 4% federal excise tax on a portion of its undistributed 41 ordinary 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 generally pays distributions of net long-term capital gains in November. The fund generally pays dividends from any net investment income or distributions from net short-term capital gainson the last business day of the month or shortly thereafter. Dividends from income and/or capital gains may also be paid at such other times as may be necessary for the fund to avoid federal income or excise tax. In order to qualify as a regulated investment company 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 and forward contracts) derived with respect to its business of investing in such stock, securities or currencies (the "90% income test") and satisfy certain annual distribution and quarterly diversification requirements. For purposes of the 90% income test, income the fund earns from equity interests in certain entities that are not treated as corporations (e.g., are treated as partnerships or trusts) for U.S. tax purposes will generally have the same character for the fund as in the hands of such entities. Consequently, the fund may be required to limit its equity investments in such entities that earn fee income, rental income or other nonqualifying income. 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 below whether a shareholder takes them in cash or reinvests them in additional shares of the fund. 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. Dividends from net long-term capital gain in excess of net short-term capital loss ("net capital gain"), if any, 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, foreign currency forward 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. Under future regulations, any such transactions that are not directly related to the fund's investments in stock or securities (or its options contracts or futures contracts with respect to stock or securities) may need to be limited in order to enable the fund to satisfy 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 resulting ordinary loss for such year would not be deductible by the fund or its shareholders in future years. The fund may invest a portion of its assets in debt obligations that are in the lowest rating categories or are unrated, including debt obligations of issuers not currently paying interest or who are in default. Investments in debt obligations that are at risk of or in default present special tax issues for the fund. Tax 42 rules are not entirely clear about issues such as when the fund may cease to accrue interest, original issue discount or market discount when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and income and whether exchanges of debt obligations in a workout context are taxable. These and other issues will be addressed by the fund, in the event it invests in such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to federal income or excise tax. If the fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the fund elects to include market discount in income currently), the fund must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments. However, the fund must distribute, at least annually, all or substantially all of its net income, including such accrued income, to shareholders to qualify as a regulated investment company under the Code and avoid federal income and excise taxes. Therefore, the fund may have to dispose of its portfolio securities under disadvantageous circumstances to generate cash, or may have to leverage itself by borrowing the cash, to satisfy distribution requirements. For federal income tax purposes, the fund is permitted to carry forward a net capital loss for any year to offset its capital gains, if any, during the eight years following the year of the loss. To the extent subsequent capital gains are offset by such losses, they would not result in federal income tax liability to the fund and are not expected to be distributed as such to shareholders. At the time of an investor's purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the fund's portfolio or undistributed taxable income of the fund. Consequently, subsequent distributions by the fund on these shares 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 economically represent a return of a portion of the investment. Redemptions and exchanges are taxable events for shareholders that are subject to tax. Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions. Any loss realized by a shareholder upon the redemption, exchange or other disposition 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 in the fund or another mutual fund at net asset value pursuant to the reinvestment privilege, or (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 reduced pursuant to the reinvestment or 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 redemptions or other dispositions of shares may be disallowed under "wash sale" rules in the event of other investments in the fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a redemption 43 or other disposition of shares. In such a case, the disallowed portion of any loss would be included in the federal tax basis of the shares acquired in the other investments. Options written or purchased and futures contracts entered into by the fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the fund to recognize gains or losses from marking-to-market even though such options may not have lapsed, been closed out, or exercised or such futures or forward contracts may not have been performed or closed out. The tax rules applicable to these contracts 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 relating to foreign currency may be subject to Section 988, as described above, and accordingly produce ordinary income or loss. Additionally, the fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a "constructive sale" of an "appreciated financial position" held by the fund under Section 1259 of the Code. Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though no corresponding cash amounts may concurrently be received, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash. 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. Certain tax elections may be available that would enable the fund to ameliorate some adverse effects of the tax rules described in this paragraph. The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the fund's income and gains or losses and hence of its distributions to shareholders. The fund's dividends and distributions will not qualify for any dividends received deduction that might otherwise be available for certain dividends received by shareholders that are corporations. The fund may be subject to withholding and other taxes imposed by foreign countries, including taxes on interest, dividends and capital gains with respect to its investments in those countries, which would, if imposed, reduce the yield on or return from those investments. Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases. The fund does not expect to satisfy the requirements for passing through to its shareholders their pro rata shares of qualified foreign taxes paid by the fund, with the result that 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. A state income (and possibly local income and/or intangible property) tax exemption is generally available to the extent the fund's distributions are derived from interest on (or, in the case of intangible property taxes, the value of its assets is attributable to) certain U.S. Government obligations, provided in some states that certain thresholds for holdings of such obligations and/or reporting requirements are satisfied. The fund will not seek to satisfy any threshold or reporting requirements that may apply in particular taxing jurisdictions, although the fund may in its sole discretion provide relevant information to shareholders. 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. 44 Federal law requires that the fund withhold (as "backup withholding") 31% of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions (including exchanges) or repurchases of fund shares paid to shareholders who have not complied with IRS regulations. In order to avoid this withholding requirement, shareholders must certify on their Account Applications, or on separate IRS Forms W-9, that the Social Security Number or other Taxpayer Identification Number they provide is their correct number 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. If, as anticipated, the fund qualifies as a regulated investment company under the Code, it will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax. The description of certain federal tax provisions 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. This description does not address the special tax rules that may be applicable to particular types of investors, such as financial institutions, insurance companies, securities dealers, or tax-exempt or tax-deferred plans, accounts or entities. Investors other than U.S. persons may be subject to different U.S. tax treatment, including a possible 30% non-resident alien U.S. withholding tax (or non-resident alien withholding tax at a lower treaty rate) on amounts treated as ordinary dividends from the fund and, unless an effective IRS Form W-8, Form W-8BEN, or other authorized withholding certificate is on file, to 31% backup withholding on certain other payments from the fund. Shareholders should consult their own tax advisers on these matters and on state, local and other applicable tax laws. 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, the fund may compare a class' yield and/or total return to the Lehman Brothers Government/Corporate Bond Index, U.S. Government bond rates, or other comparable indices or investment vehicles. In addition, the performance of the classes of the fund may be compared to alternative investment or savings vehicles and/or to indices or indicators of economic activity, e.g., inflation or interest rates. The fund may also include securities industry or comparative performance information generally and in advertising or materials marketing the fund's shares. 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, Ibbotson Associates, Investment Company Data, Inc., Johnson's Charts, Kanon Bloch Carre 45 and Co., Lipper, 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 of more classes of the fund since 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. STANDARDIZED YIELD QUOTATIONS The yield of a class is computed by dividing the class' net investment income per share during a base period of 30 days, or one month, by the maximum offering price per share of the class on the last day of such base period in accordance with the following formula: 46 ......... a-b 6 YIELD = 2[ ( ----- +1) -1] ......... cd Where: a = interest earned during the period b = net expenses accrued for the period c = the average daily number of shares outstanding during the period that were entitled to receive dividends d = the maximum offering price per share on the last day of the period For purposes of calculating interest earned on debt obligations as provided in item "a" above: (i) The yield to maturity of each obligation held by the fund is computed based on the market value of the obligation (including actual accrued interest, if any) at the close of business each day during the 30-day base period, or, with respect to obligations purchased during the month, the purchase price (plus actual accrued interest, if any) on settlement date, and with respect to obligations sold during the month the sale price (plus actual accrued interest, if any) between the trade and settlement dates. (ii) The yield to maturity of each obligation is then divided by 360 and the resulting quotient is multiplied by the market value of the obligation (including actual accrued interest, if any) to determine the interest income on the obligation for each day. The yield to maturity calculation has been made on each obligation during the 30 day base period. (iii) Interest earned on all debt obligations during the 30-day or one month period is then totaled. (iv) The maturity of an obligation with a call provision(s) is the next call date on which the obligation reasonably may be expected to be called or, if none, the maturity date. With respect to the treatment of discount and premium on mortgage- or other receivables-backed obligations which are expected to be subject to monthly payments of principal and interest ("pay downs"), the fund accounts for gain or loss attributable to actual monthly pay downs as an increase or decrease to interest income during the period. In addition, the fund may elect (i) to amortize the discount or premium remaining on a security, based on the cost of the security, to the weighted average maturity date, if such information is available, or to the remaining term of the security, if the weighted average maturity date is not available, or (ii) not to amortize the remaining discount or premium on a security. For purposes of computing yield, interest income is recognized by accruing 1/360 of the stated interest rate of each obligation in the fund's portfolio each day that the obligation is in the portfolio. Expenses of Class A and Class B accrued during any base period, if any, pursuant to the respective Distribution Plans are included among the expenses accrued during the base period. 47 See Appendix A for the 30-day yield for each class of fund shares as of the most recently completed semiannual period. STANDARDIZED AVERAGE ANNUAL TOTAL RETURN QUOTATIONS 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 calculations will usually assume the reinvestment of all dividends and capital gain 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 SEC. Average annual total return quotations for each class of 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: n P(1+T) = 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 and Class C shares at the end of the period; for Class Y shares, no sales load or CDSC applies T = average annual total return n = number of years ERV = ending redeemable value of the hypothetical $1,000 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 of shares are taken into consideration. For 48 any account fees that vary 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 the class' mean account size. See Appendix A for the annual total returns for each class of fund shares as of the most recently completed semiannual period. 17. FINANCIAL STATEMENTS The fund's annual report, filed with the SEC on August 25, 1998 (Accession No. 0000276776-98-000006), and its semiannual report, filed with the SEC on February 24, 1999 (Accession No. 0000276776-99-000004) are incorporated by reference into this SAI. The financial statements in the fund's annual report and semiannual report, including the financial highlights, for the periods ended June 30, 1998 and December 31, 1998, included or incorporated by reference into the prospectus and this SAI, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect to the financial statements, and are included in reliance upon the authority of Arthur Andersen LLP as experts in accounts and auditing in giving their report. The fund's annual and semiannual reports includes the financial statements referenced above and are available without charge upon request by calling Shareholder Services at 1-800-225-6292. To the extent permitted by the SEC, if members of the same family hold shares of the fund and have the same address of record, the fund will only send one copy of its shareholder reports to such address, unless the shareholders at such address request otherwise 49 18. APPENDIX A - ANNUAL FEE, EXPENSE AND OTHER INFORMATION PORTFOLIO TURNOVER The fund's annual portfolio turnover rate was 44% for the fiscal year ended June 30, 1998. SHARE OWNERSHIP As of April 30, 1999, the Trustees and officers of the fund owned beneficially in the aggregate less than 1% of the outstanding shares of the fund. The following is a list of the holders of 5% or more of any class of the fund's outstanding shares as of April 30, 1999: RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS MLPF&S for the Sole Benefit B 670,842.455 11.88 of its Customers Mutual Fund Administration C 206,535.931 17.10 97DT9 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484
COMPENSATION OF OFFICERS AND TRUSTEES The following table sets forth certain information with respect to the compensation of each Trustee of the fund. PENSION OR RETIREMENT TOTAL COMPENSATION FROM BENEFITS ACCRUED AS THE FUND AND OTHER AGGREGATE PART OF FUND EXPENSES PIONEER MUTUAL FUNDS** COMPENSATION FROM NAME OF TRUSTEE FUND* John F. Cogan, Jr.*** $ 500.00 $0 $ 18,750.00 Mary K. Bush 1,852.00 0 77,125.00 Richard H. Egdahl, M.D. 1,851.00 0 79,125.00 Margaret B.W. Graham 1,859.00 0 81,750.00 John W. Kendrick 1,752.00 0 65,900.00 Marguerite A. Piret 2,140.00 0 98,750.00 David D. Tripple*** 500.00 0 18,750.00 Stephen K. West 1,949.00 0 85,050.00 John Winthrop 2,079.00 0 85,875.00 -------- - ----------- $14,482.00 $0 $611,075.00
* For the fiscal year ended June 30, 1998. ** For the calendar year ended December 31, 1998. *** Under the management contract, Pioneer reimburses the fund for any Trustees fees paid by the fund. 50 APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER FOR THE FISCAL YEARS ENDED JUNE 30, 1998 1997 1996 $696,789 $596,770 $588,432 CARRYOVER OF DISTRIBUTION EXPENSES As of December 31, 1998 there was no carryover of distribution expenses under the Class A Plan. APPROXIMATE NET UNDERWRITING COMMISSIONS RETAINED BY PFD FOR THE FISCAL YEARS ENDED JUNE 30, 1998 1997 1996 $38,000 $33,000 $39,000 APPROXIMATE COMMISSIONS REALLOWED TO DEALERS FOR THE FISCAL YEARS ENDED JUNE 30, 1998 1997 1996 $305,000 $219,000 $281,000 FUND EXPENSES UNDER THE DISTRIBUTION PLANS FOR THE FISCAL YEAR ENDED JUNE 30, 1998 CLASS A PLAN CLASS B PLAN CLASS C PLAN $267,315 $248,383 $75,697 CDSCS During the fiscal year ended June 30, 1998, CDSCs in the amount of $81,811 were paid to PFD. APPROXIMATE BROKERAGE AND UNDERWRITING COMMISSIONS (PORTFOLIO TRANSACTIONS) Because most of the fund's securities transactions are affected on a principal basis involving a "spread" or "dealer mark-up", the fund has not paid any brokerage commissions during the past three years. CAPITAL LOSS CARRYFORWARDS AS OF JUNE 30, 1998 As of the end of its most recent taxable year, the fund had no capital loss carryforwards. 51 AVERAGE ANNUAL TOTAL RETURNS AS OF DECEMBER 31, 1998
AVERAGE ANNUAL TOTAL RETURN (%) SINCE INCEPTION CLASS OF SHARES ONE YEAR FIVE YEARS TEN YEARS INCEPTION DATE Class A Shares 2.85 5.32 7.98 8.85 10/31/78 Class B Shares 2.81 N/A N/A 6.41 4/4/94 Class C Shares 6.87 N/A N/A 5.38 1/31/96
STANDARDIZED 30-DAY YIELD (DECEMBER 31, 1998) - ------------------------------------ ---------------------------- CLASS OF SHARES 30-DAY YIELD - ------------------------------------ ---------------------------- - ------------------------------------ ---------------------------- Class A 4.90% - ------------------------------------ ---------------------------- - ------------------------------------ ---------------------------- Class B 4.32% - ------------------------------------ ---------------------------- - ------------------------------------ ---------------------------- Class C 4.22% - ------------------------------------ ---------------------------- 52 19. APPENDIX B - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED STOCK RATINGS1 MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") PRIME RATING SYSTEM Moody's short-term debt ratings are opinions of the ability of issuers to repay punctually senior debt obligations. These obligations have an original maturity not exceeding one year, unless explicitly noted. Moody's employs the following three designations, all judged to be investment grade, to indicate the relative repayment ability of rated issuers: Prime-1: Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will often be evidenced by many of the following characteristics: Leading market positions in well-established industries. High rates of return on funds employed. Conservative capitalization structure with moderate reliance on debt and ample asset protection. Broad margins in earnings coverage of fixed financial charges and high internal cash generation. Well-established access to a range of financial markets and assured sources of alternate liquidity. Prime-2: Issuers rated Prime-2 (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earnings trends and coverage ratios, while sound, may be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained. Prime-3: Issuers rated Prime-3 (or supporting institutions) have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and may require relatively high financial leverage. Adequate alternate liquidity is maintained. Not Prime: Issuers rated Not Prime do not fall within any of the Prime rating categories. Obligations of a branch of a bank are considered to be domiciled in the country in which the branch is located. Unless noted as an exception, Moody's rating on a bank's ability to repay senior obligations extends only to branches located in countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch obligations are rated at the lower of the bank's rating or Moody's Sovereign Rating for Bank Deposits for the country in which the branch is located. When the currency in which an obligation is denominated is not the same as the currency of the country in which the obligation is domiciled, Moody's ratings do not incorporate an opinion as to whether - ---------------------- 1The ratings indicated herein are believed to be the most recent ratings availble at the date of this statement of additional information 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. 53 payment of the obligation will be affected by actions of the government controlling the currency of denomination. In addition, risks associated with bilateral conflicts between an investor's home country and either the issuer's home country or the country where an issuer's branch is located are not incorporated into Moody's short-term debt ratings. If an issuer represents to Moody's that its short-term debt obligations are supported by the credit of another entity or entities, then the name or names of such supporting entity or entities are listed within the parenthesis beneath the name of the issuer, or there is a footnote referring the reader to another page for the name or names of the supporting entity or entities. In assigning ratings to such issuers, Moody's evaluates the financial strength of the affiliated corporations, commercial banks, insurance companies, foreign governments or other entities, but only as one factor in the total rating assessment. MOODY'S DEBT RATINGS 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 edged." 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 risk appear somewhat larger than the 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 a 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. Ba: Bonds which are rated Ba are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class. B: Bonds which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small. Caa: Bonds which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest. 54 Ca: Bonds which are rated Ca represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings. C: Bonds which are rated C are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Moody's bond ratings, where specified, are applicable to financial contracts, senior bank obligations and insurance company senior policyholder and claims obligations with an original maturity in excess of one year. Obligations relying upon support mechanisms such as letters-of-credit and bonds of indemnity are excluded unless explicitly rated. Obligations of a branch of a bank are considered to be domiciled in the country in which the branch is located. Unless noted as an exception, Moody's rating on a bank's ability to repay senior obligations extends only to branches located in countries which carry a Moody's Sovereign Rating for Bank Deposits. Such branch obligations are rated at the lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits for the country in which the branch is located. When the currency in which an obligation is denominated is not the same as the currency of the country in which the obligation is domiciled, Moody's ratings do not incorporate an opinion as to whether payment of the obligation will be affected by the actions of the government controlling the currency of denomination. In addition, risk associated with bilateral conflicts between an investor's home country and either the issuer's home country or the country where an issuer branch is located are not incorporated into Moody's ratings. Moody's makes no representation that rated bank obligations or insurance company obligations are exempt from registration under the 1933 Act or issued in conformity with any other applicable law or regulation. Nor does Moody's represent any specific bank or insurance company obligation is legally enforceable or a valid senior obligation of a rated issuer. Note: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicated that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicated a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. MOODY'S PREFERRED STOCK RATINGS Because of the fundamental differences between preferred stocks and bonds, a variation of Moody's familiar bond rating symbols is used in the quality ranking of preferred stock. The symbols, presented below, are designed to avoid comparison with bond quality in absolute terms. It should always be borne in mind that preferred stock occupies a junior position to bonds within a particular capital structure and that these securities are rated within the universe of preferred stocks. aaa: An issue which is rated aaa is considered to be a top-quality preferred stock. This rating indicates good asset protection and the least risk of dividend impairment within the universe of preferred stocks. aa: An issue which is rated aa is considered a high-grade preferred stock. This rating indicates that there is a reasonable assurance the earnings and asset protection will remain relatively well maintained in the foreseeable future. 55 a: An issue which is rated a is considered to be an upper-medium grade preferred stock. While risks are judged to be somewhat greater then in the aaa and aa classification, earnings and asset protection are, nevertheless, expected to be maintained at adequate levels. baa: An issue which is rated baa is considered to be a medium-grade preferred stock, neither highly protected nor poorly secured. Earnings and asset protection appear adequate at present but may be questionable over any great length of time. ba: An issue which is rated ba is considered to have speculative elements and its future cannot be considered well assured. Earnings and asset protection may be very moderate and not well safeguarded during adverse periods. Uncertainty of position characterizes preferred stocks in this class. b: An issue which is rated b generally lacks the characteristics of a desirable investment. Assurance of dividend payments and maintenance of other terms of the issue over any long period of time may be small. caa: An issue which is rated caa is likely to be in arrears on dividend payments. This rating designation does not purport to indicate the future status of payments. ca: An issue which is rated ca is speculative in a high degree and is likely to be in arrears on dividends with little likelihood of eventual payments. c: This is the lowest rated class of preferred or preference stock. Issues so rated can thus be regarded as having extremely poor prospects of ever attaining any real investment standing. Note: Moody's applies numerical modifiers 1, 2 and 3 in each rating classification: the modifier 1 indicates that the security ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category. STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS A-1: A short-term obligation rated A-1 is rated in the highest category by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitment on these obligations is extremely strong. A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory. A-3: A short-term obligation rated A-3 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. B: A short-term obligation rated B is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. 56 C: A short-term obligation rated C is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. D: A short-term obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized. STANDARD & POOR'S LONG-TERM CREDIT RATINGS Issue credit ratings are based, in varying degrees, on the following considerations: Likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; Nature of and provisions of the obligation; Protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors' rights. The issue rating definitions are expressed in terms of default risk. As such, they pertain to senior obligations of an entity. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as noted above. (Such differentiation applies when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.) Accordingly, in the case of junior debt, the rating may not conform exactly with the category definition. AAA: An obligation rated AAA has the highest rating assigned by Standard & Poor's. The obligor's capacity to meet its financial commitment on the obligation is extremely strong. AA: An obligation rated AA differs from the highest-rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. A: An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. BBB: An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation. Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions. 57 BB: An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's capacity to meet its financial commitment on the obligation. B: An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation. CCC: An obligation rated CCC is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. CC: An obligation rated CC is currently highly vulnerable to nonpayment. C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action has been taken, but payments on this obligation are being continued. A C also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments but that is currently paying. D: An obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor's believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments are jeopardized. Plus (+) or Minus (-): The rating from AA to CCC may be modified by the addition of a plus or minus sign to show relative standing within the major categories. r: This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating. Examples include: obligations linked or indexed to equities, currencies, or commodities; obligations exposed to severe prepayment risk, such as interest-only or principal-only mortgage securities; and obligations with unusually risky interest terms, such as inverse floaters. N.R.: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that Standard & Poor's does not rate a particular obligation as a matter of policy. LOCAL CURRENCY AND FOREIGN CURRENCY RISKS Country risk considerations are a standard part of Standard & Poor's analysis for credit ratings on any issuer or issue. Currency of repayment is a key factor in this analysis. An obligor's capacity to repay foreign currency obligations may be lower than its capacity to repay obligations in its local currency due to the sovereign government's own relatively lower capacity to repay external versus domestic debt. These sovereign risk considerations are incorporated in the debt ratings assigned to specific issues. Foreign currency issuer ratings are also distinguished from local currency issuer ratings to identify those instances where sovereign risks make them different for the same issuer. 58 APPENDIX B PERFORMANCE STATISTICS Pioneer Bond Fund A Initial Sales Charge Shares Purchased Net Asset Value Initial Net Date Investment Offering Price Included Per Share Asset Value 6/30/87 $10,000 $9.65 4.50% 1036.269 $9.22 $9,550
Dividends and Capital Gains Reinvested Value of Shares From Cap. Gains From Dividends Date From Investment Reinvested Reinvested Total Value 6/30/88 $9,368 $0 $871 $10,239 6/30/89 $9,513 $0 $1,869 $11,382 6/30/90 $9,243 $0 $2,848 $12,091 6/30/91 $9,316 $0 $4,000 $13,316 6/30/92 $9,710 $0 $5,341 $15,051 6/30/93 $10,166 $0 $6,792 $16,958 6/30/94 $9,368 $0 $7,376 $16,744 6/30/95 $9,690 $0 $8,978 $18,668 6/30/96 $9,409 $0 $10,008 $19,417 6/30/97 $9,399 $0 $11,395 $20,794 6/30/98 $9,710 $0 $13,172 $22,882 59 Pioneer Bond Fund B Initial Sales Charge Shares Purchased Net Asset Value Initial Net Date Investment Offering Price Included Per Share Asset Value 4/30/94 $10,000 $9.21 0.00% 1085.776 $9.21 $10,000
Dividends and Capital Gains Reinvested Value of Shares From Cap. Gains From Dividends Date From Investment Reinvested Reinvested Total Value 6/30/94 $9,794 $0 $102 $9,896 6/30/95 $10,109 $0 $833 $10,942 6/30/96 $9,794 $0 $1,492 $11,286 6/30/97 $9,804 $0 $2,186 $11,990 6/30/98 $10,130 $0 $2,965 $13,095 Value of shares if redeemed $12,895 Pioneer Bond Fund C Initial Sales Charge Shares Purchased Net Asset Value Initial Net Date Investment Offering Price Included Per Share Asset Value 1/31/96 $10,000 $9.54 0.00% 1048.218 $9.54 $10,000
Dividends and Capital Gains Reinvested Value of Shares From Cap. Gains From Dividends Date From Investment Reinvested Reinvested Total Value 6/30/96 $9,455 $0 $245 $9,700 6/30/97 $9,455 $0 $839 $10,294 6/30/98 $9,759 $0 $1,474 $11,233 Value of shares if redeemed $11,233 Past performance does not guarantee future results. Reutrn and share price fluctuate and your shares when redeemed may be worth more or less than your origianl cost. 60 20. APPENDIX C - PERFORMANCE STATISTICS COMPARATIVE PERFORMANCE INDEX DESCRIPTIONS The following securities indices are well known, unmanaged measures of market performance. Advertisements and sales literature for the fund may refer to these indices or may present comparisons between the performance of the fund and one or more of the indices. Other indices may also be used, if appropriate. The indices are not available for direct investment. The data presented are not meant to be indicative of the performance of the fund, do not reflect past performance and do not guarantee future results. S&P 500. This index is a readily available, carefully constructed, market value weighted benchmark of common stock performance. Currently, the S&P 500 includes 500 of the largest stocks (in terms of stock market value) in the U.S. DOW JONES INDUSTRIAL AVERAGE. This is a total return index based on the performance of stocks of 30 blue chip companies widely held by individuals and institutional investors. The 30 stocks represent about a fifth of the $8 trillion-plus market value of all U.S. stocks and about a fourth of the value of stocks listed on the New York Stock Exchange (NYSE). U.S. SMALL STOCK INDEX. This index is a market value weighted index of the ninth and tenth deciles of the NYSE, plus stocks listed on the American Stock Exchange and over the counter with the same or less capitalization as the upper bound of the NYSE ninth decile. U.S. 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 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. MERRILL LYNCH MICRO-CAP INDEX. The Merrill Lynch Micro-Cap Index represents the performance of 1,980 stocks ranging in market capitalization from $50 million to $125 million. Index returns are calculated monthly. LONG-TERM U.S. GOVERNMENT BONDS. The total returns on long-term government bonds after 1977 are constructed with data from The Wall Street Journal and are calculated as the change in the flat price or and-interest price. From 1926 to 1976, data are obtained from the government bond file at the Center for Research in Security Prices (CRSP), Graduate School of Business, University of Chicago. Each year, a one-bond portfolio with a term of approximately 20 years and a reasonably current coupon was used and whose returns did not reflect potential tax benefits, impaired negotiability or special redemption or call privileges. Where callable bonds had to be used, the term of the bond was assumed to be a simple average of the maturity and first call dates minus the current date. The bond was "held" for the calendar year and returns were computed. 61 INTERMEDIATE-TERM U.S. GOVERNMENT BONDS. Total returns of intermediate-term government bonds after 1987 are calculated from The Wall Street Journal prices, using the change in flat price. Returns from 1934 to 1986 are obtained from the CRSP government bond file. Each year, one-bond portfolios are formed, the bond chosen is the shortest noncallable bond with a maturity not less than five years, and this bond is "held" for the calendar year. Monthly returns are computed. (Bonds with impaired negotiability or special redemption privileges are omitted, as are partially or fully tax-exempt bonds starting with 1943.) From 1934 to 1942, almost all bonds with maturities near five years were partially or fully tax-exempt and were selected using the rules described above. Personal tax rates were generally low in that period, so that yields on tax-exempt bonds were similar to yields on taxable bonds. From 1926 to 1933, there are few bonds suitable for construction of a series with a five-year maturity. For this period, five-year bond yield estimates are used. MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI"). These indices are in U.S. dollar terms with gross dividends reinvested and measure the performance of 45 stock markets around the world. MSCI All Country indices represent both the developed and the emerging markets for a particular region. These indices are unmanaged. The free indices exclude shares which are not readily purchased by non-local investors. MSCI covers over 1,700 securities in 28 emerging markets and 2,600 securities in 23 developed markets, totalling over $15 trillion in market capitalization. Countries in the MSCI EAFE Index are: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and United Kingdom. Countries in the MSCI Emerging Markets Free Index are: Argentina, Brazil, Chile, China Free, Colombia, Czech Republic, Greece, Hungary, India, Indonesia Free, Israel, Jordan, Korea (at 50%), Malaysia Free, Mexico Free, Pakistan, Peru, Philippines Free, Poland, Singapore, South Africa, Sri Lanka, Taiwan (at 50%), Thailand Free, Turkey and Venezuela. MSCI All Country (AC) Asia Free ex Japan: This index is made up of the following 12 countries: China Free, Hong Kong, India, Indonesia Free, Korea @50%, Malaysia Free, Pakistan, Philippines Free, Singapore Free, Sri Lanka, Taiwan @50% and Thailand Free. MSCI All Country (AC) Asia Pacific Free ex Japan: This index is made up of the following 14 countries: Australia, China Free, Hong Kong, India, Indonesia Free, Korea @50%, Malaysia Free, New Zealand, Pakistan, Philippines Free, Singapore Free, Sri Lanka, Taiwan @50% and Thailand Free. 6-MONTH CDS. Data sources include the Federal Reserve Bulletin and The Wall Street Journal. LONG-TERM U.S. CORPORATE BONDS. Since 1969, corporate bond total returns are represented by the Salomon Brothers Long-Term High-Grade Corporate Bond Index. As most large corporate bond transactions take place over the counter, a major dealer is the natural source of these data. The index includes nearly all Aaa- and Aa-rated bonds with at least 10 years to maturity. If a bond is downgraded during a particular month, its return for the month is included in the index before removing the bond from future portfolios. From 1926 to 1968 the total returns were calculated by summing the capital appreciation returns and the income returns. For the period 1946 to 1968, Ibbotson and Sinquefield backdated the Salomon Brothers' index, using Salomon Brothers' monthly yield data with a methodology similar to that used by Salomon 62 Brothers for 1969 to 1995. Capital appreciation returns were calculated from yields assuming (at the beginning of each monthly holding period) a 20-year maturity, a bond price equal to par, and a coupon equal to the beginning-of-period yield. For the period 1926 to 1945, Standard & Poor's monthly high-grade corporate composite yield data were used, assuming a 4% coupon and a 20-year maturity. The conventional present-value formula for bond price for the beginning and end-of-month prices was used. (This formula is presented in Ross, Stephen A., and Westerfield, Randolph W., Corporate Finance, Times Mirror/Mosby, St. Louis, 1990, p. 97 ["Level-Coupon Bonds"].) The monthly income return was assumed to be one-twelfth the coupon. U.S. (30-DAY) TREASURY BILLS. For the U.S. Treasury Bill Index, data from The Wall Street Journal are used after 1977; the CRSP government bond file is the source until 1976. Each month a one-bill portfolio containing the shortest-term bill having not less than one month to maturity is constructed. (The bill's original term to maturity is not relevant.) To measure holding period returns for the one-bill portfolio, the bill is priced as of the last trading day of the previous month-end and as of the last trading day of the current month. NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS ("NAREIT") EQUITY REIT INDEX. All of the data are based upon the last closing price of the month for all tax-qualified REITs listed on the NYSE, AMEX and NASDAQ. The data are market-value-weighted. Prior to 1987 REITs were added to the index the January following their listing. Since 1987 newly formed or listed REITs are added to the total shares outstanding figure in the month that the shares are issued. Only common shares issued by the REIT are included in the index. The total return calculation is based upon the weighting at the beginning of the period. Only those REITs listed for the entire period are used in the total return calculation. Dividends are included in the month based upon their payment date. There is no smoothing of income. Liquidating dividends, whether full or partial, are treated as income. RUSSELL U.S. EQUITY INDEXES. The Russell 3000(R) Index (the "Russell 3000") is comprised of the 3,000 largest U.S. companies as determined by market capitalization representing approximately 98% of the U.S. equity market. The average market capitalization is approximately $3.7 billion. The Russell 2500TM Index measures performance of the 2,500 smallest companies in the Russell 3000. The average market capitalization is approximately $931 million, and the largest company in the index has an approximate market capitalization of $3.7 billion. The Russell 2000(R) Index measures performance of the 2,000 smallest stocks in the Russell 3000; the largest company in the index has a market capitalization of approximately $1.4 billion. The Russell 1000(R) Index (the "Russell 1000") measures the performance of the 1,000 largest companies in the Russell 3000. The average market capitalization is approximately $9.9 billion. The smallest company in the index has an approximate market capitalization of $1.4 billion. The Russell MidcapTM Index measures performance of the 800 smallest companies in the Russell 1000. The largest company in the index has an approximate market capitalization of $10.3 billion. The Russell indexes are reconstituted annually as of July 1, based on May 31 market capitalization rankings. WILSHIRE REAL ESTATE SECURITIES INDEX. The Wilshire Real Estate Securities Index is a market capitalization weighted index of 119 publicly traded real estate securities, such as REITs, real estate operating companies ("REOCs") and partnerships. The index contains performance data on five major categories of property: office, retail, industrial, apartment and miscellaneous. The companies in the index are 94.11% equity and hybrid REITs and 5.89% REOCs. 63 STANDARD & POOR'S MIDCAP 400 INDEX. The S&P 400 is a market-capitalization-weighted index. The performance data for the index were calculated by taking the stocks presently in the index and tracking them backwards in time as long as there were prices reported. No attempt was made to determine what stocks "might have been" in the S&P 400 five or ten years ago had it existed. Dividends are reinvested on a monthly basis prior to June 30, 1991, and are reinvested daily thereafter. LIPPER BALANCED FUNDS INDEX. This index represents equally weighted performance, adjusted for capital gains distributions and income dividends, of approximately 30 of the largest funds with a primary objective of conserving principal by maintaining at all times a balanced portfolio of stocks and bonds. Typically, the stock/bond ratio ranges around 60%/40%. LEHMAN BROTHERS AGGREGATE BOND INDEX. The Lehman Brothers Aggregate Bond Index is composed of the Lehman Brothers Government/Corporate Index, the Lehman Brothers Mortgage-Backed Securities Index and the Lehman Brothers Asset-Backed Securities Index. The index includes fixed rate debt issues rated investment grade or higher by Moody's Investors Service, Standard & Poor's Corporation or Fitch Investors Service, in that order. All issues have at least one year to maturity with intermediate indices including bonds with maturities up to ten years and long-term indices composed of bonds with maturities longer than ten years. All returns are market value weighted inclusive of accrued interest. BANK SAVINGS ACCOUNT. Data sources include the U.S. League of Savings Institutions Sourcebook; average annual yield on savings deposits in FSLIC [FDIC] insured savings institutions for the years 1963 to 1987; and The Wall Street Journal thereafter. Sources: Ibbotson Associates, Towers Data Systems, Lipper, Inc. and PGI 64
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT DOW S&P/ S&P/ JONES U.S. SMALL BARRA BARRA MERRILL LYNCH S&P INDUSTRIAL STOCK U.S. 500 500 MICRO-CAP 500 AVERAGE INDEX INFLATION GROWTH VALUE INDEX - ---------------------------------------------------------------------------------------------------------------------- Dec 1925 N/A N/A N/A N/A N/A N/A N/A Dec 1926 11.62 N/A 0.28 -1.49 N/A N/A N/A Dec 1927 37.49 N/A 22.10 -2.08 N/A N/A N/A Dec 1928 43.61 55.38 39.69 -0.97 N/A N/A N/A Dec 1929 -8.42 -13.64 -51.36 0.20 N/A N/A N/A Dec 1930 -24.90 -30.22 -38.15 -6.03 N/A N/A N/A Dec 1931 -43.34 -49.02 -49.75 -9.52 N/A N/A N/A Dec 1932 -8.19 -16.88 -5.39 -10.30 N/A N/A N/A Dec 1933 53.99 73.72 142.87 0.51 N/A N/A N/A Dec 1934 -1.44 8.08 24.22 2.03 N/A N/A N/A Dec 1935 47.67 43.77 40.19 2.99 N/A N/A N/A Dec 1936 33.92 30.23 64.80 1.21 N/A N/A N/A Dec 1937 -35.03 -28.88 -58.01 3.10 N/A N/A N/A Dec 1938 31.12 33.16 32.80 -2.78 N/A N/A N/A Dec 1939 -0.41 1.31 0.35 -0.48 N/A N/A N/A Dec 1940 -9.78 -7.96 -5.16 0.96 N/A N/A N/A Dec 1941 -11.59 -9.88 -9.00 9.72 N/A N/A N/A Dec 1942 20.34 14.13 44.51 9.29 N/A N/A N/A Dec 1943 25.90 19.06 88.37 3.16 N/A N/A N/A Dec 1944 19.75 17.19 53.72 2.11 N/A N/A N/A Dec 1945 36.44 31.60 73.61 2.25 N/A N/A N/A Dec 1946 -8.07 -4.40 -11.63 18.16 N/A N/A N/A Dec 1947 5.71 7.61 0.92 9.01 N/A N/A N/A Dec 1948 5.50 4.27 -2.11 2.71 N/A N/A N/A Dec 1949 18.79 20.92 19.75 -1.80 N/A N/A N/A Dec 1950 31.71 26.40 38.75 5.79 N/A N/A N/A Dec 1951 24.02 21.77 7.80 5.87 N/A N/A N/A Dec 1952 18.37 14.58 3.03 0.88 N/A N/A N/A Dec 1953 -0.99 2.02 -6.49 0.62 N/A N/A N/A Dec 1954 52.62 51.25 60.58 -0.50 N/A N/A N/A Dec 1955 31.56 26.58 20.44 0.37 N/A N/A N/A Dec 1956 6.56 7.10 4.28 2.86 N/A N/A N/A Dec 1957 -10.78 -8.63 -14.57 3.02 N/A N/A N/A Dec 1958 43.36 39.31 64.89 1.76 N/A N/A N/A Dec 1959 11.96 20.21 16.40 1.50 N/A N/A N/A Dec 1960 0.47 -6.14 -3.29 1.48 N/A N/A N/A Dec 1961 26.89 22.60 32.09 0.67 N/A N/A N/A Dec 1962 -8.73 -7.43 -11.90 1.22 N/A N/A N/A Dec 1963 22.80 20.83 23.57 1.65 N/A N/A N/A
65
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT DOW S&P/ S&P/ JONES U.S. SMALL BARRA 500 BARRA MERRILL LYNCH S&P INDUSTRIAL STOCK U.S. GROWTH 500 MICRO-CAP 500 AVERAGE INDEX INFLATION VALUE INDEX - ---------------------------------------------------------------------------------------------------------------------- Dec 1964 16.48 18.85 23.52 1.19 N/A N/A N/A Dec 1965 12.45 14.39 41.75 1.92 N/A N/A N/A Dec 1966 -10.06 -15.78 -7.01 3.35 N/A N/A N/A Dec 1967 23.98 19.16 83.57 3.04 N/A N/A N/A Dec 1968 11.06 7.93 35.97 4.72 N/A N/A N/A Dec 1969 -8.50 -11.78 -25.05 6.11 N/A N/A N/A Dec 1970 4.01 9.21 -17.43 5.49 N/A N/A N/A Dec 1971 14.31 9.83 16.50 3.36 N/A N/A N/A Dec 1972 18.98 18.48 4.43 3.41 N/A N/A N/A Dec 1973 -14.66 -13.28 -30.90 8.80 N/A N/A N/A Dec 1974 -26.47 -23.58 -19.95 12.20 N/A N/A N/A Dec 1975 37.20 44.75 52.82 7.01 31.72 43.38 N/A Dec 1976 23.84 22.82 57.38 4.81 13.84 34.93 N/A Dec 1977 -7.18 -12.84 25.38 6.77 -11.82 -2.57 N/A Dec 1978 6.56 2.79 23.46 9.03 6.78 6.16 27.76 Dec 1979 18.44 10.55 43.46 13.31 15.72 21.16 43.18 Dec 1980 32.42 22.17 39.88 12.40 39.40 23.59 32.32 Dec 1981 -4.91 -3.57 13.88 8.94 -9.81 0.02 9.18 Dec 1982 21.41 27.11 28.01 3.87 22.03 21.04 33.62 Dec 1983 22.51 25.97 39.67 3.80 16.24 28.89 42.44 Dec 1984 6.27 1.31 -6.67 3.95 2.33 10.52 -14.97 Dec 1985 32.16 33.55 24.66 3.77 33.31 29.68 22.89 Dec 1986 18.47 27.10 6.85 1.13 14.50 21.67 3.45 Dec 1987 5.23 5.48 -9.30 4.41 6.50 3.68 -13.84 Dec 1988 16.81 16.14 22.87 4.42 11.95 21.67 22.76 Dec 1989 31.49 32.19 10.18 4.65 36.40 26.13 8.06 Dec 1990 -3.17 -0.56 -21.56 6.11 0.20 -6.85 -29.55 Dec 1991 30.55 24.19 44.63 3.06 38.37 22.56 57.44 Dec 1992 7.67 7.41 23.35 2.90 5.07 10.53 36.62 Dec 1993 9.99 16.94 20.98 2.75 1.68 18.60 31.32 Dec 1994 1.31 5.06 3.11 2.67 3.13 -0.64 1.81 Dec 1995 37.43 36.84 34.46 2.54 38.13 36.99 30.70 Dec 1996 23.07 28.84 17.62 3.32 23.96 21.99 13.88 Dec 1997 33.36 24.88 22.78 1.70 36.52 29.98 24.61 Dec 1998 28.58 18.15 -7.31 1.80 42.16 14.67 -6.15
66
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT LONG- INTERMEDIATE- MSCI LONG- TERM TERM U.S. EAFE 6- TERM U.S. U.S. U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE T-BILL BONDS BONDS TAXES) CDS BONDS (30-DAY) - ------------------------------------------------------------------------------------------------------ Dec 1925 N/A N/A N/A N/A N/A N/A Dec 1926 7.77 5.38 N/A N/A 7.37 3.27 Dec 1927 8.93 4.52 N/A N/A 7.44 3.12 Dec 1928 0.10 0.92 N/A N/A 2.84 3.56 Dec 1929 3.42 6.01 N/A N/A 3.27 4.75 Dec 1930 4.66 6.72 N/A N/A 7.98 2.41 Dec 1931 -5.31 -2.32 N/A N/A -1.85 1.07 Dec 1932 16.84 8.81 N/A N/A 10.82 0.96 Dec 1933 -0.07 1.83 N/A N/A 10.38 0.30 Dec 1934 10.03 9.00 N/A N/A 13.84 0.16 Dec 1935 4.98 7.01 N/A N/A 9.61 0.17 Dec 1936 7.52 3.06 N/A N/A 6.74 0.18 Dec 1937 0.23 1.56 N/A N/A 2.75 0.31 Dec 1938 5.53 6.23 N/A N/A 6.13 -0.02 Dec 1939 5.94 4.52 N/A N/A 3.97 0.02 Dec 1940 6.09 2.96 N/A N/A 3.39 0.00 Dec 1941 0.93 0.50 N/A N/A 2.73 0.06 Dec 1942 3.22 1.94 N/A N/A 2.60 0.27 Dec 1943 2.08 2.81 N/A N/A 2.83 0.35 Dec 1944 2.81 1.80 N/A N/A 4.73 0.33 Dec 1945 10.73 2.22 N/A N/A 4.08 0.33 Dec 1946 -0.10 1.00 N/A N/A 1.72 0.35 Dec 1947 -2.62 0.91 N/A N/A -2.34 0.50 Dec 1948 3.40 1.85 N/A N/A 4.14 0.81 Dec 1949 6.45 2.32 N/A N/A 3.31 1.10 Dec 1950 0.06 0.70 N/A N/A 2.12 1.20 Dec 1951 -3.93 0.36 N/A N/A -2.69 1.49 Dec 1952 1.16 1.63 N/A N/A 3.52 1.66 Dec 1953 3.64 3.23 N/A N/A 3.41 1.82 Dec 1954 7.19 2.68 N/A N/A 5.39 0.86 Dec 1955 -1.29 -0.65 N/A N/A 0.48 1.57 Dec 1956 -5.59 -0.42 N/A N/A -6.81 2.46 Dec 1957 7.46 7.84 N/A N/A 8.71 3.14 Dec 1958 -6.09 -1.29 N/A N/A -2.22 1.54 Dec 1959 -2.26 -0.39 N/A N/A -0.97 2.95 Dec 1960 13.78 11.76 N/A N/A 9.07 2.66
67
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT LONG- INTERMEDIATE- MSCI LONG- TERM TERM U.S. EAFE 6- TERM U.S. U.S. U.S. GOV'T GOVERNMENT (NET OF MONTH CORPORATE T-BILL BONDS BONDS TAXES) CDS BONDS (30-DAY) - ------------------------------------------------------------------------------------------------------ Dec 1961 0.97 1.85 N/A N/A 4.82 2.13 Dec 1962 6.89 5.56 N/A N/A 7.95 2.73 Dec 1963 1.21 1.64 N/A N/A 2.19 3.12 Dec 1964 3.51 4.04 N/A 4.17 4.77 3.54 Dec 1965 0.71 1.02 N/A 4.68 -0.46 3.93 Dec 1966 3.65 4.69 N/A 5.76 0.20 4.76 Dec 1967 -9.18 1.01 N/A 5.47 -4.95 4.21 Dec 1968 -0.26 4.54 N/A 6.45 2.57 5.21 Dec 1969 -5.07 -0.74 N/A 8.70 -8.09 6.58 Dec 1970 12.11 16.86 -11.66 7.06 18.37 6.52 Dec 1971 13.23 8.72 29.59 5.36 11.01 4.39 Dec 1972 5.69 5.16 36.35 5.39 7.26 3.84 Dec 1973 -1.11 4.61 -14.92 8.60 1.14 6.93 Dec 1974 4.35 5.69 -23.16 10.20 -3.06 8.00 Dec 1975 9.20 7.83 35.39 6.51 14.64 5.80 Dec 1976 16.75 12.87 2.54 5.22 18.65 5.08 Dec 1977 -0.69 1.41 18.06 6.11 1.71 5.12 Dec 1978 -1.18 3.49 32.62 10.21 -0.07 7.18 Dec 1979 -1.23 4.09 4.75 11.90 -4.18 10.38 Dec 1980 -3.95 3.91 22.58 12.33 -2.76 11.24 Dec 1981 1.86 9.45 -2.28 15.50 -1.24 14.71 Dec 1982 40.36 29.10 -1.86 12.18 42.56 10.54 Dec 1983 0.65 7.41 23.69 9.65 6.26 8.80 Dec 1984 15.48 14.02 7.38 10.65 16.86 9.85 Dec 1985 30.97 20.33 56.16 7.82 30.09 7.72 Dec 1986 24.53 15.14 69.44 6.30 19.85 6.16 Dec 1987 -2.71 2.90 24.63 6.59 -0.27 5.47 Dec 1988 9.67 6.10 28.27 8.15 10.70 6.35 Dec 1989 18.11 13.29 10.54 8.27 16.23 8.37 Dec 1990 6.18 9.73 -23.45 7.85 6.78 7.81 Dec 1991 19.30 15.46 12.13 4.95 19.89 5.60 Dec 1992 8.05 7.19 -12.17 3.27 9.39 3.51 Dec 1993 18.24 11.24 32.56 2.88 13.19 2.90 Dec 1994 -7.77 -5.14 7.78 5.40 -5.76 3.90 Dec 1995 31.67 16.80 11.21 5.21 27.20 5.60 Dec 1996 -0.93 2.10 6.05 5.21 1.40 5.21 Dec 1997 15.85 8.38 1.78 5.71 12.95 5.26 Dec 1998 13.06 10.21 20.00 5.34 10.76 4.86
68
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT NAREIT LIPPER MSCI EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT - ----------------------------------------------------------------------------------------------------------------------- Dec 1925 N/A N/A N/A N/A N/A N/A N/A Dec 1926 N/A N/A N/A N/A N/A N/A N/A Dec 1927 N/A N/A N/A N/A N/A N/A N/A Dec 1928 N/A N/A N/A N/A N/A N/A N/A Dec 1929 N/A N/A N/A N/A N/A N/A N/A Dec 1930 N/A N/A N/A N/A N/A N/A 5.30 Dec 1931 N/A N/A N/A N/A N/A N/A 5.10 Dec 1932 N/A N/A N/A N/A N/A N/A 4.10 Dec 1933 N/A N/A N/A N/A N/A N/A 3.40 Dec 1934 N/A N/A N/A N/A N/A N/A 3.50 Dec 1935 N/A N/A N/A N/A N/A N/A 3.10 Dec 1936 N/A N/A N/A N/A N/A N/A 3.20 Dec 1937 N/A N/A N/A N/A N/A N/A 3.50 Dec 1938 N/A N/A N/A N/A N/A N/A 3.50 Dec 1939 N/A N/A N/A N/A N/A N/A 3.40 Dec 1940 N/A N/A N/A N/A N/A N/A 3.30 Dec 1941 N/A N/A N/A N/A N/A N/A 3.10 Dec 1942 N/A N/A N/A N/A N/A N/A 3.00 Dec 1943 N/A N/A N/A N/A N/A N/A 2.90 Dec 1944 N/A N/A N/A N/A N/A N/A 2.80 Dec 1945 N/A N/A N/A N/A N/A N/A 2.50 Dec 1946 N/A N/A N/A N/A N/A N/A 2.20 Dec 1947 N/A N/A N/A N/A N/A N/A 2.30 Dec 1948 N/A N/A N/A N/A N/A N/A 2.30 Dec 1949 N/A N/A N/A N/A N/A N/A 2.40 Dec 1950 N/A N/A N/A N/A N/A N/A 2.50 Dec 1951 N/A N/A N/A N/A N/A N/A 2.60 Dec 1952 N/A N/A N/A N/A N/A N/A 2.70 Dec 1953 N/A N/A N/A N/A N/A N/A 2.80 Dec 1954 N/A N/A N/A N/A N/A N/A 2.90 Dec 1955 N/A N/A N/A N/A N/A N/A 2.90 Dec 1956 N/A N/A N/A N/A N/A N/A 3.00 Dec 1957 N/A N/A N/A N/A N/A N/A 3.30 Dec 1958 N/A N/A N/A N/A N/A N/A 3.38 Dec 1959 N/A N/A N/A N/A N/A N/A 3.53 Dec 1960 N/A N/A N/A N/A 5.77 N/A 3.86 Dec 1961 N/A N/A N/A N/A 20.59 N/A 3.90
69
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT NAREIT LIPPER MSCI EQUITY RUSSELL WILSHIRE BALANCED EMERGING BANK REIT 2000 REAL ESTATE S&P FUND MARKETS SAVINGS INDEX INDEX SECURITIES 400 INDEX FREE INDEX ACCOUNT - ----------------------------------------------------------------------------------------------------------------------- Dec 1962 N/A N/A N/A N/A -6.80 N/A 4.08 Dec 1963 N/A N/A N/A N/A 13.10 N/A 4.17 Dec 1964 N/A N/A N/A N/A 12.36 N/A 4.19 Dec 1965 N/A N/A N/A N/A 9.80 N/A 4.23 Dec 1966 N/A N/A N/A N/A -5.86 N/A 4.45 Dec 1967 N/A N/A N/A N/A 15.09 N/A 4.67 Dec 1968 N/A N/A N/A N/A 13.97 N/A 4.68 Dec 1969 N/A N/A N/A N/A -9.01 N/A 4.80 Dec 1970 N/A N/A N/A N/A 5.62 N/A 5.14 Dec 1971 N/A N/A N/A N/A 13.90 N/A 5.30 Dec 1972 8.01 N/A N/A N/A 11.13 N/A 5.37 Dec 1973 -15.52 N/A N/A N/A -12.24 N/A 5.51 Dec 1974 -21.40 N/A N/A N/A -18.71 N/A 5.96 Dec 1975 19.30 N/A N/A N/A 27.10 N/A 6.21 Dec 1976 47.59 N/A N/A N/A 26.03 N/A 6.23 Dec 1977 22.42 N/A N/A N/A -0.72 N/A 6.39 Dec 1978 10.34 N/A 13.04 N/A 4.80 N/A 6.56 Dec 1979 35.86 43.09 70.81 N/A 14.67 N/A 7.29 Dec 1980 24.37 38.58 22.08 N/A 19.70 N/A 8.78 Dec 1981 6.00 2.03 7.18 N/A 1.86 N/A 10.71 Dec 1982 21.60 24.95 24.47 22.68 30.63 N/A 11.19 Dec 1983 30.64 29.13 27.61 26.10 17.44 N/A 9.71 Dec 1984 20.93 -7.30 20.64 1.18 7.46 N/A 9.92 Dec 1985 19.10 31.05 22.20 35.58 29.83 N/A 9.02 Dec 1986 19.16 5.68 20.30 16.21 18.43 N/A 7.84 Dec 1987 -3.64 -8.77 -7.86 -2.03 4.13 N/A 6.92 Dec 1988 13.49 24.89 24.18 20.87 11.18 40.43 7.20 Dec 1989 8.84 16.24 2.37 35.54 19.70 64.96 7.91 Dec 1990 -15.35 -19.51 -33.46 -5.12 0.66 -10.55 7.80 Dec 1991 35.70 46.05 20.03 50.10 25.83 59.91 4.61 Dec 1992 14.59 18.41 7.36 11.91 7.46 11.40 2.89 Dec 1993 19.65 18.91 15.24 13.96 11.95 74.83 2.73 Dec 1994 3.17 -1.82 1.64 -3.57 -2.05 -7.32 4.96 Dec 1995 15.27 28.44 13.65 30.94 24.89 -5.21 5.24 Dec 1996 35.26 16.49 36.87 19.20 13.05 6.03 4.95 Dec 1997 20.29 22.36 19.80 32.26 20.30 -11.59 5.17 Dec 1998 -17.51 -2.55 -17.63 19.12 15.09 -25.34 4.63
70
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT MSCI ALL COUNTRY MSCI ALL COUNTRY (AC) (AC) ASIA PACIFIC LEHMAN BROTHERS ASIA FREE EX JAPAN FREE EX JAPAN AGGREGATE BOND INDEX - ---------------------------------------------------------------------------------- Dec 1925 N/A N/A N/A Dec 1926 N/A N/A N/A Dec 1927 N/A N/A N/A Dec 1928 N/A N/A N/A Dec 1929 N/A N/A N/A Dec 1930 N/A N/A N/A Dec 1931 N/A N/A N/A Dec 1932 N/A N/A N/A Dec 1933 N/A N/A N/A Dec 1934 N/A N/A N/A Dec 1935 N/A N/A N/A Dec 1936 N/A N/A N/A Dec 1937 N/A N/A N/A Dec 1938 N/A N/A N/A Dec 1939 N/A N/A N/A Dec 1940 N/A N/A N/A Dec 1941 N/A N/A N/A Dec 1942 N/A N/A N/A Dec 1943 N/A N/A N/A Dec 1944 N/A N/A N/A Dec 1945 N/A N/A N/A Dec 1946 N/A N/A N/A Dec 1947 N/A N/A N/A Dec 1948 N/A N/A N/A Dec 1949 N/A N/A N/A Dec 1950 N/A N/A N/A Dec 1951 N/A N/A N/A Dec 1952 N/A N/A N/A Dec 1953 N/A N/A N/A Dec 1954 N/A N/A N/A Dec 1955 N/A N/A N/A Dec 1956 N/A N/A N/A Dec 1957 N/A N/A N/A Dec 1958 N/A N/A N/A Dec 1959 N/A N/A N/A Dec 1960 N/A N/A N/A Dec 1961 N/A N/A N/A
71
PERFORMANCE STATISTICS - TOTAL RETURN PERCENT MSCI ALL COUNTRY MSCI ALL COUNTRY (AC) (AC) ASIA PACIFIC LEHMAN BROTHERS ASIA FREE EX JAPAN FREE EX JAPAN AGGREGATE BOND INDEX - ---------------------------------------------------------------------------------- Dec 1962 N/A N/A N/A Dec 1963 N/A N/A N/A Dec 1964 N/A N/A N/A Dec 1965 N/A N/A N/A Dec 1966 N/A N/A N/A Dec 1967 N/A N/A N/A Dec 1968 N/A N/A N/A Dec 1969 N/A N/A N/A Dec 1970 N/A N/A N/A Dec 1971 N/A N/A N/A Dec 1972 N/A N/A N/A Dec 1973 N/A N/A N/A Dec 1974 N/A N/A N/A Dec 1975 N/A N/A N/A Dec 1976 N/A N/A 15.62 Dec 1977 N/A N/A 3.05 Dec 1978 N/A N/A 1.39 Dec 1979 N/A N/A 1.94 Dec 1980 N/A N/A 2.70 Dec 1981 N/A N/A 6.23 Dec 1982 N/A N/A 32.62 Dec 1983 N/A N/A 8.37 Dec 1984 N/A N/A 15.14 Dec 1985 N/A N/A 22.11 Dec 1986 N/A N/A 15.29 Dec 1987 N/A N/A 2.75 Dec 1988 30.00 30.45 7.89 Dec 1989 32.13 21.43 14.53 Dec 1990 -6.54 -11.86 8.95 Dec 1991 30.98 32.40 16.00 Dec 1992 21.81 9.88 7.40 Dec 1993 103.39 84.94 9.75 Dec 1994 -16.94 -12.59 -2.92 Dec 1995 4.00 10.00 18.48 Dec 1996 10.05 8.08 3.61 Dec 1997 -40.31 -34.20 9.68 Dec 1998 -7.79 -4.42 8.67 Source: Lipper, Inc.
72 21. APPENDIX D - OTHER PIONEER INFORMATION The Pioneer group of mutual funds was established in 1928 with the creation of Pioneer Fund. Pioneer is one of the oldest and most experienced money managers in the U.S. As of June 30, 1998, Pioneer employed a professional investment staff of 75. Total assets of all Pioneer mutual funds at December 31, 1998, were approximately $22 billion representing 1,363,446 shareholder accounts, 890,148 non-retirement accounts and 473,298 retirement accounts. 73 PIONEER BOND FUND PART C. OTHER INFORMATION Item 23. Financial Statements and Exhibits Amended Form N-1A Exhibit Reference (a) 1. Agreement and Declaration of Trust(1) (a) 1.1 Certificate of Trust(1) (a) 1.2 Establishment and Designation of Classes(1) (b) 2. By-Laws(1) (c) 4. Form of Specimen Stock Certificate(1) (d) 5. Form of Management Contract (1) (e) 6.1 Form of Underwriting Agreement(1) (e) 6.2 Form of Dealer Sales Agreement(1) (f) 7. None (g) 8. Custodian Agreement with Brown Brothers Harriman & Co.(2) (g) 8.1 Form of Amendment to Custody Agreement(1) (h) 9. Form of Investment Company Service Agreement(1) (h) 9.1 Administration Agreement(3) (h) 9.2 Agreement and Plan of Reorganization(1) (i) 10. Opinion and Consent of Counsel(1) (j) 11. Consent of Independent Public Accountants(1) (k) 12. None (l) 13. None (m) 15. Class A Distribution Plan(1) (m) 15.1 Class B Distribution Plan(1) (m) 15.2 Class C Distribution Plan(1) (n) 17. Financial Data Schedules(1) (o) 18. Form of Multi-Class Plan Pursuant to Rule 18f-3 Plan(1) N/A 19. Powers of Attorney(3) - ----------------------- (1) Filed herewith. (2) Incorporated by reference from the exhibits filed by the Registrant with Post-Effective Amendment No. 23 to its Registration Statement on Form N-1A (file No. 2-62436) (the "Registration Statement") with the Securities and Exchange Commission (the "SEC") on October 27, 1995 (accession number 0000276776-95-000016). (3) Incorporated by reference from the exhibits filed by the Registrant with Post-Effective Amendment No. 27 to its Registration Statement with the SEC on March 5, 1999 (accession number 0000276776-99-000007). Item 24. Persons Controlled By or Under Common Control With Registrant None Item 25. Indemnification Except for the Amended and Restated Declaration of Trust dated December 7, 1993 establishing the Registrant as a Trust under Massachusetts law, there is no contract, arrangement or statute under which any director, officer, underwriter or affiliated person of the Registrant is insured or indemnified. The Declaration of Trust provides that no Trustee or officer will be indemnified against any liability of 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. Item 26. Business and Other Connections of Investment Adviser Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered investment adviser under the Investment Advisers Act of 1940, as amended, and is a wholly owned subsidiary of The Pioneer Group, Inc. ("Pioneer"). Pioneer Investments manages investment companies, pension and profit sharing plans, trusts, estates or charitable organizations and other corporations or business entities. To the knowledge of the Fund, none of Pioneer Investments' directors or executive officers is or has been during their employment with Pioneer Investments engaged in any other business, profession, vocation or employment of a substantial nature for the past two fiscal years, except as noted below. Certain directors and officers, however, may hold or may have held various positions with, and engage or have engaged in business for, the investment companies that Pioneer Investments manages, Pioneer and/or other Pioneer subsidiaries. OTHER BUSINESS, PROFESSION, VOCATION OR EMPLOYMENT OF SUBSTANTIAL NATURE WITHIN LAST TWO NAME OF DIRECTOR/OFFICER FISCAL YEARS John F. Cogan, Jr. Senior Partner, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 Joseph P. Barri Senior Partner, Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109 Item 27. Principal Underwriters (a) See "Management of the Fund" in the Statement of Additional Information. (b) Directors and officers of Pioneer Funds Distributor, Inc.: POSITIONS AND OFFICES WITH POSITIONS AND OFFICES WITH NAME UNDERWRITER FUND John F. Cogan, Jr. Director and Chairman Chairman of the Board, President and Trustee David D. Tripple Director and President Executive Vice President and Trustee Stephen W. Long Director and Executive Vice President None Steven M. Graziano Executive Vice President None William A. Misata Senior Vice President None Constance D. Spiros Senior Vice President None Marcy L. Supovitz Senior Vice President None Mark R. Kiniry Vice President, Regional Director, Sales None Barry G. Knight Vice President None C-2 William H. Spencer Vice President, Regional Director, Sales None Elizabeth A. Watson Vice President, Compliance None Steven R. Berke Assistant Vice President, Blue Sky None John A. Boynton Treasurer Treasurer Roy P. Rossi Assistant Treasurer None Joseph P. Barri Clerk Secretary Robert P. Nault Assistant Clerk Assistant Secretary The principle business address of each of these individuals is 60 State Street, Boston, Massachusetts 02109-1820. (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 02109; contact the Treasurer. Item 31. Management Services Not Applicable Item 32. Undertakings Not Applicable SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Fund certifies that it meets all of the requirements for effectiveness of this registration statement under Rule 485(b) under the Securities Act of 1933 and has duly caused this registration statement to be signed on its behalf by the undersigned, duly authorized, in the City of Boston and The Commonwealth of Massachusetts on the 14th day of May, 1999. PIONEER BOND FUND By: /s/ John F. Cogan, Jr. ------------------------ John F. Cogan, Jr. Chairman of the Board and President Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the date indicated: Title and Signature Date Principal Executive Officer: ) ) ) /s/John F. Cogan, Jr. Chairman of the Board ) John F. Cogan, Jr. and President ) (Principal Executive ) Officer) ) ) Chief Financial Officer ) and Treasurer (Principal ) /s/ John A. Boynton Financial and Accounting ) John A. Boynton Officer) ) ) ) Trustees: ) ) /s/John F. Cogan, Jr. ) John F. Cogan, Jr. ) ) ) Mary K. Bush* ) Mary K. Bush ) ) ) Richard H. Egdahl, M.D.* ) Richard H. Egdahl, M.D. ) ) ) Margaret B. W. Graham* ) Margaret B. W. Graham ) ) ) John W. Kendrick* ) John W. Kendrick ) ) ) Marguerite A. Piret* ) Marguerite A. Piret ) ) ) David D. Tripple* ) David D. Tripple ) ) ) Stephen K. West* ) Stephen K. West ) ) ) John Winthrop* ) John Winthrop ) - --------- *By /s/John F. Cogan, Jr. May 14, 1999 John F. Cogan, Jr. Attorney-in-fact Exhibit Index Exhibit Number Document Title (a) 1. Agreement and Declaration of Trust (a) 1.1 Certificate of Trust (a) 1.2. Establishment and Designation of Classes (b) 2. By-Laws (c) 4. Form of Specimen Stock Certificate (d) 5. Form of Management Contract (e) 6.1. Form of Underwriting Agreement (e) 6.2. Form of Dealer Sales Agreement (g) 8.1 Form of Amendment to Custody Agreement (h) 9. Form of Investment Company Service Agreement (h) 9.2 Agreement and Plan of Reorganization (i) 10. Opinion and Consent of Counsel (j) 11. Consent of Independent Public Accountants (m) 15. Class A Distribution Plan (m) 15.1. Class B Distribution Plan (m) 15.2. Class C Distribution Plan (n) 17. Financial Data Schedules (filed as Exhibit 27) (o) 18. Form of Multi-Class Plan Pursuant to Rule 18f-3 Plan EX-99.1 2 AGREEMENT AND DECLARATION OF TRUST PIONEER BOND FUND AGREEMENT AND DECLARATION OF TRUST This AGREEMENT AND DECLARATION OF TRUST is made on January 5, 1999 by the undersigned trustees (together with all other persons from time to time duly elected, qualified and serving as Trustees in accordance with the provisions of Article II hereof, the "Trustees"); NOW, THEREFORE, the Trustees declare that all money and property contributed to the Trust shall be held and managed in trust pursuant to this Agreement and Declaration of Trust. ARTICLE I NAME AND DEFINITIONS Section 1. NAME. The name of the Trust created by this Agreement and Declaration of Trust is "Pioneer Bond Fund." Section 2. DEFINITIONS. Unless otherwise provided or required by the context: (a) "ADMINISTRATOR" means the party, other than the Trust, to the contract described in Article III, Section 3 hereof. (b) "BY-LAWS" means the By-laws of the Trust adopted by the Trustees, as amended from time to time, which By-laws are expressly herein incorporated by reference as part of the "governing instrument" within the meaning of the Delaware Act. (c) "CLASS" means the class of Shares of a Series established pursuant to Article V. (d) "COMMISSION," "INTERESTED PERSON" and "PRINCIPAL UNDERWRITER" have the meanings provided in the 1940 Act. Except as such term may be otherwise defined by the Trustees in conjunction with the establishment of any Series of Shares, the term "VOTE OF A MAJORITY OF THE SHARES OUTSTANDING AND ENTITLED TO VOTE" SHALL HAVE THE SAME MEANING AS IS ASSIGNED TO THE TERM "VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES" in the 1940 Act. (e) "COVERED PERSON" means a person so defined in Article IV, Section (f) "CUSTODIAN" means any Person other than the Trust who has custody of any Trust Property as required by Section 17(f) of the 1940 Act, but does not include a system for the central handling of securities described in said Section 17(f). (g) "DECLARATION" shall mean this Agreement and Declaration of Trust, as amended or restated from time to time. Reference in this Declaration of Trust to "Declaration," "hereof," "herein," and "hereunder" shall be deemed to refer to this Declaration rather than exclusively to the article or section in which such words appear. (h) "DELAWARE ACT" means Chapter 38 of Title 12 of the Delaware Code entitled "Treatment of Delaware Business Trusts," as amended from time to time. (i) "DISTRIBUTOR" means the party, other than the Trust, to the contract described in Article III, Section 1 hereof. (j) "HIS" shall include the feminine and neuter, as well as the masculine, genders. (k) "INVESTMENT ADVISER" means the party, other than the Trust, to the contract described in Article III, Section 2 hereof. (l) "NET ASSET VALUE" means the net asset value of each Series of the Trust, determined as provided in Article VI, Section 3. (m) "PERSON" means and includes individuals, corporations, partnerships, trusts, associations, joint ventures, estates and other entities, and governments and agencies and political subdivisions, thereof, whether domestic or foreign. (n) "SERIES" means a series of Shares established pursuant to Article (o) "SHAREHOLDER" means a record owner of Outstanding Shares; (p) "SHARES" means the equal proportionate transferable units of interest into which the beneficial interest of each Series or Class is divided from time to time (including whole Shares and fractions of Shares). "Outstanding Shares" means Shares shown in the books of the Trust or its transfer agent as then issued and outstanding, but does not include Shares which have been repurchased or redeemed by the Trust and which are held in the treasury of the Trust. (q) "TRANSFER AGENT" means any Person other than the Trust who maintains the Shareholder records of the Trust, such as the list of Shareholders, the number of Shares credited to each account, and the like. (r) "TRUST" means Pioneer Bond Fund established hereby, and reference to the Trust, when applicable to one or more Series, refers to that Series. (s) "TRUSTEES" means the person who has signed this Declaration of Trust, so long as he shall continue in office in accordance with the terms hereof, and all other persons who may from time to time be duly qualified and serving as Trustees in accordance with Article II, in all cases in their capacities as Trustees hereunder. (t) "TRUST PROPERTY" means any and all property, real or personal, tangible or intangible, which is owned or held by or for the Trust or any Series or the Trustees on behalf of the Trust or any Series. (u) The "1940 ACT" means the Investment Company Act of 1940, as amended from time to time. ARTICLE II THE TRUSTEES Section 1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust shall be managed by or under the direction of the Trustees, and they shall have all powers necessary or desirable to carry out that responsibility. The Trustees may execute all instruments and take all action they deem necessary or desirable to promote the interests of the Trust. Any determination made by the Trustees in good faith as to what is in the interests of the Trust shall be conclusive. In construing the provisions of this Declaration, the presumption shall be in favor of a grant of power to the Trustees. Section 2. POWERS. The Trustees in all instances shall act as principals, free of the control of the Shareholders. The Trustees shall have full power and authority to take or refrain from taking any action and to execute any contracts and instruments that they may consider necessary or desirable in the management of the Trust. The Trustees shall not in any way be bound or limited by current or future laws or customs applicable to trust investments, but shall have full power and authority to make any investments which they, in their sole discretion, deem proper to accomplish the purposes of the Trust. The Trustees may exercise all of their powers without recourse to any court or other authority. Subject to any applicable limitation herein or in the By-laws or resolutions of the Trust, the Trustees shall have power and authority, without limitation: (a) To operate as and carry on the business of an investment company, and exercise all the powers necessary and appropriate to the conduct of such operations. (b) To invest in, hold for investment, or reinvest in, cash; securities, including common, preferred and preference stocks; warrants; subscription rights; profit-sharing interests or participations and all other contracts for or evidence of equity interests; bonds, debentures, bills, time notes and all other evidences of indebtedness; negotiable or non-negotiable instruments; government securities, including securities of any state, municipality or other political subdivision thereof, or any governmental or quasi-governmental agency or instrumentality; and money market instruments including bank certificates of deposit, finance paper, commercial paper, bankers' acceptances and all kinds of repurchase agreements, of any corporation, company, trust, association, firm or other business organization however established, and of any country, state, municipality or other political subdivision, or any governmental or quasi-governmental agency or instrumentality; or any other security, property or instrument in which the Trust or any of its Series shall be authorized to invest. (c) To acquire (by purchase, subscription or otherwise), to hold, to trade in and deal in, to acquire any rights or options to purchase or sell, to sell or otherwise dispose of, to lend and to pledge any such securities, to enter into repurchase agreements, reverse repurchase agreements, firm commitment agreements and forward foreign currency exchange contracts, to purchase and sell options on securities, securities indices, currency and other financial assets, futures contracts and options on futures contracts of all descriptions and to engage in all types of hedging and risk-management transactions. (d) To exercise all rights, powers and privileges of ownership or interest in all securities and repurchase agreements included in the Trust Property, including the right to vote thereon and otherwise act with respect thereto and to do all acts for the preservation, protection, improvement and enhancement in value of all such securities and repurchase agreements. (e) To acquire (by purchase, lease or otherwise) and to hold, use, maintain, develop and dispose of (by sale or otherwise) any property, real or personal, including cash or foreign currency, and any interest therein. (f) To borrow money or other property in the name of the Trust exclusively for Trust purposes and in this connection issue notes or other evidence of indebtedness; to secure borrowings by mortgaging, pledging or otherwise subjecting as security the Trust Property; and to endorse, guarantee, or undertake the performance of any obligation or engagement of any other Person and to lend Trust Property. (g) To aid by further investment any corporation, company, trust, association or firm, any obligation of or interest in which is included in the Trust Property or in the affairs of which the Trustees have any direct or indirect interest; to do all acts and things designed to protect, preserve, improve or enhance the value of such obligation or interest; and to guarantee or become surety on any or all of the contracts, stocks, bonds, notes, debentures and other obligations of any such corporation, company, trust, association or firm. (h) To adopt By-laws not inconsistent with this Declaration providing for the conduct of the business of the Trust and to amend and repeal them to the extent such right is not reserved to the Shareholders. (i) To elect and remove such officers and appoint and terminate such agents as they deem appropriate. (j) To employ as custodian of any assets of the Trust, subject to any provisions herein or in the By-laws, one or more banks, trust companies or companies that are members of a national securities exchange, or other entities permitted by the Commission to serve as such. (k) To retain one or more transfer agents and shareholder servicing agents, or both. (l) To provide for the distribution of Shares either through a Principal Underwriter as provided herein or by the Trust itself, or both, or pursuant to a distribution plan of any kind. (m) To set record dates in the manner provided for herein or in the By-laws. (n) To delegate such authority as they consider desirable to any officers of the Trust and to any agent, independent contractor, manager, investment adviser, custodian or underwriter. (o) To hold any security or other property (i) in a form not indicating any trust, whether in bearer, book entry, unregistered or other negotiable form, or (ii) either in the Trust's or Trustees' own name or in the name of a custodian or a nominee or nominees, subject to safeguards according to the usual practice of business trusts or investment companies. (p) To establish separate and distinct Series with separately defined investment objectives and policies and distinct investment purposes, and with separate Shares representing beneficial interests in such Series, and to establish separate Classes, all in accordance with the provisions of Article V. (q) To the full extent permitted by Section 3804 of the Delaware Act, to allocate assets, liabilities and expenses of the Trust to a particular Series and assets, liabilities and expenses to a particular Class or to apportion the same between or among two or more Series or Classes, provided that any liabilities or expenses incurred by a particular Series or Class shall be payable solely out of the assets belonging to that Series or Class as provided for in Article V, Section 4. (r) To consent to or participate in any plan for the reorganization, consolidation or merger of any corporation or concern whose securities are held by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of property by such corporation or concern; and to pay calls or subscriptions with respect to any security held in the Trust. (s) To compromise, arbitrate, or otherwise adjust claims in favor of or against the Trust or any matter in controversy including, but not limited to, claims for taxes. (t) To make distributions of income, capital gains, returns of capital (if any) and redemption proceeds to Shareholders in the manner hereinafter provided for. (u) To establish committees for such purposes, with such membership, and with such responsibilities as the Trustees may consider proper, including a committee consisting of fewer than all of the Trustees then in office, which may act for and bind the Trustees and the Trust with respect to the institution, prosecution, dismissal, settlement, review or investigation of any legal action, suit or proceeding, pending or threatened. (v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold, resell, reissue, dispose of and otherwise deal in Shares; to establish terms and conditions regarding the issuance, sale, repurchase, redemption, cancellation, retirement, acquisition, holding, resale, reissuance, disposition of or dealing in Shares; and, subject to Articles V and VI, to apply to any such repurchase, redemption, retirement, cancellation or acquisition of Shares any funds or property of the Trust or of the particular Series with respect to which such Shares are issued. (w) To invest part or all of the Trust Property (or part or all of the assets of any Series), or to dispose of part or all of the Trust Property (or part or all of the assets of any Series) and invest the proceeds of such disposition, in securities issued by one or more other investment companies registered under the 1940 Act all without any requirement of approval by Shareholders. Any such other investment company may (but need not) be a trust (formed under the laws of the State of New York or of any other state) which is classified as a partnership for federal income tax purposes. (x) To carry on any other business in connection with or incidental to any of the foregoing powers, to do everything necessary or desirable to accomplish any purpose or to further any of the foregoing powers, and to take every other action incidental to the foregoing business or purposes, objects or powers. (y) To sell or exchange any or all of the assets of the Trust, subject to Article IX, Section 4. (z) To enter into joint ventures, partnerships and other combinations and associations. (aa) To join with other security holders in acting through a committee, depositary, voting trustee or otherwise, and in that connection to deposit any security with, or transfer any security to, any such committee, depositary or trustee, and to delegate to them such power and authority with relation to any security (whether or not so deposited or transferred) as the Trustees shall deem proper, and to agree to pay, and to pay, such portion of the expenses and compensation of such Committee, depositary or trustee as the Trustees shall deem proper; (bb) To purchase and pay for entirely out of Trust Property such insurance as the Trustees may deem necessary or appropriate for the conduct of the business, including, without limitation, insurance policies insuring the assets of the Trust or payment of distributions and principal on its portfolio investments, and, subject to applicable law and any restrictions set forth in the By-laws, insurance policies insuring the Shareholders, Trustees, officers, employees, agents, investment advisers, Principal Underwriters, or independent contractors of the Trust, individually, against all claims and liabilities of every nature arising by reason of holding Shares, holding, being or having held any such office or position, or by reason of any action alleged to have been taken or omitted by any such Person as Trustee, officer, employee, agent, investment adviser, Principal underwriter, or independent contractor, including any action taken or omitted that may be determined to constitute negligence, whether or not the Trust would have the power to indemnify such Person against liability; (cc) To adopt, establish and carry out pension, profit-sharing, share bonus, share purchase, savings, thrift and other retirement, incentive and benefit plans and trusts, including the purchasing of life insurance and annuity contracts as a means of providing such retirement and other benefits, for any or all of the Trustees, officers, employees and agents of the Trust; (dd) To enter into contracts of any kind and description; (ee) To interpret the investment policies, practices or limitations of any Series or Class; and (ff) To guarantee indebtedness and contractual obligations of others. The clauses above shall be construed as objects and powers, and the enumeration of specific powers shall not limit in any way the general powers of the Trustees. Any action by one or more of the Trustees in their capacity as such hereunder shall be deemed an action on behalf of the Trust or the applicable Series, and not an action in an individual capacity. No one dealing with the Trustees shall be under any obligation to make any inquiry concerning the authority of the Trustees, or to see to the application of any payments made or property transferred to the Trustees or upon their order. In construing this Declaration, the presumption shall be in favor of a grant of power to the Trustees. Section 3. CERTAIN TRANSACTIONS. Except as prohibited by applicable law, the Trustees may, on behalf of the Trust, buy any securities from or sell any securities to, or lend any assets of the Trust to, any Trustee or officer of the Trust or any firm of which any such Trustee or officer is a member acting as principal, or have any such dealings with any investment adviser, administrator, distributor or transfer agent for the Trust or with any Interested Person of such person. The Trust may employ any such person or entity in which such person is an Interested Person, as broker, legal counsel, registrar, investment adviser, administrator, distributor, transfer agent, dividend disbursing agent, custodian or in any other capacity upon customary terms. Section 4. INITIAL TRUSTEES; ELECTION AND NUMBER OF TRUSTEES. The initial Trustees shall be the persons initially signing this Declaration. The number of Trustees (other than the initial Trustees) shall be fixed from time to time by a majority of the Trustees; provided, that there shall be at least one (1) Trustee and no more than fifteen (15). The Shareholders shall elect the Trustees (other than the initial Trustees) on such dates as the Trustees may fix from time to time. Section 5. TERM OF OFFICE OF TRUSTEES. Each Trustee shall hold office for life or until his successor is elected or the Trust terminates; except that (a) any Trustee may resign by delivering to the other Trustees or to any Trust officer a written resignation effective upon such delivery or a later date specified therein; (b) any Trustee may be removed with or without cause at any time by a written instrument signed by at least a majority of the then Trustees, specifying the effective date of removal; (c) any Trustee who requests to be retired, or who is declared bankrupt or has become physically or mentally incapacitated or is otherwise unable to serve, may be retired by a written instrument signed by a majority of the other Trustees, specifying the effective date of retirement; and (d) any Trustee may be removed at any meeting of the Shareholders by a vote of at least two-thirds of the Outstanding Shares. Section 6. VACANCIES; APPOINTMENT OF TRUSTEES. Whenever a vacancy shall exist in the Board of Trustees, regardless of the reason for such vacancy, the remaining Trustees shall appoint any person as they determine in their sole discretion to fill that vacancy, consistent with the limitations under the 1940 Act. Such appointment shall be made by a written instrument signed by a majority of the Trustees or by a resolution of the Trustees, duly adopted and recorded in the records of the Trust, specifying the effective date of the appointment. The Trustees may appoint a new Trustee as provided above in anticipation of a vacancy expected to occur because of the retirement, resignation or removal of a Trustee, or an increase in number of Trustees, provided that such appointment shall become effective only at or after the expected vacancy occurs. As soon as any such Trustee has accepted his appointment in writing, the trust estate shall vest in the new Trustee, together with the continuing Trustees, without any further act or conveyance, and he shall be deemed a Trustee hereunder. The Trustees' power of appointment is subject to Section 16(a) of the 1940 Act. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided in this Article II, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by the Declaration. The death, declination to serve, resignation, retirement, removal or incapacity of one or more Trustees, or all of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration of Trust. Section 7. TEMPORARY VACANCY OR ABSENCE. Whenever a vacancy in the Board of Trustees shall occur, until such vacancy is filled, or while any Trustee is absent from his domicile (unless that Trustee has made arrangements to be informed about, and to participate in, the affairs of the Trust during such absence), or is physically or mentally incapacitated, the remaining Trustees shall have all the powers hereunder and their certificate as to such vacancy, absence, or incapacity shall be conclusive. Any Trustee may, by power of attorney, delegate his powers as Trustee for a period not exceeding six (6) months at any one time to any other Trustee or Trustees. Section 8. CHAIRMAN. The Trustees shall appoint one of their number to be Chairman of the Board of Trustees. The Chairman shall preside at all meetings of the Trustees, shall be responsible for the execution of policies established by the Trustees and the administration of the Trust, and may be the chief executive, financial and/or accounting officer of the Trust. Section 9. ACTION BY THE TRUSTEES. The Trustees shall act by majority vote at a meeting duly called at which a quorum is present, including a meeting held by conference telephone, teleconference or other electronic media or communication equipment by means of which all persons participating in the meeting can communicate with each other; or by written consent of a majority of Trustees (or such greater number as may be required by applicable law) without a meeting. A majority of the Trustees shall constitute a quorum at any meeting. Meetings of the Trustees may be called orally or in writing by the President or by any one of the Trustees. Notice of the time, date and place of all Trustees' meetings shall be given to each Trustee as set forth in the By-laws; provided, however, that no notice is required if the Trustees provide for regular or stated meetings. Notice need not be given to any Trustee who attends the meeting without objecting to the lack of notice or who signs a waiver of notice either before or after the meeting. The Trustees by majority vote may delegate to any Trustee or Trustees or committee authority to approve particular matters or take particular actions on behalf of the Trust. Any written consent or waiver may be provided and delivered to the Trust by facsimile or other similar electronic mechanism. (b) A Trustee who with respect to the Trust is not an Interested Person shall be deemed to be independent and disinterested when making any determinations or taking any action as a Trustee, whether pursuant to the 1940 Act, the Delaware Act or otherwise. Section 10. OWNERSHIP OF TRUST PROPERTY. The Trust Property of the Trust and of each Series shall be held separate and apart from any assets now or hereafter held in any capacity other than as Trustee hereunder by the Trustees or any successor Trustees. Legal title in and beneficial ownership of all of the assets of the Trust shall at all times be considered as vested in the Trust, except that the Trustees may cause legal title in and beneficial ownership of any Trust Property to be held by, or in the name of one or more of the Trustees acting for and on behalf of the Trust, or in the name of any person as nominee acting for and on behalf of the Trust. No Shareholder shall be deemed to have a severable ownership in any individual asset of the Trust or of any Series or any right of partition or possession thereof, but each Shareholder shall have, as provided in Article V, a proportionate undivided beneficial interest in the Trust or Series or Class thereof represented by Shares. The Shares shall be personal property giving only the rights specifically set forth in this Trust Instrument. The Trust, or at the determination of the Trustees one or more of the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed to hold legal title and beneficial ownership of any income earned on securities of the Trust issued by any business entities formed, organized, or existing under the laws of any jurisdiction, including the laws of any foreign country. Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute and deliver such documents as the remaining Trustees shall require for the purpose of conveying to the Trust or the remaining Trustees any Trust Property held in the name of the resigning or removed Trustee. Upon the incapacity or death of any Trustee, his legal representative shall execute and deliver on his behalf such documents as the remaining Trustees shall require as provided in the preceding sentence. Section 11. EFFECT OF TRUSTEES NOT SERVING. The death, resignation, retirement, removal, incapacity or inability or refusal to serve of the Trustees, or any one of them, shall not operate to annul the Trust or to revoke any existing agency created pursuant to the terms of this Declaration. Section 12. TRUSTEES, ETC. AS SHAREHOLDERS. Subject to any restrictions in the By-laws, any Trustee, officer, agent or independent contractor of the Trust may acquire, own and dispose of Shares to the same extent as any other Shareholder; the Trustees may issue and sell Shares to and buy Shares from any such person or any firm or company in which such person is interested, subject only to any general limitations herein. Section 13. SERIES TRUSTEES. In connection with the establishment of one or more Series or Classes, the Trustees establishing such Series or Class may appoint, to the extent permitted by the Delaware Act, separate Trustees with respect to such Series or Classes (the "Series Trustees"). Series Trustees may, but are not required to, serve as Trustees of the Trust or any other Series or Class of the Trust. The Series Trustees shall have, to the exclusion of any other Trustee of the Trust, all the powers and authorities of Trustees hereunder with respect to such Series or Class, but shall have no power or authority with respect to any other Series or Class. Any provision of this Declaration relating to election of Trustees by Shareholders only shall entitle the Shareholders of a Series or Class for which Series Trustees have been appointed to vote with respect to the election of such Series Trustees and the Shareholders of any other Series or Class shall not be entitled to participate in such vote. In the event that Series Trustees are appointed, the Trustees initially appointing such Series Trustees shall, without the approval of any Outstanding Shares, amend either the Declaration or the By-laws to provide for the respective responsibilities of the Trustees and the Series Trustees in circumstances where an action of the Trustees or Series Trustees affects all Series of the Trust or two or more Series represented by different Trustees. ARTICLE III CONTRACTS WITH SERVICE PROVIDERS Section 1. UNDERWRITING CONTRACT. The Trustees may in their discretion from time to time enter into an exclusive or non-exclusive distribution contract or contracts providing for the sale of the Shares whereby the Trustees may either agree to sell the Shares to the other party to the contract or appoint such other party as their sales agent for the Shares, and in either case on such terms and conditions, if any, as may be prescribed in the By-laws, and such further terms and conditions as the Trustees may in their discretion determine not inconsistent with the provisions of this Article III or of the By-laws; and such contract may also provide for the repurchase of the Shares by such other party as agent of the Trustees. Section 2. ADVISORY OR MANAGEMENT CONTRACT. The Trustees may in their discretion from time to time enter into one or more investment advisory or management contracts or, if the Trustees establish multiple Series, separate investment advisory or management contracts with respect to one or more Series whereby the other party or parties to any such contracts shall undertake to furnish the Trust or such Series management, investment advisory, administration, accounting, legal, statistical and research facilities and services, promotional or marketing activities, and such other facilities and services, if any, as the Trustees shall from time to time consider desirable and all upon such terms and conditions as the Trustees may in their discretion determine. Notwithstanding any provisions of the Declaration, the Trustees may authorize the Investment Advisers or persons to whom the Investment Adviser delegates certain or all of their duties, or any of them, under any such contracts (subject to such general or specific instructions as the Trustees may from time to time adopt) to effect purchases, sales, loans or exchanges of portfolio securities and other investments of the Trust on behalf of the Trustees or may authorize any officer, employee or Trustee to effect such purchases, sales, loans or exchanges pursuant to recommendations of such Investment Advisers, or any of them (and all without further action by the Trustees). Any such purchases, sales, loans and exchanges shall be deemed to have been authorized by all of the Trustees. Section 3. ADMINISTRATION AGREEMENT. The Trustees may in their discretion from time to time enter into an administration agreement or, if the Trustees establish multiple Series or Classes, separate administration agreements with respect to each Series or Class, whereby the other party to such agreement shall undertake to manage the business affairs of the Trust or of a Series or Class thereof of the Trust and furnish the Trust or a Series or a Class thereof with office facilities, and shall be responsible for the ordinary clerical, bookkeeping and recordkeeping services at such office facilities, and other facilities and services, if any, and all upon such terms and conditions as the Trustees may in their discretion determine. Section 4. SERVICE AGREEMENT. The Trustees may in their discretion from time to time enter into service agreements with respect to one or more Series or Classes of Shares whereby the other parties to such Service Agreements will provide administration and/or support services pursuant to administration plans and service plans, and all upon such terms and conditions as the Trustees in their discretion may determine. Section 5. TRANSFER AGENT. The Trustees may in their discretion from time to time enter into a transfer agency and shareholder service contract whereby the other party to such contract shall undertake to furnish transfer agency and shareholder services to the Trust. The contract shall have such terms and conditions as the Trustees may in their discretion determine not inconsistent with the Declaration. Such services may be provided by one or more Persons. Section 6. CUSTODIAN. The Trustees may appoint or otherwise engage one or more banks or trust companies, each having aggregate capital, surplus and undivided profits (as shown in its last published report) of at least two million dollars ($2,000,000), or any other entity satisfying the requirements of the 1940 Act, to serve as Custodian with authority as its agent, but subject to such restrictions, limitations and other requirements, if any, as may be contained in the By-laws of the Trust. The Trustees may also authorize the Custodian to employ one or more sub-custodians, including such foreign banks and securities depositories as meet the requirements of applicable provisions of the 1940 Act, and upon such terms and conditions as may be agreed upon between the Custodian and such sub-custodian, to hold securities and other assets of the Trust and to perform the acts and services of the Custodian, subject to applicable provisions of law and resolutions adopted by the Trustees. Section 7. AFFILIATIONS OF TRUSTEES OR OFFICERS, ETC. The fact that: (i) any of the Shareholders, Trustees or officers of the Trust or any Series thereof is a shareholder, director, officer, partner, trustee, employee, manager, adviser or distributor of or for any partnership, corporation, trust, association or other organization or of or for any parent or affiliate of any organization, with which a contract of the character described in this Article III or for services as Custodian, Transfer Agent or disbursing agent or for related services may have been or may hereafter be made, or that any such organization, or any parent or affiliate thereof, is a Shareholder of or has an interest in the Trust, or that (ii) any partnership, corporation, trust, association or other organization with which a contract of the character described in Sections 1, 2, 3 or 4 of this Article III or for services as Custodian, Transfer Agent or disbursing agent or for related services may have been or may hereafter be made also has any one or more of such contracts with one or more other partnerships, corporations, trusts, associations or other organizations, or has other business or interests, shall not affect the validity of any such contract or disqualify any Shareholder, Trustee or officer of the Trust from voting upon or executing the same or create any liability or accountability to the Trust or its Shareholders. ARTICLE IV COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION Section 1. COMPENSATION. The Trustees as such shall be entitled to reasonable compensation from the Trust, and they may fix the amount of such compensation. Nothing herein shall in any way prevent the employment of any Trustee for advisory, management, legal, accounting, investment banking or other services and payment for the same by the Trust. Section 2. LIMITATION OF LIABILITY. All persons contracting with or having any claim against the Trust or a particular Series shall look only to the assets of all Series or such particular Series for payment under such contract or claim; and neither the Trustees nor, when acting in such capacity, any of the Trust's officers, employees or agents, whether past, present or future, shall be personally liable therefor. Every written instrument or obligation on behalf of the Trust or any Series shall contain a statement to the foregoing effect, but the absence of such statement shall not operate to make any Trustee or officer of the Trust liable thereunder. Provided they have exercised reasonable care and have acted under the reasonable belief that their actions are in the best interest of the Trust, the Trustees and officers of the Trust shall not be responsible or liable for any act or omission or for neglect or wrongdoing of them or any officer, agent, employee, investment adviser or independent contractor of the Trust, but nothing contained in this Declaration or in the Delaware Act shall protect any Trustee or officer of the Trust against liability to the Trust or to Shareholders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Section 3. INDEMNIFICATION. (a) Subject to the exceptions and limitations contained in subsection (b) below: (i) every person who is, or has been, a Trustee or an officer, employee or agent of the Trust (including any individual who serves at its request as director, officer, partner, trustee or the like of another organization in which it has any interest as a shareholder, creditor or otherwise) ("Covered Person") shall be indemnified by the Trust or the appropriate Series to the fullest extent permitted by law against liability and against all expenses reasonably incurred or paid by him in connection with any claim, action, suit or proceeding in which he becomes involved as a party or otherwise by virtue of his being or having been a Covered Person and against amounts paid or incurred by him in the settlement thereof; and (ii) as used herein, the words "claim," "action," "suit," or "proceeding" shall apply to all claims, actions, suits or proceedings (civil, criminal or other, including appeals), actual or threatened, and the words "liability" and "expenses" shall include, without limitation, attorneys' fees, costs, judgments, amounts paid in settlement, fines, penalties and other liabilities. (b) No indemnification shall be provided hereunder to a Covered Person: (i) who shall have been adjudicated by a court or body before which the proceeding was brought (A) to be liable to the Trust or its Shareholders by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, or (B) not to have acted in good faith in the reasonable belief that his action was in the best interest of the Trust; or (ii) in the event of a settlement, unless there has been a determination that such Covered Person did not engage in willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office; (A) by the court or other body approving the settlement; (B) by at least a majority of those Trustees who are neither Interested Persons of the Trust nor are parties to the matter based upon a review of readily available facts (as opposed to a full trial-type inquiry); (C) by written opinion of independent legal counsel based upon a review of readily available facts (as opposed to a full trial-type inquiry) or (D) by a vote of a majority of the Outstanding Shares entitled to vote (excluding any Outstanding Shares owned of record or beneficially by such individual). (c) The rights of indemnification herein provided may be insured against by policies maintained by the Trust, shall be severable, shall not be exclusive of or affect any other rights to which any Covered Person may now or hereafter be entitled, and shall inure to the benefit of the heirs, executors and administrators of a Covered Person. (d) To the maximum extent permitted by applicable law, expenses in connection with the preparation and presentation of a defense to any claim, action, suit or proceeding of the character described in subsection (a) of this Section may be paid by the Trust or applicable Series from time to time prior to final disposition thereof upon receipt of an undertaking by or on behalf of such Covered Person that such amount will be paid over by him to the Trust or applicable Series if it is ultimately determined that he is not entitled to indemnification under this Section; provided, however, that either (i) such Covered Person shall have provided appropriate security for such undertaking, (ii) the Trust is insured against losses arising out of any such advance payments or (iii) either a majority of the Trustees who are neither Interested Persons of the Trust nor parties to the matter, or independent legal counsel in a written opinion, shall have determined, based upon a review of readily available facts (as opposed to a full trial-type inquiry) that there is reason to believe that such Covered Person will not be disqualified from indemnification under this Section. (e) Any repeal or modification of this Article IV by the Shareholders, or adoption or modification of any other provision of the Declaration or By-laws inconsistent with this Article, shall be prospective only, to the extent that such repeal, or modification would, if applied retrospectively, adversely affect any limitation on the liability of any Covered Person or indemnification available to any Covered Person with respect to any act or omission which occurred prior to such repeal, modification or adoption. Section 3. INDEMNIFICATION OF SHAREHOLDERS. If any Shareholder or former Shareholder of any Series shall be held personally liable solely by reason of his being or having been a Shareholder and not because of his acts or omissions or for some other reason, the Shareholder or former Shareholder (or his heirs, executors, administrators or other legal representatives or in the case of any entity, its general successor) shall be entitled out of the assets belonging to the applicable Series to be held harmless from and indemnified against all loss and expense arising from such liability. The Trust, on behalf of the affected Series, shall, upon request by such Shareholder, assume the defense of any claim made against such Shareholder for any act or obligation of the Series and satisfy any judgment thereon from the assets of the Series. Section 4. NO BOND REQUIRED OF TRUSTEES. No Trustee shall be obligated to give any bond or other security for the performance of any of his duties hereunder. Section 5. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC. No purchaser, lender, transfer agent or other Person dealing with the Trustees or any officer, employee or agent of the Trust or a Series thereof shall be bound to make any inquiry concerning the validity of any transaction purporting to be made by the Trustees or by said officer, employee or agent or be liable for the application of money or property paid, loaned, or delivered to or on the order of the Trustees or of said officer, employee or agent. Every obligation, contract, instrument, certificate, Share, other security of the Trust or a Series thereof or undertaking, and every other act or thing whatsoever executed in connection with the Trust shall be conclusively presumed to have been executed or done by the executors thereof only in their capacity as Trustees under this Declaration or in their capacity as officers, employees or agents of the Trust or a Series thereof. Every written obligation, contract, instrument, certificate, Share, other security of the Trust or a Series thereof or undertaking made or issued by the Trustees may recite that the same is executed or made by them not individually, but as Trustees under the Declaration, and that the obligations of the Trust or a Series thereof under any such instrument are not binding upon any of the Trustees or Shareholders individually, but bind only the Trust Property or the Trust Property of the applicable Series, and may contain any further recital which they may deem appropriate, but the omission of such recital shall not operate to bind the Trustees individually. The Trustees shall at all times maintain insurance for the protection of the Trust Property or the Trust Property of the applicable Series, its Shareholders, Trustees, officers, employees and agents in such amount as the Trustees shall deem adequate to cover possible tort liability, and such other insurance as the Trustees in their sole judgment shall deem advisable. Section 6. RELIANCE ON EXPERTS, ETC. Each Trustee, officer or employee of the Trust or a Series thereof shall, in the performance of his duties, powers and discretions hereunder be fully and completely justified and protected with regard to any act or any failure to act resulting from reliance in good faith upon the books of account or other records of the Trust or a Series thereof, upon an opinion of counsel, or upon reports made to the Trust or a Series thereof by any of its officers or employees or by the Investment Adviser, the Administrator, the Distributor, Transfer Agent, selected dealers, accountants, appraisers or other experts or consultants selected with reasonable care by the Trustees, officers or employees of the Trust, regardless of whether such counsel or expert may also be a Trustee. ARTICLE V SERIES; CLASSES; SHARES Section 1. ESTABLISHMENT OF SERIES OR CLASS. The Trust shall consist of one or more Series. Without limiting the authority of the Trustees to establish and designate any further Series, the Trustees hereby establish a single Series which shall be designated Pioneer Bond Fund. Each additional Series shall be established and is effective upon the adoption of a resolution of a majority of the Trustees or any alternative date specified in such resolution. The Trustees may designate the relative rights and preferences of the Shares of each Series. The Trustees may divide the Shares of any Series into Classes. Without limiting the authority of the Trustees to establish and designate any further Classes, the Trustees hereby establish three Classes of Shares which shall be designated Class A, Class B, Class C and Class Y Shares. The Classes of Shares of the existing Series herein established and designated and any Shares of any further Series and Classes that may from time to time be established and designated by the Trustees shall be established and designated, and the variations in the relative rights and preferences as between the different Series shall be fixed and determined, by the Trustees; provided, that all Shares shall be identical except for such variations as shall be fixed and determined between different Series or Classes by the Trustees in establishing and designating such Class or Series. In connection therewith with respect to the existing Classes, the purchase price, the method of determining the net asset value, and the relative dividend rights of holders shall be as set forth in the Trust's Registration Statement on Form N-1A under the Securities Act of 1933 and/or the 1940 Act and as in effect at the time of issuing Shares of the existing Classes. All references to Shares in this Declaration shall be deemed to be Shares of any or all Series or Classes as the context may require. The Trust shall maintain separate and distinct records for each Series and hold and account for the assets thereof separately from the other assets of the Trust or of any other Series. A Series may issue any number of Shares or any Class thereof and need not issue Shares. Each Share of a Series shall represent an equal beneficial interest in the net assets of such Series. Each holder of Shares of a Series or a Class thereof shall be entitled to receive his pro rata share of all distributions made with respect to such Series or Class. Upon redemption of his Shares, such Shareholder shall be paid solely out of the funds and property of such Series. The Trustees may adopt and change the name of any Series or Class. Section 2. SHARES. The beneficial interest in the Trust shall be divided into transferable Shares of one or more separate and distinct Series or Classes established by the Trustees. The number of Shares of each Series and Class is unlimited and each Share shall have no par value per Share or such other amount as the Trustees may establish. All Shares issued hereunder shall be fully paid and nonassessable. Shareholders shall have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust. The Trustees shall have full power and authority, in their sole discretion and without obtaining Shareholder approval, to issue original or additional Shares at such times and on such terms and conditions as they deem appropriate; to issue fractional Shares and Shares held in the treasury; to establish and to change in any manner Shares of any Series or Classes with such preferences, terms of conversion, voting powers, rights and privileges as the Trustees may determine (but the Trustees may not change Outstanding Shares in a manner materially adverse to the Shareholders of such Shares); to divide or combine the Shares of any Series or Classes into a greater or lesser number; to classify or reclassify any unissued Shares of any Series or Classes into one or more Series or Classes of Shares; to abolish any one or more Series or Classes of Shares; to issue Shares to acquire other assets (including assets subject to, and in connection with, the assumption of liabilities) and businesses; and to take such other action with respect to the Shares as the Trustees may deem desirable. Shares held in the treasury shall not confer any voting rights on the Trustees and shall not be entitled to any dividends or other distributions declared with respect to the Shares. Section 3. INVESTMENT IN THE TRUST. The Trustees shall accept investments in any Series or Class from such persons and on such terms as they may from time to time authorize. At the Trustees' discretion, such investments, subject to applicable law, may be in the form of cash or securities in which that Series is authorized to invest, valued as provided in Article VI, Section 3. Investments in a Series shall be credited to each Shareholder's account in the form of full Shares at the Net Asset Value per Share next determined after the investment is received or accepted as may be determined by the Trustees; provided, however, that the Trustees may, in their sole discretion, (a) impose a sales charge upon investments in any Series or Class, (b) issue fractional Shares, (c) determine the Net Asset Value per Share of the initial capital contribution or (d) authorize the issuance of Shares at a price other than Net Asset Value to the extent permitted by the 1940 Act or any rule, order or interpretation of the Commission thereunder. The Trustees shall have the right to refuse to accept investments in any Series at any time without any cause or reason therefor whatsoever. Section 4. ASSETS AND LIABILITIES OF SERIES. All consideration received by the Trust for the issue or sale of Shares of a particular Series, together with all assets in which such consideration is invested or reinvested, all income, earnings, profits, and proceeds thereof (including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be), shall be held and accounted for separately from the assets of every other Series and are referred to as "assets belonging to" that Series. The assets belonging to a Series shall belong only to that Series for all purposes, and to no other Series, subject only to the rights of creditors of that Series. Any assets, income, earnings, profits, and proceeds thereof, funds, or payments which are not readily identifiable as belonging to any particular Series shall be allocated by the Trustees between and among one or more Series as the Trustees deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series for all purposes, and such assets, earnings, income, profits or funds, or payments and proceeds thereof shall be referred to as assets belonging to that Series. The assets belonging to a Series shall be so recorded upon the books of the Trust, and shall be held by the Trustees in trust for the benefit of the Shareholders of that Series. The assets belonging to a Series shall be charged with the liabilities of that Series and all expenses, costs, charges and reserves attributable to that Series, except that liabilities and expenses allocated solely to a particular Class shall be borne by that Class. Any general liabilities, expenses, costs, charges or reserves of the Trust which are not readily identifiable as belonging to any particular Series or Class shall be allocated and charged by the Trustees between or among any one or more of the Series or Classes in such manner as the Trustees deem fair and equitable. Each such allocation shall be conclusive and binding upon the Shareholders of all Series or Classes for all purposes. Without limiting the foregoing, but subject to the right of the Trustees to allocate general liabilities, expenses, costs, charges or reserves as herein provided, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall be enforceable against the assets of such Series only, and not against the assets of any other Series. Notice of this contractual limitation on liabilities among Series may, in the Trustees' discretion, be set forth in the certificate of trust of the Trust (whether originally or by amendment) as filed or to be filed in the Office of the Secretary of State of the State of Delaware pursuant to the Delaware Act, and upon the giving of such notice in the certificate of trust, the statutory provisions of Section 3804 of the Delaware Act relating to limitations on liabilities among Series (and the statutory effect under Section 3804 of setting forth such notice in the certificate of trust) shall become applicable to the Trust and each Series. Any person extending credit to, contracting with or having any claim against any Series may look only to the assets of that Series to satisfy or enforce any debt, with respect to that Series. No Shareholder or former Shareholder of any Series shall have a claim on or any right to any assets allocated or belonging to any other Series. Section 5. OWNERSHIP AND TRANSFER OF SHARES. The Trust or a transfer or similar agent for the Trust shall maintain a register containing the names and addresses of the Shareholders of each Series and Class thereof, the number of Shares of each Series and Class held by such Shareholders, and a record of all Share transfers. The register shall be conclusive as to the identity of Shareholders of record and the number of Shares held by them from time to time. The Trustees may authorize the issuance of certificates representing Shares and adopt rules governing their use. The Trustees may make rules governing the transfer of Shares, whether or not represented by certificates. Except as otherwise provided by the Trustees, Shares shall be transferable on the books of the Trust only by the record holder thereof or by his duly authorized agent upon delivery to the Trustees or the Trust's transfer agent of a duly executed instrument of transfer, together with a Share certificate if one is outstanding, and such evidence or the genuineness of each such execution and authorization and of such other matters as may be required by the Trustees. Upon such delivery, and subject to any further requirements specified by the Trustees or contained in the By-laws, the transfer shall be recorded on the books of the Trust. Until a transfer is so recorded, the Shareholder of record of Shares shall be deemed to be the holder of such Shares for all purposes hereunder and neither the Trustees nor the Trust, nor any transfer agent or registrar or any officer, employee or agent of the Trust, shall be affected by any notice of a proposed transfer. Section 6. STATUS OF SHARES; LIMITATION OF SHAREHOLDER LIABILITY. Shares shall be deemed to be personal property giving Shareholders only the rights provided in this Declaration. Every Shareholder, by virtue of having acquired a Share, shall be held expressly to have assented to and agreed to be bound by the terms of this Declaration and to have become a party hereto. No Shareholder shall be personally liable for the debts, liabilities, obligations and expenses incurred by, contracted for, or otherwise existing with respect to, the Trust or any Series. The death, incapacity, dissolution, termination or bankruptcy of a Shareholder during the existence of the Trust shall not operate to terminate the Trust, nor entitle the representative of any such Shareholder to an accounting or to take any action in court or elsewhere against the Trust or the Trustees, but entitles such representative only to the rights of such Shareholder under this Trust. Ownership of Shares shall not entitle the Shareholder to any title in or to the whole or any part of the Trust Property or right to call for a partition or division of the same or for an accounting, nor shall the ownership of Shares constitute the Shareholders as partners. Neither the Trust nor the Trustees shall have any power to bind any Shareholder personally or to demand payment from any Shareholder for anything, other than as agreed by the Shareholder. Shareholders shall have the same limitation of personal liability as is extended to shareholders of a private corporation for profit incorporated in the State of Delaware. Every written obligation of the Trust or any Series shall contain a statement to the effect that such obligation may only be enforced against the assets of the appropriate Series or all Series; however, the omission of such statement shall not operate to bind or create personal liability for any Shareholder or Trustee. ARTICLE VI DISTRIBUTIONS AND REDEMPTIONS Section 1. DISTRIBUTIONS. The Trustees or a committee of one or more Trustees and one or more officers may declare and pay dividends and other distributions, including dividends on Shares of a particular Series and other distributions from the assets belonging to that Series. No dividend or distribution, including, without limitation, any distribution paid upon termination of the Trust or of any Series (or Class) with respect to, nor any redemption or repurchase of, the Shares of any Series (or Class) shall be effected by the Trust other than from the assets held with respect to such Series, nor shall any Shareholder of any particular Series otherwise have any right or claim against the assets held with respect to any other Series except to the extent that such Shareholder has such a right or claim hereunder as a Shareholder of such other Series. The Trustees shall have full discretion to determine which items shall be treated as income and which items as capital; and each such determination and allocation shall be conclusive and binding upon the Shareholders. The amount and payment of dividends or distributions and their form, whether they are in cash, Shares or other Trust Property, shall be determined by the Trustees. Dividends and other distributions may be paid pursuant to a standing resolution adopted once or more often as the Trustees determine. All dividends and other distributions on Shares of a particular Series shall be distributed pro rata to the Shareholders of that Series in proportion to the number of Shares of that Series they held on the record date established for such payment, except that such dividends and distributions shall appropriately reflect expenses allocated to a particular Class of such Series. The Trustees may adopt and offer to Shareholders such dividend reinvestment plans, cash dividend payout plans or similar plans as the Trustees deem appropriate. Section 2. REDEMPTIONS. Each Shareholder of a Series shall have the right at such times as may be permitted by the Trustees to require the Series to redeem all or any part of his Shares at a redemption price per Share equal to the Net Asset Value per Share at such time as the Trustees shall have prescribed by resolution, or, to the extent permitted by the 1940 Act, at such other redemption price and at such times as the Trustees shall prescribe by resolution. In the absence of such resolution, the redemption price per Share shall be the Net Asset Value next determined after receipt by the Series of a request for redemption in proper form less such charges as are determined by the Trustees and described in the Trust's Registration Statement for that Series under the Securities Act of 1933. The Trustees may specify conditions, prices, and places of redemption, may specify binding requirements for the proper form or forms of requests for redemption and may specify the amount of any deferred sales charge to be withheld from redemption proceeds. Payment of the redemption price may be wholly or partly in securities or other assets at the value of such securities or assets used in such determination of Net Asset Value, or may be in cash. Upon redemption, Shares may be reissued from time to time. The Trustees may require Shareholders to redeem Shares for any reason under terms set by the Trustees, including, but not limited to, the failure of a Shareholder to supply a taxpayer identification number if required to do so, or to have the minimum investment required, or to pay when due for the purchase of Shares issued to him. To the extent permitted by law, the Trustees may retain the proceeds of any redemption of Shares required by them for payment of amounts due and owing by a Shareholder to the Trust or any Series or Class or any governmental authority. Notwithstanding the foregoing, the Trustees may postpone payment of the redemption price and may suspend the right of the Shareholders to require any Series or Class to redeem Shares during any period of time when and to the extent permissible under the 1940 Act. Section 3. DETERMINATION OF NET ASSET VALUE. The Trustees shall cause the Net Asset Value of Shares of each Series or Class to be determined from time to time in a manner consistent with applicable laws and regulations. The Trustees may delegate the power and duty to determine Net Asset Value per Share to one or more Trustees or officers of the Trust or to a custodian, depository or other agent appointed for such purpose. The Net Asset Value of Shares shall be determined separately for each Series or Class at such times as may be prescribed by the Trustees or, in the absence of action by the Trustees, as of the close of regular trading on the New York Stock Exchange on each day for all or part of which such Exchange is open for unrestricted trading. Section 4. SUSPENSION OF RIGHT OF REDEMPTION. If, as referred to in Section 2 of this Article, the Trustees postpone payment of the redemption price and suspend the right of Shareholders to redeem their Shares, such suspension shall take effect at the time the Trustees shall specify, but not later than the close of business on the business day next following the declaration of suspension. Thereafter Shareholders shall have no right of redemption or payment until the Trustees declare the end of the suspension. If the right of redemption is suspended, a Shareholder may either withdraw his request for redemption or receive payment based on the Net Asset Value per Share next determined after the suspension terminates. Section 5. REPURCHASE BY AGREEMENT. The Trust may repurchase Shares directly, or through the Distributor or another agent designated for the purpose, by agreement with the owner thereof at a price not exceeding the Net Asset Value per Share determined as of the time when the purchase or contract of purchase is made or the Net Asset Value as of any time which may be later determined, provided payment is not made for the Shares prior to the time as of which such Net Asset Value is determined. ARTICLE VII SHAREHOLDERS' VOTING POWERS AND MEETINGS Section 1. VOTING POWERS. The Shareholders shall have power to vote only with respect to (a) the election of Trustees as provided in Section 2 of this Article; (b) the removal of Trustees as provided in Article II, Section 3(d); (c) any investment advisory or management contract as provided in Article VIII, Section 1; (d) any termination of the Trust as provided in Article IX, Section 4; (e) the amendment of this Declaration to the extent and as provided in Article X, Section 8; and (f) such additional matters relating to the Trust as may be required or authorized by law, this Declaration, or the By-laws or any registration of the Trust with the Commission or any State, or as the Trustees may consider desirable. On any matter submitted to a vote of the Shareholders, all Shares shall be voted by individual Series or Class, except (a) when required by the 1940 Act, Shares shall be voted in the aggregate and not by individual Series or Class, and (b) when the Trustees have determined that the matter affects the interests of more than one Series or Class, then the Shareholders of all such Series or Classes shall be entitled to vote thereon. As determined by the Trustees without the vote or consent of shareholders, on any matter submitted to a vote of Shareholders either (i) each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote or (ii) each dollar of net asset value (number of Shares owned times net asset value per share of such Series or Class, as applicable) shall be entitled to one vote on any matter on which such Shares are entitled to vote and each fractional dollar amount shall be entitled to a proportionate fractional vote. Without limiting the power of the Trustees in any way to designate otherwise in accordance with the preceding sentence, the Trustees hereby establish that each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote. There shall be no cumulative voting in the election of Trustees. Shares may be voted in person or by proxy or in any manner provided for in the By-laws. The By-laws may provide that proxies may be given by any electronic or telecommunications device or in any other manner, but if a proposal by anyone other than the officers or Trustees is submitted to a vote of the Shareholders of any Series or Class, or if there is a proxy contest or proxy solicitation or proposal in opposition to any proposal by the officers or Trustees, Shares may be voted only in person or by written proxy. Until Shares of a Series are issued, as to that Series the Trustees may exercise all rights of Shareholders and may take any action required or permitted to be taken by Shareholders by law, this Declaration or the By-laws. Meetings of Shareholders shall be called and notice thereof and record dates therefor shall be given and set as provided in the By-laws. Section 2. QUORUM; REQUIRED VOTE. One-third of the Outstanding Shares of each Series or Class, or one-third of the Outstanding Shares of the Trust, entitled to vote in person or by proxy shall be a quorum for the transaction of business at a Shareholders' meeting with respect to such Series or Class, or with respect to the entire Trust, respectively. Any lesser number shall be sufficient for adjournments. Any adjourned session of a Shareholders' meeting may be held within a reasonable time without further notice. Except when a larger vote is required by law, this Declaration or the By-laws, a majority of the Shares voting at a Shareholders' meeting in person or by proxy shall decide any matters to be voted upon with respect to the entire Trust and a plurality of such Shares shall elect a Trustee; provided, that if this Declaration or applicable law permits or requires that Shares be voted on any matter by individual Series or Classes, then a majority of the Shares of that Series or Class (or, if required by law, a majority of the Shares outstanding and entitled to vote of that Series or Class) voting at a Shareholders' meeting in person or by proxy on the matter shall decide that matter insofar as that Series or Class is concerned. Shareholders may act as to the Trust or any Series or Class by the written consent of a majority (or such other amount as may be required by applicable law) of the Outstanding Shares of the Trust or of such Series or Class, as the case may be. Section 3. RECORD DATES. For the purpose of determining the Shareholders of any Series (or Class) who are entitled to receive payment of any dividend or of any other distribution, the Trustees may from time to time fix a date, which shall be before the date for the payment of such dividend or such other payment, as the record date for determining the Shareholders of such Series (or Class) having the right to receive such dividend or distribution. Without fixing a record date, the Trustees may for distribution purposes close the register or transfer books for one or more Series (or Classes) any time prior to the payment of a distribution. Nothing in this Section shall be construed as precluding the Trustees from setting different record dates for different Series (or Classes). Section 4. ADDITIONAL PROVISIONS. The By-laws may include further provisions for Shareholders' votes and meetings and related matters. ARTICLE VIII EXPENSES OF THE TRUST AND SERIES Section 1. PAYMENT OF EXPENSES BY THE TRUST. Subject to Article V, Section 4, the Trust or a particular Series shall pay, or shall reimburse the Trustees from the assets belonging to all Series or the particular Series, for their expenses (or the expenses of a Class of such Series) and disbursements, including, but not limited to, interest charges, taxes, brokerage fees and commissions; expenses of issue, repurchase and redemption of Shares; certain insurance premiums; applicable fees, interest charges and expenses of third parties, including the Trust's investment advisers, managers, administrators, distributors, custodians, transfer agents and fund accountants; fees of pricing, interest, dividend, credit and other reporting services; costs of membership in trade associations; telecommunications expenses; funds transmission expenses; auditing, legal and compliance expenses; costs of forming the Trust and its Series and maintaining its existence; costs of preparing and printing the prospectuses of the Trust and each Series, statements of additional information and Shareholder reports and delivering them to Shareholders; expenses of meetings of Shareholders and proxy solicitations therefor; costs of maintaining books and accounts; costs of reproduction, stationery and supplies; fees and expenses of the Trustees; compensation of the Trust's officers and employees and costs of other personnel performing services for the Trust or any Series; costs of Trustee meetings; Commission registration fees and related expenses; state or foreign securities laws registration fees and related expenses; and for such non-recurring items as may arise, including litigation to which the Trust or a Series (or a Trustee or officer of the Trust acting as such) is a party, and for all losses and liabilities by them incurred in administering the Trust. The Trustees shall have a lien on the assets belonging to the appropriate Series, or in the case of an expense allocable to more than one Series, on the assets of each such Series, prior to any rights or interests of the Shareholders thereto, for the reimbursement to them of such expenses, disbursements, losses and liabilities. Section 2. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustees shall have the power, as frequently as they may determine, to cause each Shareholder, or each Shareholder of any particular Series, to pay directly, in advance or arrears, for charges of the Trust's custodian or transfer, shareholder servicing or similar agent, an amount fixed from time to time by the Trustees, by setting off such charges due from such Shareholder from declared but unpaid dividends owed such Shareholder and/or by reducing the number of Shares in the account of such Shareholder by that number of full and/or fractional Shares which represents the outstanding amount of such charges due from such Shareholder. ARTICLE IX MISCELLANEOUS Section 1. TRUST NOT A PARTNERSHIP. This Declaration creates a trust and not a partnership. No Trustee shall have any power to bind personally either the Trust's officers or any Shareholder. Section 2. TRUSTEE ACTION. The exercise by the Trustees of their powers and discretion hereunder in good faith and with reasonable care under the circumstances then prevailing shall be binding upon everyone interested. Subject to the provisions of Article IV, the Trustees shall not be liable for errors of judgment or mistakes of fact or law. Section 3. RECORD DATES. The Trustees may fix in advance a date up to ninety (90) days before the date of any Shareholders' meeting, or the date for the payment of any dividends or other distributions, or the date for the allotment of rights, or the date when any change or conversion or exchange of Shares shall go into effect as a record date for the determination of the Shareholders entitled to notice of, and to vote at, any such meeting, or entitled to receive payment of such dividend or other distribution, or to receive any such allotment of rights, or to exercise such rights in respect of any such change, conversion or exchange of Shares. Section 4. TERMINATION OF THE TRUST. (a) This Trust shall have perpetual existence. Subject to the vote of a majority of the Shares outstanding and entitled to vote of the Trust or of each Series to be affected, the Trustees may (i) sell and convey all or substantially all of the assets of all Series or any affected Series to another Series or to another entity which is an open-end investment company as defined in the 1940 Act, or is a series thereof, for adequate consideration, which may include the assumption of all outstanding obligations, taxes and other liabilities, accrued or contingent, of the Trust or any affected Series, and which may include shares of or interests in such Series, entity, or series thereof; or (ii) at any time sell and convert into money all or substantially all of the assets of all Series or any affected Series. Upon making reasonable provision for the payment of all known liabilities of all Series or any affected Series in either (i) or (ii), by such assumption or otherwise, the Trustees shall distribute the remaining proceeds or assets (as the case may be) ratably among the Shareholders of all Series or any affected Series; however, the payment to any particular Class of such Series may be reduced by any fees, expenses or charges allocated to that Class. (b) The Trustees may take any of the actions specified in subsection (a) (i) and (ii) above without obtaining the vote of a majority of the Shares Outstanding and entitled to vote of the Trust or any Series if a majority of the Trustees determines that the continuation of the Trust or Series is not in the best interests of the Trust, such Series, or their respective Shareholders as a result of factors or events adversely affecting the ability of the Trust or such Series to conduct its business and operations in an economically viable manner. Such factors and events may include the inability of the Trust or a Series to maintain its assets at an appropriate size, changes in laws or regulations governing the Trust or the Series or affecting assets of the type in which the Trust or Series invests, or economic developments or trends having a significant adverse impact on the business or operations of the Trust or such Series. (c) Upon completion of the distribution of the remaining proceeds or assets pursuant to subsection (a), the Trust or affected Series shall terminate and the Trustees and the Trust shall be discharged of any and all further liabilities and duties hereunder with respect thereto and the right, title and interest of all parties therein shall be canceled and discharged. Upon termination of the Trust, following completion of winding up of its business, the Trustees shall cause a certificate of cancellation of the Trust's certificate of trust to be filed in accordance with the Delaware Act, which certificate of cancellation may be signed by any one Trustee. Section 5. REORGANIZATION. (a) Notwithstanding anything else herein, to change the Trust's form or place of organization the Trustees may, without Shareholder approval unless such approval is required by applicable law, (i) cause the Trust to merge or consolidate with or into one or more entities, if the surviving or resulting entity is the Trust or another open-end management investment company under the 1940 Act, or a series thereof, that will succeed to or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to be exchanged under or pursuant to any state or federal statute to the extent permitted by law, or (iii) cause the Trust to incorporate under the laws of Delaware or any other U.S. jurisdiction. Any agreement of merger or consolidation or certificate of merger may be signed by a majority of Trustees and facsimile signatures conveyed by electronic or telecommunication means shall be valid. (b) Pursuant to and in accordance with the provisions of Section 3815(f) of the Delaware Act, an agreement of merger or consolidation approved by the Trustees in accordance with this Section 5 may effect any amendment to the Declaration or effect the adoption of a new trust instrument of the Trust if it is the surviving or resulting trust in the merger or consolidation. (c) The Trustees may create one or more business trusts to which all or any part of the assets, liabilities, profits or losses of the Trust or any Series or Class thereof may be transferred and may provide for the conversion of Shares in the Trust or any Series or Class thereof into beneficial interests in any such newly created trust or trusts or any series or classes thereof. Section 6. DECLARATION OF TRUST. The original or a copy of this Declaration of Trust and of each amendment hereto or Declaration of Trust supplemental shall be kept at the office of the Trust where it may be inspected by any Shareholder. Anyone dealing with the Trust may rely on a certificate by a Trustee or an officer of the Trust as to the authenticity of the Declaration of Trust or any such amendments or supplements and as to any matters in connection with the Trust. The masculine gender herein shall include the feminine and neuter genders. Headings herein are for convenience only and shall not affect the construction of this Declaration of Trust. This Declaration of Trust may be executed in any number of counterparts, each of which shall be deemed an original. Section 7. APPLICABLE LAW. This Declaration and the Trust created hereunder are governed by and construed and administered according to the Delaware Act and the applicable laws of the State of Delaware; provided, however, that there shall not be applicable to the Trust, the Trustees or this Declaration of Trust (a) the provisions of Section 3540 of Title 12 of the Delaware Code, or (b) any provisions of the laws (statutory or common) of the State of Delaware (other than the Delaware Act) pertaining to trusts which relate to or regulate (i) the filing with any court or governmental body or agency of trustee accounts or schedules of trustee fees and charges, (ii) affirmative requirements to post bonds for trustees, officers, agents or employees of a trust, (iii) the necessity for obtaining court or other governmental approval concerning the acquisition, holding or disposition of real or personal property, (iv) fees or other sums payable to trustees, officers, agents or employees of a trust, (v) the allocation of receipts and expenditures to income or principal, (vi) restrictions or limitations on the permissible nature, amount or concentration of trust investments or requirements relating to the titling, storage or other manner of holding of trust assets, or (vii) the establishment of fiduciary or other standards of responsibilities or limitations on the acts or powers of trustees, which are inconsistent with the limitations or liabilities or authorities and powers of the Trustees set forth or referenced in this Declaration. The Trust shall be of the type commonly called a Delaware business trust, and, without limiting the provisions hereof, the Trust may exercise all powers which are ordinarily exercised by such a trust under Delaware law. The Trust specifically reserves the right to exercise any of the powers or privileges afforded to trusts or actions that may be engaged in by trusts under the Delaware Act, and the absence of a specific reference herein to any such power, privilege or action shall not imply that the Trust may not exercise such power or privilege or take such actions. Section 8. AMENDMENTS. The Trustees may, without any Shareholder vote, amend or otherwise supplement this Declaration by making an amendment, a Declaration of Trust supplemental hereto or an amended and restated trust instrument; provided, that Shareholders shall have the right to vote on any amendment (a) which would affect the voting rights of Shareholders granted in Article VII, Section l, (b) to this Section 8, (c) required to be approved by Shareholders by law or by the Trust's registration statement(s) filed with the Commission, and (d) submitted to them by the Trustees in their discretion. Any amendment submitted to Shareholders which the Trustees determine would affect the Shareholders of any Series shall be authorized by vote of the Shareholders of such Series and no vote shall be required of Shareholders of a Series not affected. Notwithstanding anything else herein, any amendment to Article IV which would have the effect of reducing the indemnification and other rights provided thereby to Trustees, officers, employees, and agents of the Trust or to Shareholders or former Shareholders, and any repeal or amendment of this sentence shall each require the affirmative vote of the holders of two-thirds of the Outstanding Shares of the Trust entitled to vote thereon. Section 9. DERIVATIVE ACTIONS. In addition to the requirements set forth in Section 3816 of the Delaware Act, a Shareholder may bring a derivative action on behalf of the Trust only if the following conditions are met: (a) Shareholders eligible to bring such derivative action under the Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, 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 shareholder request and to investigate the basis of such claim. The Trustees 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 Trust for the expense of any such advisers in the event that the Trustees determine not to bring such action. Section 10. FISCAL YEAR. The fiscal year of the Trust shall end on a specified date as set forth in the By-laws. The Trustees may change the fiscal year of the Trust without Shareholder approval. Section 11. SEVERABILITY. The provisions of this Declaration are severable. If the Trustees determine, with the advice of counsel, that any provision hereof conflicts with the 1940 Act, the regulated investment company provisions of the Internal Revenue Code or with other applicable laws and regulations, the conflicting provision shall be deemed never to have constituted a part of this Declaration; provided, however, that such determination shall not affect any of the remaining provisions of this Declaration or render invalid or improper any action taken or omitted prior to such determination. If any provision hereof shall be held invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall attach only to such provision only in such jurisdiction and shall not affect any other provision of this Declaration. IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust have executed this instrument as of the date first written above. /S/MARY K. BUSH Mary K. Bush As Trustee and not individually /S/JOHN F. COGAN, JR. John F. Cogan, Jr. As Trustee and not individually /S/RICHARD H. EGDAHL Richard H. Egdahl As Trustee and not individually /S/MARGARET B, W, GRAHAM Margaret B. W. Graham As Trustee and not individually /S/JOHN W. KENDRICK John W. Kendrick As Trustee and not individually /S/MARGUERITE A. PIRET Marguerite A. Piret As Trustee and not individually /S/DAVID D. TRIPPLE David D. Tripple As Trustee and not individually /S/STEPHEN K. WEST Stephen K. West As Trustee and not individually /S/JOHN WINTHROP John Winthrop As Trustee and not individually The address of each Trustee is c/o Pioneer Bond Fund 60 State Street, Boston, Massachusetts 02109 EX-99.1.1 3 CERTIFICATE OF TRUST CERTIFICATE OF TRUST THIS Certificate of Trust of Pioneer Bond Fund (the "Trust"), dated January 5, 1999, is being duly executed and filed by the undersigned trustees, to form a business trust under the Delaware Business Trust Act (12 Del. C. ss. 3801, ET SEQ). 1. NAME. The name of the business trust formed hereby is Pioneer Bond Fund. 2. REGISTERED AGENT. The business address of the registered office of the Trust in the State of Delaware is 1201 North Market Street in the City of Wilmington, County of New Castle, 19801. The name of the Trust's registered agent at such address is Delaware Corporation Organizers, Inc. 3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon the date and time of filing. 4. SERIES TRUST. Notice is hereby given that pursuant to Section 3804 of the Delaware Business Trust Act, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular series of the Trust shall be enforceable against the assets of such series only and not against the assets of the Trust generally. The Trust is a registered investment company under the Investment Company Act of 1940, as amended. IN WITNESS WHEREOF, the undersigned being all the Trustees of the Trust have executed this instrument as of the date first written above. /S/MARY K. BUSH Mary K. Bush As Trustee and not individually /S/JOHN F. COGAN, JR. John F. Cogan, Jr. As Trustee and not individually /S/RICHARD H. EGDAHL Richard H. Egdahl As Trustee and not individually /S/MARGARET B.W. GRAHAM Margaret B.W. Graham As Trustee and not individually /S/JOHN W. KENDRICK John W. Kendrick As Trustee and not individually /S/MARGUERITE A. PIRET Marguerite A. Piret As Trustee and not individually /S/DAVID D. TRIPPLE David D. Tripple As Trustee and not individually /S/STEPHEN K. WEST Stephen K. West As Trustee and not individually /S/JOHN WINTHROP John Winthrop As Trustee and not individually EX-99.2 4 BY-LAWS BY-LAWS OF PIONEER BOND FUND ARTICLE I DEFINITIONS All capitalized terms have the respective meanings given them in the Agreement and Declaration of Trust of Pioneer Bond Fund dated January 5, 1999, as amended or restated from time to time. ARTICLE II OFFICES SECTION 1. PRINCIPLES OFFICE. Until changed by the Trustees, the principal office of the Trust shall be in Boston, Massachusetts. SECTION 2. OTHER OFFICES. The Trust may have offices in such other places without as well as within the State of Delaware as the Trustees may from time to time determine. SECTION 3. REGISTERED OFFICE AND REGISTERED AGENT. The Board of Trustees shall establish a registered office in the State of Delaware and shall appoint as the Trust's registered agent for service of process in the State of Delaware an individual resident of the State of Delaware or a Delaware corporation or a corporation authorized to transact business in the State of Delaware; in each case the business office of such registered agent for service of process shall be identical with the registered Delaware office of the Trust. ARTICLE III SHAREHOLDERS SECTION 1. MEETINGS. Meetings of the Shareholders of the Trust or a Series or Class thereof shall be held as provided in the Declaration of Trust at such place within or without the State of Delaware as the Trustee shall designate. The holders of one-third of the Outstanding Shares of the Trust or a Series or Class thereof present in person or by proxy and entitled to vote shall constitute a quorum at any meeting of the Shareholders of the Trust or a Series or Class thereof. SECTION 2 NOTICE OF MEETINGS. Notice of all meetings of the Shareholders, stating the time, place and purposes of the meeting, shall be given by the Trustees by mail or telegraphic or electronic means to each Shareholder at his address as recorded on the register of the Trust mailed at least (10) days and not more than ninety (90) days before the meeting, PROVIDED, HOWEVER, that notice of a meeting need not be given to a Shareholder to whom such notice need not be given under the proxy rules of the Commission under the 1940 Act and the Securities Exchange Act of 1934, as amended. Only the business stated in the notice of the meeting shall be considered at such meeting. Any adjourned meeting may be held a adjourned without further notice. No notice need be given to any Shareholder who shall have failed to inform the Trust of his current address or if a written waiver of notice, executed before or after the meeting by the Shareholder who shall have failed to inform the Trust of his current address or if a written waiver of notice, executed before or after the meeting by the Shareholder or his attorney thereunto authorized, is filed with the records of the meeting. SECTION 3. RECORD DATE FOR MEETINGS AND OTHER PURPOSES. For the purpose of determining the Shareholders who are entitled to notice of and to vote at any meeting, or to participate in any distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding thirty (30) days, as the Trustees may determine; or without closing the transfer books the Trustees may fix a date not more than ninety (90) days prior to the date of any meeting of Shareholders or distribution or other action as a record date for the determination of the persons to be treated as Shareholders of record for such purposes, except for dividend payments which shall be governed by the Declaration of Trust. SECTION 4. PROXIES. At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Secretary, or with such other officer or agent of the Trust as the Secretary may direct, for verification prior to the time at which such vote shall be taken. A proxy shall be deemed signed if the shareholder's name is placed on the proxy, (whether by manual signature, typewriting, telegraphic transmission, facsimile, other electronic means or otherwise) by the Shareholder or the Shareholder's attorney-in-fact. Proxies may be given by any electronic or telecommunication device except as otherwise provided in the Declaration of Trust. Proxies may be solicited in the name of one or more Trustees or one or more of the officers of the Trust. Only Shareholders of record shall be entitled to vote. As determined by the Trustees without the vote or consent of Shareholders, on any matter submitted to a vote of Shareholders, either (i) each whole Share shall be entitled to one vote as to any matter on which it is entitled to vote and each fractional Share shall be entitled to a proportionate fractional vote or (ii) each dollar of net asset value (number of Shares owned times net asset value per Share of such Series or Class, as applicable) shall be entitled to one vote on any matter on which such Shares are entitled to vote and each fractional dollar amount shall be entitled to a proportionate fractional vote. Without limiting their power to designate otherwise in accordance~with the preceding sentence, the Trustees have established in the Declaration of Trust that each whole share shall be entitled to one vote as to any matter on which it is entitled by the Declaration of Trust to vote and fractional shares shall be entitled to a proportionate fractional vote. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. If the holder of any such share is a minor or a person of unsound mind, and subject to guardianship or the legal control of any other person as regards the charge or management of such Share, he may vote by his guardian or such other person appointed or having such control, and such vote may be given in person or by proxy. SECTION 5. ABSTENTIONS AND BROKER NON-VOTES. Outstanding Shares represented in person or by proxy (including Shares which abstain or do not vote with respect to one or more of any proposals presented for Shareholder approval) will be counted for purposes of determining whether a quorum is present at a meeting. Abstentions will be treated as Shares that are present and entitled to vote for purposes of determining the number of Shares that are present and entitled to vote with respect to any particular proposal, but will not be counted as a vote in favor of such proposal. If a broker or nominee holding Shares in "street name" indicates on the proxy that it does not have discretionary authority to vote as to a particular proposal, those Shares will not be considered as present and entitled to vote with respect to such proposal. SECTION 6. INSPECTION OF RECORDS. The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a Delaware business corporation. SECTION 7. ACTION WITHOUT MEETING. Any action which may be taken by Shareholders may be taken without a meeting if a majority of Outstanding Shares entitled to vote on the matter (or such larger proportion thereof as shall be required by law) consent to the action in writing and the written consents are filed with the records of the meetings of Shareholders. Such consents shall be treated for all purposes as a vote taken at a meeting of Shareholders. ARTICLE IV TRUSTEES SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may in their discretion provide for regular or stated meetings of the Trustees. Notice of regular or stated meetings need not be given. Meetings of the Trustees other than regular or stated meetings shall be held whenever called by the president, the Chairman or by any one of the Trustees, at the time being in office. Notice of the time and place of each meeting other than regular or stated meetings shall be given by the Secretary or an Assistant Secretary or by the officer or Trustee calling the meeting and shall be mailed to each Trustee at least two days before the meeting, or shall be given by telephone, cable, wireless, facsimile or other electronic mechanism to each Trustee at his business address, or personally delivered to him at least one day before the meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him. A notice or waiver of notice need not specify the purpose of any meeting. The Trustees may meet by means of a telephone conference circuit or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time and participation by such means shall be deemed to have been held at a place designated by the Trustees at the meeting. participation in a telephone conference meeting shall constitute presence in person at such meeting. Any action required or permitted to be taken at any meeting of the Trustees may be taken by the Trustees without a meeting if a majority of the Trustees consent to the action in writing and the written consents are filed with the records of the Trustees' meetings. Such consents shall be treated as a vote for all purposes. SECTION 2. QUORUM AND MANNER OF ACTING. A majority of the Trustees shall be present in person at any regular or special meeting of the Trustees in order to constitute a quorum for the transaction of business at such meeting and (except as otherwise required by law, the Declaration of Trust or these By-laws) the act of a majority of the Trustees present at any such meeting, at which a quorum is present, shall be the act of the Trustees. In the absence of a quorum, a majority of the Trustees present may adjourn the meeting from time to time until a quorum shall be present. Notice of an adjourned meeting need not be given. ARTICLE V COMMITTEES SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The Trustees by vote of a majority of all the Trustees may elect from their own number an Executive Committee to consist of not less than three (3) members to hold office at the pleasure of the Trustees, which shall have the power to conduct the current and ordinary business of the Trust while the Trustees are not in session, including the purchase and sale of securities and the designation of securities to be delivered upon redemption of Shares of the Trust or a Series thereof, and such other powers of the Trustees as the Trustees may delegate to them, from time to time, except those powers which by law, the Declaration of Trust or these By-laws they are prohibited from delegating. The Trustees may also elect from their own number other Committees from time to time; the number composing such Committees, the powers conferred upon the same (subject to the same limitations as with respect to the Executive Committee) and the term of membership on such Committees to be determined by the Trustees. The Trustees may designate a chairman of any such Committee. In the absence of such designation the Committee may elect its own Chairman. SECTION 2. MEETINGS QUORUM AND MANNER OF ACTING. The Trustees may (1) provide for stated meetings of any Committee, (2) specify the manner of calling and notice required for special meetings of any Committee, (3) specify the number of members of a Committee required to constitute a quorum and the number of members of a Committee required to exercise specified powers delegated to such Committee, (4) authorize the making of decisions to exercise specified powers by written assent of the requisite number of members of a Committee without a meeting, and (5) authorize the members of a Committee to meet by means of a telephone conference circuit. The Executive Committee shall keep regular minutes of its meetings and records of decisions taken without a meeting and cause them to be recorded in a book designated for that purpose and kept in the office of the Trust. ARTICLE VI OFFICERS SECTION 1. GENERAL PROVISIONS. The officers of the Trust shall be a President, a Treasurer and a Secretary, who shall be elected by the Trustees. The Trustees may elect or appoint such other officers or agents as the business of the Trust may require, including one or more Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers. The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents. SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except as otherwise provided by law, the Declaration of Trust or these Bylaws, the President, the Treasurer, the Secretary and any other officer shall each hold office at the pleasure of the Board of Trustees or until his successor shall have been duly elected and qualified. The Secretary and the Treasurer may be the same person. A Vice President and the Treasurer or a Vice President and the Secretary may be the same person, but the offices of Vice President, Secretary and Treasurer shall not be held by the same person. The President shall hold no other office, however, the President may also serve as Chairman. Except as above provided, any two offices may be held by the same person. Any officer may be but none need be a Trustee or Shareholder. SECTION 3. REMOVAL. The Trustees, at any regular or special meeting of the Trustees, may remove any officer with or without cause, by a vote of a majority of the Trustees then in office. Any officer or agent appointed by an officer or committee may be removed with or without cause by such appointing officer or committee. SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The Trustees may, but need not, appoint from among their number a Chairman. When present he shall preside at the meetings of the Shareholders and of the Trustees. He may call meetings of the Trustees and of any committee thereof whenever he deems it necessary. He shall be an executive officer of the Trust and shall have, with the President, general supervision over the business and policies of the Trust, subject to the limitations imposed upon the President, as provided in Section 5 of this Article VI. SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. The President may call meetings of the Trustees and of any Committee thereof when he deems it necessary and shall preside at all meetings of the Shareholders. Subject to the control of the Trustees and to the control of any Committees of the Trustees, within their respective spheres, as provided by the Trustees, he shall at all times exercise a general supervision and direction over the affairs of the Trust. He shall have the power to employ attorneys and counsel for the Trust or any Series or Class thereof and to employ such subordinate officers, agents, clerks and employees as he may find necessary to transact the business of the Trust or any Series or Class thereof. He shall also have the power to grant, issue, execute or sign such powers of attorney, proxies or other documents as may be deemed advisable or necessary in furtherance of the interests of the Trust or any Series thereof. The President shall have such other powers and duties, as from time to time may be conferred upon or assigned to him by the Trustees. SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In the absence or disability of the President, the Vice President or, if there be more than one Vice President, any Vice President designated by the Trustees, shall perform all the duties and may exercise any of the powers of the President, subject to the control of the Trustees. Each Vice President shall perform such other duties as may be assigned to him from time to time by the Trustees and the President. SECTION 7. POWERS AND DUTIES OF THE TREASURER.The Treasurer shall be the principal financial and accounting officer of the Trust. He shall deliver all funds of the Trust or any Series or Class thereof which may come into his hands to such Custodian as the Trustees may employ. He shall render a statement of condition of the finances of the Trust or any Series or Class thereof to the Trustees as often as they shall require the same and he shall in general perform all the duties incident to the office of a Treasurer and such other duties as from time to time may be assigned to him by the Trustees. The Treasurer shall give a bond for the faithful discharge of his duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require. SECTION 8. POWERS AND DUTIES OF THE SECRETARY. The Secretary shall keep the minutes of all meetings of the Trustees and of the Shareholders in proper books provided for that purpose; he shall have custody of the seal of the Trust; he shall have charge of the Share transfer books, lists and records unless the same are in the charge of a transfer agent. He shall attend to the giving and serving of all notices by the Trust in accordance with the provisions of these By-laws and as required by law; and subject to these By-laws, he shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Trustees. SECTION 9. POWERS AND DUTIES OF ASSISTANT OFFICERS. In the absence or disability of the Treasurer, any officer designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Treasurer. Each officer shall perform such other duties as from time to time may be assigned to him by the Trustees. Each officer performing the duties and exercising the powers of the Treasurer, if any, and any Assistant Treasurer, shall give a bond for the faithful discharge of his duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require. SECTION 10. POWERS AND DUTIES OF ASSISTANT SECRETARIES. In the absence or disability of the Secretary, any Assistant Secretary designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Secretary. Each Assistant Secretary shall perform such other duties as from time to time may be assigned to him by the Trustees. SECTION 11. COMPENSATION OF OFFICERS AND TRUSTEES AND MEMBERS OF THE ADVISORY BOARD. Subject to any applicable provisions of the Declaration of Trust, the compensation of the officers and Trustees and members of an advisory board shall be fixed from time to time by the Trustees or, in the case of officers, by any Committee or officer upon whom such power may be conferred by the Trustees. No officer shall be prevented from receiving such compensation as such officer by reason of the fact that he is also a Trustee. ARTICLE VII FISCAL YEAR The fiscal year of the Trust shall begin on the first day of November in each year and shall end on the last day of October in each year, provided, however, that the Trustees may from time to time change the fiscal year. The taxable year of each Series of the Trust shall be as determined by the Trustees from time to time. ARTICLE VIII SEAL The Trustees may adopt a seal which shall be in such form and shall have such inscription thereon as the Trustees may from time to time prescribe. ARTICLE IX SUFFICIENCY AND WAIVERS OF NOTICE Whenever any notice whatever is required to be given by law, the Declaration of Trust or these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. A notice shall be deemed to have been sent by mail, telegraph, cable, wireless, facsimile or other electronic means for the purposes of these By-laws when it has been delivered to a representative of any company holding itself out as capable of sending notice by such means with instructions that it be so sent. ARTICLE X AMENDMENT S These By-laws, or any of them, may be altered, amended or repealed, or new By-laws may be adopted by (a) vote of a majority of the Outstanding Shares voting in person or by proxy at a meeting of Shareholders and entitled to vote or (b) by the Trustees, provided, however, that no By-law may be amended, adopted or repealed by the Trustees- if such amendment, adoption or repeal requires, pursuant to law, the Declaration of Trust or these By-laws, a vote of the Shareholders. END OF BY-LAWS EX-99.4 5 FORM OF SPECIMAN STOCK CERTIFICATE PIONEER BOND 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 REVERSE THE REGISTERED HOLDER OF THIS CERTIFICATE IS ENTITLED TO ALL THE RIGHTS, INTEREST AND PRIVILEGES OF A SHAREHOLDER AS PROVIDED BY THE AGREEMENT AND DECLARATION OF TRUST AND BY-LAWS OF THE TRUST, AS MAY BE AMENDED FROM TIME TO TIME, 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 TRUST. THE HOLDER OF THIS CERTIFICATE, AS PROVIDED IN SAID AGREEMENT AND DECLARATION OF TRUST AND BY-LAWS, SHALL NOT IN ANY WISE BE PERSONALLY LIABLE FOR ANY DEBT, OBLIGATION OR ACT OF THE TRUST. 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 TRUST, TOGETHER WITH AN IRREVOCABLE OFFER IN WRITING TO SELL THE SHARES REPRESENTED THEREBY AT THE NET ASSET VALUE THEREOF AND THE TRUST 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 AGREEMENT AND DECLARATION OF TRUST AND BY-LAWS. 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 TRUST. 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. 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 Trust 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: EX-99.5 6 FORM OF MANAGEMENT CONTRACT FORM OF MANAGEMENT CONTRACT THIS AGREEMENT dated this day of , 1999 between Pioneer Bond Fund, a Delaware business trust (the "Trust"), and Pioneer Investment Management, Inc., a Delaware corporation (the "Manager"). WITNESSETH WHEREAS, the Trust is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has filed with the Securities and Exchange Commission (the "Commission") a registration statement (the "Registration Statement") for the purpose of registering its shares for public offering under the Securities Act of 1933, as amended (the "1933 Act"), WHEREAS, the Trust currently issues only one series of shares (the "Portfolio") WHEREAS, the parties hereto deem it mutually advantageous that the Manager should be engaged, subject to the supervision of the Trust's Board of Trustees and officers, to manage the Portfolio. NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, the Trust and the Manager do hereby agree as follows: 1. (a) The Manager will regularly provide the Trust with investment research, advice and supervision and will furnish continuously an investment program for the Portfolio, consistent with the investment objectives and policies of the Portfolio. The Manager will determine from time to time what securities shall be purchased for the Portfolio, what securities shall be held or sold by the Portfolio and what portion of the Portfolio's assets shall be held uninvested as cash, subject always to the provisions of the Trust's Certificate of Trust, Agreement and Declaration of Trust, By-Laws and its registration statements under the 1940 Act and under the 1933 Act covering the Trust's shares, as filed with the Securities and Exchange Commission, and to the investment objectives, policies and restrictions of the Portfolio, as each of the same shall be from time to time in effect, and subject, further, to such policies and instructions as the Board of Trustees of the Trust may from time to time establish. To carry out such determinations, the Manager will exercise full discretion and act for the Portfolio in the same manner and with the same force and effect as the Trust itself might or could do with respect to purchases, sales or other transactions, as well as with respect to all other things necessary or incidental to the furtherance or conduct of such purchases, sales or other transactions. (b) The Manager will, to the extent reasonably required in the conduct of the business of the Portfolio and upon the Trust's request, furnish to the Portfolio research, statistical and advisory reports upon the industries, businesses, corporations or securities as to which such requests shall be made, whether or not the Trust shall at the time have any investment in such industries, businesses, corporations or securities. The Manager will use its best efforts in the preparation of such reports and will endeavor to consult the persons and sources believed by it to have information available with respect to such industries, businesses, corporations or entities. (c) The Manager will maintain all books and records with respect to the Portfolio's securities transactions required by subparagraphs (b)(5), (6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those records being maintained by the custodian or transfer agent appointed by the Trust with respect to the Portfolio) and preserve such records for the periods prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees such periodic and special reports as the Board may reasonably request. 2. The Manager recognizes that the fund may from time to time create additional investment portfolios, that this agreement relates only to the management of the assets of the Portfolio, and that the management of the assets of any additional portfolio of the Fund are subject, or will be subject, to one or more separate investment management agreements. 3. (a) Except as otherwise provided herein, the Manager, at its own expense, shall furnish to the Trust office space in the offices of the Manager or in such other place as may be agreed upon from time to time, and all necessary office facilities, equipment and personnel for managing the Portfolio's affairs and investments, and shall arrange, if desired by the Trust, for members of the Manager's organization to serve as officers or agents of the Trust. (b) The Manager shall pay directly or reimburse the Trust for: (i) the compensation (if any) of the Trustees who are affiliated with, or "interested persons" (as defined in the 1940 Act) of, the Manager and all officers of the Trust as such; and (ii) all expenses not hereinafter specifically assumed by the Trust or the Portfolio where such expenses are incurred by the Manager or by the Trust or the Portfolio in connection with the management of the affairs of, and the investment and reinvestment of the assets of, the Portfolio. (d) The Trust shall assume and shall pay: (i) charges and expenses or fund accounting, pricing and appraisal services and related overhead, including, to the extent such services are performed by personnel of the Manager, or its affiliates, office space and facilities and personnel compensation, training and benefits; (ii) the charges and expenses of auditors; (iii) the charges and expenses of any custodian, transfer agent, plan agent, dividend disbursing agent and registrar appointed by the Trust with respect to the Portfolio; (iv) issue and transfer taxes chargeable to the Trust in connection with securities transactions to which the Trust is a party; (v) insurance premiums, interest charges, dues and fees for membership in trade associations and all taxes and corporate fees payable by the Trust to federal, state or other governmental agencies; (vi) fees and expenses involved in registering and maintaining registrations of the Trust and/or its shares with the Commission, state or blue sky securities agencies and foreign countries, including the preparation of Prospectuses and Statements of Additional Information for filing with the Commission; (vii) all expenses of shareholders' and Trustees' meetings and of preparing, printing and distributing prospectuses, notices, proxy statements and all reports to shareholders and to governmental agencies; (viii) charges and expenses of legal counsel to the Trust and the Trustees; (ix) any distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of the Trust who are not affiliated with or interested persons of the Manager, the Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer Trusts Distributor, Inc.; (xi) the cost of preparing and printing share certificates; and (xii) interest on borrowed money, if any. (f) In addition to the expenses described in Section 3(c) above, the Trust shall pay all brokers' and underwriting commissions chargeable to the Trust in connection with securities transactions to which the Trust is a party. 4. (a) The Trust shall pay to the Manager, as compensation for the Manager's services hereunder, a fee at the rate of 0.50% per annum of the Portfolio's average daily net assets paid monthly in arrears. In the event of termination of this Agreement, the fee provided in this Section shall be computed on the basis of the period ending on the last business day on which this Agreement is in effect subject to a pro rata adjustment based on the number of days elapsed in the current month as a percentage of the total number of days in such month. (b) If the operating expenses of the Trust in any year exceed the limits set by state securities laws or regulations in states in which shares of the Trust are sold, the amount payable to the Manager under subsection (a) above will be reduced (but not below $0), and the Manager shall make other arrangements concerning expenses but, in each instance, only as and to the extent required by such laws or regulations. If amounts have already been advanced to the Manager under this Agreement, the Manager will return such amounts to the Trust to the extent required by the preceding sentence. (c) In addition to the foregoing, the Manager may from time to time agree not to impose all or a portion of its fee otherwise payable hereunder (in advance of the time such fee or a portion thereof would otherwise accrue) and/or undertake to pay or reimburse the Trust for all or a portion of its expenses not otherwise required to be borne or reimbursed by the Manager. Any such fee reduction or undertaking may be discontinued or modified by the Manager at any time. 5. The Manager will not be liable for any error of judgment or mistake of law or for any loss sustained by reason of the adoption of any investment policy or the purchase, sale, or retention of any security on the recommendation of the Manager, whether or not such recommendation shall have been based upon its own investigation and research or upon investigation and research made by any other individual, firm or corporation, but nothing contained herein will be construed to protect the Manager against any liability to the Trust, the Portfolio or its shareholders by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement. 6. (a) Nothing in this Agreement will in any way limit or restrict the Manager or any of its officers, directors, or employees from buying, selling or trading in any securities for its or their own accounts or other accounts. The Manager may act as an investment advisor to any other person, firm or corporation, and may perform management and any other services for any other person, association, corporation, firm or other entity pursuant to any contract or otherwise, and take any action or do any thing in connection therewith or related thereto; and no such performance of management or other services or taking of any such action or doing of any such thing shall be in any manner restricted or otherwise affected by any aspect of any relationship of the Manager to or with the Trust or deemed to violate or give rise to any duty or obligation of the Manager to the Trust except as otherwise imposed by law. The Trust recognizes that the Manager, in effecting transactions~for its various accounts, may not always be able to take or liquidate investment positions in the same security at the same time and at the same price. (b) In connection with purchases or sales of securities for the account of the Portfolio, neither the Manager nor any of its Directors, officers or employees will act as a principal or agent or receive any commission except as permitted by the 1940 Act. The Manager shall arrange for the placing of all orders for the purchase and sale of securities for the Portfolio's account with brokers or dealers selected by the Manager. In the selection of such brokers or dealers and the placing of such orders, the Manager is directed at all times to seek for the Portfolio the most favorable execution and net price available except as described herein. It is also understood that it is desirable for the Portfolio that the Manager have access to supplemental investment and market research and security and economic analyses provided by brokers who may execute brokerage transactions at a higher cost to the Portfolio than may result when allocating brokerage to other brokers on the basis of seeking the most favorable price and efficient execution. Therefore, the Manager is authorized to place orders for the purchase and sale of securities for the Portfolio with such brokers, subject to review by the Trust's Trustees from time to time with respect to the extent and continuation of this practice. It is understood that the services provided by such brokers may be useful to the Manager in connection with its or its affiliates' services to other clients. In addition, subject to the Manager's obligation to seek the most favorable execution and net price available, the Manager may consider the sale of Portfolio shares in selecting brokers and dealers. (c) On occasions when the Manager deems the purchase or sale of a security to be in the best interest of the Portfolio as well as other clients, the Manager, to the extent permitted by applicable laws and regulations, may aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any. In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Manager in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Portfolio and to such clients. 7. This Agreement shall become effective on the date hereof -and shall remain in force until _____, 2000 and from year to year thereafter, but only so long as its continuance is approved annually by a vote of the Trustees of the Trust voting in person, including a majority of its Trustees who are not parties to this Agreement or "interested persons" (as defined in the 1940 Act) of any such parties, at a meeting of Trustees called for the purpose of voting on such approval or by a vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Portfolio, subject to the right of the Trust and the Manager to terminate this contract as provided in Section 8 hereof. 8. Either party hereto may, without penalty, terminate this Agreement by vote of its Board of Trustees or Directors, as the case may be, or by vote of a "majority of its outstanding voting securities" (as defined in the 1940 Act) of the Portfolio and the giving of 60 days' written notice to the other party. 9. This Agreement shall automatically terminate in the event of its assignment. For purposes of this Agreement, the term "assignment" shall have the meaning given it by Section 2(a)(4) of the 1940 Act. 10. The Manager is an independent contractor and not an employee of the Trust for any purpose. If any occasion should arise in which the Manager gives any advice to its clients concerning the shares of the Portfolio, the Manager will act solely as investment counsel for such clients and not in any way on behalf of the Trust or any series thereof. 11. This Agreement states the entire agreement of the parties hereto, and is intended to be the complete and exclusive statement of the terms hereof. It may not be added to or changed orally, and may not be modified or rescinded except by a writing signed by the parties hereto and in accordance with the 1940 Act, when applicable. 12. This Agreement and all performance hereunder shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts. 13. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms or provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. 14. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers and their seal to be hereto affixed as of the day and year first above written. ATTEST: PIONEER BOND FUND By: Joseph P. Barri John F. Cogan, Jr. Secretary Chairman and President ATTEST: PIONEER INVESTMENT MANAGEMENT, INC. By: Joseph P. Barri David D. Tripple Secretary President EX-99.6.1 7 FORM OF UNDERWRITING AGREEMENT FORM OF UNDERWRITING AGREEMENT THIS UNDERWRITING AGREEMENT, dated this day of , 1999 by and between Pioneer Bond Fund, a Delaware business trust ("Trust"), and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the "Underwriter") WITNESSETH WHEREAS, the Trust is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has filed 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 the Trust 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, the Trust and the Underwriter do hereby agree as follows: 1. The Trust hereby grant to the Underwriter the right and option to purchase shares of beneficial interest of each class of each Portfolio of the Trust (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 the Trust 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 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 the Trust 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 the Trust 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 the Trust or 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 the Trust 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 the Trust during the most recent 12 month period exceeded 10% of all Shares of the Trusts old by the Underwriter during such period. 5. The compensation for the services of the Underwriter as a principal underwriter under this Agreement shall be: With respect to Class A shares (i) that part of the sales charge which is retained by the Underwriter after allowance of discounts to dealers as set forth, if required, 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 the Trust which may be in effect. With respect to Class B shares (i) the Underwriter's Allocable Portion (as defined in Section 9) of the Distribution Fee, if any, payable from time to time to the Underwriter under the Pioneer's Class B Distribution Plan and (ii) the contingent deferred sales charge payable with respect to Class B shares of the Trust sold through the Underwriter as set forth in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the sale of such Class B shares. With respect to Class C shares (i) the Distribution Fee, if any, payable from time to time to the Underwriter under the Pioneer's Class C Distribution Plan and (ii) the contingent deferred sales charge payable with respect to Class C shares of the Trust sold through the Underwriter as set forth in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the sale so such Class C shares. With respect to Class Y shares, the Underwriter shall not be entitled to any compensation. With respect to any future class of shares, the Underwriter shall be entitled to such consideration as the Trust and the Underwriter shall agree at the time such class of shares is established. Notwithstanding anything to the contrary herein, subsequent to the issuance of a Class B Share the Trust agrees not take any action to waive or change any contingent deferred sales charge (including, without limitation, by change in the rules applicable to conversion of Class B Shares into another class) in respect of such Class B Shares, except (i) as provided in the Trust's prospectus or statement of additional information in effect on , or (ii) as required by a change in the 1940 Act and the rules and regulations thereunder, the Conduct Rules of the NASD or any order of any court or governmental agency enacted, issued or promulgated after . Neither the termination of the Underwriter's role as principal underwriter of the Class B Shares nor the termination of this Agreement nor the termination or modification of the Class B Distribution Plan shall terminate the Underwriter's right to the contingent deferred sales charge with respect to Class B Shares sold through said Underwriter or Class B Shares issued through one or a series of exchanges of shares of another investment company for which the Underwriter acts as principal underwriter, in each case with respect to Class B Shares or their predecessors initially issued prior to such termination or modification ("Pre-Amendment Class B Shares"). Except as provided in the preceding sentences and notwithstanding any other provisions of the Agreement or the Class B Distribution Plan, the Underwriter is entitled to its Allocable Portion of the contingent deferred sales charge payable in respect of the Pre-Amendment Class B Shares shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, at law or equity, including, without limitation, any of the foregoing based on the insolvency or bankruptcy of such Underwriter. 6. Notwithstanding anything to the contrary set forth in the Distribution Plan or this Agreement, the Trust agrees to comply with respect to pre-amendment shares (as such term is defined in the Distribution Plan) with the provision of Sections 1(b), (d), (g) and (h) and Section 4 and Section 6 of the Trust's Amended and Restated Class B Distribution Plan as though such provision were set forth in this Agreement. 7. Nothing contained herein shall relieve the Trust or any obligation under its management contract or any other contract with any affiliate of the Underwriter. 8. Notwithstanding anything to the contrary set forth in the Class B Distribution Plan or this Agreement the Trust acknowledges that the Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to Distribution Fees and contingent deferred sales charges with respect to Class B shares. Upon receipt of notice of such Transfer, the Trust shall pay to the assignee, purchaser or pledgee (collectively with their subsequent transferees, "Transferees"), as third party beneficiaries, such portion of the Distribution Fees and contingent deferred sales charges payable to the Underwriter as provided in written instructions (the "Allocation Instructions") from the Underwriter to the Trust and shall pay the balance, if any, to the Underwriter. In the absence of Allocation Instructions, the Trust shall have no obligations to a Transferee. 9. Payments of the Distribution Fee and contingent deferred sales charges with respect to Class B shares shall be allocated between the Underwriter (or its Transferee) and such co- or successor principal underwriter (each an "Allocable Portion"), as provided in the Allocation Procedures attached hereto. 10. 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 the Trustor 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 the Trust and that no Trustee, officer or holder of shares of beneficial interest of the Trust shall be personally liable for any of the foregoing liabilities. 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. 11. This Agreement shall automatically terminate in the event of its assignment (as that term is defined in the 1940 Act). 12. In the event of any dispute between the parties, this Agreement shall be construed according to the laws of The Commonwealth of Massachusetts. [Remainder of Page Intentionally Left Blank] 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 BOND FUND By: Joseph P. Barri John F. Cogan, Jr. Secretary President ATTEST: PIONEER FUNDS DISTRIBUTOR, INC. By: Joseph P. Barri Clerk EX-99.6.2 8 FORM OF DEALER SALES AGREEMENT PIONEER FUNDS DISTRIBUTOR, INC. 60 State Street Boston, MA 02109 (617) 742-7825 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. 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:__________________________________________________ Title:________________________________________________ RETAIN ONE COPY AND RETURN THE OTHER APPENDIX A CLASS A Schedule 1
Pioneer Fund Pioneer Mid-Cap Fund* Pioneer Equity-Income Fund Pioneer II Pioneer Gold Shares Pioneer Growth Shares Pioneer International Growth Fund Pioneer Europe Fund Pioneer Real Estate Shares Pioneer Capital Growth Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund Pioneer India Fund Pioneer World Equity Fund 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 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 1 and 2 above, the rate is as follows: 1% on the first $5 million invested, .50 of 1% on the next $45 million and .25 of 1% on the excess over 50 million. For funds listed on schedules 3 and 4 : .50 of 1% on purchases of $1 million to $5 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 Schedule 5 Pioneer Cash Reserves Fund Pioneer U.S. Government Money Fund No Load CLASS B Schedule 1 Schedule 2 Schedule 3 ---------- ---------- ----------
Pioneer Fund Pioneer Intermediate Tax-Free Pioneer Short-Term Pioneer II Fund Fund Income Trust Pioneer Equity Income Fund Pioneer Bond Fund 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 Pioneer Small Company Fund Pioneer International Growth Fund Pioneer Real Estate Shares Pioneer Mid-Cap Fund* Pioneer World Equity 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 a)Dealer Commission includes a first year service fee equal to 0.25% of the amount invested in all Class B shares. CLASS C
Pioneer America Income Trust Pioneer Bond Fund Pioneer Capital Growth Fund Pioneer Cash Reserves Funds Pioneer Emerging Markets Fund Pioneer Equity-Income Fund Pioneer Europe Fund Pioneer Gold Shares Pioneer Growth Shares Pioneer Income Fund Pioneer Real Estate Shares Pioneer India Fund Pioneer Intermediate Tax-Free Fund Pioneer Small Company Fund Pioneer Tax-Free Income Fund Pioneer International Growth Fund Pioneer Mid-Cap Fund* Pioneer World Equity Fund
a) 1% Payout to Broker b) 1% CDSC for One Year *formerly Pioneer Three Fund PIONEER FUNDS DISTRIBUTOR, INC. 60 State Street Boston, MA 02109 (617) 742-7825 SUPPLEMENTAL SALES AND SERVICE AGREEMENT You have entered into a Sales Agreement with Pioneer Funds Distributor, Inc. ("PFD") with respect to the Pioneer mutual funds for which PFD serves as principal underwriter ("the Funds"). This agreement incorporates and supplements that agreement. In consideration of your sales of shares of the Funds, for providing services to shareholders of the Funds and of the Pioneer money market funds and assisting PFD and its affiliates in providing such services, we are authorized to pay you certain service fees as specified herein. Receipt by you of any such service fees is subject to the terms and conditions contained in the Funds' prospectuses and/or specified below, as may be amended from time to time. 1. You agree to cooperate as requested with programs that the Funds, PFD or their affiliates provide to enhance shareholder service. 2. You agree to take an active role in providing such shareholder services as processing purchase and redemption transactions and, where applicable, exchanges and account transfers; establishing and maintaining shareholder accounts; providing certain information and assistance with respect to the Funds; responding to shareholder inquiries or advising us of such inquiries where appropriate. 3., You agree to assign an active registered representative to each shareholder account on your and our records and to reassign accounts when registered representatives leave your firm. You also agree, with respect to accounts which are held in nominee or "street" name, to provide such documentation and verification that active representatives are assigned to all such accounts as PFD may require from time to time. 4. You agree to pay to the registered representatives assigned to shareholder accounts a share of any service fees paid to you pursuant to this agreement. You also agree to instruct your representatives to regularly contact shareholders whose accounts are assigned to them. 5. You acknowledge that service fee payments are subject to terms and conditions set forth herein and in the Funds' prospectuses, Statements of Additional Information and Plans of Distribution and that this agreement may be terminated by either party at any time by written notice to the other. Any order to purchase or sell shares received by PFD from you subsequent to the date of our notification to you of an amendment of the Agreement shall be deemed to be your acceptance of such an amendment. 6. You acknowledge that your continued participation in this agreement is subject to your providing a level of support to PFD's marketing and shareholder retention efforts that is deemed acceptable by PFD. Factors which may be considered by PFD in this respect include, but are not limited to, the level of shareholder redemptions, the level of assistance in disseminating shareholder communications, reasonable access to your offices and/or representatives by PFD wholesalers or other employees and whether your compensation system or "preferential list" unduly discriminates against the sale of shares of the Funds. 7. Service fees will generally be paid quarterly, at the rates and under the conditions specified on schedule A hereto. 8. All communications to PFD should be sent to the above address. Any notice to you shall be duly given if mailed or telegraphed to the address specified by you below. This agreement, in conjunction with the Sales Agreement, describes the complete understanding of the parties. This agreement shall be construed under the laws of the Commonwealth of Massachusetts. Accepted: Execute this Agreement in duplicate and return one ofthe duplicate originals to us. By:___________________________ By:_________________________________________ Title:________________________ William A. Misata Vice President RETAIN ONE COPY AND RETURN THE OTHER SUPPLEMENTAL SALES AND SERVICE AGREEMENT WITH PIONEER FUNDS DISTRIBUTOR, INC. SCHEDULE A 1. Except as specified in Section 4 below, service fees on the aggregate net asset value of each account assigned to you in Pioneer Fund, Pioneer II, and Pioneer Mid-Cap Fund** will be paid at the rate of: a. 0.15% annually on shares acquired prior to August 19, 1991. b. 0.25% annually on shares acquired on or after August 19, 1991. 2. Except as specified in Section 4 below, service fees on the aggregate net asset value of each account assigned to you in: Pioneer Fund Pioneer II Pioneer America Income Trust Pioneer International Growth Fund Pioneer Bond Fund Pioneer Growth Shares Pioneer Intermediate Tax-Free Fund Pioneer Real Estate Shares Pioneer Europe Fund Pioneer Income Fund Pioneer Capital Growth Fund Pioneer Tax-Free Income Fund Pioneer Equity-Income Fund Pioneer Short-Term Income Trust Pioneer Gold Shares Pioneer India Fund Pioneer Emerging Markets Fund Pioneer Small Company Fund* Pioneer World Equity Fund will be paid at the rate of: a. 0.15% annually if the shares are acquired on or after August 19, 1991, as a result of an exchange from Pioneer Fund, Pioneer II, or Pioneer Mid-Cap Fund** of shares owned prior to August 19, 1991. b. 0.25% annually on all other shares. 3. Except as specified in Section 4 below, service fees will be paid at an annual rate of 0.15% of the aggregate net asset value of each account assigned to you in: Pioneer Cash Reserves Fund 4. Exceptions -- Service fees will not be paid on accounts representing: a. Purchases by you or your affiliates, employees or representatives. b Shares which were purchased at net asset value, except for sales of the money market funds or sales on which you are paid a commission and which are subject to the contingent deferred sales charge described in the funds' prospectuses. c. "House" accounts or any other accounts not assigned to an active registered representative(s). d. Accounts established in Pioneer Bond Fund prior to January 1, 1986. e. Service fees of less than $50 per calendar quarter will not be paid. f. Pioneer reserves the right to reduce the service fee paid on individual accounts of more than $10 million. g. First year services fees on shares subject to a CDSC are at the rate of 0.25% and are prepaid as part of the initial sales commission. 5. Service fees on shares sold with a front-end sales charge normally begin to be earned as soon as the transaction settles, unless specified otherwise in the fund prospectus. Since the commission on shares sold with a CDSC includes a prepaid one year service fee , periodic service fees on such shares are paid beginning one year following the transaction. 6. Service Fees of 1% on class C shares will begin after first year. * Service fees begin accruing January 1, 1996 ** Formerly Pioneer Three Fund EX-99.8 9 FORM OF AMENDMENT TO CUSTODY AGREEMENT PIONEER BOND FUND 60 State Street Boston, Massachusetts 02109 May 17, 1999 Brown Brothers Harriman & Co. 40 Water Street Boston, MA 02109 Ladies and Gentlemen: This Letter of Acceptance executed by and among Pioneer Bond Fund, a Massachusetts business Trust (the "Current Trust"), Pioneer Bond Fund (the "Successor Trust"), a Delaware business trust and Brown Brother Harriman & Co. concerns the transfer of certain rights and obligations under the Custody Agreement between Brown Brothers Harriman & Co. (the "Custodian") and the Current Trust, dated December 23, 1991 (the "Agreement") by the Current Trust to Successor Trust. The Successor Trust hereby agrees to assume all of the Current Trust's rights and obligations under the Agreement and all modifications and amendments thereof, as attached in Exhibit A. The Custodian agrees that the Agreement will be construed to apply to the Trust, its existing series and those future series that the parties may agree to include. The Custodian consents to the transfer and agrees to continue the performance of all of the terms, covenants and conditions of the Agreement and all modifications and amendments thereof, as if the Successor Trust had originally signed and was a party to the Agreement. Accepted, PIONEER BOND FUND, a Massachusetts business trust By: _________________________________ Name: Title: Date: May 17, 1999 PIONEER BOND FUND, a Delaware business trust By: _________________________________ Name: Title: Date: May 17, 1999 BROWN BROTHERS HARRIMAN & CO. By: _________________________________ Name: Title: Date: May 17, 1999 EXHIBIT A The Agreement is lodged among the records of the Current Trust located at Brown Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts 02109. EX-99.9 10 FORM OF INVESTMENT COMPANY SERVICE AGREEMENT INVESTMENT COMPANY SERVICE AGREEMENT __________ __, 1999 __________________, a ____________ business trust with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("Customer"), and Pioneering Services Corporation, a Massachusetts corporation with its principal place of business at 60 State Street, Boston, Massachusetts 02109 ("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 of Customer, 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 OF DOCUMENTATION, MATERIALS AND DATA. Customer shall, from time to time, while this Agreement is in effect deliver all such documentation, materials and data as may be necessary or desirable to enable PSC to perform its services hereunder. 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 shall 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 -1- 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 -2- 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 to PSC an annual fee of $______* per open account and an annual fee of $7.30 per closed account, such fees to be payable in equal monthly installments. Customer shall reimburse PSC monthly for out-of-pocket expenses, including but not limited to, forms, postage, mail service, telephone charges, including internet access charges, archives, microfiche and other records storage services, mailing and tabulating proxies, sub account recordkeeper fees relating to omnibus accounts, and miscellaneous. In addition, the Customer will reimburse any other expenses incurred by PSC at the request of or with the consent of the Customer. 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 the Exhibits, 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. REPRESENTATIONS AND WARRANTIES; REQUIRED DOCUMENTS. 12.1 REPRESENTATIONS AND WARRANTIES OF PSC. PSC represents and warrants to the Customer that: (a) It is a corporation duly organized and existing and in good standing under the laws of The Commonwealth of Massachusetts. (b) It is duly qualified to carry on its business in The Commonwealth of Massachusetts and the State of Nebraska. (c) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement. (d) It is empowered under all applicable laws and by its Articles of Organization and By Laws to enter into and perform this Agreement. 12.2 REPRESENTATIONS AND WARRANTIES OF CUSTOMER. Customer represents and warrants to PSC that: - -------- * Insert $25.25 for equity funds and $33.00 for fixed income funds and money market fund. -3- (a) It is a business trust duly organized and existing and in good standing under the laws of its governing jurisdiction. (b) All requisite corporate proceedings have been taken to authorize it to enter into this Agreement. (c) It is empowered under all applicable laws and by its Agreement and Declaration of Trust and By Laws to enter into and perform this Agreement. (d) It is an open-end management investment company registered under the Investment Company Act of 1940, as amended. (e) A registration statement under the Securities Act of 1933, as amended (the "Registration Statement"), has been filed with the Securities and Exchange Commission and is currently effective and will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all shares of beneficial interest of the Customer to be offered for sale. 12.3 CUSTOMER DOCUMENT DELIVERY. Customer shall promptly furnish to PSC the following: (a) A copy of Customer's Agreement and Declaration of Trust and By Laws and all amendments related thereto. (b) A certified copy of the resolution of the Customer's Board of Trustees authorizing the appointment of PSC and the execution and delivery of this Agreement. (c) A copy of the Customer's Registration Statement and all amendments thereto. 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 describes in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of shares of beneficial interest of Customer. 14. 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. -4- This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject matter hereof whether written or oral. If any provision or provisions of this Agreement shall be held invalid, unlawful or unenforceable, the validity, legality, and enforceability of the remaining provisions of the Agreement shall not in any way be affected or impaired. This Agreement shall be construed in accordance with the laws of The Commonwealth of Massachusetts. 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 _____________________________ By: _____________________________ Robert P. Nault, Assistant Clerk Roger B. Rainville President PIONEER ________________ _____________________________ By: _____________________________ Robert P. Nault, Assistant Secretary John F. Cogan, Jr. President -5- 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 and Statement of Additional Information, 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 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). -6- 16. Provide Customer with such information regarding correspondence as well as enable Customer to comply with related Form N-SAR (semi-annual report) 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 outlining the level of service provided. 22. Provide sale/statistical reporting for purposes of providing Customer's management with information to maximizing the return to shareholders. -7- EXHIBIT B - TO INVESTMENT COMPANY SERVICE AGREEMENT REDEMPTION SERVICE: In accordance with the provisions of the Customer's Prospectus and Statement of Additional Information, 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, Statement of Additional Information and Agreement 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 and Statement of Additional Information. 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 Form N-SAR (semi-annual report) filing. -8- 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 and Statement of Additional Information. 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. -9- 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. -10- EX-99.9.2 11 AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION is made as of the 4th day of May, 1999, by and between Pioneer Bond Fund, a Massachusetts business trust (the "Current Trust"), and Pioneer Bond Fund, a business trust duly formed under the laws of the State of Delaware (the "Successor Trust"). This Agreement is intended to be and is adopted as a plan of reorganization within the meaning of Section 368 (a)(1) of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and is intended to effect the conversion of the Current Trust into a Delaware business trust. In consideration of the premises and of the covenants and agreements hereinafter set forth the parties hereto covenant and agree as follows. 1. TRANSFER OF ASSETS OF THE CURRENT TRUST IN EXCHANGE FOR ASSUMPTION OF LIABILITIES AND ISSUANCE OF SHARES OF THE SUCCESSOR TRUST; DISSOLUTION OF THE CURRENT TRUST 1.1 Subject to the terms and conditions set forth herein and on the basis of the representations and warranties contained herein, the Current Trust agrees to transfer all of its assets set forth in paragraph 1.2 and assign and transfer all of its liabilities to the Successor Trust established solely for the purpose of acquiring all of the assets and assuming all of the liabilities of the Current Trust. As of the date of this Agreement, the Successor Trust has not issued any shares of beneficial interest or commenced operations. The Successor Trust agrees that in exchange for all of the assets of the Current Trust (1) the Successor Trust shall assume all of the liabilities of the Current Trust, whether contingent or otherwise, then existing and (2) the Successor Trust shall deliver to the Current Trust the number of full and fractional shares of each Class of the Successor Trust (the "Successor Trust Shares") equal to the number of each class of Current Trust Shares then outstanding, the value of the Successor Trust Shares collectively to be equal to the value of the assets of the Current Trust transferred to, less the liabilities of Current Trust assumed by, the Successor Trust (the "Net Assets"), as described in paragraph 3.1 on the Closing Date provided for in paragraph 3.1. Such transactions shall take place at the Closing provided for in paragraph 3.1. 1.2 The assets of the Current Trust to be acquired by the Successor Trust shall include, without limitation, all cash, cash equivalents, securities, receivables (including interest and dividends receivable), any claims or rights of action or rights to register shares under applicable securities laws, any books or records of the Current Trust and other property owned by the Current Trust and any deferred or prepaid expenses shown as assets on the books of the Current Trust on the Closing Date provided for in paragraph 3.1. 1.3 Immediately upon delivery to the Current Trust of Successor Trust Shares of the Successor Trust, any duly authorized officer of the Current Trust as the then sole shareholder of the Successor Trust shall (i) elect as Trustees of the Successor Trust the persons 27 who currently serve as Trustees of the Current Trust; (ii) ratify the selection of the independent accountants; (iii) approve a management contract for the Successor Trust with Pioneer Investments in the form most recently approved for the Current Trust; and (iv) adopt the investment objectives, investment policies and investment restrictions of the Current Trust. 1.4 As provided in paragraph 3.4, on the Closing Date, the Current Trust will distribute in liquidation to its shareholders of record ("Current Trust Shareholders"), determined as of the close of business on the Closing Date, the Successor Trust Shares of each class received from the Successor Trust pro rata in proportion to their respective shares of beneficial interest of such class in the Current Trust ("Current Trust Shares"), in exchange for such Current Trust Shares. Such distribution will be accomplished by the transfer of the Successor Trust Shares then credited to the account of the Current Trust on the share records of the Successor Trust to open accounts on those records in the names of such Current Trust Shareholders and representing the respective pro rata number of the Successor Trust Shares of each class received from the Successor Trust due to the Current Trust Shareholders. The Successor Trust shall not issue certificates representing Successor Trust Shares in connection with such distributions and, if applicable, in exchange for the outstanding certificates representing Acquired Fund Shares, as described in paragraph 1.8. Fractional Successor Trust Shares shall be rounded to the third place after the decimal point. 1.5 As soon as practicable after the distribution of the Successor Trust Shares as set forth in Section 1.4, the Current Trust shall be terminated and any such further actions shall be taken in connection therewith as are required by applicable law. 1.6 Ownership of the Successor Trust Shares by each Successor Trust Shareholder shall be maintained separately on the books of Pioneering Services Corporation as the shareholder services and transfer agent for the Successor Trust. 1.7 Any transfer taxes payable upon issuance of Successor Trust Shares in a name other than the registered holder of the Current Trust Shares on the books of the Current Trust as of that time shall be paid by the person to whom such Successor Trust Shares are to be distributed as a condition of such transfer. 1.8 The Successor Trust shall record the net asset value of all outstanding Current Trust certificated shares in its books and records as of the Closing Date, in accordance with paragraph 2.2, and daily thereafter, in accordance with the Successor Trust's procedures for determining net asset value per share. The Successor Trust may honor certificates representing Current Trust shares at their net asset value as determined only on the books and records of the Successor Trust, and subject to the Successor Trust's normal requirements for redeeming or transferring shares evidenced by certificates. The Current Trust Shareholders need not surrender such certificates or deliver an affidavit with respect to lost certificates, after the Closing. Any Current Trust certificate which remains outstanding on the Closing Date shall be deemed to be cancelled, shall no longer evidence ownership of shares of beneficial interest of the Current Trust and shall not evidence ownership of the Successor Trust Shares. 28 2. VALUATION 2.1 The value of the Net Assets of the Current Trust to be acquired hereunder by the Successor Trust shall be the net asset value computed as of the valuation time provided in the then current prospectus of the Current Trust on the Closing Date using the valuation procedures set forth in the then current prospectus or statement of additional information. 2.2 The value of full and fractional Successor Trust Shares of the Successor Trust to be issued in exchange for the Net Assets of each of the Current Trust shall be equal to the value of such Net Assets on the Closing Date, and the number of such Successor Trust Shares of each class to be issued by the Successor Trust shall equal the number of full and fractional Current Trust Shares of each class of the Current Trust on the Closing Date. 2.3 All computations of value shall be made by Pioneering Services Corporation. 3. CLOSING AND CLOSING DATE 3.1 The transfer of the assets of the Current Trust in exchange for the assumption by the Successor Trust of the liabilities of the Current Trust and the issuance of Successor Trust Shares to the Current Trust, as described above, together with related acts necessary to consummate such acts (the "Closing"), shall occur at the offices of Hale and Dorr LLP at 60 State Street, Boston, Massachusetts 02109 on May 17, 1999 ("Closing Date"), or at such other place or date on or prior to December 31, 1999 as the parties may agree in writing. All acts taking place at the Closing shall be deemed to take place simultaneously as of the last daily determination of the net asset value of the Current Trust or at such other time and or place as the parties may agree. 3.2 In the event that on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon is restricted or (b) trading or reporting of trading on said Exchange or in any market in which portfolio securities of the Current Trust are traded is disrupted so that accurate appraisal of the value of the Net Assets of the Current Trust is impracticable, the Closing shall be postponed until the first business day upon which trading shall have been fully resumed and reporting shall have been restored. 3.3 The Current Trust shall deliver at the Closing a certificate or separate certificates of an authorized officer stating that it has notified the Custodian, as custodian for the Current Trust and the Successor Trust, of the conversion of the Current Trust to the Successor Trust. 3.4 Pioneering Services Corporation, as shareholder services and transfer agent for the Current Trust, shall deliver at the Closing certificates as to the conversion on its books and records of the accounts of the shareholders of the Current Trust to accounts as holders of shares of the Successor Trust. The Successor Trust shall issue and deliver to the Current Trust a confirmation evidencing the shares of Successor Trust to be credited on the Closing Date or provide evidence satisfactory to the Current Trust that such shares of the Successor Trust have been credited to the account of the Current Trust on the books of the Successor Trust. At the Closing each party shall deliver to the other such bills of sale, 29 checks, assignments, share certificates, receipts or other documents as such other party or its counsel may reasonably request. 3.5 Portfolio securities that are not held in book-entry form in the name of the Custodian as record holder for the Current Trust shall be presented by the Current Trust to the Custodian for examination no later than five business days preceding the Closing Date. Portfolio securities which are not held in book-entry form shall be delivered by the Current Trust to the Custodian for the account of the Successor Trust on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Custodian in book-entry form on behalf of the Current Trust shall be delivered to the Successor Trust by the Custodian by recording the transfer of beneficial ownership thereof on its records. The cash of the Current Trust to be delivered shall be in the form of currency or by the Custodian crediting the Successor Trust's account maintained with the Custodian with immediately available funds. 4. REPRESENTATIONS AND WARRANTIES 4.1 The Current Trust represents and warrants as follows: 4.1.A. The Current Trust is a business trust duly authorized to exist under the laws of The Commonwealth of Massachusetts and has the power to own all of its properties and assets and, subject to approval by the shareholders of the Current Trust, to perform its obligations under this Agreement. The Current Trust is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would not subject it to any material liability or disability. The Current Trust has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; 4.1.B. The Current Trust is a registered investment company classified as a management company of the open-end diversified type and its registration with the Securities and Exchange Commission (the "SEC") as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), is in full force and effect; 4.1.C. The Current Trust is not, and the execution, delivery and performance of this Agreement will not result, in violation of any provision of its Declaration of Trust or By-laws, or any agreement, indenture, instrument, contract, lease or other undertaking to which the Current Trust is a party or by which the Current Trust is bound; 4.1.D. The Current Trust has no material contracts or other commitments (other than this Agreement or agreements for the purchase of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) that will not be terminated without liability to the Current Trust on or prior to the Closing Date; 4.1.E. No material litigation or administrative proceeding or investigation of or before any court or governmental body presently is pending or threatened against the Current 30 Trust or any of its properties or assets. The Current Trust knows of no facts that might form the basis for the institution of such proceedings and the Current Trust is not a party to, or subject to, the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions herein contemplated; 4.1.F. At the date hereof and at the Closing Date, all federal, state and other tax returns and reports, including information returns and payee statements, of the Current Trust required by law to have been filed or furnished by such dates shall have been filed or furnished and all federal, state and other taxes, interest and penalties shall have been paid so far as due or provision shall have been made for the payment thereof and no such return is currently under audit and no assessment has been asserted with respect to any of such returns or reports; 4.1.G. The Current Trust has elected that it be treated as a regulated investment company under Subchapter M of the Code, has qualified as such for each taxable year since its inception, and will qualify as such as of the Closing Date; 4.1.H. The authorized capital of the Current Trust consists of an unlimited number of shares of beneficial interest, no par value, divided into three classes (Class A, Class B and Class C) of one series. All issued and outstanding shares of beneficial interest of the Current Trust are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable. The Current Trust does not have outstanding any options, warrants or other rights to subscribe for or purchase any of its shares of beneficial interest, nor is there outstanding any security convertible into any of its shares of beneficial interest; 4.1.I. The information to be furnished by the Current Trust for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete and shall comply in all material respects with federal securities and other laws and regulations thereunder applicable thereto; 4.1.J. All of the issued and outstanding Current Trust Shares will at the time of the Closing be held by the persons and in the amounts as, on behalf of the Current Trust, certified in accordance with the provisions of paragraph 3.4; 4.1.K. At the Closing Date, the Current Trust will have good and marketable title to the assets to be transferred to the Successor Trust pursuant to paragraph 1.1, and full right, power and authority to sell, assign, transfer and deliver such assets hereunder, and upon delivery and in payment for such assets, the Successor Trust will acquire good and marketable title thereto subject to no restrictions on the full transfer thereof, including such restrictions as might arise under the Securities Act of 1933, as amended (the "1933 Act), except as otherwise disclosed in writing and accepted by the Successor Trust; 4.1.L. The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of the Current Trust and this Agreement constitutes a valid and binding obligation of the Current Trust 31 enforceable in accordance with its terms, subject to the approval of the Current Trust's shareholders; 4.1.M. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Current Trust of the transactions contemplated herein, except such as shall have been obtained prior to the Closing Date. 4.2 The Successor Trust represents and warrants as follows: 4.2.A. The Successor Trust is a business trust duly organized, validly existing and in good standing under the laws of the State of Delaware and has the power to own all of its properties and assets and to perform its obligations under this Agreement; the Successor Trust is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would not subject it to any material liability or disability; the Successor Trust has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; that as of the date hereof and as of the Closing Date, the Successor Trust consists of one duly established and designated series; 4.2.B. The Successor Trust is not, and the execution, delivery and performance of this Agreement will not result, in violation of any provision of the Certificate of Trust, Agreement and Declaration of Trust or By-laws of the Successor Trust or any agreement, indenture, instrument, contract, lease or other undertaking to which the Successor Trust is a party or by which the Successor Trust is bound; 4.2.C. No material litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or threatened against the Successor Trust or any of its properties or assets. The Successor Trust knows of no facts that might form the basis for the institution of such proceedings, and the Successor Trust is not a party to, or subject to, the provisions of any order, decree or judgment of any court or governmental body that materially and adversely affects its business or its ability to consummate the transactions herein contemplated; 4.2.D. The Successor Trust will qualify as a regulated investment company under Subchapter M of the Code for the taxable year in which the Closing occurs and to continue to qualify as such for each taxable year; 4.2.E. Prior to the Closing Date, there shall be no issued and outstanding Successor Trust Shares or any other securities of the Successor Trust; Successor Trust Shares issued in connection with the transactions contemplated herein will be duly and validly issued and outstanding and fully paid and non-assessable; 4.2.F. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action on the part of the Successor Trust, and this Agreement constitutes a valid and binding obligation of the Successor Trust enforceable against the Successor Trust in accordance with its terms; 4.2.G. The information to be furnished by the Successor Trust for use in applications for orders, registration statements, proxy materials and other documents which may be 32 necessary in connection with the transactions contemplated hereby shall be accurate and complete and shall comply in all material respects with Federal securities and other laws and regulations applicable thereto; 4.2.H. No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Successor Trust of the transactions contemplated herein, except such as shall have been obtained prior to the Closing Date. 5. COVENANTS OF THE CURRENT TRUST AND THE SUCCESSOR TRUST 5.1 The Current Trust covenants that the Successor Trust Shares are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms of this Agreement. 5.2 The Current Trust covenants that it will assist the Successor Trust in obtaining such information as the Successor Trust may reasonably request concerning the beneficial ownership of Current Trust Shares. 5.3 The Current Trust will, from time to time, as and when requested by the Successor Trust execute and deliver, or cause to be executed and delivered, all such assignments and other instruments, and will take or cause to be taken such further action, as the Successor Trust may deem necessary or desirable in order to vest in, and confirm to, the Successor Trust, title to, and possession of, all the assets of the Current Trust to be sold, assigned, transferred and delivered to the Successor Trust hereunder and otherwise to carry out the intent and purpose of this Agreement. 5.4 The Successor Trust will, from time to time, as and when requested by the Current Trust, execute and deliver or cause to be executed and delivered all such assignments and other instruments, and will take or cause to be taken such further action, as the Current Trust may deem necessary or desirable in order to vest in, and confirm to, the Current Trust, title to, and possession of, the Successor Trust Shares issued, sold, assigned, transferred and delivered hereunder and otherwise to carry out the intent and purpose of this Agreement. 5.5 The Successor Trust shall use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act and such state securities laws as it may deem appropriate in order to operate after the Closing Date. 5.6 Subject to the provisions of this Agreement, the Successor Trust and the Current Trust each will take, or cause to be taken, all action and will do or cause to be done all things reasonably necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement. 5.7 As promptly as practicable, but in any event within 60 days after the Closing Date, the Current Trust shall furnish to the Successor Trust, in such form as is reasonably satisfactory to Successor Trust, a statement of the earnings and profits of the Current Trust for federal income tax purposes, and of any capital loss carryovers and other items that 33 will be carried over to the Successor Trust as a result of Section 381 of the Code, and which statement will be certified by the President or Treasurer of Current Trust. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST The obligations of the Current Trust to consummate the transactions provided for herein shall be subject to the performance by the Successor Trust of all the obligations to be performed by the Successor Trust hereunder on or before the Closing Date and, in addition thereto, to the following further conditions: 6.1 All representations and warranties of the Successor Trust contained in this Agreement shall be true and correct in all material respects as of the date hereof and except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date, and 6.2 The Successor Trust shall have delivered on the Closing Date to the Current Trust a certificate executed in Successor Trust's name by its President or Executive Vice President, in form and substance satisfactory to the Current Trust, dated as of the Closing Date, to the effect that the representations and warranties of the Successor Trust made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Current Trust shall reasonably request. Each of the foregoing conditions precedent may be waived by the Current Trust. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SUCCESSOR TRUST The obligations of the Successor Trust to consummate the transactions provided for herein shall be subject to the performance by the Current Trust of all the obligations to be performed hereunder on or before the Closing Date and, in addition thereto, to the following further conditions: 7.1 All representations and warranties of the Current Trust contained in this Agreement shall be true and correct in all material respects as of the date hereof and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date, with the same force and effect as if made on and as of the Closing Date; 7.2 The Current Trust shall have delivered to the Successor Trust on the Closing Date a statement of its assets and liabilities, prepared in accordance with generally accepted accounting principles consistently applied, together with a certificate of the Treasurer or Assistant Treasurer of the Current Trust as to the portfolio securities of the Current Trust and the federal income tax basis and holding period for each such portfolio security as of the Closing Date; and 34 7.3 The Current Trust shall have delivered to the Successor Trust on the Closing Date a certificate executed in the name of the Current Trust by its President or Executive Vice President, in form and substance satisfactory to the Successor Trust, dated as of the Closing Date, to the effect that the representations and warranties made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as the Successor Trust shall reasonably request. Each of the foregoing conditions precedent may be waived by the Successor Trust. 8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE CURRENT TRUST AND THE SUCCESSOR TRUST The obligations of the Current Trust and the Successor Trust are subject to the further conditions that on or before the Closing Date: 8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the shareholders of the Current Trust in accordance with applicable law; 8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with, the transactions contemplated hereby; 8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state securities authorities) deemed necessary by the Successor Trust or the Current Trust to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of the Successor Trust or the Current Trust, provided that either party hereto may for itself waive any of such conditions; 8.4 The President or Executive Vice President of the Successor Trust shall have delivered a certificate to the Current Trust on the Closing Date certifying that the Successor Trust has taken all necessary action so that it shall be a registered open-end investment company under the 1940 Act. 8.5 The Current Trust and the Successor Trust shall have received on or before the Closing Date an opinion of Hale and Dorr LLP satisfactory to the Current Trust and the Successor Trust, substantially to the effect that for federal income tax purposes: 8.5.A. The acquisition of all of the assets of the Current Trust by the Successor Trust solely in exchange for the issuance of Successor Trust Shares to the Current Trust and the assumption by the Successor Trust of all of the liabilities of the Current Trust, followed by the distribution in liquidation by the Current Trust of Successor Trust Shares to the shareholders of the Current Trust in exchange for their shares of the Current Trust and the termination of the Current Trust, will constitute a "reorganization" within the meaning 35 of Section 368(a)(1) of the Code, and the Current Trust and the Successor Trust will each be "a party to a reorganization" within the meaning of Section 368(b) of the Code; 8.5.B. No gain or loss will be recognized by the Current Trust upon (i) the transfer of all of its assets to the Successor Trust solely in exchange for the issuance of Successor Trust Shares to the Current Trust and the assumption by the Successor Trust of the liabilities of the Current Trust and (ii) the distribution by the Current Trust of such Successor Trust Shares to the shareholders of the Current Trust; 8.5.C. No gain or loss will be recognized by the Successor Trust upon receipt of all of the assets of the Current Trust solely in exchange for the issuance of the Successor Trust Shares to the Current Trust and the assumption by the Successor Trust of all of the liabilities of the Current Trust; 8.5.D. The tax basis of the assets acquired by the Successor Trust from the Current Trust will be, in each instance, the same as the tax basis of those assets in the hands of the Current Trust immediately before the transfer; 8.5.E. The tax holding period of the assets of the Current Trust in the hands of the Successor Trust will, in each instance, include the tax holding period of the Current Trust for those assets; 8.5.F. Current Trust Shareholders will not recognize gain or loss upon the exchange of all of their shares of the Current Trust solely for Successor Trust Shares as part of the transaction; 8.5.G. The tax basis of the Successor Trust Shares received by Current Trust Shareholders in the transaction will be, for each shareholder, the same as the tax basis of the shares of the Current Trust surrendered in exchange therefor; and 8.5.H. The tax holding period of the Successor Trust Shares received by Current Trust Shareholders will include, for each shareholder, the tax holding period for the Current Trust Shares surrendered in exchange therefor, provided that such Current Trust Shares were held as capital assets on the date of the exchange. The Current Trust and the Successor Trust each agree to make and provide representations with respect to the Current Trust and the Successor Trust which are reasonably necessary to enable Hale and Dorr LLP to deliver an opinion substantially as set forth in this paragraph 8.5, which opinion may address such other federal income tax consequences, if any, that Hale and Dorr LLP believes to be material to the transaction. Each of the foregoing conditions precedent to the obligations of a party, except for the receipt of the opinion of Hale and Dorr LLP set forth in paragraph 8.5, may be waived by that party. 9. BROKERAGE FEES AND EXPENSES 9.1 The Successor Trust and the Current Trust each represent and warrant to the other that there are no broker's or finder's fees payable in connection with the transactions contemplated hereby. 36 9.2 The Current Trust and the Successor Trust shall each be liable for its own expenses incurred in connection with entering into and carrying out the provisions of this Agreement whether or not the transactions contemplated hereby are consummated; if the transactions are consummated, such expenses of the Current Trust will be assumed by the Successor Trust as part of the transaction. 10. ENTIRE AGREEMENT The Successor Trust and the Current Trust agree that neither party has made any representation, warranty or covenant not set forth herein and that this Agreement constitutes the entire agreement between the parties. The representations, warranties and covenants contained herein or in any document delivered pursuant hereto or in connection herewith shall survive the consummation of the transactions contemplated hereunder. 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Successor Trust and the Current Trust. In addition, either the Successor Trust or the Current Trust may at its option terminate this Agreement at or prior to the Closing Date because: 11.1.A. There exists a material breach by the other party of any representations, warranties or agreements contained herein to be performed at or prior to the Closing Date; or 11.1.B. A condition herein expressed to be precedent to the obligations of the terminating party has not been met and it reasonably appears that it will not or cannot be met. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Successor Trust or the Current Trust, or their respective trustees or officers, to the other party or its trustees or officers. 12. AMENDMENT This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the parties; provided, however, that following the approval of this Agreement by Current Trust Shareholders, no such amendment may have the effect of changing the provisions for determining the number of Successor Trust Shares to be paid to Current Trust Shareholders under this Agreement to the detriment of Current Trust Shareholders without their further approval. 13. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 13.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 13.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 37 13.3 This Agreement shall be governed by and construed in accordance with the laws of The Commonwealth of Massachusetts. 13.4 This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by any party without the written consent of the other party. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation other than the parties hereto and their respective successors and assigns any rights or remedies under or by reason of this Agreement. 13.5 All persons dealing with the Current Trust and the Successor Trust must look solely to the property of the Current Trust and the Successor Trust for the enforcement of any claims against such Trust as neither the Trustees, officers, agents or shareholders of either Trust assume any personal liability for obligations entered into on behalf of the Current Trust and the Successor Trust. 13.6 A copy of the Agreement and Declaration of Trust of the Current Trust is on file with the Secretary of State of The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on behalf of the Trustees of the Current Trust as trustees and not individually and that the obligations of this instrument are not binding upon any of the trustees, officers, or shareholders of the current Trust individually, but are binding only upon the assets and property of the Current Trust. 14. NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Current Trust or the Successor Trust, each at 60 State Street, Boston, Massachusetts 02109, Attention: Secretary. IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by its duly authorized officer. PIONEER BOND FUND, a Massachusetts business trust By:/s/John F. Cogan, Jr. Its: Chairman of the Board and President PIONEER BOND FUND, a Delaware business trust By:/s/ John F. Cogan, Jr. Its: Chairman of the Board and President EX-99.10 12 OPINION AND CONSENT OF COUNSEL HALE AND DORR LLP Counsellors at Law 60 State Street, Boston, Massachusetts 02109 617-526-6000 o fax 617-526-5000 May 14, 1999 Pioneer Bond Fund 60 State Street Boston, Massachusetts 02109 Ladies and Gentlemen: Pioneer Bond Fund (the "Trust") was established as a Delaware business trust under an Agreement and Declaration of Trust dated January 5, 1999, as amended from time to time (as so amended, the "Declaration of Trust"). The beneficial interests thereunder are represented by transferable shares of beneficial interest, no par value. The Trustees have the powers set forth in the Declaration of Trust, subject to the terms, provisions and conditions therein provided. Pursuant to Article V, Section 2 of the Declaration of Trust, the number of shares of beneficial interest authorized to be issued under the Declaration of Trust is unlimited and the Trustees are authorized to divide the shares into one or more series of shares and one or more classes thereof as they deem necessary or desirable. Pursuant to Article V, Section 2 of the Declaration of Trust, the Trustees are empowered in their discretion to issue shares of any series for such amount and type of consideration, including cash or securities in which that series is authorized to invest, and on such terms as the Trustees may deem best, all without action or approval of the shareholders. We have examined the Declaration of Trust and By-Laws, each as amended from time to time, of the Trust, and such other documents as we have deemed necessary or appropriate for the purposes of this opinion, including, but not limited to, originals, or copies certified or otherwise identified to our satisfaction, of such documents, Trust records and other instruments. In our examination of the above documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as certified of photostatic copies. Any reference to "our knowledge", to any matter "known to us", "coming to our attention" or "of which we are aware" or any variation of any of the foregoing shall mean the conscious awareness of the attorneys in this firm who have rendered substantive attention to the preparation of the Trust's Registration Statement on Form N-1A or any amendments thereto, of the existence or absence of any facts which would contradict the opinions set forth below. We have not undertaken any independent investigation to determine the existence or Washington, DC Boston, MA London, UK* - -------------------------------------------------------------------------------- HALE AND DORR LLP INCLUDES PROFESSIONAL CORPORATIONS *BROBECK HALE AND DORR INTERNATIONAL (AN INDEPENDENT JOINT VENTURE LAW FIRM) Pioneer Bond Fund May 14, 1999 Page 2 absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn from the fact of our representation of the Trust. Without limiting the foregoing, we have not examined any dockets or records of any court, administrative tribunal or other similar entity, or any electronic or computer databases, in connection with our opinions expressed below. Our opinions below are qualified to the extent that they may be subject to or affected by (i) applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the rights and remedies of creditors generally, (ii) statutory or decisional law concerning recourse by creditors to security in the absence of notice or hearing and (iii) duties and standards imposed on creditors and parties to contracts, including, without limitation, requirements of good faith, reasonableness and fair dealing. Further, we do not express any opinion as to (i) the availability of the remedy of specific performance or any other equitable remedy upon breach of any provision of any agreement whether applied by a court of law or equity, (ii) the successful assertion of any equitable defense, or (iii) the right of any party to enforce the indemnification or contribution provisions of any agreement. In rendering the opinion below, insofar as it relates to the good standing and valid existence of the Trust, we have relied solely on a certificate of the Secretary of State of the State of Delaware, dated as of a recent date, and such opinion is limited accordingly and is rendered as of the date of such certificate. This opinion is limited to the Delaware Business Trust Act, and we express no opinion with respect to the laws of any other jurisdiction or to any other laws of the State of Delaware. Further, we express no opinion as to compliance with any state or federal securities laws, including the securities laws of the State of Delaware. Our opinion below, as it relates to the non-assessability of the shares of the Trust, is qualified to the extent that any shareholder is, was or may become a named Trustee of the Trust. It is also qualified to the extent that, pursuant to Section 2 of Article VIII of the Declaration of Trust, the Trustees have the power to cause shareholders, or shareholders of a particular series, to pay certain custodian, transfer, shareholder servicing or similar agent charges by setting off the same against declared but unpaid dividends or by reducing share ownership (or by both means). Subject to the foregoing, we are of the opinion that the Trust is a validly existing business trust in good standing under the laws of the State of Delaware and that the shares of beneficial interest of the Trust to be sold pursuant to the Trust's Registration Statement on Form N-1A, when issued in accordance with the terms, conditions, requirements and procedures set forth in the Declaration of Trust, the Trust's Registration Statement on Form N-1A and the Underwriting Agreement between the Trust and Pioneer Funds Distributor, Inc., will constitute legally and validly issued, Pioneer Bond Fund May 14, 1999 Page 3 fully paid and non-assessable shares of beneficial interest in the Trust, subject to compliance with the Securities Act of 1933, as amended, the Investment Company Act of 1940, as amended, and the applicable state laws regulating the sale of securities. We are opining only as to the specific legal issues expressly set forth herein, and no opinion should be inferred as to any other matters. We are opining on the date hereof as to the law in effect on the date hereof, and we disclaim any obligation to advise you of any change in any of these sources of law or subsequent legal or factual developments which might affect any matters or opinions set forth herein. Further, we are expressing no opinion as to shares previously issued by the Trust and currently outstanding. This opinion is furnished to you solely for your use and may not be quoted to or relied upon by any other person or entity or used for any other purpose, without our prior written consent. We consent to your filing this opinion with the Securities and Exchange Commission as an exhibit to any amendments to the Trust's registration statement with the Commission. Except as provided in this paragraph, this opinion may not be relied upon by, or filed with, any other parties or for any other purpose. Very truly yours, /s/ Hale and Dorr LLP Hale and Dorr LLP EX-99.11 13 AUDITORS' CONSENT Consent of Independent Public Accountants To the Shareholders and Trustees of Pioneer Bond Fund: As independent public accountants, we hereby consent to the use of our reports on Pioneer Bond Fund dated August 7, 1998 and February 12, 1999 (and to all references to our firm) included in or made a part of Pioneer Bond Fund's Post-Effective Amendment No. 28 and Amendment No. 27 to Registration Statement File Nos. 2-62436 and 811-02864, respectively. /s/ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Boston, Massachusetts May 13, 1999 EX-99.15.1 14 CLASS A DISTRIBUTION PLAN CLASS A SHARES DISTRIBUTION PLAN PIONEER BOND FUND CLASS A SHARES DISTRIBUTION PLAN, dated as of May 17, 1999, of PIONEER BOND 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 the Trust in accordance with Rule 12b-l 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-l, 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 the Trust 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 the Trust'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 real low 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 May 17, 2000. This Class A Plan shall automatically terminate upon assignment. In the event of termination or non-continuance of this Class A Plan, the Trust has twelve months to reimburse any expense which it incurs prior to such termination or non-continuance, 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. 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. H:\convert\tmp\lynnr.wpf EX-99.15.2 15 CLASS B DISTRIBUTION PLAN CLASS B SHARES DISTRIBUTION PLAN PIONEER BOND FUND CLASS B SHARES DISTRIBUTION PLAN, dated as of May 17, 1999 of PIONEER BOND 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 Funds Distributor, Inc., a Massachusetts corporation ("PFD") or such other persons as may be appointed principal underwriter from time to time, provide certain distribution services for the Trust's Class B Shares in connection with the Class B Plan (PFD and any successor principal underwriter of the Trust's shares being referred to as an "Underwriter"); 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 the Underwriter, whereby the Underwriter 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) the Underwriter 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) the Underwriter 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 the Underwriter and such Dealer and (c) the Underwriter may make such payments to the Dealers for distribution services out of the fee paid to the Underwriter hereunder, any deferred sales charges imposed by the Underwriter 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 the Underwriter may impose certain deferred sales charges in connection with the repurchase of Class B Shares by the Trust, and the Underwriter 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 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 the Underwriter for (1) distribution services and (2) personal and account maintenance services performed and expenses incurred by the Underwriter 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 payable to the Underwriter during any one year for distribution services with respect to Class B Shares shall be its Allocable Portion (as defined in Section 14 below) of .75% of the Trust's average daily net assets attributable to Class B Shares for such year (the "Distribution Fee"). Notwithstanding anything to the contrary set forth in this Distribution Plan or any Underwriting Agreement, the Distribution Fee shall not be terminated or modified (including a modification by change in the rules relating to the conversion of Class B Shares into Class A shares of the Trust) with respect to Class B shares (or the assets of the Trust attributable to such Class B Shares) either (x) issued prior to the date of any termination or modification or (y) attributable to Class B shares issued through one or a series of exchanges of shares of another investment company for which the Underwriter acts as principal underwriter which were initially issued prior to the date of such termination or modification or (z) issued as a dividend or distribution upon Class B Shares initially issued or attributable to Class B Shares issued prior to the date of any such termination or modification (the "Pre-Amendment Class B Shares") except: (i) to the extent required by a change in the Investment Company Act of 1940 (the "Act"), the rules or regulations under the Act, the Conduct Rules of the National Association of Securities Dealers, Inc., (the "NASD") or an order of any court or governmental agency, in each case enacted, issued or promulgated after , 1999, (ii) in connection with a "Complete Termination" of this Plan. For purposes of this Plan, a "Complete Termination" shall have occurred if: (x) this Plan and the distribution plan for Class B Shares of any successor trust or fund or any trust or fund acquiring substantially all of the assets of the Trust (collectively, the "Affected Funds") is terminated with respect to all Class B Shares of the Trust and each Affected Fund then outstanding or subsequently issued, (y) the payment by the Trust of Distribution Fees with respect to all Class B Shares of the Trust and each Affected Fund is terminated and (z) neither the Trust nor any Affected Fund establishes concurrently with or subsequent to such termination of this Plan another class of shares which has substantially similar characteristics to the current Class B Shares of the Trust, including the manner of payment and amount of contingent deferred sales charge paid directly or indirectly by the holders of such shares (all of such classes of shares "Class B Shares"), or (iii) on a basis, determined by the Board of Trustees, including a majority of the Qualified Trustees (as hereinafter defined), acting in good faith, so long as from and after the effective date of such modification or termination: (x) neither (1) the Trust, (2) any Affected Fund nor (3) the investment advisor or any other sponsor entity (or their affiliates) of the Trust or any Affected Fund pay, directly or indirectly, a fee, a trailer fee, or expense reimbursement to any person for the provision of personal and account maintenance services (as such terms is used in the Conduct Rules of the NASD) to the holder of Class B Shares of the Trust or any Affected Fund (but the forgoing shall not prevent payments for transfer agency or subaccounting services), and (y) the termination or modification of the Distribution Fee applies with equal effect to both Pre-Amendment Class B Shares and Post-Amendment Class B Shares (as defined in Section 7) outstanding from time to time of the Trust and all Affected Funds. (c) Distribution services and expenses for which an Underwriter 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 NASD or their officers, sales representatives and employees, (ii) the Underwriter 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 Underwriter shall be deemed to have performed all services required to be performed in order to be entitled to receive it Allocable Portion of the Distribution Fee, if any, payable with respect to Class B Shares sold through such Underwriter upon the settlement date of the sale of such Class B Share or in the case of Class B Shares issued through one or a series of exchanges of shares of another investment company for which the Underwriter acts as principal underwriter or issued as a dividend or distribution upon Class B Shares, on the settlement date of the first sale on a commission basis of a Class B Share from which such Class B share was derived. The Trust's obligation to pay an Underwriter its Allocable Portion of the Distribution Fees payable in respect of the Class B Shares shall be absolute and unconditional and shall not be subject to dispute, offset, counterclaim or any defense whatsoever, at law or equity, including, without limitation, any of the foregoing based on the insolvency or bankruptcy of such Underwriter. The foregoing provisions of this Section 1(d) shall not limit the rights of the Trust to modify or terminate payments under this Class B Plan as provided in Section 1(b) with respect to Pre-Amendment Class B Shares or Section 7 with respect to Post-Amendment Class B Shares. (e) The amount of compensation paid during any one year for personal and account maintenance services and expenses (the "Service Fee") 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 the Underwriter to the Class B Shares, the Underwriter shall be entitled to be paid any fees payable under this clause (e) with respect to Class B Shares for which no dealer of record exists, where less than all consideration has been paid to a dealer of record or where qualification standards have not been met. (f) Personal and account maintenance services for which the Underwriter 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 the Underwriter 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. (g) The Underwriter may impose certain deferred sales charges in connection with the repurchase of Class B Shares by the Trust and the Underwriter may retain (or receive from the Trust as the case may be) all such deferred sales charges. (h) The Trust has agreed in the Underwriting Agreement to certain restrictions on the Trust's ability to modify or waive certain terms of the Trust's Class B Shares or the contingent deferred sales charge with respect to Pre-Amendment Class B Shares. (i) 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 Section 2830(d) the Conduct Rules of the NASD. 2. The Trust understands that agreements between the Underwriter 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. The Underwriter shall agree and undertake that any agreement entered into between the Underwriter and any Dealer shall provide that such Dealer shall look solely to the Underwriter for compensation for its services thereunder and that in no event shall such Dealer seek any payment from the Trust. 3. Notwithstanding anything to the contrary in this Distribution Plan or any Underwriting Agreement, the Underwriter may assign, sell or pledge (collectively, "Transfer") its rights to its Allocable Portion of any Distribution Fees under this Plan. Upon receipt of notice of such Transfer, the Trust shall pay to the assignee, purchaser or pledgee (collectively with their subsequent transferees, "Transferees"), as third party beneficiaries, such portion of the Distribution Fees payable to the Underwriter as provided in written instructions (the "Allocation Instructions") from the Underwriter and said Transferee to the Trust. In the absence of Allocation Instructions, the Trust shall have no obligations to a Transferee. 4. 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; it being understood that actions taken pursuant to Section 1(b) shall not be considered such an action described above. 5. This Class B Plan shall become effective upon approval by a vote of the Board of Trustees, including 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 to be cast in person at a meeting called for the purpose of voting on this Class B Plan. 6. All of the terms of this Distribution Plan are intended to apply in respect of all Pre-Amendment Class B Shares and to the Distribution Fees payable in respect of any thereof. 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 the annual anniversary of the adoption of this Plan following the last such approval. 7. Subject to the limitation set forth in Section 1(b) with respect to Pre-Amendment Class B shares, this Class B Plan may be amended at any time by the Board of Trustees with respect to Class B Shares (and the assets attributable to such Class B Shares) which are not Pre-Amendment Class B Shares ("Post-Amendment Class B Shares"); 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, subject to Section 1(b), 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. 8. The Trust and the Underwriter 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. 9. 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. 10. For the purposes of this Class B Plan, the terms "interested persons," "majority of the outstanding voting securities" and "specifically approved at least annually" are used as defined in the 1940 Act. 11. 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. 12. 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. 22. 23. 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. 13. Payments under this Class B Plan shall be allocated between PFD and any successor Underwriter or co-Underwriter (each an Underwriter's "Allocable Portion) as provided in the Allocation Procedures appended hereto. EX-99.15.3 16 CLASS C DISTRIBUTION PLAN CLASS C SHARES DISTRIBUTION PLAN PIONEER BOND FUND CLASS C SHARES DISTRIBUTION PLAN, dated as of May 17, 1999 of PIONEER BOND 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 C 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 C Shares distribution plan (the "Class C 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 C Shares in connection with the Class C 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 C 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 C Shares in connection with the offering of Class C Shares, (b) PFD may compensate any Dealer that sells Class C 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 C 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 C 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 C Plan, has evaluated such information as it deemed necessary to an informed determination whether this Class C 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 C Plan will benefit the Trust and its Class C shareholders; NOW, THEREFORE, the Board of Trustees of the Trust hereby adopts this Class C Plan for the Trust as a plan of distribution of Class C Shares in accordance with Rule 12b-l, 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 C 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 C Shares shall be .75% of the Trust's average daily net assets attributable to Class C 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 C 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 C Shares for such year. As partial consideration for personal services and/or account maintenance services provided by PFD to the Class C Shares, PFD shall be entitled to be paid any fees payable under this clause (d) with respect to Class C shares for which no dealer of record 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 C 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 C 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 C Shares and the provision of services to shareholders of the Trust. Nothing in this Class C 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 C 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 C Plan shall become effective upon approval by (i) a "majority of the outstanding voting securities" of Class C 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 C Plan or in any agreements related to the Class C 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 C Plan. 5. This Class C 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 C Plan shall expire on May 17, 2000. 6. This Class C Plan may be amended at any time by the Board of Trustees, PROVIDED that this Class C 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 C 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 C 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 C 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 C Plan and the purposes for which such expenditures were made. 8. While this Class C 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 C 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 C 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 C 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 C Plan shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of the Class C Plan shall not be affected thereby. EX-99.18 17 FORM OF MULTICLASS PLAN PIONEER BOND FUND Multiple Class Plan Pursuant to Rule 18f-3 Class A Shares, Class B Shares and Class C Shares May 17, 1999 Each class of shares of Pioneer Bond Fund, a Delaware business trust (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. The initial purchase date for Class A Shares acquired through (i) reinvestment of dividends on Class A Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class A shares were purchased. 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 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. Class C Shares Class C Shares are sold at net asset value per share without the imposition of an initial sales charge. However, Class C Shares redeemed within one year of purchase will be subject to a CDSC as set forth in the Fund's prospectus. Class C Shares are sold subject to the minimum purchase requirements set forth in the Fund's prospectus. Class C Shares shall be entitled to the shareholder services set forth from time to time in the Fund's prospectus with respect to Class C Shares. Class C Shares are subject to fees calculated as a stated percentage of the net assets attributable to Class C Shares under the Class C Rule 12b-1 Distribution Plan as set forth in such Distribution Plan. The Class C Shareholders of the Fund have exclusive voting rights, if any, with respect to the Fund's Class C Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to Class C 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 C Shares shall bear the costs and expenses associated with conducting a shareholder meeting for matters relating to Class C Shares. The initial purchase date for Class C Shares acquired through (i) reinvestment of dividends on Class C Shares or (ii) exchange from another Pioneer mutual fund will be deemed to be the date on which the original Class C shares were purchased. Article IV. Article V. 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 Act) of (a) all of the Trustees of the Fund and (b) those of the Trustees who are not "interested persons" (as such term may be from time to time defined under the Act) of the Fund. Article V. 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 IV. EX-27.1 18 FDS CLASS A SHARES
6 0000276776 PIONEER BOND FUND 001 PIONEER BOND FUND CLASS A 6-MOS JUN-30-1999 DEC-31-1998 180565404 187853349 5936402 5582 516 193795849 0 0 1705631 1705631 0 188706765 14043549 12202078 93094 0 0 3997586 7287945 192090218 0 6297045 0 1019908 5277137 723220 653877 6654234 0 3829383 0 0 7739227 6209098 311342 38361684 15047 0 0 4720806 358045 0 1046508 123848605 9.37 0.29 0.09 0.29 0 0 9.46 0.95 0 0
EX-27.2 19 FDS CLASS B SHARES
6 0000276776 PIONEER BOND FUND 002 PIONEER BOND FUND CLASS B 6-MOS JUN-30-1999 DEC-31-1998 180565404 187853349 5936402 5582 516 193795849 0 0 1705631 1705631 0 188706765 4882034 3311042 93094 0 0 3997586 7287945 192090218 0 6297045 0 1019908 5277137 723220 653877 6654234 0 1056742 0 0 2755599 1256816 72209 38361684 15047 0 0 4720806 358045 0 1046508 39409119 9.33 0.25 0.09 0.25 0 0 9.42 1.71 0 0
EX-27.3 20 FDS CLASS C SHARES
6 0000276776 PIONEER BOND FUND 003 PIONEER BOND FUND CLASS C 6-MOS JUN-30-1999 DEC-31-1998 180565404 187853349 5936402 5582 516 193795849 0 0 1705631 1705631 0 188706765 1414893 914450 93094 0 0 3997586 7287945 192090218 0 6297045 0 1019908 5277137 723220 653877 6654234 0 312965 0 0 1416488 929909 13864 38361684 15047 0 0 4720806 358045 0 1046508 11552080 9.31 0.26 0.09 0.26 0 0 9.40 1.69 0 0
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