-----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, RmhXjOHmr4gyHHFmqYw8jYmJN0ARZ7DDmC7N8Kpit12XbACe99OCIhljppeW4dJd 64rqLJpHcDYlAuxICRkcFw== 0001016964-97-000167.txt : 19971216 0001016964-97-000167.hdr.sgml : 19971216 ACCESSION NUMBER: 0001016964-97-000167 CONFORMED SUBMISSION TYPE: N-8B-2 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19971212 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER INDEPENDENCE PLANS CENTRAL INDEX KEY: 0001051008 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-8B-2 SEC ACT: SEC FILE NUMBER: 811-08551 FILM NUMBER: 97737257 BUSINESS ADDRESS: STREET 1: C/O THE PIONEER GROUP INC STREET 2: 60 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109-1820 BUSINESS PHONE: 6174224960 MAIL ADDRESS: STREET 1: C/O THE PIONEER GROUP INC STREET 2: 60 STATE STREET CITY: BOSTON STATE: MA ZIP: 02109-1820 N-8B-2 1 FORM N-8B-2 - PIONEER INDEPENDENCE PLANS As filed with the Securities and Exchange Commission on December 12, 1997 Registration No. 811-08551 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-8B-2 REGISTRATION STATEMENT OF UNIT INVESTMENT TRUSTS WHICH ARE CURRENTLY ISSUING SECURITIES Pursuant to Section 8(b) of the Investment Company Act of 1940 Pioneer Independence Plans -------------------------- (Name of Unit Investment Trust) ___ Not the issuer of periodic payment plan certificates. _X_ Issuer of periodic payment plan certificates. I. ORGANIZATION AND GENERAL INFORMATION 1. (a) Furnish name of the trust and the Internal Revenue Service Employer Identification Number. Name: Pioneer Independence Plans (hereinafter referred to as the "Trust" or "Plans") Internal Revenue Service Employer Identification Number: The Trust's depositor has applied for the Trust's Employer Identification Number (b) Furnish title of each class or series of securities issued by the Trust. Pioneer Independence Plans 2. Furnish name and principal business address and ZIP Code and the Internal Revenue Employer Identification Number of each depositor of the Trust. Name: Pioneer Funds Distributor, Inc. Address: 60 State Street Boston, MA 02109-1820 Internal Revenue Service Employer Identification Number: 04-3042318 Pioneer Funds Distributor, Inc. is the depositor, as defined in Section 27 of the Act, and is hereinafter referred to as the "Sponsor." 3. Furnish name and principal business address and ZIP Code and the Internal Revenue Service Employer Identification Number of each custodian or trustee of the Trust indicating for which class or series of securities each custodian or trustee is acting. Custodian: [_________________________________] Address: [_________________] [____], [_______] Internal Revenue Service Employer Identification Number: []-[_____] [_____________________________________] is acting as custodian (the "Custodian") for Pioneer Independence Plans. -2- 4. Furnish name and principal business address and ZIP Code and the Internal Revenue Service Employer Identification Number of each principal underwriter currently distributing securities of the Trust. See response to Item 2. 5. Furnish name of state or other sovereign power, the laws of which govern with respect to the organization of the Trust. The Commonwealth of Massachusetts 6. (a) Furnish the dates of execution and termination of any indenture or agreement currently in effect under the terms of which the Trust was organized and issued or proposes to issue securities: Individual agreements (the Plans) will be entered into with Plan investors (hereinafter referred to as "Planholders"). A Plan represents an agreement among the Planholder, the Sponsor, and the Custodian under which amounts invested (after deduction of a front-end sales load (the "Creation and Sales Charge") and other fees) are used to purchase shares of the Pioneer Independence Fund (the "Fund") at net asset value. (b) Furnish the dates of execution and termination of any indenture or agreement currently in effect pursuant to which the proceeds of payments on securities issued or to be issued by the Trust are held by the Custodian or trustee. Custodian agreement, dated ________ __, 199_ (the "Custodian Agreement"), between the Custodian and the Sponsor. See Item 20(b) for termination provisions. 7. Furnish in chronological order the following information with respect to each change of name of the Trust since January 1, 1930. If the name has never been changed, so state. The name of the Trust has never been changed. 8. State the date on which the fiscal year of the Trust ends. December 31. -3- MATERIAL LITIGATION 9. Furnish a description of any pending legal proceedings, material with respect to the security holders of the Trust by reason of the nature of the claim or the amount thereof, to which the Trust, the depositor, or the principal underwriter is a party or of which the assets of the Trust are the subject, including the substance of the claims involved in such proceeding and the title of the proceeding. Furnish a similar statement with respect to any pending administrative proceeding commenced by a governmental authority or any such proceeding or legal proceeding known to be contemplated by a governmental authority. Include any proceeding which, although immaterial itself, is representative of, or one of, a group which in the aggregate is material. None. II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST GENERAL INFORMATION CONCERNING THE SECURITIES OF THE TRUST AND THE RIGHTS OF HOLDERS 10. Furnish a brief statement with respect to the following matters for each class or series of securities issued by the Trust: (a) Whether the securities are of the registered or bearer type. Registered. (b) Whether the securities are of the cumulative or distributive type. Distributive. (c) The rights of security holders with respect to withdrawal or redemption. The sections entitled "Partial Withdrawal or Redemption Without Termination of the Plan," "Systematic Withdrawal Program," "Cancellation and Refund Rights" and "Termination of a Plan by the Planholder and Withdrawal of Shares" under the caption "Rights and Privileges of Planholders" in the prospectus contained in the Trust's registration statement on Form S-6 (the "Prospectus"), filed with the Commission on December 12, 1997 (Accession No. 0001016964-97-000166), are incorporated herein in response to this item. -4- (d) The rights of security holders with respect to conversion, transfer, partial redemption, and similar matters. The sections entitled "Partial Withdrawal or Redemption Without Termination of the Plan," "Replacements of Partial Withdrawals," "Systematic Withdrawal Program," "Cancellation and Refund Rights," "Termination of a Plan by the Planholder and Withdrawal of Shares," "Replacement Privilege on Termination" and "Transfer or Assignment of Rights in a Plan" under the caption "Rights and Privileges of Planholders" in the Prospectus are incorporated herein in response to this item. (e) If the Trust is the issuer of periodic payment plan certificates, state the substance of the provisions of any indenture or agreement with respect to lapses or defaults by security holders in making principal payments, and with respect to reinstatement. A Plan may be terminated by the Custodian or Sponsor if a Planholder fails to make investments under his or her Plan for a period of 12 consecutive months or if Fund shares are not available and a substitution is not made. The text under the caption "Termination of a Plan by the Sponsor or Custodian" and the sections entitled "Replacements of Partial Withdrawals" and "Replacement Privilege on Termination" under the caption "Rights and Privileges of Planholders" in the Prospectus are also incorporated herein in response to this item. (f) The substance of the provisions of any indenture or agreement with respect to voting rights, together with the names of any persons other than security holders given the right to exercise voting rights pertaining to the Trust's securities or the underlying securities and the relationship of such persons to the Trust. Investments under a Plan will not constitute direct ownership of Fund shares, but rather an interest in a custodial arrangement which will have direct ownership of the Fund's shares on behalf of each Planholder. Planholders have only a beneficial interest in the underlying shares of the Fund. A Planholder will, however, retain full voting rights with respect to such underlying shares of the Fund. The section entitled "Voting Rights in Fund Shares" under The caption "Rights and Privileges of Planholders" in the Prospectus is also incorporated herein in response to this item. -5- (g) Whether security holders must be given notice of any change in: (1) The composition of the assets in the Trust. Planholders must be notified of any substitution of the Plan's underlying investment. The text under the caption "Substitution of the Underlying Investment" in the Prospectus is also incorporated herein in response to this item. (2) The terms and conditions of the securities issued by the Trust. A Plan is established in the name of the Planholder at the time of issuance and constitutes an individual agreement among the Planholder, the Sponsor and the Custodian. No agent or other person has the authority to modify, alter or otherwise change the terms of the Plan or to bind the Sponsor, the Custodian or the issuer of Fund shares by any statement, written or oral, not contained in the Prospectus. The terms and conditions of a Planholder's Plan may not be amended to adversely affect any material right of the Planholder without notice to, and consent of, the Planholder. Notice is not required to be given as to changes in the general terms and conditions of subsequently issued Plans. (3) The provisions of any indenture or agreement of the Trust. The terms of the Custodian Agreement cannot be amended to adversely affect the rights and privileges of a Planholder without obtaining his or her written consent. (4) The identity of the depositor, trustee or Custodian. The Sponsor is not required to notify Planholders or seek their approval prior to replacing the Custodian, nor are there other Planholder notification provisions with respect to the identity of the Sponsor or the Custodian. (h) Whether the consent of security holders is required in order for action to be taken concerning any change in: (1) The composition of the assets of the Trust. -6- Before any substitution in the assets of the Trust can be effected, the Sponsor must, in addition to other requirements, submit written notice of the proposed substitution to each Planholder, giving a reasonable description of the substituted fund shares, disclosing that unless the Plan is surrendered within 30 days of the date of mailing such notice, the Planholder will be considered to have consented to the substitution and to have agreed to bear his or her pro rata share of expenses and taxes in connection with the substitution. (2) The terms and conditions of the securities issued by the Trust. The terms and conditions of a Planholder's Plan may not be adversely amended without consent. Consent is not required for changes in the general terms and conditions of subsequently issued Plans. (3) The provisions of any indenture or agreement of the Trust. See response to Item 10(g)(3). (4) The identity of the depositor, trustee or Custodian. Consent of Planholders is not required. (i) Any other principal feature of the securities issued by the Trust or any other principal right, privilege or obligation not covered by subdivisions (a) to (g) or by any other item in this form. The sections entitled "Planholders May Qualify for Reduced Sales Charges," "Making Investments Ahead of Schedule to Complete a Plan Early," "Changing the Face Amount of Your Plan," "Extended Investment Option," "Dividends and Distributions" and "Statements, Reports and Notices" under the caption "Rights and Privileges of Planholders" in the Prospectus are also incorporated herein in response to this item. INFORMATION CONCERNING THE SECURITIES UNDERLYING THE TRUST'S SECURITIES 11. Describe briefly the kind or type of securities comprising the unit of specified securities in which security holders have an interest. -7- The Trust will invest in shares of the Fund, a diversified open-end management investment company which will file a Registration Statement on Form N-1A under the Act and the Securities Act of 1933, as amended. The investment objective of the Fund is to seek capital appreciation. The Fund will invest in a diversified portfolio of securities consisting primarily of common stocks. 12. If the Trust is the issuer of periodic payment plan certificates and if any underlying securities were issued by another investment company, furnish the following information for each such company: (a) Name of company. Pioneer Independence Fund (b) Name and principal business address of depositor. Not applicable (c) Name and principal business address of trustee or custodian. Custodian: Brown Brothers Harriman & Co. Address: 40 Water Street Boston, MA 02205-9014 (d) Name and principal business address of principal underwriter. Name: Pioneer Funds Distributor, Inc. Address: 60 State Street Boston, MA 02109-1820 (e) The period during which the securities of such company have been the underlying securities. Shares of the Fund will be the underlying securities from the date the Trust commences operations. INFORMATION CONCERNING LOADS, FEES, CHARGES AND EXPENSES 13. (a) Furnish the following information with respect to each load, fee, expense or charge to which (1) principal payments, (2) underlying securities, (3) distributions, (4) cumulated or reinvested -8- distributions or income, and (5) redeemed or liquidated assets of the Trust's securities are subject: (A) the nature of such load, fee, expense or charge; (1) Principal Payments. Each Plan includes a Creation and Sales Charge (a "front-end load" sales charge) equal to a maximum of 50% of the first 12 investments. The effect of a "front- end load" is that if a Planholder terminates his or her Plan between the second and eighteenth month, total deductions may amount to as much as 15% of the total Plan investments made up to that date and as much as 31.6% after 18 months. However, the maximum Creation and Sales Charge for a 15-year Plan is only 3.33% when expressed as a percentage of the total Plan investments. Accordingly, a Plan is not suited for short-term investments. These charges are deducted from each of the first 12 monthly Plan investments. For example, on a $100 a month Plan, $50 is deducted from each of the first 12 monthly Plan investments. After the 12th investment, Creation and Sales Charges no longer apply to subsequent monthly investments. Deductions will decrease proportionately on certain larger Plans. The Custodian is also entitled to deduct fees for certain services to Planholders. (2) Underlying Securities. The Fund pays usual and customary expenses in connection with its operations, including, but not limited to, a management fee, distribution fees, custody expenses, transfer agency fees, registration fees under securities laws, printing expenses, accounting and brokerage fees, trustee fees and expenses and insurance costs. (3) Distributions. None. -9- (4) Cumulated or Reinvested Distributions of Income. Dividends and distributions are reinvested at net asset value. (5) Redeemed or Liquidated Assets of the Trust's Securities. None. (B) the amount thereof; (1) Principal Payments. Relevant information including the Creation and Sales Charge Tables and the hypothetical investment table under the caption "Plan Investments and Deductions" in the Prospectus is incorporated herein in response to this item. (2) Underlying Securities. Under its management contract with the Fund, the Fund's investment adviser is responsible for the overall management of the Fund's business affairs including, in particular, the rendering of investment advisory services. As compensation for its management services, the adviser is entitled to a management fee equal to 0.75% per annum of the Fund's average daily net assets. Under a service agreement with the Fund, the transfer agent acts as such for shareholders who have direct investments in the Fund. For providing its services the transfer agent is entitled to an annual fee of $22.75 per account. Under an agreement with the Fund, the Fund's custodian is compensated for holding the Fund's portfolio securities and other assets. The expense table and other relevant information from the section entitled "Fund Annual Expenses (After Expense Limitation)" under the caption "Plan Investments and Deductions" in the Prospectus are also incorporated herein in response to this item. -10- (3) Distributions. The Fund and the Sponsor reserve the right to deduct all or a portion of the Custodian's fees in the future. (4) Cumulated or Reinvested Distributions of Income. See Subitem 13(a)(B)(3). (5) Redeemed or Liquidated Assets of the Trust's Securities. None. (C) the name of the person to whom such amounts are paid and its relationship to the Trust; (1) Principal Payments. Such amounts are paid to Pioneer Funds Distributor, Inc. ("PFD" ) as the Sponsor. (2) Underlying Securities. For the Fund, such amounts are paid to the each of following (relationship indicated): PFD (principal underwriter) Pioneering Management Corporation ("PMC") (investment adviser) Pioneering Services Corporation ("PSC") (transfer agent) Brown Brothers Harriman & Co. (custodian) Each of PMC and PSC is a wholly owned subsidiary of The Pioneer Group, Inc. ("PGI"), a Massachusetts corporation. (The Sponsor [PFD] is an indirect wholly owned subsidiary of PGI.) PMC, PSC and PFD provide similar services for other Pioneer mutual funds and, in the case of PMC, other institutional accounts. -11- (3) Distributions. Not applicable. (4) Cumulated or Reinvested Distributions of Income. Not applicable. (5) Redeemed or Liquidated Assets of the Trust's Securities. Not applicable. (D) the nature of the services performed by such person in consideration for such load, fee, expense or charge. (1) Principal Payments. The Creation and Sales Charge is paid to the Sponsor as compensation for its services and costs in creating the Plans and arranging for their administration, for making the Fund shares available to Planholders at their net asset value and for certain selling expenses and commissions with respect to the Plans. Relevant information under the caption "Service Charges and Other Fees" in the Prospectus is also incorporated herein in response to this item. (2) Underlying Securities. See Subitem(s) 13(a)(B)(2) and 13(a)(C) (2). (3) Distributions. Not applicable. (4) Cumulated or Reinvested Distributions of Income. Not applicable. (5) Redeemed or Liquidated Assets of the Trust's Securities. Not applicable. -12- (b) For each installment payment type of periodic payment plan certificate of the Trust, furnish the following information with respect to sales load and other deductions from principal payments. See response to Subitem 13(a)(B)(1). (c) State the amount of total deductions as a percentage of the net amount invested for each type of security issued by the Trust. State each different sales charge available as a percentage of the public offering price and as a percentage of the net amount invested. List any special purchase plans or methods established by rule or exemptive order that reflect scheduled variations in, or elimination of, the sales load and identify each class of individuals or transactions to which such plans apply. See response to Subitem 13(a)(B)(1). The sections entitled "Planholders May Qualify for Reduced Sales Charges" and "Changing the Face Amount of Your Plan" under the caption "Rights and Privileges of Planholders" in the Prospectus are also incorporated herein in response to this item. (d) Explain fully the reasons for any difference in the price at which securities are offered generally to the public, and the price at which securities are offered for any class of transactions to any class or group of individuals, including officers, directors, or employees of the depositor, trustee, Custodian or principal underwriter. A Planholder's purchase price of the Fund's shares is subject, each time an investment is made, to the Fund's fluctuating net asset value as described in the Prospectus. Additionally, for the first 12 monthly Plan investments under a 15-year Plan, there is no other variation in offering price for Planholders making monthly Plan investments in amounts ranging from $50 to $1,250. The offering price is reduced proportionately for Planholders making monthly Plan investments in amounts ranging from $1,500 to $10,000 (i.e., those Planholders investing $10,000 on a monthly basis paying the lowest offering price under a 15-year Plan). Likewise, Planholders exercising the extended investment option (a 25-year Plan) may take advantage of proportionately lower offering prices for larger Plan denominations. The subsections entitled "Purchasing Two or More Plans" and "Rights of Accumulation" under the caption "Rights and Privileges of Planholders" in the Prospectus are also incorporated herein in response to this item. -13- (e) Furnish a brief description of any loads, fees, expenses or charges not covered in Item 13(a) which may be paid by security holders in connection with the Trust or its securities. Plans established as individual retirement accounts ("IRAs") are subject to an annual IRA custodial fee of $10 which is paid to PGI as IRA custodian. This annual fee will be deducted from the Plan unless a separate check is received in payment of the IRA custodial fee. (f) State whether the depositor, principal underwriter, Custodian or trustee, or any affiliated person of the foregoing may receive profits or other benefits not included in answer to Item 13(a) or 13(d) through the sale or purchase of the Trust's securities or interests in such securities, or underlying securities or interests in underlying securities, and describe fully the nature and extent of such profits or benefits. The Sponsor, Custodian, or any affiliated person thereof will not receive any profits or other benefits not included in answer to Item 13(a) or 13(d) through the sale or purchase of the Plans or Fund shares. (g) State the percentage that the aggregate annual charges and deductions for maintenance and other expenses of the Trust bear to the dividend and interest income from the Trust property during the period covered by the financial statements filed herewith. Not applicable. INFORMATION CONCERNING THE OPERATIONS OF THE TRUST 14. Describe the procedure with respect to applications (if any) and the issuance and authentication of the Trust's securities, and state the substance of the provisions of any indenture or agreement pertaining thereto. To start a Plan, prospective Planholders complete an application (the "Plan Application") indicating the monthly Plan investment amount. Because a Plan is specifically designed for regular monthly investing, Planholders are encouraged to invest through an automatic investment option such as military government allotment or a preauthorized check transaction (a "PACT"). A Planholder should complete the required forms and forward them to the Custodian to elect an automatic investment option. -14- Also see response to Item 3(6)(a). A Plan is established in the name of the Planholder at the time of issuance and constitutes an individual agreement among the Planholder, the Sponsor and the Custodian, and a Planholder may terminate a Plan completely or partially at any time as described in the Prospectus. 15. Describe the procedure with respect to the receipt of payments from purchasers of the Trust's securities and the handling of the proceeds thereof, and state the substance of the provisions of any indenture or agreement pertaining thereto. Investments under a Plan are applied, after authorized deductions, to the purchase of Fund shares at net asset value. Also see response to Item 14. 16. Describe the procedure with respect to the acquisition of underlying securities and the disposition thereof, and state the substance of the provisions of any indenture or agreement pertaining thereto. After making authorized deductions, the Custodian applies the remaining balance of the investment to the purchase of Fund shares for a Plan at the net asset value as of the end of the business day on which the Custodian receives the Plan's investment. The Custodian holds these shares in its custody, receiving any dividends and distributions. Fund returns and share prices fluctuate and, upon redemption, the value of the Fund shares held in a Plan may be more or less than the purchase price. The Sponsor may substitute the shares of another investment medium as the underlying investment for the shares of the Fund if it deems such action to be in the best interests of Planholders. 17. (a) Describe the procedure with respect to withdrawal or redemption by security holders. See response to Item 10(c). (b) Furnish the names of any persons who may redeem or repurchase, or are required to redeem or repurchase, the Trust's securities or underlying securities from security holders, and the substance of the provisions of any indenture or agreement pertaining thereto. The Custodian shall be required to accept requests for surrender and termination of an investor's interest in the Plans in accordance with the procedures set forth in Item 10(c). -15- PFD is required to redeem the underlying securities on behalf of the Fund. (c) Indicate whether repurchased or redeemed securities will be canceled or may be resold. If a Plan is terminated, that Plan is canceled and no further purchase payments may be made thereunder. 18. (a) Describe the procedure with respect to the receipt, custody and disposition of the income and other distributable funds of the Trust and state the substance of the provisions of any indenture or agreement pertaining thereto. Not applicable. (b) Describe the procedure, if any, with respect to the reinvestment of distributions to security holders and state the substance of the provisions of any indenture or agreement pertaining thereto. All Fund dividends and distributions, after any applicable deductions, are reinvested on behalf of the Planholders automatically by the Custodian in additional shares of the Fund as of the payment date, at the net asset value determined on the ex-dividend date of the dividend or distribution, unless the Planholder elects to receive the dividends or distributions in cash. (c) If any reserves or special funds are created out of income or principal, state with respect to each such reserve or fund the purpose and ultimate disposition thereof, and describe the manner of handling the same. No reserves or special funds out of income or principal are currently anticipated. (d) Submit a schedule showing the periodic and special distributions which have been made to security holders during the three years covered by the financial statements filed herewith. State for each such distribution the aggregate amount and amount per share. If distributions from sources other than current income have been made identify each such other source and indicate whether such distribution represents the return of principal payments to security holders. If payments other than cash were made describe the -16- nature thereof, the account charged and the basis of determining the amount of such charge. Not applicable. 19. Describe the procedure with respect to the keeping of records and accounts of the Trust, the making of reports and the furnishing of information to security holders, and the substance of the provisions of any indenture or agreement pertaining thereto. The duties of the Custodian under the Custodian Agreement include recordkeeping related to the receipt of all investments from Planholders and income dividends and capital gains distributions on Fund shares, the processing of all authorized deductions therefrom and the purchase and retention of Fund shares for the Planholders' accounts. The Custodian has assumed only those obligations specifically imposed on it under the Custodian Agreement. For the first 18 months after the issuance of a Plan, the Custodian will mail to each Planholder a confirmation statement for each financial transaction as it occurs. Beginning after the 19th month, the Custodian may mail statements to Planholders quarterly. Each transaction confirmation statement, quarterly statement or other statement, as required, will state the price per share of the Fund shares purchased after applicable deductions and the total number of Fund whole and fractional shares held in the Planholder's account. Any notices, reports or documents required or authorized to be given or sent to a Planholder under the Prospectus will be conclusively deemed to have been given or sent upon mailing to the Planholder's address of record, and the date of such mailing shall be deemed the date of the giving of such notice. An appropriate notice regarding taxes will be sent to Planholders each year by the Custodian. 20. State the substance of the provisions of any indenture or agreement concerning the Trust with respect to the following: (a) Amendments to such indenture or agreement. The Custodian Agreement, which may be amended from time to time as mutually agreed by the Sponsor and the Custodian, cannot be amended to adversely affect the rights and privileges of a Planholder without obtaining his or her written consent. (b) The extension or termination of such indenture or agreement. -17- The obligation of the Custodian to accept any new Plan for custodianship shall terminate if the Sponsor: (1) fails to maintain an effective registration statement under the Securities Act of 1933, as amended, covering the issuance of the Plans; (2) fails to satisfy the requirements of the Act in connection with the issuance of the Plans; (3) has its membership in the National Association of Securities Dealers, Inc. or its registration as a broker-dealer under the Securities Exchange Act of 1934, canceled or revoked, or suspended for more than 120 days for any cause involving failure on the part of an executive officer or director to follow ethical standards or serious neglect of his or her duty to require representatives to follow such standards; or (4) defaults in the performance of any other duty, covenant or agreement contained in the Custodian Agreement and such default shall remain unremedied for 30 days after written notice thereof shall have been given to the Sponsor by the Custodian (except with respect to clause (3), for which such remedy period shall be 120 days). (c) The removal or resignation of the trustee or Custodian, or the failure of the trustee or Custodian to perform its duties, obligations and functions. The Sponsor shall have the right, upon at least 90 days' written notice to the Custodian, to substitute, as custodian, both under the Plans issued and still in force and/or under any Plan issued thereafter, whether such Plans are otherwise identical with that issued under the Custodian Agreement or not, any other bank or trust company having capital, surplus and undivided profits totaling at least $2,000,000. The Sponsor also has the right, by giving written notice to the Custodian 90 days prior to the event, to assume such administrative functions with respect to the Plans as may be mutually agreed by the Sponsor and the Custodian. The Custodian shall have the right to resign as custodian under any existing Plan at any time if either: (a) the securities and other property in which the funds of the Planholders are invested have been completely liquidated and the proceeds of such liquidation have been distributed to the Planholders or (b) a successor custodian that meets the qualifications discussed above and approved by the Sponsor has been designated by either the Sponsor or the resigning Custodian and the successor custodian has accepted such custodianship. -18- In addition, the Custodian shall have the right, upon at least 90 days' written notice to the Sponsor, to terminate its obligation to accept any new Plan for custodianship. (d) The appointment of a successor trustee and the procedure if a successor trustee is not appointed. Not applicable. (e) The removal or resignation of the depositor, or the failure of the depositor to perform its duties, obligations and functions. The Custodian Agreement does not provide for the removal or resignation of the Sponsor or the failure of the Sponsor to perform its duties, obligations and functions. (f) The appointment of a successor depositor and the procedure if a successor depositor is not appointed. The Custodian Agreement does not provide for the appointment of a successor Sponsor. 21. (a) State the substance of the provisions of any indenture or agreement with respect to loans to security holders. There are no such provisions in any indenture or agreement. (b) Furnish a brief description of any procedure or arrangement by which loans are made available to security holders by the depositor, principal underwriter, trustee or Custodian, or any affiliated person of the foregoing. The following items should be covered: (1) The name of each person who makes such agreements or arrangements with security holders. Not applicable. (2) The rate of interest payable on such loans. Not applicable. (3) The period for which loans may be made. Not applicable. -19- (4) Costs or charges for default in repayment at maturity. Not applicable. (5) Other material provisions of the agreement or arrangement. Not applicable. (c) If such loans are made, furnish the aggregate amount of loans outstanding at the end of the last fiscal year, the amount of interest collected during the last fiscal year allocated to the depositor, principal underwriter, trustee or Custodian or affiliated person of the foregoing and the aggregate amount of loans in default at the end of the last fiscal year covered by financial statements filed herewith. Not applicable. 22. State the substance of the provisions of any indenture or agreement with respect to limitations on the liabilities of the depositor, Trustee or Custodian, or any other party to such indenture or agreement. The Custodian Agreement provides in substance that the Sponsor shall at all times fully indemnify and hold harmless the Custodian and its successors from any and all liability and expense which may arise from the failure of the Sponsor to comply with any law, rule, regulation or order of the United States, any state or any other jurisdiction relating to the sale, registration or qualification of securities, provided that no claim against the Custodian which might be subject to indemnification shall be confessed, settled or compromised by the Custodian without the Custodian first having given 15 days' written notice to the Sponsor of the material facts and that following such notice the Sponsor shall have the right upon written demand to contest or defend such a claim in the name of the Custodian. 23. Describe any bonding arrangement for officers, directors, partners or employees of the depositor or principal underwriter of the Trust, including the amount of coverage and the type of bond. The officers, directors and other employees of the Sponsor are bonded under a joint investment company blanket bond covering the Sponsor, PMC, PSC, the Pioneer mutual funds (including the Trust and the Fund) and certain other subsidiaries of PGI in the amount of $25,000,000. 24. State the substance of any other material provisions of any indenture or agreement concerning the Trust or its securities and a description of any -20- other material functions or duties of the depositor, trustee or Custodian not stated in Item 10 or Items 14 to 23 inclusive. None. III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR ORGANIZATION AND OPERATIONS OF DEPOSITOR 25. State the form of organization of the depositor of the Trust, the name of the state or other sovereign power under the laws of which the depositor was organized and the date of organization. The Sponsor is a corporation organized under the laws of the Commonwealth of Massachusetts on March 2, 1989. 26. (a) Furnish the following information with respect to all fees received by the depositor of the Trust in connection with the exercise of any functions or duties concerning securities of the Trust during the period covered by the financial statements filed herewith: Not applicable. (b) Furnish the following information with respect to any fee or any participation in fees received by the depositor from any underlying investment company or any affiliated person or investment adviser of such company: (1) The nature of such fee or participation. The Fund has adopted a distribution plan in accordance with Rule 12b-1 under the Act pursuant to which certain distribution and service fees are paid to PFD. Under the distribution plan, the Fund reimburses PFD for its actual expenditures as follows: (i) a service fee to be paid to qualified broker-dealers and (ii) reimbursement to PFD for expenses incurred providing services to Fund shareholders, including the Plans, and supporting broker dealers in their efforts to provide such services. Expenditures under the distribution plan may not exceed on an annual basis 0.25% of the Fund's average daily net assets. -21- (2) The name of the person making payment. See response to Item 26(b)(1). (3) The nature of the services rendered in consideration for such fee or participation. See response to Item 26(b)(1). (4) The aggregate amount received during the last fiscal year covered by the financial statements filed herewith. Not applicable. 27. Describe the general character of the business engaged in by the depositor including a statement as to any business other than that as depositor of the Trust. If the depositor acts or has acted in any capacity with respect to any investment company or companies other than the Trust, state the name or names of such company or companies, their relationship, if any, to the Trust, and the nature of the depositor's activities therewith. If the depositor has ceased to act in such named capacity, state the date of and circumstances surrounding such cessation. The Sponsor is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, and is a member in good standing of the National Association of Securities Dealers, Inc. The Sponsor is the principal underwriter for the following registered management investment companies, excluding the Trust and the underlying investment company: Pioneer International Growth Fund Pioneer Real Estate Shares Pioneer World Equity Fund Pioneer Short-Term Income Trust Pioneer Europe Fund Pioneer America Income Trust Pioneer Emerging Markets Fund Pioneer Bond Fund Pioneer India Fund Pioneer Balanced Fund Pioneer Growth Trust Pioneer Intermediate Tax-Free Fund Pioneer Mid-Cap Fund Pioneer Tax-Free Income Fund Pioneer Growth Shares Pioneer Money Market Trust Pioneer Small Company Fund Pioneer Variable Contracts Trust Pioneer Fund Pioneer Interest Shares Pioneer II Pioneer Micro-Cap Fund
The Sponsor is also the principal underwriter for the underlying investment company. -22- OFFICIALS AND AFFILIATED PERSONS OF DEPOSITOR 28. (a) Furnish as at latest practicable date the following information with respect to the depositor of the Trust, with respect to each officer, director, or partner of the depositor, and with respect to each natural person directly or indirectly owning, controlling or holding with power to vote 5% or more of the outstanding voting securities of the depositor. The Sponsor is a wholly owned subsidiary of PMC, which is a wholly owned subsidiary of PGI. As at November 28, 1997.
---------------------------------------------------------------------- Nature of relationship or Name and principal affiliation with depositor business address of the Trust Pioneer Funds Distributor, Inc. Not applicable Pioneering Management Corporation Owner The Pioneer Group, Inc. Parent Cogan, John F., Jr. Chairman and Director Butler, Robert L. President and Director Tripple, David Director Steven M. Graziano Senior Vice President Stephen W. Long Senior Vice President Mary T. Kleeman Vice President Barry G. Knight Vice President William A. Misata Vice President Anne W. Patenaude Vice President Gail A. Smyth Vice President Constance D. Spiros Vice President David Zigas Vice President William H. Keough Treasurer Joseph P. Barri Clerk ----------------------------------------------------------------------
The principal business address of each of these individuals is 60 State Street, Boston, Massachusetts 02109-1820. Ownership of all securities of the depositor: See response to Item 29. Ownership of all securities of the Trust: None. Mr. Cogan has the power to vote 5% or more of the outstanding voting securities of PGI. ---------------------------------------------------------------------- -23- ---------------------------------------------------------------------- The information directly below pertains to each of John F. Cogan, Jr. and Joseph P. Barri:
Other companies of which each of the persons* named above is presently an officer, director or partner ---------------------------------------------------------------------- Name and principal Nature of business Nature of affiliation business address of such other company with such other such other company company Hale and Dorr Law Firm Partner 60 State Street Boston, MA 02109 ----------------------------------------------------------------------
*Exclude persons whose affiliation with the depositor arises solely by virtue of stock ownership (Section 2(a)(3)(A) of the Act). (b) Furnish a brief statement of the business experience during the last five years of each officer, director or partner of the depositor. The management biographies under the caption "The Sponsor" in the Prospectus are incorporated herein in response to this item. If titles had changed, the most recent position is indicated. Each of the Sponsor's directors, senior vice presidents, treasurer and clerk has been employed by PGI or PFD for at least five years. Each of the Sponsor's vice presidents (except Mary Kleeman and Barry Knight) has also been employed by PGI or PFD for at least five years. Prior to January 1996, Ms. Kleeman was employed by MFS Fund Distributors as a project manager. From June 1993 to July 1994, Mr. Knight was a regional manager for Great Western Financial Securities, and prior to June 1993, he was the director of marketing and training for Barnett Securities, Inc. COMPANIES OWNING SECURITIES OF DEPOSITOR 29. Furnish as at latest practicable date the following information with respect to each company which directly or indirectly owns, controls or holds with power to vote 5% or more of the outstanding voting securities of the depositor. -24- As at November 28, 1997. ---------------------------------------------------------------------- Name and principal business address: Pioneering Management Corporation and The Pioneer Group, Inc. 60 State Street Boston, MA 02109-1820 Nature of business: PGI and its subsidiaries are engaged in financial services businesses in the United States and several foreign countries and in a number of natural resource development projects. PMC directly owns all of the outstanding stock of the Sponsor. ----------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------- Ownership of all securities of the depositor --------------------------------------------------------------------------------------------------------- Title of class Securities owned of record Securities owned of record Securities owned which are also owned which are not owned beneficially which are not beneficially beneficially owned of record ----------------------------- ------------------------------ --------------------------- Amount Percent of Amount Percent of Amount Percent of class class class Common Stock 100 shares 100% None 0% None 0% ---------------------------------------------------------------------------------------------------------
CONTROLLING PERSONS 30. Furnish as at latest practicable date the following information with respect to any person, other than those covered by Items 28, 29 and 42, who directly or indirectly controls the depositor. None. COMPENSATION OF OFFICERS AND DIRECTORS OF DEPOSITOR, COMPENSATION OF OFFICERS OF DEPOSITOR 31. Furnish the following information with respect to the remuneration for services paid by the depositor during the last fiscal year covered by financial statements filed herewith: (a) directly to each of the officers or partners of the depositor directly receiving the three highest amounts of remuneration; Not applicable. -25- (b) directly to all officers or partners of the depositor as a group exclusive of persons whose remuneration is included under Item 31(a), stating separately the aggregate amount paid by the depositor itself and the aggregate amount paid by all the subsidiaries; Not applicable. (c) indirectly or through subsidiaries to each of the officers or partners of the depositor. Not applicable. COMPENSATION OF DIRECTORS 32. Furnish the following information with respect to the remuneration for services, exclusive of remuneration reported under Item 31, paid by the depositor during the last fiscal year covered by financial statements filed herewith: (a) The aggregate direct remuneration to directors Not applicable. (b) Indirect or through subsidiaries to directors Not applicable. COMPENSATION TO EMPLOYEES 33. (a) Furnish the following information with respect to the aggregate amount of remuneration for services of all employees of the depositor (exclusive of persons whose remuneration is reported in Items 31 and 32) who received remuneration in excess of $10,000 during the last fiscal year covered by financial statements filed herewith from the depositor and any of its subsidiaries. Not applicable. (b) Furnish the following information with respect to the remuneration for services paid directly during the last fiscal year covered by financial statements filed herewith to the following classes of persons (exclusive of those persons covered by Item 33(a)): (1) Sales managers, branch managers, direct managers and other persons supervising the sale of registrant's securities; (2) Salesmen, -26- sales agents, canvassers and other persons making solicitations but not in supervisory capacity; (3) Administrative and clerical employees; and (4 ) Others (specify). If a person is employed in more than one capacity, classify according to predominant type of work. Not applicable. COMPENSATION TO OTHER PERSONS 34. Furnish the following information with respect to the aggregate amount of compensation for services paid any person (exclusive of persons whose remuneration is reported in Items 31, 32 and 33), whose aggregate compensation in connection with services rendered with respect to the Trust in all capacities exceeded $10,000 during the last fiscal year covered by financial statements filed herewith from the depositor and any of its subsidiaries. Not applicable. IV. DISTRIBUTION AND REDEMPTION OF SECURITIES DISTRIBUTION OF SECURITIES 35. Furnish the names of the states in which sales of the Trust's securities (A) are currently being made, (B) are presently proposed to be made, and (C) have been discontinued, indicating by appropriate letter the status with respect to each state. (A) None. (B) It is the Sponsor's intention to sell Plans in all states where it is lawful to do so. (C) None. 36. If sales of the Trust's securities have at any time since January 1, 1937 been suspended for more than a month describe briefly the reasons for such suspension. Sales of the Trust's securities have never been suspended. 37. (a) Furnish the following information with respect to each instance where, subsequent to January 1, 1937, any federal or state governmental officer, agency or regulatory body denied authority -27- to distribute securities of the Trust, excluding a denial which was merely a procedural step prior to any determination by such officer, etc. and which denial was subsequently rescinded. (1) Name of officer, agency or body. None. (2) Date of denial. Not applicable. (3) Brief statement of reason given for denial. Not applicable. (b) Furnish the following information with regard to each instance where, subsequent to January 1, 1937, the authority to distribute securities of the Trust has been revoked by any federal or state governmental officer, agency or regulatory body. (1) Name of officer, agency or body. None. (2) Date of revocation. Not applicable. (3) Brief statement of reason given for revocation. Not applicable. 38. (a) Furnish a general description of the method of distribution of securities of the Trust. Plans will be sold through registered representatives of broker-dealers who are members of the National Association of Securities Dealers, Inc. and who have entered into sales agreements with the Sponsor. (b) State the substance of any current selling agreement between each principal underwriter and the Trust or the depositor, including a statement as to the inception and termination dates of the -28- agreement, any renewal and termination provisions, and any assignment provisions. The Sponsor will enter into sales agreements with the broker - dealers described above under which commissions ranging from 80% to 95% of the total Creation and Sales Charges will be paid to such broker-dealers. (c) State the substance of any current agreements or arrangements of each principal underwriter with dealers, agents, salesmen, etc. with respect to commissions and over- riding commissions, territories, franchises, qualifications and revocations. If the Trust is the issuer of periodic payment plan certificates, furnish schedules of commissions and the bases thereof. In lieu of a statement concerning schedules of commissions, such schedules of commissions may be filed as Exhibit A(3)(c). The dealer firm of record has proprietary rights to all commissions, including any service fees, earned from the Sponsor during the duration of a Plan. The dealer firm of record is under no obligation to transfer a Plan to another dealer firm as long as its dealer agreement with the Sponsor is still in effect; thus, a new dealer engaged by a Planholder may have no direct incentive to provide services with respect to the Plan. If the dealer firm of record chooses to release a Plan to a new dealer firm, the new dealer firm must first complete, sign and signature guarantee a release form that can be obtained from the Sponsor. The form must be returned and accepted by the Custodian. INFORMATION CONCERNING PRINCIPAL UNDERWRITER 39. (a) State the form of organization of each principal underwriter of securities of the Trust, the name of the state or other sovereign power under the laws of which each underwriter was organized and the date of organization. See response to Item 25. (b) State whether any principal underwriter currently distributing securities of the Trust is a member of the National Association of Securities Dealers, Inc. See response to Item 27. -29- 40. (a) Furnish the following information with respect to all fees received by each principal underwriter of the Trust from the sale of securities of the Trust and any other functions in connection therewith exercised by such underwriter in such capacity or otherwise during the period covered by the financial statements filed herewith. Not applicable. (b) Furnish the following information with respect to any fee or any participation in fees received by each principal under- writer from any underlying investment company or any affiliated person or investment adviser of such company. (1) The nature of such fee or participation. Not applicable. (2) The name of the person making payment. Not applicable. (3) The nature of the services rendered in considera- tion for such fee or participation. Not applicable. (4) The aggregate amount received during the last fiscal year covered by the financial statements filed herewith. Not applicable. 41. (a) Describe the general character of the business engaged in by each principal underwriter, including a statement as to any business other than the distribution of securities of the Trust. If a principal underwriter acts or has acted in any capacity with respect to any investment company or companies other than the Trust, state the name or names of such company or companies, their relationship, if any, to the Trust and the nature of such activities. If a principal underwriter has ceased to act in such named capacity, state the date of and the circumstances surrounding such cessation. See response to Item 27. -30- (b) Furnish as at latest practicable date the address of each branch office of each principal underwriter currently selling securities of the Trust and furnish the name and residence address of the person in charge of such office. Not applicable. (c) Furnish the number of individual salesmen of each principal underwriter through whom any of the securities of the Trust were distributed for the last fiscal year of the Trust covered by the financial statements filed herewith and furnish the aggregate amount of compensation received by such salesmen in such year. Not applicable. 42. Furnish as at latest practicable date the following information with respect to each principal underwriter currently distributing securities of the Trust and with respect to each of the officers, directors or partners of such underwriter. Not applicable. 43. Furnish, for the last fiscal year covered by the financial statements filed herewith, the amount of brokerage commissions received by any principal underwriter who is a member of a national securities exchange and who is currently distributing the securities of the Trust or effecting transactions for the Trust in the portfolio securities of the Trust. Not applicable. OFFERING PRICE OR ACQUISITION VALUATION OF SECURITIES OF THE TRUST 44. (a) Furnish the following information with respect to the method of valuation used by the Trust for the purpose of determin- ing the offering price to the public of securities issued by the Trust or the valuation of shares or interests in the underlying securities acquired by the holder of a periodic payment plan certificate: (1) The source of quotations used to determine the value of portfolio securities. (2) Whether opening, closing, bid, asked or any other price is used. -31- (3) Whether price is as of the day of sale or as of any other time. (4) A brief description of the methods used by registrant for determining other assets and liabilities including accrual for expenses and taxes (including taxes on unrealized appreciation). (5) Other items which registrant adds to the net asset value in computing offering price of its securities. (6) Whether adjustments are made for fractions: (i) before adding distributor's compensation (load); and (ii) after adding distributor's compensation (load). The response to Item 44(a) is omitted pursuant to instruction in Form N-8B-2. (b) Furnish a specimen schedule showing the components of the offering price of the Trust's securities as at the latest practicable date. Not applicable. (c) If there is any variation in the offering price of the Trust's securities to any person or classes of persons other than underwriters, state the nature and amount of such variation and indicate the person or classes of persons to whom such offering is made. See response to Item 13(d). 45. Furnish the following information with respect to any suspension of the redemption rights of the securities issued by the Trust during the three fiscal years covered by the financial statements filed herewith: (a) by whose action redemption rights were suspended. Not applicable. (b) the number of days' notice given to security holders prior to suspension of redemption rights. Not applicable. -32- (c) Reason for suspension. Not applicable. (d) Period during which suspension was in effect. Not applicable. REDEMPTION VALUATION OF SECURITIES OF THE TRUST 46. (a) Furnish the following information with respect to the method of determining the redemption or withdrawal valuation of securities issued by the Trust. (1) The source of quotations used to determine the value of portfolio securities. (2) Whether opening, closing, bid, asked or any other price is used. (3) Whether price is as of the date of sale or as of any other time. (4) A brief description of the methods used by registrant for determining other assets and liabilities including accrual for expenses and taxes (including taxes on unrealized appreciation). (5) Other items which registrant deducts from the net asset value in computing redemption value of its securities. (6) Whether adjustments are made for fractions. The response to Item 46( a ) is omitted pursuant to instruction in Form N-8B-2. (b) Furnish a specimen schedule showing the components of the redemption price to the holders of the Trust's securities as at the latest practicable date. Not applicable. -33- PURCHASE AND SALE OF INTERESTS IN UNDERLYING SECURITIES FROM AND TO SECURITY HOLDERS 47. Furnish a statement as to the procedure with respect to the maintenance of a position in the underlying securities or interests in the underlying securities, the extent and nature thereof and the person who maintains such a position. Include a description of the procedure with respect to the purchase of underlying securities or interests in the underling securities from security holders who exercise redemption or withdrawal rights and the sale of such underlying securities and interests in the underlying securities to other security holders. State whether the method of valuation of such underlying securities or interests in underlying securities differs from that set forth in Items 44 and 46. If any item of expenditure included in the determination of the valuation is not or may not actually be incurred or expended, explain the nature of such item and who may benefit from the transaction. The Trust will purchase only shares of the Fund at net asset value, as stated in Item 11. Procedures regarding the acquisition of Fund shares are described in Item 16. Relevant information under the captions "The Custodian" and "Substitution of the Underlying Investment" in the Prospectus are also incorporated herein in response to this item. V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN 48. Furnish the following information as to each trustee or Custodian of the Trust: (a) Name and principal business address. See response to Item 3. (b) Form of organization. The Custodian is a [___________]. (c) State or other sovereign power under the laws of which the trustee or Custodian was organized. [_______________________________]. (d) Name of governmental supervising or examining authority. [___________________________________________________________ ____________________________]. -34- 49. State the basis for payment of fees or expenses of the trustee or Custodian for services rendered with respect to the Trust and its securities, and the aggregate amount thereof for the last fiscal year. Indicate the person paying such fees or expenses. If any fees or expenses are prepaid, state the unearned amount. For its services to Planholders and the Trust, the Custodian is entitled to a per-Plan fee as described in the Custodian Agreement. 50. State whether the trustee or Custodian or any other person has or may create a lien on the assets of the Trust and, if so, give full particulars, outlining the substance of the provisions of any indenture or agreement with respect thereto. None. VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES 51. Furnish the following information with respect to insurance of holders of securities: (a) The name and address of the insurance company. (b) The types of policies and whether individual or group policies. (c) The types of risks insured and excluded. (d) The coverage of the policies. (e) The beneficiaries of such policies and the uses to which the proceeds of policies must be put. (f) The terms and manner of cancellation and of reinstatement. (g) The method of determining the amount of premiums to be paid by holders of securities. (h) The amount of aggregate premiums paid to the insurance company during the last fiscal year. (i) Whether any person other than the insurance company receives any part of such premiums, the name of each such person and the amounts involved, and the nature of the services rendered therefor. (j) The substance of any other material provisions of any indenture or agreement of the Trust relating to insurance. -35- Subitems 51(a) through 51(j) are not applicable. VII. POLICY OF REGISTRANT 52. (a) Furnish the substance of the provisions of any indenture or agreement with respect to the conditions upon which and the method of selection by which particular portfolio securities must or may be eliminated from assets of the Trust or must or may be replaced by other portfolio securities. If an investment adviser or other person is to be employed in connection with such selection, elimination or substitution, state the name of such person, the nature of any affiliation to the depositor, trustee or Custodian, and any principal underwriter, and the amount of remuneration to be received for such services. If any particular person is not designated in the indenture or agreement, describe briefly the method of selection of such person. The Sponsor may substitute the shares of another investment medium as the underlying investment for shares of the Fund if it deems such action to be in the best interests of Planholders. Such substituted investment generally shall be comparable in character and quality to the Fund's shares and shall be registered with the Commission under the Securities Act of 1933, as amended. Before any substitution can be effected, the Sponsor must: (A) to the extent required, obtain an order from the Commission approving such substitution under the provisions of Section 26(b) of the Act; (B) submit written notice of the proposed substitution to the Custodian; (C) submit written notice of the proposed substitution to each Planholder, giving a reasonable descrip- tion of the substituted fund shares, disclosing that unless the Plan is surrendered within 30 days of the date of mailing such notice, the Planholder will be considered to have consented to the substitution and to have agreed to bear his or her pro rata share of expenses and taxes in connection with the substitution; and (D) provide the Custodian with a signed certificate stating that the required notice has been given to Planholders. -36- If a Plan account is not surrendered within 30 days from the date of such notice, the Custodian shall purchase the shares of the substituted fund for the Plan account with the proceeds of any Plan payments received from the Planholder and any dividends or distributions which may be reinvested for the Plan. If shares of the substituted fund are also to be substituted for the Fund shares already held, the Sponsor must arrange for the Custodian to be furnished, without pay- ment of a sales charge or fees of any kind, with shares of the substituted fund having an aggregate value equal to the value of the Fund shares for which they are to be exchanged. If the Fund shares are not available for purchase for a period of 120 days or longer, and the Sponsor fails to substitute other shares, the Custodian may, but is not required to, select a substitute underlying investment or terminate the Pioneer Independence Plans. If the Custodian selects a substitute investment, it shall, to the extent required, first obtain an order from the Commission approving such substitution as specified above and then shall notify the Planholder, and if, within 30 days after mailing such notice, the Planholder gives written approval of the substitution and agrees to bear his or her pro rata share of actual expenses, including tax liability sustained by the Custodian, the Custodian may thereafter purchase such substituted shares. The Planholder's failure to give such written approval within the 30-day period shall give the Sponsor the authority to terminate the Plan. If shares of the Fund are not available for purchase for a period of 120 days or longer, and neither the Sponsor nor the Custodian substitutes other shares, the Custodian shall have authority, without further action on its part, to terminate the Plans. The underlying investment could change under certain other circumstances. For instance, the Fund could be reorganized with, or acquired by or merge with another entity, which would result in a Plan investing in the successor to any such transaction. (b) Furnish the following information with respect to each transaction involving the elimination of any underlying security during the period covered by the financial state- ments filed herewith: (1) Title of security. Not applicable. -37- (2) Date of elimination. Not applicable. (3) Reasons for elimination. Not applicable. (4) The use of the proceeds from the sale of the eliminated security. Not applicable. (5) Title of security substituted, if any. Not applicable. (6) Whether depositor, principal underwriter, trustee or Custodian or any affiliated person of the fore- going were involved in the transaction. Not applicable. (7) Compensation or remuneration received by each such person directly or indirectly as a result of the transaction. Not applicable. (c) Describe the policy of the Trust with respect to the substitution and elimination of the underlying securities of the Trust with respect to: (1) the grounds for elimination and substitution; See response to Item 52(a). (2) the type of securities which may be substituted for any underlying security; See response to Item 52(a). (3) whether the acquisition of such substituted security or securities would constitute the concentration of investment in a particular industry or group of industries or would conform to a policy of concentration of investment in a particular industry or group of industries; Not applicable. -38- (4) whether such substituted securities may be the securities of another investment company; and See response to Item 52(a). (5) the substance of the provisions of any indenture or agreement which authorize or restrict the policy of the registrant in this regard. See response to Item 52(a). (d) Furnish a description of any policy (exclusive of policies covered by paragraphs (a) and (b) herein) of the Trust which is deemed a matter of fundamental policy and which is elected to be treated as such. None. REGULATED INVESTMENT COMPANY 53. (a) State the taxable status of the Trust. The Trust itself will not pay any United States income tax. For federal income tax purposes, each Planholder is treated as directly owning the underlying Fund shares accumulated in his or her Plan account. Designated long - term capital gain distributions, which are automatically reinvested in additional Fund shares, are treated as long-term capital gains. The tax cost of the Fund shares acquired is the amount paid for those shares, including the Creation and Sales Charge. The text under the caption "Taxes" in the Prospectus is also incorporated herein in response to this item. (b) State whether the Trust qualified for the last taxable year as a regulated investment company as defined in Section 851 of the Internal Revenue Code of 1986, and state its present intention with respect to such qualifications during the current taxable year. The Trust has not completed its first taxable year end. The Trust presently intends to qualify as a regulated investment company. -39- VIII. FINANCIAL AND STATISTICAL INFORMATION 54. If the Trust is not the issuer of periodic payment plan certificates, furnish the following information with respect to each class or series of its securities: Not applicable. 55. If the Trust is the issuer of periodic payment plan certificates, a transcript of a hypothetical account shall be filed in approximately the following form on the basis of the certificate calling for the smallest amount of payments. The schedule shall cover a certificate of the type currently being sold assuming that such certificate had been sold at a date approximately ten years prior to the date of registra- tion or at the approximate date of organization of the Trust. Not applicable. 56. If the Trust is the issuer of periodic payment plan certificates, furnish by years for the period covered by the financial statements filed herewith in respect of certificates sold during such period, the following information for each fully paid type and each installation payment type of periodic payment plan certificate currently being issued by the Trust. Not applicable. 57. If the Trust is the issuer of periodic payment plan certificates, furnish by years for the period covered by the financial statements filed herewith the following information for each installment payment type of periodic payment plan certificate currently being issued by the Trust. Not applicable. 58. If the Trust is the issuer of periodic payment plan certificates, furnish the following information for each installment payment type of periodic payment plan certificate outstanding as at the latest practicable date. Not applicable. FINANCIAL STATEMENTS 59. Financial Statements of the Trust. Not applicable. -40- Financial Statements of the Depositor (see Exhibit D). Consolidated Balance Sheet at December 31, 1996 Consolidated Statement of Income for the year ended December 31, 1996 Consolidated Statement of Changes in Stockholder's Equity for the year ended December 31, 1996 Consolidated Statement of Cash Flows for the year ended December 31, 1996 Notes to Consolidated Financial Statements at December 31, 1996 Report of Independent Public Accountants at February 21, 1997 IX. EXHIBITS
EXHIBIT NUMBER DESCRIPTION A. (1) Form of Custodian Agreement between Pioneer Funds Distributor, Inc. and [____________________________________] (depositor and custodian, respectively) (2) Not applicable (3)(a) Form of Sponsorship Agreement for the registrant* (3)(b) Form of Sales Agreement between Pioneer Funds Distributor, Inc. and broker-dealers* (3)(c) Schedules of Sales Commissions (4) Not applicable (5) Not applicable (6) Certificate of incorporation and by-laws of Pioneer Funds Distributor, Inc. (7) Not applicable (8) Form of Underwriting Agreement between Pioneer Funds Distributor, Inc. and Pioneer Independence Fund (underlying security) (9) Not applicable (10) Form of investment application B. (1) Not applicable (2) Not applicable C. Not applicable D. Financial statements of Pioneer Funds Distributor, Inc. --------------------------- *To be filed by amendment.
G:\EDGAR\PERIODIC\N8B.DOC -41- SIGNATURE Pursuant to the requirements of the Investment Company Act of 1940, the depositor of the Registrant has caused this registration statement to be duly signed on behalf of the Registrant in the City of Boston and Commonwealth of Massachusetts on the 12th day of December, 1997. PIONEER INDEPENDENCE PLANS (Registrant) By: PIONEER FUNDS DISTRIBUTOR, INC. (Depositor) By: /s/ John F. Cogan, Jr. Name: John F. Cogan, Jr. Title: Chairman Attest: /s/ Joseph P. Barri Joseph P. Barri Clerk -42- EX-99.A1 2 FORM OF CUSTODIAN AGREEMENT; SPONSOR-CUSTODIAN [G:\EDGAR\PERIODIC\CUSTOGR7.RTF] CUSTODIAN AGREEMENT ------------------- BETWEEN ------- PIONEER FUNDS DISTRIBUTOR, INC. ------------------------------- AND --- [_________________________________] ----------------------------------- TABLE OF CONTENTS ----------------- PAGE ---- I. PIONEER INDEPENDENCE PLANS AND CUSTODIANSHIP...............................2 A. PIONEER INDEPENDENCE PLANS............................................2 1. NATURE OF PIONEER INDEPENDENCE PLANS............................2 2. CHANGES IN PIONEER INDEPENDENCE PLANS...........................2 B. CUSTODIAN.............................................................3 1. QUALIFICATION...................................................3 2. CUSTODIANSHIP...................................................5 3. TERMINATION OF CUSTODIANSHIP....................................5 II. CUSTODIAN'S FUNCTIONS....................................................8 A. PROCESSING OF PLANHOLDER INVESTMENTS..................................8 1. ISSUANCE OF NEW PLANS...........................................8 2. APPLICATION OF INVESTMENTS UNDER ISSUED AND OUTSTANDING PLANS...9 3. ADDITIONAL NOTICES.............................................10 4. REINVESTMENT OF DIVIDENDS......................................12 5. ADVANCE INVESTMENTS............................................12 6. EXTENDED INVESTMENT OPTION.....................................13 7. CHANGES IN FACE AMOUNT.........................................14 8. RIGHTS OF ACCUMULATION.........................................15 9. PLAN REINSTATEMENT PRIVILEGE...................................16 10. TAX-QUALIFIED RETIREMENT ACCOUNTS.............................17 11. RECORDKEEPING..................................................17 B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS, TRANSFERS, ASSIGNMENTS AND COMPLETIONS...............................18 1. GENERAL........................................................18 2. REFUND.........................................................18 3. EIGHTEEN MONTH SURRENDER.......................................19 4. PARTIAL WITHDRAWAL AND LIQUIDATION.............................20 5. SYSTEMATIC WITHDRAWAL PROGRAM..................................21 6. TRANSFER OR ASSIGNMENT.........................................22 7. TERMINATION OF PLANS...........................................22 8. COMPLETION.....................................................24 C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES..26 1. PURCHASE AND SALE OF FUND SHARES...............................26 2. MAINTENANCE....................................................29 3. STATEMENTS.....................................................30 4. VOTING OF FUND SHARES..........................................30 5. SUBSTITUTION...................................................30 6. FURNISHING OF INFORMATION......................................31 D. DUTIES...............................................................32 1. DUTIES.........................................................32 E. FEES AND CHARGES.....................................................33 1. REMUNERATION...................................................33 2. PAYMENTS TO SPONSOR............................................34 III. SPONSOR'S FUNCTION.....................................................34 A. ADMINISTRATION OF PIONEER INDEPENDENCE PLANS.........................34 1. GENERAL........................................................34 2. OPERATIONS.....................................................34 3. COMPLIANCE.....................................................34 4. INITIAL PAYMENT................................................35 5. CREATION AND SALES CHARGES.....................................35 7. PLANS IN DEFAULT...............................................36 8. PLAN CANCELLATIONS.............................................36 B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION.......................36 C. SUBSTITUTION OF THE UNDERLYING INVESTMENT............................38 1. PROCEDURE......................................................38 IV. FUNCTIONS OF SPONSOR AND CUSTODIAN......................................39 A. PLANHOLDER INQUIRIES.................................................39 V. MISCELLANEOUS............................................................40 A. ASSIGNMENT...........................................................40 B. INDEMNIFICATION BY THE SPONSOR.......................................40 C. COMMUNICATIONS.......................................................41 D. COUNTERPARTS........................................................41 E. INSPECTION...........................................................42 F. SCHEDULES............................................................42 G. AMENDMENT............................................................42 H. CONSTRUCTION.........................................................42 -ii- CUSTODIAN AGREEMENT ------------------- AGREEMENT made this _____ day of ________, 199__, between Pioneer Funds Distributor, Inc., a Massachusetts corporation with its office at 60 State Street, Boston, Massachusetts (hereinafter called the "Sponsor") and [____ ____________________________], a [_________________________] having an office at [_________________], [____], [___________] (hereinafter called the "Custodian"). WITNESSETH: WHEREAS, the Sponsor is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (hereinafter, the "1934 Act"), is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD") and was formed to sell investment company products to other registered broker-dealers; and WHEREAS, Pioneer Independence Plans is a unit investment trust registered under the Investment Company Act of 1940, as amended (the "1940 Act"), providing for the accumulation of shares of Pioneer Independence Fund (the "Fund"); and WHEREAS, the Fund is a Delaware business trust registered as an open-end management investment company under the 1940 Act; and WHEREAS, the Sponsor desires to obtain the services of the Custodian in connection with the administration of Pioneer Independence Plans providing for investment in shares of the Fund or shares of other open-end management investment companies as herein provided; NOW, THEREFORE, in consideration of their mutual covenants herein set forth, the parties hereto agree as follows: I. PIONEER INDEPENDENCE PLANS AND CUSTODIANSHIP A. PIONEER INDEPENDENCE PLANS. 1. NATURE OF PIONEER INDEPENDENCE PLANS. The Sponsor intends to offer Pioneer Independence Plans for the accumulation of shares of the Fund (all such shares being hereinafter called the "Fund Shares"), or any other shares substituted therefor, under the terms of Pioneer Independence Plans . Holders of each Pioneer Independence Plan (a "Plan") issued under Pioneer Independence Plans are hereinafter called "Planholders." Issuance and transfer of the Plans will be by book entry only. 2. CHANGES IN PIONEER INDEPENDENCE PLANS. Each Plan shall be governed by the terms and conditions set forth in the prospectus for such Plan in effect at the time such Plan was issued (the "Prospectus"). Pioneer Independence Plans are subject to such changes in form and content as the Sponsor may effect from time to time. No changes in the terms and conditions of any previously issued and outstanding Plan which will adversely affect any material right of a Planholder thereof may be made without notice to, and consent of, the Planholder. Any such changes in Pioneer Independence Plans affecting the implementation of the provisions of this Agreement shall be acknowledged by the Sponsor and the Custodian. The Sponsor or Custodian may substitute other shares for Fund Shares on the conditions provided in Sections II(C)(5) and III(C) below. -2- B. CUSTODIAN. 1. QUALIFICATION. a. The Custodian and any successor Custodian shall be a bank or trust company, as defined under the 1940 Act, having at all times an aggregate capital, surplus and undivided profits in excess of $2,000,000. The Custodian covenants that it has now, and agrees that so long as it acts as Custodian under any Plan it shall continue to have, such qualifications. b. All monies received by the Custodian under or pursuant to any provision of this Agreement or any Plan or other instrument referred to herein shall be held by the Custodian as a deposit for the purposes for which they were paid or are held, and the Custodian shall not be under any liability for interest on any such monies, except such as it may agree to pay thereon. c. The Custodian shall be obligated to perform such duties and only such duties as are specifically set forth in this Agreement and the Prospectus, and no implied obligations shall be read into this Agreement or the Prospectus against the Custodian, and in the absence of bad faith on its part, the Custodian may conclusively rely, as to the truth of the statements and the correctness of the representations made therein, upon any instruments, certificates, opinions or other writings furnished to the Custodian and conforming to the requirements hereof. The Custodian shall not be responsible in any manner whatsoever for the correctness of the covenants of the Custodian herein, or recitals -3- in the Prospectus made solely by the Sponsor. The Custodian makes no representations as to the Prospectus or the securities issued in connection therewith, or the validity thereof, and the Custodian shall incur no liability or responsibility with respect to any such matters. The Custodian shall not be responsible for any actions or inactions of, and may rely on information, records, documents or services (including functions performed by the Sponsor under Section II. (D)(1)(h) of this Agreement) that have been taken or have failed to be taken, prepared, maintained or performed by, the Sponsor or any other person authorized by the Sponsor on behalf of the Custodian, the Sponsor or Pioneer Independence Plans. d. The Custodian may, at the same time it acts hereunder, act in any one or more of the following capacities: as registrar, transfer agent and custodian for the issuer of Fund Shares, as agent for the parties or for the Planholders or the Sponsor, or the issuer of Fund Shares, and in other capacities customary for banks on behalf of these persons and of others dealing with them. e. The Custodian may consult with legal counsel to be selected with reasonable care by the Custodian (who may be counsel to the Sponsor) and the Custodian shall not be liable for any action taken, omitted or suffered by it in good faith in accordance with the advice of such counsel. Whenever in the performance of its duties hereunder the Custodian shall deem it necessary or desirable, a matter may be proved or established by a certificate signed by any two officers of the Sponsor and delivered to the Custodian, and such certificate shall be fully warranted to the Custodian for any action taken, suffered or omitted by or in reliance thereon. The Custodian may, in the absence of bad faith on its -4- part, rely and shall be protected in acting upon any request, letter or transmittal, certificate, opinion of counsel, statement, instrument, report, notice, consent, order, Plan or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties. The Custodian shall be liable for its willful misconduct or negligence. 2. CUSTODIANSHIP. The Custodian accepts the custodianship hereunder with respect to Plans issued after the date of this Agreement and shall continue custodianship on the terms and conditions set forth in this Agreement and in the Prospectus applicable to such Plans, provided that the Custodian may require the Sponsor to furnish the following items to the Custodian as a condition to accepting custodianship with respect to a Plan: a. Evidence satisfactory to the Custodian that the Sponsor has taken all necessary action to satisfy the requirements of the Securities Act of 1933, as amended (the "1933 Act") and the 1940 Act in connection with the offer and issuance of the Plans; that the Sponsor is registered as a broker-dealer under the 1934 Act and is a member in good standing of the NASD; that the Fund Shares are the subject of a currently effective registration statement under the 1933 Act; and that the Sponsor has complied with all other federal and state regulatory requirements respecting the offer and issuance of the Plans. b. Such additional documents, certificates and opinions as the Custodian may reasonably require. 3. TERMINATION OF CUSTODIANSHIP. -5- a. Replacement of Custodian by Sponsor; Assumption of Administrative Functions by Sponsor (Existing Plans and/or New Plans). The Sponsor shall have the right, upon at least 90 days' written notice to the Custodian, to substitute, as custodian, both under Pioneer Independence Plans issued and still in force and/or under any Pioneer Independence Plans issued thereafter, whether such Pioneer Independence Plans are otherwise identical with that issued under this Agreement or not, any other bank or trust company having the qualifications prescribed in Section I(B)(1)(a) above. The Sponsor shall further have the right, by giving written notice to the Custodian 90 days prior to the event, to assume such administrative functions with respect to Pioneer Independence Plans as may be mutually agreed by the Sponsor and the Custodian. Upon such termination, the Sponsor shall bear the cost of all reasonable out-of-pocket expenses associated with the movement of materials and records. Additionally, the Custodian reserves the right to charge for any other reasonable expenses associated with such termination, provided that the Custodian advises the Sponsor of such additional charges in advance. b. RESIGNATION BY CUSTODIAN (EXISTING PLANS AND/OR NEW PLANS). The Custodian shall have the right to resign as custodian under any existing Plan at any time but only if either: (a) the securities and other property in which the funds of the Planholders are invested have been completely liquidated and the proceeds of such liquidation have been distributed to the Planholders; or (b) a successor custodian, meeting with the approval of the Sponsor and having the qualifications prescribed in Section -6- I(B)(1)(a) above, has been designated by the resigning Custodian or the Sponsor and the successor custodian has accepted such custodianship. Notwithstanding the above, the Custodian shall have the right, upon at least 90 days' written notice to the Sponsor, to terminate its obligation to accept any new Pioneer Independence Plans for custodianship hereunder In addition, the obligation of the Custodian to accept any new Pioneer Independence Plans for custodianship hereunder shall terminate if the Sponsor: (1) fails to maintain an effective registration statement under the 1933 Act covering the issuance of Pioneer Independence Plans; (2) fails to cause the requirements of the 1940 Act to remain satisfied in connection with the issuance of Pioneer Independence Plans; (3) has its membership in the NASD or its registration as a broker-dealer under the 1934 Act canceled, revoked or suspended for more than 120 days for any cause involving failure on the part of an executive officer or director of the Sponsor to follow ethical standards or serious neglect of his or her duty to require representatives to follow such standards; or (4) defaults in the performance of any other duty, covenant or agreement contained in this Agreement and such default shall remain unremedied for 30 days after written notice thereof shall have been given to the Sponsor by the Custodian (except with respect to item (3), for which such remedy period shall be 120 days). c. RECORDS. In connection with any termination of custodian- ship, the Custodian shall furnish such records and other information as the Sponsor and any -7- successor custodian reasonably believe to be necessary or appropriate to effect the termination. II. CUSTODIAN'S FUNCTIONS A. PROCESSING OF PLANHOLDER INVESTMENTS. 1. ISSUANCE OF NEW PLANS. Upon receipt by the Custodian or its agent of: (1) an application for a Plan (a "Plan Application") in a form designated by the Sponsor, and (2) a check or other order for the payment of money representing the initial investment under a Plan by the Planholder thereof, the Custodian shall: a. Establish a Plan account ("Plan Account") for such Planholder that reflects the face amount of the new Plan; b. Forward for collection such check or other order for the payment of money as hereinafter provided in Section (II)(2)(a); and c. Forward to the Planholder by first-class mail, the Custodian's letter of transmittal and notice conforming to the requirements of Section 27(f) of the 1940 Act, Rule 27f-1 thereunder (or any successor rule) and as described in the Prospectus, such other explanatory information or communication to the Planholders as may be furnished by the Sponsor, and forward to the Planholder or, if requested by the Sponsor, to the Sponsor for forwarding to the Planholder, by first - class mail any notice of the right of refund or surrender, as provided in Sections II(B)(2), (3) and (4) below. Such forms of notice shall be approved in writing by the Sponsor. -8- 2. APPLICATION OF INVESTMENTS UNDER ISSUED AND OUTSTANDING PLANS. Upon receipt by the Custodian or its agent of any Plan investment that is made in accordance with the applicable Prospectus, including any investment being made pursuant to an extended investment option, the Custodian shall: a. Forward for collection any check or other order for the payment of money representing such investment. In the event that any check or other order for the payment of money received by the Custodian from a Planholder is returned unpaid for any reason, the Sponsor agrees that the amount thereof shall be forthwith charged by the Custodian to the Plan Account of the Planholder with the Custodian. The Custodian shall forthwith place a stop order against the Fund Shares purchased with the amount so charged and held in the Plan Account of the Planholder, and such Fund Shares shall thereafter be held by the Custodian for the account of the Sponsor and subject to its instructions including, but not limited to, any instructions by the Sponsor to redeem the Fund Shares purchased with such check or other order for payment of money. The Custodian shall notify the Planholder of any such returned check and send a copy of such notice together with the returned check to the Sponsor (if the returned item is an order for payment of money, the Custodian shall send the notification of the unpaid order). The Custodian shall impose a fee for any such returned checks or orders in accordance with the terms of the Plan Prospectus. b. Deduct from the payment the amount of any applicable original issue, stock transfer, sales or other taxes and apply such amounts to the purchase of the necessary tax stamps or to payments to the proper taxing authorities, as the case may be. -9- c. Deduct therefrom the applicable fees of the Sponsor and the Custodian as set forth in Schedules A and B to this Agreement applicable to such Plan. Such deductions shall be credited to the Sponsor or the Custodian, as the case may be. d. Apply, within two business days unless impracticable, the balance of the investment to the purchase of Fund Shares, at net asset value next determined (to be computed to two decimal places) after receipt of the investment in good order, and credit the Plan Account with the number of Fund Shares so purchased. e. Prepare and mail to the Planholder a receipt in a form to be approved by the Sponsor, and which complies as to form and delivery with the requirements of Rule 10b-10 of the 1934 Act (or any successor rule), and which receipt shall show the following: the Plan account number; the amount of the investment received; the date of receipt; the front-end sales load (the "Creation and Sales Charge") deducted, if applicable; the price paid per Fund Share; the number of full and fractional Fund Shares purchased after the deductions; the total number of Fund Shares then held by the Custodian for the Planholder; and the due date of the Planholder's next investment. The receipt of the purchase of Fund Shares shall be mailed promptly by the Custodian to the Planholder, and to the Planholder's investment dealer. 3. ADDITIONAL NOTICES. a. REMINDER NOTICES. The Custodian shall mail to each Plan- holder who has not elected an automatic investment option prior to the Planholder's investment date a -10- remittance form and, unless otherwise agreed to, a return envelope to be used with the Planholder's next investment. Such form of notice shall be approved in writing by the Sponsor. b. PAST DUE INVESTMENT NOTICES. On a periodic basis as agreed to from time to time by the Custodian and the Sponsor, the Custodian shall prepare and mail to the Planholder a notice of past due investment in accordance with the Prospectus and applicable law. Such form shall be approved in writing by the Sponsor. The Custodian shall provide to the selling broker-dealer, or in the absence of such, the Sponsor, a duplicate of each such notice sent to any Planholder. c. REFUND NOTICES. The Custodian shall also mail to each Planholder any notice(s) required by Section 27(e) of the 1940 Act and Rule 27e-1 thereunder (or any successor rule) and shall be in accordance with the terms and conditions of the Prospectus. Such form of notice shall be approved in writing by the Sponsor. d. TERMINATION NOTICES. In the event that a Plan is being terminated by the Sponsor or the Custodian in accordance with the terms of the Prospectus and this Agreement, the Custodian shall also mail or deliver to the affected Planholder a notice of termination. The Custodian will provide the selling broker-dealer or, in the absence of such, the Sponsor with a duplicate of each such notice sent to any Planholder. Such form of notice shall be approved in writing by the Sponsor. -11- e. OTHER NOTICES. The Custodian shall also mail or deliver to each Planholder any other notices required by any applicable federal or state law, rule or regulation, in such form and by such means as are required under such law, rule or regulation. The form of any such notice shall be approved in writing by the Sponsor. 4. REINVESTMENT OF DIVIDENDS. The Custodian shall reinvest all dividends and capital gain distributions received on the Fund Shares held by it as Custodian for each Planholder, after deduction therefrom the applicable fees set forth in the attached Schedules and/or specified in the Prospectus, and any applicable taxes required by law or elected by a Planholder to be withheld, in accordance with the terms of the Prospectus, in Fund Shares on the dividend payment date, at the net asset value, determined on that date, as provided in Section II(C)(1) below, unless the Planholder has instructed the Custodian, in writing, at least seven days prior to the record date, to pay the dividends or distributions in cash directly to the Planholder. 5. ADVANCE INVESTMENTS. A Planholder may complete his or her Plan ahead of schedule by making one or more Plan investments in advance of their due dates, but only in accordance with the terms and conditions of the applicable Prospectus. Advance investments shall be first applied to satisfy the obligation of the Planholder to pay for his or her next succeeding Plan investment or investments. Thereafter, the Custodian shall, unless timely advised to the contrary by the Sponsor, invest the balance of any advance investment, after authorized deductions, in additional Fund Shares as of the close of business on the business day that such accelerated investment is received. The Custodian shall, if so instructed by the Sponsor, redeem all or a portion of the Fund Shares purchased with such advance investment and remit the proceeds -12- of such redemption to the Planholder. There is no reduction in the Creation and Sales Charges for advance investments. Advance investments do not accelerate in any way the due dates of unpaid Plan investments; such unpaid investments will be considered to be due on that date on which they would have originally been required if all prior Plan investments (whether or not in fact made in advance) had been made when respectively due. Upon receipt by the Custodian of a permissible advance investment by any Planholder, the Custodian shall: a. Process the investment as provided in Section II (A) (2) above. b. Apply the balance of the investment to the next succeeding monthly Plan investment or investments in the order due under the Plan. 6. EXTENDED INVESTMENT OPTION. A Planholder who owns any completed Plan may make additional investments, without completing a new Plan Application, thereby activating the extended investment option, subject to deductions in accordance with the terms and conditions of the applicable Prospectus. The Planholder must make the 181st investment within the six-month period, unless such limitation has been waived by the Sponsor, after the 180th investment date in order to activate the extended investment option; failure of a Planholder to make the 181st investment within such six-month period after being credited for any advance investments made under the option will result in the Planholder's forfeiture of his or her right to make additional investments under the extended investment option, and the Plan will be considered to have been completed. In addition, failure of a Planholder, during the extended investment option period, to make any investment during any six-month period (after any credit for any accelerated investment) -13- may result in the Planholder's forfeiture of his or her right to make any investments under the extended investment option, and the Plan will be considered to have been completed. All Plans exercising the extended investment option shall terminate after the 300th investment made under the Plan. 7. CHANGES IN FACE AMOUNT. A Planholder may change the Plan face amount initially selected upon issuance of a Plan to a new Plan face amount offered by the Sponsor, but only in accordance with the terms and conditions of the applicable Prospectus. Plans are only available in face amounts offered by the Sponsor, as set forth in the Prospectus. If such a change in the Plan face amount is approved by the Sponsor, the Custodian shall make appropriate changes to the Planholder's Account. Changes in the face amount of a Plan shall be implemented by the Custodian only upon receipt of: a. written instructions from the Planholder, Sponsor or selling broker-dealer, as applicable, as to the increase or decrease in Plan face amount, which instructions shall set forth the Plan Account number and registration, the face amount of the new Plan, the amount of each monthly investment under the new Plan, the number of Plan investments which are to be credited to the new Plan, and the amount, if any, of the adjustment in Creation and Sales Charges resulting from the change in Plan face amount, which adjustment shall be effected at the time of the issuance of the new Plan, and such other information as may be reasonably requested by the Custodian. Such adjustment shall be in accordance with the terms of the applicable Prospectus and shall be effective concurrently -14- with the change in Plan face amount, I.E., at the time the Plan is adjusted to reflect the new face amount; b. in the case of an increase in a Plan face amount, payment by check or other order for the payment of money in the amount of the first Plan investment to be made under the increased face amount for the Plan, as specified in the applicable Prospectus, unless such investment is reduced or waived by the Sponsor; c. if the total investments made on the original Plan are not an integral multiple of the monthly Plan investments required on the amended Plan, a check or other order for the payment of money in the sum that is required by the Sponsor to enable the remaining monthly investments (after giving credit for investments already made) to equal the face amount of the amended Plan. 8. RIGHTS OF ACCUMULATION. A Planholder may accumulate Plans for reduced Creation and Sales Charges, but only in accordance with the terms and conditions of the applicable Prospectus. The face amounts of two or more Plans purchased at one time by "any person," as defined in the applicable Prospectus may be combined to take advantage of the lower Creation and Sales Charges available on larger purchases. In addition, a Planholder purchasing any new Plan or increasing the face amount of any existing Plan(s) may qualify for a reduced Creation and Sales -15- Charge on the new Plan by combining the face amount of the new Plan with the face amounts of existing Plans on which Plan investments due are current and/or with the current value of assets held in accounts in other Pioneer mutual funds for which Pioneering Management Corporation or one of its affiliates serves as investment adviser. To qualify for the reduced Creation and Sales Charges, all of the Plan Applications for the new Plans involved must be submitted to the Sponsor at the same time together with a request in writing that the face amounts of such Plans and/or asset values of such Pioneer mutual fund accounts be cumulated for the purpose of determining the applicable Creation and Sales Charge for the new Plan. If such a reduction in the Creation and Sales charge is approved by the Sponsor, the Custodian shall make appropriate changes to the Planholder's Account. In the event investments in one or more of such Plans are discontinued, the remaining Creation and Sales Charge will be changed to reflect the charges applicable to the Plan that is still in effect. The face amounts of any Plans which have been completed (and not liquidated) or on which investments are current may be aggregated with the face amount of a Plan being purchased by "any person" to ascertain the Creation and Sales Charge applicable to the Plan being purchased. To qualify for a reduced Creation and Sales Charge, the Sponsor must be notified by the dealer or the Planholder at the time of placing the order that the Planholder qualifies for the reduced Creation and Sales Charge. If such a reduction in the Creation and Sales charge is approved by the Sponsor, the Custodian shall make appropriate changes to the Planholder's Account. 9. PLAN REINSTATEMENT PRIVILEGE. A Planholder who has terminated his or her Plan may exercise a Plan reinstatement or replacement provision, which provides for reinvestment of a specified amount in the Plan, but only in accordance with the terms and conditions of the applicable Prospectus. If the Plan reinstatement privilege is exercised, neither the total number of monthly Plan investments to be made nor the unpaid balance of monthly Plan investments due under the Plan will be affected. Any such reinstatement or replacement order received by the -16- Custodian or its agent shall be processed by the Custodian and credited for the Plan Account of such Planholder in accordance with the terms and conditions of the applicable Prospectus, this Agreement and the 1940 Act. 10. TAX-QUALIFIED RETIREMENT ACCOUNTS. A Plan may be used by qualified individuals who wish to establish Plan Accounts for tax-qualified retirement plans or by an individual who wishes to register a Plan as an Individual Retirement Account (an "IRA"). 11. RECORDKEEPING. The Custodian will prepare and maintain complete up-to-date records of the performance of its duties hereunder, on magnetic media or otherwise, including records showing a separate Plan Account for each Planholder, and the name and address of the Planholder; the number, date and amount of each investment made by the Planholder; the date and amount of all dividends and distributions received by the Custodian on Fund Shares held for the account of the Planholder; any amounts withheld from withdrawals under a Plan in accordance with the Internal Revenue Code of 1986, as amended, and any regulations thereunder (or successor regulations); and all deductions made and the number of Fund Shares acquired and held by the Custodian for the account of the Planholder. These records shall be maintained and preserved in accordance with applicable requirements of Section 31 of the 1940 Act and rules thereunder (or any successor rule), and in accordance with state securities laws ("Blue Sky laws") applicable to records kept with regard to the Plans. Such records shall be made available to the Sponsor for inspection or audit via magnetic media or at the office of the Custodian at all reasonable times. -17- B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS, TRANSFERS, ASSIGNMENTS, TERMINATIONS AND COMPLETIONS. 1. GENERAL. The Custodian shall liquidate Fund Shares in a Planholder's Plan Account, as provided in Section II(C)(1) below, and pay the proceeds, plus additional amounts, if any, to the Planholder within the time set forth in the applicable Prospectus. The Sponsor shall not suspend redemption or postpone payment of redemption proceeds more than seven days after such date of receipt, except during any period when: (a) the New York Stock Exchange, Inc. (the "Exchange") is closed, other than for customary weekends and holidays; (b) trading on the Exchange is restricted; (c) 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 (d) the Securities and Exchange Commission, by order, so permits. 2. REFUND. A Planholder has the right for 45 days to surrender his or her Plan in accordance with Section 27 of the 1940 Act and the terms and conditions of the applicable Prospectus. Upon surrender the Custodian will accept the return of the Plan and the Planholder will receive a refund of all charges deducted from his or her Plan investments and the net asset value of the Fund Shares held in his or her Plan Account at the time. The 45-day period shall run from the date on which the Planholder is mailed a notice (described in Section II(A)(1)(c) above) of his or her refund rights, a statement of charges to be deducted from projected investments, and a form for exercising the refund right, which information shall be mailed by the Custodian within 60 days after the issuance of the Plan, to the date of receipt of the Plan by the Sponsor. The -18- Custodian shall inform the selling broker-dealer or, in the absence of such, the Sponsor in the event such refund procedures are initiated with respect to any Planholder Account. 3. EIGHTEEN MONTH SURRENDER. A Planholder has the privilege for 18 months to surrender his or her Plan, but only in accordance with Section 27 of the 1940 Act and the terms and conditions of the applicable Prospectus. Upon surrender, the Planholder will receive a payment in an amount that is the sum of: (1) the net asset value of the Fund Shares held in his or her Plan Account at the time; and (2) a refund of the amount by which the Creation and Sales Charges deducted from Plan investments exceed 15% of the Plan investments made up to the date of the surrender of the Plan. In the event the Plan is surrendered, the Custodian shall liquidate Fund Shares and pay the proceeds to the Planholder who has exercised the foregoing privilege. Any excess Creation and Sales Charge amount due the Planholder shall be paid to the Custodian by the Sponsor for refund to the Planholder. The Planholder shall not be entitled to be refunded any Custodian fees previously paid. The 18-month period shall run from the date on which the Plan is issued. The Planholder must request a refund in writing. The request must be signed by the Planholder and be addressed to the Custodian. A cancellation request involving a Plan Account with a current asset value of $100,000 or more (or any other amount specified in the applicable Plan Prospectus) will require a signature guarantee for all Planholders by an acceptable guarantor as described in the Prospectus or as shall otherwise be approved by the Custodian and Sponsor (hereinafter referred to as an "Approved Guarantor"). The Custodian will send to the Planholder a notice (described in Section II(A)(1)(c) above) within 30 days following the expiration of 15 months after the date of the issuance of a Plan if the Planholder has missed three Plan investments or more. The Custodian will also send to the Planholder a notice prior to the -19- expiration of the 18-month period described above if the Planholder has missed one Plan investment or more after the expiration of the 15-month period but prior to the expiration of the 18-month period. (If the Custodian has already sent a notice at 15 months, a second notice will not be required even if additional investments are missed.) These notices will inform the Planholder of the Planholder's rights of cancellation as set forth above, of the value of the Plan at the time the notice is sent and of the amount to which the Planholder is entitled. The Custodian shall inform the selling broker-dealer or, in the absence of such, the Sponsor, in the event such refund procedures are initiated with respect to any Planholder Account. 4. PARTIAL WITHDRAWAL AND LIQUIDATION. A Planholder may make a partial cash withdrawal from his or her Plan Account, but only in accordance with the terms and conditions of the applicable Prospectus. The holder of a Plan which has been established for at least 45 days may withdraw or liquidate part of the Fund Shares held in his or her Plan account without terminating the Plan, subject to the following: a. The Planholder making a partial withdrawal of his or her Fund Shares may direct the Custodian to transfer the Fund Shares held in the Plan Account registered in his or her name to an identically registered Pioneer Independence Fund account. Following a partial withdrawal, the Planholder may, at any time prior to the termination of the Plan under which his or her Plan Account was established, redeposit the same number of Fund Shares. b. A Planholder may also partially liquidate by directing the Custodian, as Planholder's agent, to sell or redeem part of the Fund Shares held in his or her Plan -20- Account and to forward the net proceeds to the Plan- holder. Following a partial liquidation, the Planholder may, at any time prior to the termination of the Plan under which his or her Plan Account was established, redeposit an amount equal to the net proceeds withdrawn and have the Custodian purchase Fund Shares at net asset value for his or her Plan Account as provided in Section II(C)(1) below. Cash must be redeposited for cash received on liquidation. Any such request for a withdrawal received by the Custodian or its agent shall be processed by the Custodian, and proceeds shall be payable by the Custodian to such Planholder, in accordance with the terms and conditions of the applicable Prospectus and the 1940 Act. Following a partial cash withdrawal, a Planholder is permitted to exercise a restoration or replacement privilege with respect to such withdrawal if and to the extent such restoration or replacement is provided for in the applicable Prospectus. Upon receipt by the Custodian or its agent of any investment identified by the Planholder as being a replacement or restoration of a partial withdrawal for the account of a Planholder and that is made in accordance with the applicable Prospectus, the Custodian will process and credit such payment to the Plan Account in accordance with this Agreement, the applicable Prospectus, and the 1940 Act. 5. SYSTEMATIC WITHDRAWAL PROGRAM. A Planholder may elect to establish a systematic withdrawal program, after the Planholder has completed all regularly scheduled Plan investments or from an incomplete Plan if the withdrawals are to be taken from a Plan that is part of an IRA and the Planholder has reached age 59 1/2, but only in accordance with the terms and conditions of the -21- applicable Prospectus. Under a systematic withdrawal program, the Planholder can elect to receive monthly or quarterly payments in any amount of $50 or more. To provide funds for payments to be made under a systematic withdrawal program, the Custodian, as agent for the Planholder, will redeem Fund Shares held in the Planholder's Plan Account at the net asset value in effect at the time of each such redemption. All systematic withdrawal program transactions will be made as of the end of the day specified for the withdrawal by the Planholder (or, if such day is not a business day, the first business day after that date). The Planholder may change the amount of payments under a systematic withdrawal program or discontinue the program at any time. While a systematic withdrawal program is in effect, the Planholder may not elect to receive dividends and distributions on Fund Shares held in his or her Plan account in cash. 6. TRANSFER OR ASSIGNMENT. A Planholder may make a transfer or assignment of his or her right, title, and interest in the entire plan, but only in accordance with the terms and conditions of applicable Prospectus. Any such request for a transfer or assignment received by the Custodian or its agent shall be recorded by the Custodian in accordance with the terms and conditions of the applicable Prospectus until the assignee shall have notified the Custodian that the transfer or assignment has terminated. The terms of any such transfer or assignment shall be subject to the applicable Prospectus. During the term of the transfer or assignment, such Planholder shall retain those rights specified in applicable Prospectus. 7. TERMINATION OF PLANS. Plans may be terminated only in accordance with the terms and conditions of the applicable Prospectus. Plans may be terminated under the following circumstances: -22- a. TERMINATION BY PLANHOLDER. A Planholder may at any time terminate his or her Plan by surrendering the Plan to the Custodian, but only in accordance with the terms and conditions of the applicable Prospectus. b. TERMINATION BY SPONSOR OR CUSTODIAN. Neither the Sponsor nor the Custodian may terminate a Plan until such time as is specified in the applicable Prospectus, unless and to the extent that conditions specified in the Prospectus applicable to such Plan and permitting such termination have been satisfied. If a Plan is in a state of default or delinquency, as defined in the applicable Prospectus, either the Sponsor or the Custodian may terminate such Plan in the manner provided in such Prospectus. c. TERMINATION UNDER OTHER CIRCUMSTANCES. Pioneer Independence Plans shall be terminated if Fund Shares cannot be purchased for more than 120 days, and neither the Sponsor nor the Custodian substitutes another investment medium as provided in Sections II(C)(5) and III(C), below. If a Planholder fails to consent to a substitution by the Custodian pursuant to Section II(C)(5)(b), below, the Custodian may consider the Plan terminated. d. PLAN TERMINATION PROCEDURES. In connection with the termination of any Plan in accordance with the provisions of the applicable Prospectus and this Agreement, the Custodian will furnish the Planholder and the Sponsor with a notice of termination showing all changes in such Planholder's Plan Account since the date of the last previous statement issued by the Custodian, and the Planholder shall thereafter have no further claim against the Custodian, except as may be set forth in such statement, and shall not be -23- entitled to any further accounting. In the event of termination of a Plan, liquidation of the Plan Account and final payment to the Plan- holder shall be effected by the Custodian in accordance with the applicable Prospectus. 8. COMPLETION. The options described below are available for the disposition of the Fund Shares from a completed Plan. If the disposition of Fund Shares is such that all of the Fund Shares held in a Plan are transferred or liquidated, the Planholder shall be deemed to have no further rights under the Plan, except in accordance with the terms of the applicable Prospectus. a. The Planholder may elect to have the Custodian hold the Fund Shares for 15 years from the date of issuance of the Plan, plus an additional 10 years, and neither the Custodian nor the Sponsor may terminate the custodianship except in accordance with the terms of the applicable Prospectus; b. The Planholder may elect to have the Fund Shares held in his or her Plan Account transferred to a Pioneer Independence Fund account registered in the Planholder's name, at which time the Planholder will be deemed to have no further rights under the Plan except as described in the applicable Prospectus; c. The Planholder may elect to have the Fund Shares in his or her Plan Account redeemed and the cash proceeds paid to the Planholder directly; or d. The Planholder may elect to have the Fund Shares in his or her Plan Account redeemed in accordance with the systematic withdrawal program established in -24- connection with the Plan on a monthly or quarterly basis in amounts of $50 or more and have the cash proceeds paid to the Planholder directly. The Custodian and the Sponsor agree that no Plan may be terminated by the Sponsor or the Custodian for a period of 15 years from the date of issue so long as the Planholder continues to make investments in accordance with the terms of the applicable Prospectus. After expiration of 15 years from the date of issue of the Plan, or after the 300th investment if the Planholder has exercised the option to extend the custodianship, the Custodian shall include with the next to last confirmation statement a notice to the Planholder advising the Planholder to exercise the privilege of complete withdrawal within 60 days. In the event of the Planholder's failure to exercise the privilege of complete withdrawal, the Custodian in its discretion may, as agent for the Planholder, (a) surrender for liquidation all Fund Shares in the Planholder's Plan Account or (b) redeem sufficient Fund Shares to pay all authorized deductions. The remaining Fund Shares and/or cash (after payment all authorized deductions), will be held by the Custodian for delivery to the Planholder. Upon surrender of the Plan to the Custodian, the Custodian will deliver to the Planholder a confirmation statement for his or her full Fund Shares after transferring such Fund Shares to a Pioneer Independence Fund account registered in the name of the Planholder and any balance of cash, or if all Fund Shares have been sold, the net redemption proceeds less any additional authorized deductions. No interest shall be payable upon any funds held by the Custodian pending the surrender of the Plan. If the Planholder fails to surrender the Plan for a period of 60 days after the sending of the termination notice, the Custodian in its discretion, acting as agent for the Planholder, may mail to -25- the Planholder a check for all cash standing to the Planholder's credit and surrender for liquidation such Fund Shares, if any, held in the Planholder's Plan Account, and the Planholder will be deemed to have no further rights under the Plan. In the event a check and/or a confirmation statement for Fund Shares cannot be delivered to the Planholder as described above, the Custodian shall hold the cash or the Fund Shares in trust subject only to the escheatment laws. C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES. 1. PURCHASE AND SALE OF FUND SHARES. a. Purchases and sales of Fund Shares by the Custodian pursuant to this Agreement shall be made in accordance with applicable law, the Prospectus, the Fund's Prospectus and the Sponsor's Distribution Agreement with the Fund. b. All purchases of Fund Shares by the Custodian pursuant to the provisions of this Agreement shall be made from the Fund, or its issuing agent (or any underwriter of Fund Shares with which the Sponsor may contract for such purpose) at the net asset value of the Fund next determined after the time of purchase as calculated by Pioneering Management Corporation (or any successor thereto) in accordance with the terms of the Fund's then current Prospectus. The Custodian shall be entitled to presume conclusively that the price so set with respect to any Fund Shares purchased by the Custodian is said net asset value. -26- c. Funds received by the Custodian to be applied to the purchase of Fund Shares at the net asset value per share determined as described in Section II(C)(1)(a) shall, unless impracticable, be applied to such purchase within two business days after the receipt by the Custodian of said investments payments, dividends or distributions. d. All sales of Fund Shares by the Custodian, as agent, pursuant to the provisions of this Agreement, shall be made by deposit of the Fund Shares with the Fund or its duly authorized agent together with a request that the Fund Shares be repurchased at the net asset value of the Fund next determined after receipt of a proper redemption request as calculated by Pioneering Management Corporation (or any successor thereto) in accordance with the terms of the Fund's then current Prospectus, so long as the privilege of redemption at net asset value is available to holders of Fund Shares as set forth in the Fund's then current Prospectus. Whenever, pursuant to the provisions of this Agreement, Fund Shares are to be sold or redeemed, the Custodian shall first withdraw the Fund Shares from the custodianship hereunder and, as agent for the Planholder, shall sell or redeem said Fund Shares by depositing them for repurchase as set forth above. Anything herein to the contrary notwithstanding, (i) the Custodian, as agent for the Planholders, is authorized to offset sales and purchases for all of the Planholders on a business day and, accordingly, to place with the Fund or its agent a net purchase order for the excess of purchases over sales, or a net sale order for the excess of sales over purchases; and (ii) any such sales of Fund Shares in connection with a Plan termination, a withdrawal of Fund Shares by a Planholder, or an exercise of an exchange privilege by a Planholder, shall be effected by the Custodian in accordance with the terms and conditions of the applicable Prospectus. -27- e. Issuance and transfer of Fund Shares will be by book entry only. f. The Fund shall make the net asset value per share for Fund Shares available to the Custodian as soon as reasonably practicable after the net asset value per share is calculated and shall use its best efforts to make such net asset value per share available by 7 p.m. Boston time each Business Day. For the purposes of this section of the Agreement, "Business Day" shall mean any day on which the Exchange is open for regular trading and on which the Fund calculates its net asset value pursuant to the rules of the Securities and Exchange Commission. g. Fund shall furnish notice as soon as reasonably practicable (by wire or telephone, followed by written confirmation) to the Custodian of any income, dividends, or capital gain distributions payable on Fund Shares. Consistent with the foregoing, the Custodian shall enter a gross purchase and sale order for full and fractional Fund Shares (in two decimal places) at the net asset value next determined for all Planholder requests to invest in, transfer or redeem Fund Shares under Pioneer Independence Plans which, pursuant to the terms and conditions of the Prospectus, the Custodian received in good order prior to the close of trading on the Exchange, normally 4 p.m. Boston time. Such orders shall be forwarded to the Fund by 11 a.m. Boston time on the next following Business Day. The Custodian shall pay for Fund Shares on the same Business Day an order to purchase Fund Shares is transmitted to the Fund. Payment shall be in federal funds transmitted by wire to the Fund to be received by 11:00 a.m. Boston time of the Business Day the Fund is notified of the purchase order for Fund Shares. If payment in federal funds for any purpose is not received or is -28- received by the Fund after 11:00 a.m. Boston time on such Business Day, the Custodian shall promptly, upon the Fund's request, reimburse the Fund for any charges, costs, fees, interest or other expenses incurred by the Fund in connection with any advances to, or borrowings or overdrafts by, the Fund, or any similar expenses incurred by the Fund, as a result of portfolio transactions effected by the Fund based on such purchase request. For purposes of this section, upon receipt by the Fund of the federal funds so wired, such funds cease to be the responsibility of the Custodian and shall become the responsibility of the Fund.] 2. MAINTENANCE. The Custodian shall have possession of and shall segregate and hold in trust, or shall hold in book share form, where applicable, all securities and other properties in which the funds of the Planholders are invested on behalf of the Planholders, all monies held for such Plan investments, any redemption to the Planholders or other special funds for payments to the Planholders, and all income and distributions upon, accretions to and proceeds of such securities and funds, subject only to the deductions specified in this Agreement or in the Prospectus, until distribution thereof to the Planholders in accordance with the terms and conditions of the applicable Prospectus. The Custodian also will effect partial or complete liquidation of Plans in connection with withdrawals or terminations. The Custodian is authorized to commingle payments and dividends for all Fund Shares held by it hereunder and to direct all Fund Shares to be registered in its name or the names of its nominees. Nothing herein shall be construed to allow the Custodian to commingle the Fund Shares, funds, or securities with those of any plans other than the Pioneer Independence Plans specifically covered herein. The Custodian shall maintain a separate record for each Plan established by a Planholder, showing the number of Fund Shares (to two decimal places) and the amount of cash, if any, to the credit of each Plan -29- Account. Such records shall be maintained separate and apart from the Custodian's corporate records. All monies deposited with or received by the Custodian hereunder shall be held by it without interest as part of the custodianship until required to be disbursed in accordance with the provisions of this Agreement or of Pioneer Independence Plans. 3. STATEMENTS. The Custodian shall render statements to the Sponsor at such time and in such form as may be agreed upon by the parties hereto showing, for each Plan Account in which transactions were effected during the specified period, the Plan number, the amount and date of the Plan investment(s) received, the number of such investment(s), the deductions made, the balance applied to the purchase of Fund Shares for each Plan Account and the number of Fund Shares purchased. 4. VOTING OF FUND SHARES. The Custodian will provide notice to Planholders of all Pioneer Independence Fund shareholder meetings, together with proxy statements. The Custodian shall vote Fund Shares held under any Plan in accordance with the Planholder's instructions contained in a voting instruction card provided with the proxy statement or in accordance with the terms of the applicable Prospectus. 5. SUBSTITUTION. a. BY SPONSOR. The Sponsor may effect substitution of Fund Shares as provided in Section III(C), below. -30- b. BY CUSTODIAN. If Fund Shares cannot be purchased by the Custodian for more than 120 days, and the Sponsor fails to substitute shares, the Custodian may select another investment medium which it deems to be comparable to the Fund Shares and, to the extent required, subject to prior approval of the Securities and Exchange Commission to the extent required by the 1940 Act. The Custodian shall notify each Planholder in writing that the substitution will be made if the Planholder, within 30 days, gives written consent to the Custodian and agrees to bear his or her reasonable pro-rata share of the Custodian's related expenses, including tax liability sustained by the Custodian. The Planholder's failure to give such written consent within the 30 day period shall give the Custodian authority to terminate the Plan Account. If the Fund Shares are not available for purchase for a period of 120 days or longer, and neither the Sponsor nor the Custodian substitutes other shares, the Custodian shall have the authority, without further action on its part, to terminate the Plan. c. NOTICE. The Custodian or the Sponsor shall, within five days after any substitution, deliver or mail to each Planholder a notice of substitution, including an identification of the Fund Shares eliminated and the securities substituted, and a specification of the Fund Shares of such Planholders affected by the substitution. 6. FURNISHING OF INFORMATION. The Custodian shall furnish such records and other information regarding Pioneer Independence Plans and the custodianship as the Sponsor may reasonably believe necessary or appropriate for the administration of the Plans, as provided in Section III below. -31- D. DUTIES. 1. DUTIES. The Custodian shall: a. Mail to each Planholder a confirmation of Fund Shares purchased, stating the purchase price per Fund Share, number of Fund Shares purchased after applicable deductions, and the total number of Fund Shares held for the Planholder's Plan Account; b. Mail to each Planholder a notice of the next investment due; c. Upon the instruction of the Sponsor or the Fund, mail to each Planholder such prospectuses, periodic financial reports, dividend statements, tax notices and notices of meetings and other proxy soliciting materials as are required by law or regulation; the cost of such mailings shall be reimbursed to the Custodian by the Sponsor or the Fund; d. Cause periodic audits of the books of the Custodian relating to the custodianship of Pioneer Independence Plans to be made at least annually by independent certified public accountants selected by the Sponsor and reasonably satisfactory to the Custodian, and more frequently, if required by law or regulation; e. Prepare and file such reports and returns as are required by law or regulation to permit the custodianship to continue in operation; f. Answer all inquires from Planholders concerning their Plans; -32- g. Furnish to the Internal Revenue Service and to each Planholder all required returns relating to dividends or other distributions to such Planholder's Plan Account(s) for federal income tax reporting purposes; and h. Any and all duties of the Custodian enumerated in the foregoing provisions of Section II for which the Custodian assumes primary responsibility may be delegated by the Custodian to the Sponsor. Upon the written request of the Sponsor, the Custodian will delegate any of its functions described in this Section II or in Section III. below, provided that such delegation is consistent with Sections 26 and 27 of the 1940 Act. No other delegation of the Custodian's duties may be made without the written agreement of the Sponsor. In the event that the Custodian delegates one or more of its duties with the consent of the Sponsor, the Custodian shall remain responsible for the performance of such duties as if any related acts and/or omissions are its own. E. FEES AND CHARGES. 1. REMUNERATION. As remuneration for the services to be performed by the Custodian under this Agreement, the Custodian shall receive the fees, charges, and reimbursements for expenses as listed in the attached Schedule A to this Agreement and the applicable Prospectus which charges shall be deducted from Plan investments or Planholders' Plan Accounts, as specified in the applicable Prospectus, unless the Custodian is otherwise reimbursed by the Sponsor. -33- In the event of a default by the Sponsor in the performance of any administrative service relating to the custodianship described in this Agreement, the Custodian will perform such service for a consideration payable by or from the account of the Planholders. Such consideration shall not be in excess of the amount provided for in this Agreement, including Schedules hereto. Any deductions under the terms of this provision shall be made in accordance with the terms of Section 26(a)(2) of the 1940 Act and any rules thereunder (or any successor rules). 2. PAYMENTS TO SPONSOR. No payment to the Sponsor, or to any affiliated person or agent of the Sponsor, shall be allowed the Custodian as an expense except for payment to the Sponsor of a delegated duty fee described in the attached Schedule A. III. SPONSOR'S FUNCTION A. ADMINISTRATION OF PIONEER INDEPENDENCE PLANS. 1. GENERAL. The Sponsor agrees to perform the functions required of it by the terms of this Agreement and the applicable Prospectus. 2. OPERATIONS. The Sponsor will use its best efforts to distribute Pioneer Independence Plans by entering into sales agreements with other registered broker - dealers, maintain adequate office facilities and management staff and keep current records. 3. COMPLIANCE. The Sponsor assumes full responsibility for the preparation, contents and distribution of the Prospectus, for complying with all applicable requirements of the 1933 Act and of the 1940 Act and for the preparation and filing of such other reports or documents as are required by law or regulation, and covenants and agrees to take all action, and not to omit any -34- action, necessary to carry out such responsibilities. The Custodian is not responsible for the preparation, contents and distribution of the Fund Prospectus, or for any related compliance. With respect to any duties for which the Custodian assumes primary responsibility but which it delegates to the Sponsor, the Sponsor covenants and agrees that the Sponsor will take or cause its affiliates to take all action, and not to omit any action, necessary to carry out such duties, and agrees to furnish to the Custodian, upon request, evidence thereof satisfactory to the Custodian and its counsel. The Sponsor will use its best efforts to make Fund Shares available for purchase to the Custodian at net asset value. 4. INITIAL PAYMENT. Upon the sale of each Plan, the Sponsor will require each selling broker-dealer, not later than the time for the first Plan investment for the purchase of Fund Shares, to forward to the Custodian: (i) the Plan Application and (ii) a check payable to the Custodian representing the initial Plan investment or copies of forms appropriate for the election of an automatic investment option authorizing the payment of money by wire, by Automatic Clearinghouse ("ACH"), by Electronic Funds Transfer ("EFT") or transfer or in some other form acceptable to the Custodian. 5. CREATION AND SALES CHARGES. The Sponsor receives a Creation and Sales Charge to compensate it for its services and costs in creating the Plans and arranging for their administration, for making the Fund Shares available to Planholders at net asset value and for selling expenses and commissions with respect to the Pioneer Independence Plans. This charge is deducted from the first 12 investments under a Plan as set forth in the attached Schedule B. -35- 6. PLANS IN DEFAULT. Upon receipt from the Custodian of a monthly statement of Planholders specifying those Plans in current default on Plan investments, the Sponsor will request that the selling broker-dealer endeavor promptly to have said Planholders remedy their defaults. 7. PLAN CANCELLATIONS. In the event that the Sponsor receives from the Custodian a notice of Plan cancellation by a Planholder, and such cancellation is subject under applicable law and the Prospectus to a refund of a portion of the Creation and Sales Charges previously imposed under the Plan, the Sponsor shall transmit funds to the order of the Custodian in an amount equal to the refundable amount calculated in accordance with applicable law and the Prospectus. The Custodian shall then refund the appropriate amount to the Planholder. B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION. 1. The Sponsor shall furnish to the Custodian and file to the extent required by law on behalf of the Custodian: a. FINANCIAL STATEMENTS. As soon as available, a copy of each audit report and other financial statements relating to the custodianship of the Pioneer Independence Plans and sufficient reports and other documents required to be mailed to Planholders under Section II. b. TAX RETURNS. Not less than 20 calendar days prior to the due date thereof, all federal and state income tax returns, and all other tax returns, if any, required by law to be filed by the Custodian with respect to its custodianship hereunder, prepared in form for execution and filing, together with advice concerning the proper allocation of expenses and -36- other items among the Planholders. Such tax returns shall be filed by the Sponsor on behalf of the Custodian. c. DISTRIBUTION AGREEMENT. Promptly after the execution thereof, a copy of any amendment to the Distribution Agreement between the Sponsor and the Fund and a copy of any new or additional agreement entered into in lieu thereof. d. PIONEER INDEPENDENCE PLANS MATERIALS. Draft copies of all literature, prospectuses, printed matter and other material which contain any references to the Custodian, except material which is merely circulated among or sent to employees, stockholders or representatives of the employees, stockholders or representatives of the Sponsor and correspondence in the ordinary course of business which refers in accurate terms to the Custodian's functions with respect to Pioneer Independence Plans. The Sponsor agrees that none of the documents specified in this clause shall be reproduced in final form or distributed until a draft of such documents have been provided to the Custodian. In the event the Custodian has comments on such drafts, the Custodian shall comment in writing and transmit such comments to the Sponsor within 48 hours of receipt of the draft material. e. DISTRIBUTION REPORTS. Not later than the time specified by Treasury Regulations for advising Planholders of income and capital gains distributions of regulated investment companies and within such time requirements as may be specified by the -37- Securities and Exchange Commission or other regulatory agency, printed forms for reporting distribution to Planholders for income tax purposes. C. SUBSTITUTION OF THE UNDERLYING INVESTMENT. 1. PROCEDURE. In the event that the Sponsor substitutes shares of another investment medium for Fund Shares in accordance with the procedures set forth in the applicable Prospectus and as required by law, all required notices shall be prepared by the Sponsor. In connection with such substitution, the Custodian is authorized to charge against the Plan Account of a Planholder such Planholder's pro rata share of the expenses (including tax liability) incurred by the Custodian or the Sponsor, and to pay to the Custodian or to the Sponsor the amount of such charge attributable to expenses incurred by the Custodian or the Sponsor, respectively, in connection with the substitution. The Custodian and the Sponsor shall furnish one another, and make available to Planholders upon request, a detailed statement itemizing their respective expenses. The Sponsor may effect substitution of Fund Shares whenever it deems such substitution to be in the best interests of the Planholders, subject to the following: a. SECURITIES AND EXCHANGE COMMISSION. To the extent required, the Sponsor shall receive prior approval by the Securities and Exchange Commission for any substitution under the provisions of Section 26(b) of the 1940 Act. b. SHARES. The Sponsor may substitute for Fund Shares then held and yet to be purchased or both. Substituted shares must be generally comparable in character and -38- quality to Fund Shares and must be registered under the 1933 Act. In the event of a substitution of Fund Shares, the terms "Fund" and "Fund Shares" as used herein shall be deemed to include the substituted open- end management company and the substituted shares of such open-end management company. c. CUSTODIAN. The Sponsor shall satisfy the Custodian that the substitute shares may be purchased and redeemed on generally favorable terms and arrange for the Custodian to acquire substitute shares having an aggregate value at least equal to that of the Fund Shares replaced. In addition, the Sponsor shall provide the Custodian with a signed certificate stating that any appropriate notice of the proposed substitution has been given to each Planholder according to the terms of the Prospectus. d. PLANHOLDERS. The Sponsor shall notify each Planholder in writing that, unless the Planholder surrenders the Plan to the Custodian within 30 days of the date of mailing of such notice, the Planholder will be deemed to have authorized the substitution and agreed to bear his or her pro rata share of actual related expenses, if any. IV. FUNCTIONS OF SPONSOR AND CUSTODIAN A. PLANHOLDER INQUIRIES. The Sponsor and the Custodian will respond promptly to each Planholder inquiry received by the Sponsor and Custodian, respectively, to the extent that the Sponsor or Custodian, as -39- applicable, can respond to such inquiry. In the event that any such inquiry cannot be responded to, the party receiving such inquiry will refer the inquiry to the other party to this Agreement. V. MISCELLANEOUS A. ASSIGNMENT. This Agreement shall not be assigned by either of the parties hereto without the prior written consent of the other party. B. INDEMNIFICATION BY THE SPONSOR. The Sponsor, its successors and assigns, shall at all times fully indemnify and hold harmless the Custodian, its successors and assigns, from any and all liability, claims, demands, actions, suits, cost or expense of any nature as the same may arise or be made against or be incurred by the Custodian from the failure of the Sponsor to comply with any law, rule, regulation or order of the United States, any state or any other jurisdiction, governmental authority, body or board having jurisdiction, relating to the sale, registration or qualification of the Plans or any of them, or the securities sold in connection therewith. The Fund also agrees to indemnify the Custodian for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Custodian, arising out of or in connection with the acceptance hereof or the performance of its duties hereunder, as well as the costs and expenses of defending against any claim or liability in the premises, provided that no claim against the Custodian which might be subject to the foregoing indemnification provisions shall be confessed, settled or compromised by the Custodian without the Custodian first having given 15 days' notice -40- in writing to the Sponsor of the material facts, and provided further that the Sponsor shall have the right upon written demand delivered to the Custodian within 15 days following the date of such notice to contest or defend such claim in the name of the Custodian. C. COMMUNICATIONS. All communications provided for hereunder shall be in writing sent by first class mail or delivered to the respective parties as follows: PIONEER FUNDS DISTRIBUTOR, INC. Attention: Robert P. Nault, General Counsel 60 State Street Boston, MA 02109 [_________________________________] Attention: _________________________________ [_________________] [____], [_______] provided that either party may, by written notice duly given in accordance herewith, specify a different address for the purpose hereof. D. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall be deemed one and the same instrument. -41- E. INSPECTION. An executed copy of this Agreement and all amendments thereto shall be kept on file by the Custodian and shall be open to inspection by any Planholder at any time during the business hours of the Custodian. F. SCHEDULES. All references herein to Schedules shall be deemed to refer to Schedules A and B attached to this Agreement which are hereby expressly made a part hereof. G. AMENDMENT. This Agreement, including but not limited to Schedules A and B hereto, may be amended from time to time as mutually agreed by the parties hereto in writing. Notwithstanding the foregoing, this Agreement shall not be amended in such a manner as to adversely affect the rights and privileges of any Planholder without first obtaining the Planholder's written consent. H. CONSTRUCTION. This Agreement shall be subject to and construed under the laws of the Commonwealth of Massachusetts. -42- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. PIONEER FUNDS DISTRIBUTOR, INC. By: ____________________________________ (Seal) Attest: - ---------------------------- [_________________________________] By: ____________________________________ (Seal) Attest: - ---------------------------- -43- SCHEDULE A ACCOUNT FEES AND CHARGES DUE TO CUSTODIAN The following fees and charges will be deducted from Plan investment or Plan and paid to the Custodian in accordance with the terms of the Prospectus. An asterisk (*) denotes fees that the Fund has voluntarily elected to pay to the Custodian on behalf of the Plans. SCHEDULE B FEES AND CHARGES DUE TO SPONSOR The following fees and charges will be deducted from each Plan investment or Plan and paid to the Sponsor in accordance with the terms of the Prospectus. EX-99.A3C 3 SCHEDULE OF SALES COMMISSIONS
PIONEER INDEPENDENCE PLANS 15-YEAR PLAN INVESTMENTS AND DEDUCTIONS CREATION AND SALES CHARGE ---------------------------------------------------------- PER TO NET MONTHLY PER INVEST- TOTAL TO INVEST- MONTHLY PLAN TOTAL INVEST- MENT SALES TOTAL MENT PLAN INVEST- INVEST- MENT 13 THRU CHARGE INVEST- IN INVEST- MENT MENT 1 THRU 12 180 (A) MENT SHARES MENT - ---------- ------------- --------- -------- ------------- ------- ------- ---------- $ 50.00 $ 9,000.00 $ 25.00 $0 $ 300.00 3.33% 3.45% $ 50.00 75.00 13,500.00 37.50 0 450.00 3.33% 3.45% 75.00 100.00 18,000.00 50.00 0 600.00 3.33% 3.45% 100.00 125.00 22,500.00 62.50 0 750.00 3.33% 3.45% 125.00 150.00 27,000.00 75.00 0 900.00 3.33% 3.45% 150.00 166.66 29,998.80 83.33 0 999.96 3.33% 3.45% 166.66 200.00 36,000.00 100.00 0 1,200.00 3.33% 3.45% 200.00 250.00 45,000.00 125.00 0 1,500.00 3.33% 3.45% 250.00 300.00 54,000.00 150.00 0 1,800.00 3.33% 3.45% 300.00 350.00 63,000.00 175.00 0 2,100.00 3.33% 3.45% 350.00 400.00 72,000.00 200.00 0 2,400.00 3.33% 3.45% 400.00 450.00 81,000.00 225.00 0 2,700.00 3.33% 3.45% 450.00 500.00 90,000.00 250.00 0 3,000.00 3.33% 3.45% 500.00 600.00 108,000.00 300.00 0 3,600.00 3.33% 3.45% 600.00 700.00 126,000.00 350.00 0 4,200.00 3.33% 3.45% 700.00 800.00 144,000.00 400.00 0 4,800.00 3.33% 3.45% 800.00 900.00 162,000.00 450.00 0 5,400.00 3.33% 3.45% 900.00 1,000.00 180,000.00 500.00 0 6,000.00 3.33% 3.45% 1,000.00 1,250.00 225,000.00 625.00 0 7,500.00 3.33% 3.45% 1,250.00 1,500.00 270,000.00 675.00 0 8,100.00 3.00% 3.09% 1,500.00 1,750.00 315,000.00 700.00 0 8,400.00 2.67% 2.74% 1,750.00 2,000.00 360,000.00 750.00 0 9,000.00 2.50% 2.56% 2,000.00 2,500.00 450,000.00 812.50 0 9,750.00 2.17% 2.21% 2,500.00 5,000.00 900,000.00 1,250.00 0 15,000.00 1.67% 1.69% 5,000.00 10,000.00 1,800,000.00 1,500.00 0 19,000.00 1.00% 1.01% 10,000.00
NOTES: (A) Does not include an annual service fee paid by Pioneer Independence Fund of up to 0.25% based on Pioneer Independence Fund's average daily net assets.
PIONEER INDEPENDENCE PLANS TOTAL 25-YEAR PLAN INVESTMENTS AND DEDUCTIONS WHEN EXTENDED INVESTMENT OPTION IS USED CREATION AND SALES CHARGE ------------------------------------------------------- PER TO NET MONTHLY PER INVEST- TOTAL TO INVEST- MONTHLY PLAN TOTAL INVEST- MENT SALES TOTAL MENT PLAN INVEST- INVEST- MENT 13 THRU CHARGE INVEST- IN INVEST- MENT MENT 1 THRU 12 180 (A) MENT SHARES MENT - ---------- ------------- --------- -------- ---------- ------- ------- ---------- $ 50.00 $ 15,000.00 $ 25.00 $0 $ 300.00 2.00% 2.04% $ 50.00 75.00 22,500.00 37.50 0 450.00 2.00% 2.04% 75.00 100.00 30,000.00 50.00 0 600.00 2.00% 2.04% 100.00 125.00 37,500.00 62.50 0 750.00 2.00% 2.04% 125.00 150.00 45,000.00 75.00 0 900.00 2.00% 2.04% 150.00 166.66 49,988.00 83.33 0 999.96 2.00% 2.04% 166.66 200.00 60,000.00 100.00 0 1,200.00 2.00% 2.04% 200.00 250.00 75,000.00 125.00 0 1,500.00 2.00% 2.04% 250.00 300.00 90,000.00 150.00 0 1,800.00 2.00% 2.04% 300.00 350.00 105,000.00 175.00 0 2,100.00 2.00% 2.04% 350.00 400.00 120,000.00 200.00 0 2,400.00 2.00% 2.04% 400.00 450.00 135,000.00 225.00 0 2,700.00 2.00% 2.04% 450.00 500.00 150,000.00 250.00 0 3,000.00 2.00% 2.04% 500.00 600.00 180,000.00 300.00 0 3,600.00 2.00% 2.04% 600.00 700.00 210,000.00 350.00 0 4,200.00 2.00% 2.04% 700.00 800.00 240,000.00 400.00 0 4,800.00 2.00% 2.04% 800.00 900.00 270,000.00 450.00 0 5,400.00 2.00% 2.04% 900.00 1,000.00 300,000.00 500.00 0 6,000.00 2.00% 2.04% 1,000.00 1,250.00 375,000.00 625.00 0 7,500.00 2.00% 2.04% 1,250.00 1,500.00 450,000.00 675.00 0 8,100.00 1.80% 1.83% 1,500.00 1,750.00 525,000.00 700.00 0 8,400.00 1.60% 1.63% 1,750.00 2,000.00 600,000.00 750.00 0 9,000.00 1.50% 1.52% 2,000.00 2,500.00 750,000.00 812.50 0 9,750.00 1.30% 1.32% 2,500.00 5,000.00 1,500,000.00 1,250.00 0 15,000.00 1.00% 1.01% 5,000.00 10,000.00 3,000,000.00 1,500,00 0 10,000.00 0.60% 0.60% 10,000.00
NOTES: (A) Does not include an annual service fee paid by Pioneer Independence Fund of up to 0.25% based on Pioneer Independence Fund's average daily net assets. EX-99.A6 4 SPONSOR'S CERT. OF INCORPORATION AND BY-LAWS THE COMMONWEALTH OF MASSACHUSETTS [Seal of The Commonwealth --------------------------------- of Massachusetts] Secretary of the Commonwealth ----------------------------- William Francis Galvin State House, Boston, Massachusetts 02133 Secretary of the ---------------------------------------- Commonwealth December 3, 1997 TO WHOM IT MAY CONCERN: I hereby certify that the records of this office show that Pioneer Distributor, Inc. was incorporated under the General Laws of this Commonwealth on March 2, 1989 I further certify that by articles of amendment filed on June 19, 1989 the name of said corporation was changed to Pioneer Funds Distributor, Inc. and said corporation still has legal existence. IN TESTIMONY OF WHICH, I HAVE HEREUNTO AFFIXED THE [Great Seal of the Commonwealth] GREAT SEAL OF THE COMMONWEALTH ON THE DATE FIRST ABOVE WRITTEN. /s/ William Francis Galvin Secretary of the Commonwealth k mt [*]MGL Chapter 156B, [subsection] 83A provides that certain consolidations and mergers may be filed with the Division within thirty days AFTER the effective date of the merger or consolidation. BY-LAWS OF PIONEER DISTRIBUTORS, INC. BY-LAWS TABLE OF CONTENTS Page ---- Article 1 - Stockholders................................................. 1 Section 1.1 Place of Meetings............................... 1 Section 1.2 Annual Meeting.................................. 1 Section 1.3 Special Meetings................................ 1 Section 1.4 Notice of Meetings.............................. 1 Section 1.5 Quorum.......................................... 2 Section 1.6 Adjournments.................................... 2 Section 1.7 Voting and Proxies.............................. 2 Section 1.8 Action at Meeting............................... 3 Section 1.9 Action without Meeting.......................... 3 Article 2 - Directors.................................................... 3 Section 2.1 Powers.......................................... 3 Section 2.2 Number, Election and Qualification.............. 3 Section 2.3 Enlargement of the Board........................ 4 Section 2.4 Tenure.......................................... 4 Section 2.5 Vacancies....................................... 4 Section 2.6 Resignation..................................... 4 Section 2.7 Removal......................................... 4 Section 2.8 Regular Meetings................................ 5 Section 2.9 Special Meetings................................ 5 Section 2.10 Meetings by Telephone Conference Calls.......... 5 Section 2.11 Notice of Special Meetings...................... 5 Section 2.12 Quorum.......................................... 5 Section 2.13 Action at Meeting............................... 6 Section 2.14 Action by Consent............................... 6 Section 2.15 Committees...................................... 6 Section 2.16 Compensation of Directors....................... 6 Article 3 - Officers..................................................... 6 Section 3.1 Enumeration..................................... 6 Section 3.2 Election........................................ 7 Section 3.3 Qualification................................... 7 Section 3.4 Tenure.......................................... 7 Section 3.5 Resignation and Removal......................... 7 Section 3.6 Vacancies....................................... 8 Section 3.7 Chairman of the Board and Vice- Chairman of the Board......................... 8 Section 3.8 President....................................... 8 Section 3.9 Vice Presidents................................. 8 Section 3.10 Treasurer and Assistant Treasurers.............. 8 Section 3.11 Clerk and Assistant Clerks...................... 9 Section 3.12 Secretary and Assistant Secretaries............. 9 Section 3.13 Salaries........................................ 10 Article 4 - Capital Stock................................................ 10 Section 4.1 Issue of Capital Stock.......................... 10 Section 4.2 Certificate of Stock............................ 10 Section 4.3 Transfers....................................... 11 Section 4.4 Record Date..................................... 11 Section 4.5 Replacement of Certificates..................... 12 Article 5 - Miscellaneous Provisions..................................... 12 Section 5.1 Fiscal Year..................................... 12 Section 5.2 Seal............................................ 12 Section 5.3 Voting of Securities............................ 12 Section 5.4 Corporate Records............................... 12 Section 5.5 Evidence of Authority........................... 13 Section 5.6 Articles of Organization........................ 13 Section 5.7 Severability.................................... 13 Section 5.8 Pronouns........................................ 13 Article 6 - Amendments................................................... 13 B Y - L A W S OF PIONEER DISTRIBUTORS, INC. ARTICLE 1 - Stockholders ------------------------ 1.1 PLACE OF MEETINGS. All meetings of stockholders shall be held within the Commonwealth of Massachusetts unless the Articles of Organization permit the holding of stockholders' meetings outside Massachusetts, in which event such meetings may be held either within or without Massachusetts. Meetings of stockholders shall be held at the principal office of the corporation unless a different place is fixed by the Board of Directors or the President and stated in the notice of the meeting. 1.2 ANNUAL MEETING. The annual meeting of stockholders shall be held on the second Tuesday in May in each year (or if that be a legal holiday in the place where the meeting is to be held, on the next succeeding full business day) at 10:00 A.M., unless a different hour is fixed by the Directors or the President and stated in the notice of the meeting. The purposes for which the annual meeting is to be held, in addition to those prescribed by law, by the Articles of Organization or by these By-Laws, may be specified by the Board of Directors or the President. If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu of the annual meeting, and any action taken at that special meeting shall have the same effect as if it had been taken at the annual meeting, and in such case all references in these By-Laws to the annual meeting of stockholders shall be deemed to refer to such special meeting. 1.3 SPECIAL MEETINGS. Special meetings of stockholders may be called by the President or by the Board of Directors. Upon written application of one or more stockholders who are entitled to vote and who hold at least ten percent of the capital stock entitled to vote at the meeting, special meetings shall be called by the Clerk, or in the case of the death, absence, incapacity or refusal of the Clerk, by any other officer. 1.4 NOTICE OF MEETINGS. A written notice of each meeting of stockholders, stating the place, date and hour thereof, and the purposes for which the meeting is to be held, shall be given by the Clerk, Assistant Clerk or other person calling the meeting at least seven days before the meeting to each stockholder entitled to vote at the meeting and to each stockholder who by law, by the Articles of Organization or by these By-Laws is entitled to such notice, by leaving such notice with him or at his residence or usual place of business, or by mailing it postage prepaid and addressed to him at his address as it appears in the records of the corporation. Whenever any notice is required to be given to a stockholder by law, by the Articles of Organization or by these By-Laws, no such notice need be given if a written waiver of notice, executed before or after the meeting by the stockholder or his authorized attorney, is filed with the records of the meeting. 1.5 QUORUM. Unless the Articles of Organization otherwise provide, the holders of a majority of the number of shares of the stock issued, outstanding and entitled to vote on any matter shall constitute a quorum with respect to that matter, except that if two or more classes of stock are outstanding and entitled to vote as separate classes, then in the case of each such class a quorum shall consist of the holders of a majority of the number of shares of the stock of that class issued, outstanding and entitled to vote. Shares owned directly or indirectly by the corporation shall not be counted in determining the total number of shares outstanding for this purpose. 1.6 ADJOURNMENTS. Any meeting of stockholders may be adjourned to any other time and to any other place at which a meeting of stockholders may be held under these By-Laws by the stockholders present or represented at the meeting, although less than a quorum, or by any officer entitled to preside or to act as clerk of such meeting, if no stockholder is present. It shall not be necessary to notify any stockholder of any adjournment. Any business which could have been transacted at any meeting of the stockholders as originally called may be transacted at any adjournment of the meeting. 1.7 VOTING AND PROXIES. Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by the Articles of Organization. Stockholders may vote either in person or by written proxy dated not more than six months before the meeting named in the proxy. Proxies shall be filed with the clerk of the meeting, or of any adjourned meeting, before being voted. Except as otherwise limited by their terms, a proxy shall entitle the persons named in the proxy to vote at any adjournment of such meeting, but shall not be valid after final adjournment of such meeting. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by any one of them, unless at or prior to exercise of the proxy the corporation receives a specific written notice to the contrary from any one of them. A proxy purported to be executed by or on behalf of a stockholder shall be deemed valid unless challenged at or prior to its exercise. 1.8 ACTION AT MEETING. When a quorum is present at any meeting, the holders of a majority of the stock present or represented and voting on a matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority of the stock of that class present or represented and voting on a matter), shall decide any matter to be voted on by the stockholders, except when a larger vote is required by law, the Articles of Organization or these By-Laws. Any election by stockholders shall be determined by a plurality of the votes cast by the stockholders entitled to vote at the election. No ballot shall be required for such election unless requested by a stockholder present or represented at the meeting and entitled to vote in the election. The corporation shall not directly or indirectly vote any share of its own stock. 1.9 ACTION WITHOUT MEETING. Any action required or permitted to be taken at any meeting of the stockholders may be taken without a meeting if all stockholders entitled to vote on the matter consent to the action in writing and the written consents are filed with the records of the meetings of stockholders. Each such consent shall be treated for all purposes as a vote at a meeting. ARTICLE 2 - Directors --------------------- 2.1 POWERS. The business of the corporation shall be managed by a Board of Directors, who may exercise all the powers of the corporation except as otherwise provided by law, by the Articles of Organization or by these By-Laws. In the event of a vacancy in the Board of Directors, the remaining Directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled. 2.2 NUMBER, ELECTION AND QUALIFICATION. The number of Directors which shall constitute the whole Board of Directors shall be determined by vote of the stockholders or the Board of Directors, but shall consist of not less than three Directors (except that whenever there shall be only two stockholders the number of Directors shall be not less than two and whenever there shall be only one stockholder or prior to the issuance of any stock, there shall be at least one Director). The number of Directors may be decreased at any time and from time to time either by the stockholders or by a majority of the Directors then in office, but only to eliminate vacancies existing by reason of the death, resignation, removal or expiration of the term of one or more Directors. The Directors shall be elected at the annual meeting of stockholders by such stockholders as have the right to vote on such election. No Director need be a stockholder of the corporation. 2.3 ENLARGEMENT OF THE BOARD. The number of Directors may be increased at any time and from time to time by the stockholders or by a majority of the Directors then in office. 2.4 TENURE. Each Director shall hold office until the next annual meeting of stockholders and until his successor is elected and qualified, or until his earlier death, resignation or removal. 2.5 VACANCIES. Unless and until filled by the stockholders, any vacancy in the Board of Directors, however occurring, including a vacancy resulting from an enlargement of the Board, may be filled by vote of a majority of the Directors present at any meeting of Directors at which a quorum is present. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is chosen and qualified or until his earlier death, resignation or removal. 2.6 RESIGNATION. Any Director may resign by delivering his written resignation to the corporation at its principal office or to the President or Clerk. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. 2.7 REMOVAL. A Director may be removed from office with or without cause by vote of the holders of a majority of the shares entitled to vote in the election of Directors. However, the Directors elected by the holders of a particular class or series of stock may be removed from office with or without cause only by vote of the holders of a majority of the outstanding shares of such class or series. In addition, a Director may be removed from office for cause by vote of a majority of the Directors then in office. A Director may be removed for cause only after reasonable notice and opportunity to be heard before the body proposing to remove him. 2.8 REGULAR MEETINGS. Regular meetings of the Directors may be held without call or notice at such places, within or without Massachusetts, and at such times as the Directors may from time to time determine, provided that any Director who is absent when such determination is made shall be given notice of the determination. A regular meeting of the Directors may be held without a call or notice immediately after and at the same place as the annual meeting of stockholders. 2.9 SPECIAL MEETINGS. Special meetings of the Directors may be held at any time and place, within or without Massachusetts, designated in a call by the Chairman of the Board, President, Treasurer, two or more Directors or by one Director in the event that there is only a single Director in office. 2.10 MEETINGS BY TELEPHONE CONFERENCE CALLS. Directors or members of any committee designated by the Directors may participate in a meeting of the Directors or such committee by means of a conference telephone 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 constitute presence in person at a meeting. 2.11 NOTICE OF SPECIAL MEETINGS. Notice of any special meeting of he Directors shall be given to each Director by the Secretary or Clerk or by the officer or one of the Directors calling the meeting. Notice shall be duly given to each Director (i) by notice given to such Director in person or by telephone at least 48 hours in advance of the meeting, (ii) by sending a telegram or telex, or by delivering written notice by hand, to his last known business or home address at least 48 hours in advance of the meeting, or (iii) by mailing written notice to his last known business or home address at least 72 hours in advance of the meeting. Notice need not be given to any Director 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 Director who attends the meeting without protesting prior to the meeting or at its commencement the lack of notice to him. A notice or waiver of notice of a Directors' meeting need not specify the purposes of the meeting. If notice is given in person or by telephone, an affidavit of the Secretary, Clerk, officer or Director who gives such notice that the notice has been duly given shall, in the absence of fraud, be conclusive evidence that such notice was duly given. 2.12 QUORUM. At any meeting of the Board of Directors, a majority of the Directors then in office shall constitute a quorum. Less than a quorum may adjourn any meeting from time to time without further notice. 2.13 ACTION AT MEETING. At any meeting of the Board of Directors at which a quorum is present, the vote of a majority of those present shall be sufficient to take any action, unless a different vote is specified by law, by the Articles of organization or by these By-Laws. 2.14 ACTION BY CONSENT. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if all the Directors consent to the action in writing and the written consents are filed with the records of the Directors' meetings. Each such consent shall be treated for all purposes as a vote at a meeting. 2.15 COMMITTEES. The Board of Directors may, by vote of a majority of the Directors then in office, elect from their number an executive committee or other committees and may by like vote delegate to committees so elected some or all of their powers to the extent permitted by law. Except as the Board of Directors may otherwise determine, any such committee may make rules for the conduct of its business, but unless otherwise provided by the Directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided by these By-Laws for the Directors. The Board of Directors shall have the power at any time to fill vacancies in any such committee, to change its membership or to discharge the committee. 2.16 COMPENSATION OF DIRECTORS. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any Director from serving the corporation in any other capacity and receiving compensation therefor. ARTICLE 3 - Officers -------------------- 3.1 ENUMERATION. The officers of the corporation shall consist of a President, a Treasurer, a Clerk and such other officers with such other titles as the Board of Directors may determine, including, but not limited, to a Chairman of the Board, a Vice Chairman of the Board, a Secretary and one or more Vice Presidents, Assistant Treasurers, Assistant Clerks and Assistant Secretaries. 3.2 ELECTION. The President, Treasurer and Clerk shall be elected annually by the Board of Directors at their first meeting following the annual meeting of stockholders. Other officers may be chosen or appointed by the Board of Directors at such meeting or at any other meeting. 3.3 QUALIFICATION. No officer need be a director or stockholder. Any two or more offices may be held by the same person. The Clerk shall be a resident of Massachusetts unless the corporation has a resident agent appointed for the purpose of service of process. Any officer may be required by the Directors to give bond for the faithful performance of his duties to the corporation in such amount and with such sureties as the Directors may determine. The premiums for such bonds may be paid by the corporation. 3.4 TENURE. Except as otherwise provided by law, by the Articles of Organization or by these By-Laws, the President, Treasurer and Clerk shall hold office until the first meeting of the Directors following the next annual meeting of stockholders and until their respective successors are chosen and qualified; and all other officers shall hold office until the first meeting of the Directors following the annual meeting of stockholders, unless a different term is specified in the vote choosing or appointing them, or until his earlier death, resignation or removal. 3.5 RESIGNATION AND REMOVAL. Any officer may resign by delivering his written resignation to the corporation at its principal office or to the President, Clerk or Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. Any officer may be removed at any time, with or without cause, by vote of a majority of the entire number of Directors then in office. An officer may be removed for cause only after reasonable notice and opportunity to be heard by the Board of Directors prior to action thereon. Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following his resignation or removal, or any right to damages on account of such removal, whether his compensation be by the month or the year or otherwise, unless such compensation is expressly provided in a duly authorized written agreement with the corporation. 3.6 VACANCIES. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of President, Treasurer and Clerk. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is chosen and qualified, or until he sooner dies, resigns or is removed. 3.7 CHAIRMAN OF THE BOARD AND VICE-CHAIRMAN OF THE BOARD. The Board of Directors may appoint a Chairman of the Board and may designate him as Chief Executive Officer. If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. If the Board of Directors appoints a Vice-Chairman of the Board, he shall, in the absence or disability of the Chairman of the Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him by the Board of Directors. 3.8 PRESIDENT. The President shall, subject to the direction of the Bard of Directors, have general charge and supervision of the business of the corporation. Unless otherwise provided by the Board of Directors, he shall preside at all meetings of the stockholders and, if he is a Director, at all meetings of the Board of Directors. Unless the Board of Directors has designated the Chairman of the Board or another officer as Chief Executive Officer, the President shall be the Chief Executive officer of the corporation. The President shall perform such other duties and shall possess such other powers as the Board of Directors may from time to time prescribe. 3.9 VICE PRESIDENTS. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors. 3.10 TREASURER AND ASSISTANT TREASURERS. The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned to him by the Board of Directors or the President. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these By-Laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation. The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the President or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer. 3.11 CLERK AND ASSISTANT CLERKS. The Clerk shall perform such duties and shall possess such powers as the Board of Directors or the President may from time to time prescribe. In addition, the Clerk shall perform such duties and have such powers as are incident to the office of the clerk, including without limitation the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents. Any Assistant Clerk shall perform such duties and possess such powers as the Board of Directors, the President or the Clerk may from time to time prescribe. In the event of the absence, inability or refusal to act of the Clerk, the Assistant Clerk (or if there shall be more than one, the Assistant Clerks in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Clerk. In the absence of the Clerk or any Assistant Clerk at any meeting of stockholders or Directors, the person presiding at meeting shall designate a temporary clerk to keep a record of the meeting. 3.12 SECRETARY AND ASSISTANT SECRETARIES. If a Secretary is appointed, he shall attend all meetings of the Board of Directors and shall keep a record of the meetings of the Directors. He shall, when required, notify the Directors of their meetings, and shall possess such other powers and shall perform such other duties as the Board of Directors or the President may from time to time prescribe. Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary. 3.13 SALARIES. Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors. ARTICLE 4 - Capital Stock ------------------------- 4.1 ISSUE OF CAPITAL STOCK. Unless otherwise voted by the stockholders, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of the capital stock of the corporation held in its treasury may be issued or disposed of by vote of the Board of Directors, in such manner, for such consideration and on such terms as the Directors may determine. 4.2 CERTIFICATE OF STOCK. Each stockholder shall be entitled to a certificate of the capital stock of the corporation in such form as may be prescribed from time to time by the Directors. The certificate shall be signed by the President or a Vice President, and by the Treasurer or an Assistant Treasurer, but when a certificate is countersigned by a transfer agent or a registrar, other than a Director, officer or employee of the corporation, such signature may be a facsimile. In case any officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer at the time of its issue. Every certificate for shares of stock which are subject to any restriction on transfer pursuant to the Articles of Organization, the By-Laws, applicable securities laws or any agreement to which the corporation is a party, shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restrictions and a statement that the corporation will furnish a copy of the restrictions to the holder of such certificate upon written request and without charge. Every certificate issued when the corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either the full text of the preferences, voting powers, qualifications and special and relative rights of the shares of each class and series authorized to be issued or a statement of the existence of such preferences, powers, qualifications and rights and a statement that the corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge. 4.3 TRANSFERS. Subject to the restrictions, if any, stated or noted on the stock certificates, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Articles of Organization or by these By-Laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect thereto, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws. It shall be the duty of each stockholder to notify the corporation of his post office address and of his taxpayer identification number. 4.4 RECORD DATE. The Board of Directors may fix in advance a time not more than 60 days preceding the date of any meeting of stockholders or the date for the payment of any dividend or the making of any distribution to stockholders or the last day on which the consent or dissent of stockholders may be effectively expressed for any purpose, as the record date for determining the stockholders having the right to notice of and to vote at such meeting, and any adjournment, or the right to receive such dividend or distribution or the right to give such consent or dissent. In such case only stockholders of record on such record date shall have such right, notwithstanding any transfer of stock on the books of the corporation after the record date. Without fixing such record date the Directors may for any of such purposes close the transfer books for all or any part of such period. If no record date is fixed and the transfer books are not closed, the record date for determining the stockholders having the right to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, and the record date for determining the stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors acts with respect to such purpose. 4.5 REPLACEMENT OF CERTIFICATES. In case of the alleged loss or destruction or the mutilation of a certificate of stock, a duplicate certificate may be issued in place of the lost, destroyed or mutilated certificate, upon such terms as the Directors may prescribe, including the presentation of reasonable evidence of such loss, destruction or mutilation and the giving of such indemnity as the Directors may require for the protection of the corporation or any transfer agent or registrar. ARTICLE 5 - Miscellaneous Provisions ------------------------------------ 5.1 FISCAL YEAR. Except as otherwise set forth in the Articles of Organization or as otherwise determined from time to time by the Board of Directors, the fiscal year of the corporation shall in each year end on December 31. 5.2 SEAL. The seal of the corporation shall, subject to alteration by the Directors, bear its name, the word "Massachusetts" and the year of its incorporation. 5.3 VOTING OF SECURITIES. Except as the Board of Directors may otherwise designate, the President or Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of stockholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation. 5.4 CORPORATE RECORDS. The original, or attested copies, of the Articles of Organization, By-Laws and records of all meetings of the incorporators and stockholders, and the stock records, which shall contain the names of all stockholders and the record address and the amount of stock held by each, shall be kept in Massachusetts at the principal office of the corporation, or at an office of its transfer agent or of the Clerk. These copies and records need not all be kept in the same office. They shall be available at all reasonable times for the inspection of any stockholder for any proper purpose, but not to secure a list of stockholders for the purpose of selling the list or copies of the list or of using the list for a purpose other than in the interest of the applicant, as a stockholder, relative to the affairs of the corporation. 5.5 EVIDENCE OF AUTHORITY. A certificate by the Clerk or Secretary, or an Assistant Clerk or Assistant Secretary, or a temporary Clerk or temporary Secretary, as to any action taken by the stockholders, Directors, any committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action. 5.6 ARTICLES OF ORGANIZATION. All references in these By-Laws to the Articles of Organization shall be deemed to refer to the Articles of Organization of the corporation, as amended and in effect from time to time. 5.7 SEVERABILITY. Any determination that any provision of these By-Laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-Laws. 5.8 PRONOUNS. All pronouns used in these By-Laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require. ARTICLE 6 - Amendments ---------------------- These By-Laws may be amended by vote of the holders of a majority of the shares of each class of the capital stock at the time outstanding and entitled to vote at any annual or special meeting of stockholders, if notice of the substance of the proposed amendment is stated in the notice of such meeting. If authorized by the Articles of Organization, the Directors, by a majority of their number then in office, may also make, amend or repeal these By-Laws, in whole or in part, except with respect to (a) the provisions of these By-Laws governing (i) the removal of Directors and (ii) the amendment of these By-Laws and (b) any provision of these By-Laws which by law, the Articles of Organization or these By-Laws requires action by the stockholders. No change in the date fixed in these By-Laws for the annual meeting of stockholders may be made within 60 days before the date fixed in these By-Laws. Subject to the preceding sentence, notice of any change in the date fixed in these By-Laws for the annual meeting of stockholders shall be given to each stockholder in person or by letter mailed to his last known post office address at least 20 days before the new date fixed for such meeting. Not later than the time of giving notice of the meeting of stockholders next following the making, amending or repealing by the Directors of any By-Law, notice stating the substance of such change shall be given to all stockholders entitled to vote on amending the By-Laws. Any By-Law adopted by the Directors may be amended or repealed by the stockholders entitled to vote on amending the ByLaws. EX-99.A8 5 FORM OF UNDERWRITING AGREEMENT - SPONSOR-FUND UNDERWRITING AGREEMENT THIS UNDERWRITING AGREEMENT, dated this day of , 1998, by and between Pioneer Independence Fund, a Delaware business trust ("Pioneer"), and Pioneer Funds Distributor, Inc., a Massachusetts corporation (the "Underwriter"). W I T N E S S E T H WHEREAS, Pioneer is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"), and has filed a registration statement (the "Registration Statement") with the Securities and Exchange Commission (the "Commission") for the purpose of registering shares of beneficial interest for public offering under the Securities Act of 1933, as amended; WHEREAS, the Underwriter engages in the purchase and sale of securities both as a broker and a dealer and is registered as a broker-dealer with the Commission and is a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"); WHEREAS, the parties hereto deem it mutually advantageous that the Underwriter should act as principal underwriter, as defined in the 1940 Act, for the sale to the public of the shares of beneficial interest of the securities portfolio of each series of Pioneer which the Trustees may establish from time to time (individually, a "Portfolio" and collectively, the "Portfolios"); and NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth herein, Pioneer and the Underwriter do hereby agree as follows: 1. Pioneer does hereby grant to the Underwriter the right and option to purchase shares of beneficial interest of each class of each Portfolio of Pioneer (the "Shares") for sale to investors either directly or indirectly through other broker-dealers. The Underwriter is not required to purchase any specified number of Shares, but will purchase from Pioneer only a sufficient number of Shares as may be necessary to fill unconditional orders received from time to time by the Underwriter from investors and dealers. 2. The Underwriter shall offer Shares to the public at an offering price based upon the net asset value of the Shares, to be calculated for each 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 (the "Prospectus"), plus sales charges as approved by the Underwriter and the Trustees of Pioneer and as further outlined in the 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 intent, exchangeability of shares, reinstatement privileges, net asset value purchases by certain persons and reinvestments of dividends and capital gain distributions. 3. In the case of all Shares sold to investors through other broker-dealers, a portion of applicable sales charges will be reallowed to such broker-dealers who are members of the NASD or, in the case of certain sales by banks or certain sales to foreign nationals, to brokers or dealers exempt from registration with the Commission. The concession reallowed to broker-dealers shall be set forth in a written sales agreement and shall be generally the same for broker-dealers providing comparable levels of sales and service. 4. This Agreement shall terminate on any anniversary hereof if its terms and renewal have not been approved by a majority vote of the Trustees of Pioneer voting in person, including a majority of its Trustees who are not "interested persons" of Pioneer 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 -2- purpose of voting on such approval. This Agreement may also be terminated at any time, without payment of any penalty, by Pioneer on 60 days' written notice to the Underwriter, or by the Underwriter upon similar notice to Pioneer. This Agreement may also be terminated by a party upon five 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 the Shares. Finally, this Agreement may also be terminated by Pioneer upon five 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 during the most recent 12-month period exceeded 10% of all Shares sold by the Underwriter during such period. 5. The compensation for the services of the Underwriter as a principal underwriter under this Agreement shall be (i) that part of the sales charge which is retained by the Underwriter after allowance of discounts to dealers as set forth in the Registration Statement, including the Prospectus, filed with the Commission and in effect at the time of the offering, as amended, and (ii) those amounts payable to the Underwriter as reimbursement of expenses pursuant to any distribution plan for Pioneer which may be in effect. Nothing contained herein shall relieve Pioneer of any obligation under its management contract or any other contract with any affiliate of the Underwriter. 6. The parties to this Agreement acknowledge and agree that all liabilities arising hereunder, whether direct or indirect, of any nature whatsoever, including without limitation, liabilities arising in connection with any agreement of Pioneer or its Trustees as set forth herein to indemnify any party to this Agreement or any other person, if any, shall be satisfied out of the assets of Pioneer and that no Trustee, officer or holder of shares of beneficial interest of Pioneer shall be personally liable for any of the foregoing liabilities. -3- Pioneer's Agreement and Declaration of Trust, as may be amended from time to time, describes in detail the respective responsibilities and limitations on liability of the Trustees, officers, and holders of the Shares. 7. This Agreement shall automatically terminate in the event of its assignment (as that term is defined in the 1940 Act). 8. In the event of any dispute between the parties, this Agreement shall be construed according to the laws of The Commonwealth of Massachusetts. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their duly authorized officers and their seals to be hereto affixed as of the day and year first above written. ATTEST: PIONEER INDEPENDENCE FUND ____________________________ By: __________________________ Joseph P. Barri John F. Cogan, Jr. Secretary President ATTEST: PIONEER FUNDS DISTRIBUTOR, INC. ___________________________ By: ___________________________ Joseph P. Barri Robert L. Butler Clerk President -4- EX-99.A10 6 FORM OF INVESTMENT APPLICATION R E G I S T R A T I O N - Please Print or Type [landscape oriented along left margin] [Pioneer logo] Independence Plans PIONEER Application - -------------------------------------------------------------------------------- / Special pricing applicable? [] Yes [] No / / Special Pricing Breakpoint (Dealer Use) / [____________________________] / New Account Number __________ / List all associated account numbers and / monthly amounts. Monthly Unit $__________ / / _________________________ $__________ Total Plan Amount $__________ / _________________________ $__________ / _________________________ $__________ Initial Investment $__________ / _________________________ $__________ - -------------------------------------------------------------------------------- /REGISTER THIS PLAN AS FOLLOWS: / Individual /_________________________________________ ____-____-____ /First Name Middle Initial Last Name Social Security Number Joint Tenant / (If joint tenants, use with Right of /_________________________________________ Social Security Number Survivorship /First Name Middle Initial Last Name of the first joint / tenant listed.) Uniform /_________________________________________ Gifts/ /Custodian's Name Transfers / to Minors /_________________________________________ ____-____-____ /Minor's Name (only one permitted) Social Security Number / of Minor /under the _____ [] Uniform [] Uniform / State Gifts to Transfers to ____-____-____ / Minors Act Minors Act Birthdate of Minor - -------------------------------------------------------------------------------- Corporations, /_______________________________________ ____-_________ Trusts, or /Name of Corporation or Trustee(s) Taxpayer other / Identification Number Fiduciaries /_______________________________________ ____-____-____ /Name of Trust Date of Trust - -------------------------------------------------------------------------------- Address /__________________________ ______________ _________ ________ & /Street or P.O. Box City State ZIP Citizenship / /____-____-____ Citizen of U.S. [] Yes []No ___________________ /Telephone If no, citizen of - -------------------------------------------------------------------------------- TELEPHONE WITHDRAWAL FEATURE--Unless indicated below, I authorize BFDS to accept instructions from any person to redeem up to 90% of the share value of my account(s) by telephone, in accordance with the procedures and conditions set forth in the Pioneer Independence Plans current prospectus. [] I DO NOT want the Telephone Redemption Privilege. Redemptions by telephone must be for an amount less than $100,000 and will be sent by check via U.S. mail to the address of record. In the event that the mailing address has been changed within 30 days of the redemption request, the redemption request must be in writing if over $5,000. Pioneering Services Corporation and BFDS will not be liable for any loss, expense or cost arising out of any telephone redemption request effected in accordance with the authorization(s) set forth in this application if they reasonably believe such request to be genuine, but may in certain cases be liable for losses due to unauthorized or fradulent transactions. Procedures for verification of telephone transactions may include recordings of telephone transactions and requests for conformation of the shareholder's Social Security Number and current address. Mailings of confirmations occur promptly after the transaction. - -------------------------------------------------------------------------------- The undersigned warrant(s) that I (we) have full authority and, if a natural person, I (we) am (are) of legal age to purchase shares pursuant to this application, and have received a current prospectus for the plans. - -------------------------------------------------------------------------------- WITHHOLDING INFORMATION (Substitute Form W-9) UNDER THE INTEREST AND DIVIDEND TAX COMPLIANCE ACT OF 1983, WE ARE REQUIRED TO HAVE THE FOLLOWING CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT: (1) The number shown above is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage interest paid, the acquisition or abandonment of secured property, contributions to an individual retirement arrangement (IRA), and generally payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct taxpayer identification number. - -------------------------------------------------------------------------------- SIGNATURE PROVISIONS I/We, the undersigned Depositor(s), have read and understand the foregoing application and the attached material included herein by reference. In addition, I/We certify that the information which I/we have provided and the information which is included within the application and the attached material included herein by reference is accurate including but not limited to the representations contained in the Withholding Information section of this application above. [The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.] Signature of Owner* X ___________________________________ Date ________________ Signature of Joint Owner X ______________________________ Date ________________ *If a corporate or trust account, authorized signor should indicate title (e.g., President, Treasurer, or Trustee). - -------------------------------------------------------------------------------- A Bank Draft Authoriza- / MAIL APPLICATION United Services Planning tion is attached [] Yes [] No / AND INITIAL Association, Inc. / INVESTMENT TO: P.O. Box XXXX Check box for / Fort Worth, Texas 76113 Government Allotment [] / / MAKE ALL CHECKS [___________ / PAYABLE TO: ______________ / ______] / - -------------------------------------------------------------------------------- Dealer Name ________________________ Authorized Signature X ____________________ Branch Office (Location) _______________________________________________________ Representative _________________________________________________________________ Name Number Representative's Signature X ______________________________________ 7XX (12/97) [copyright symbol] 1997 United Services Planning Association, Inc. 12057 EX-99.D 7 FINANCIAL STATEMENTS OF THE SPONSOR A R T H U R A N D E R S E N L L P REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Board of Directors of Pioneer Funds Distributor, Inc.: We have audited the accompanying consolidated balance sheet of Pioneer Funds Distributor, Inc. (a Massachusetts corporation and a wholly owned subsidiary of Pioneering Management Corporation) as of December 31, 1996, and the related consolidated statements of income, changes in stockholders' equity and cash flows for the year then ended. These consolidated financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements and schedules based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Pioneer Funds Distributor, Inc. as of December 31, 1996, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The information contained in Schedules I and II [intentionally omitted] is presented for the purposes of additional analysis and is not a required part of the consolidated financial statements, but is supplementary information required by Rule 17a-5 of the Securities and Exchange Commission. Such information has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic consolidated financial statements taken as a whole. /s/ Arthur Andersen LLP Boston, Massachusetts February 21, 1997 PIONEER FUNDS DISTRIBUTOR, INC. ------------------------------- CONSOLIDATED BALANCE SHEET - DECEMBER 31, 1996 ---------------------------------------------- (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNT)
ASSETS Cash and temporary investments, at cost which approximates value (Note 2) . . . . . . . . . . . . . . . $ 4,217 Investments in marketable securities, at value . . . . . . . . . . 4,958 Receivables: From securities brokers and dealers for sales of mutual fund shares . . . . . . . . . . . 9,010 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,301 Due from affiliates, net . . . . . . . . . . . . . . . . . . . . . 267 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,830 Furniture, equipment and leasehold improvements, at cost (net of accumulated depreciation and amortization of $1,239) (Note 2) . . . . . . . . . . . . . . . 592 Dealer advances (net of accumulated amortization of $8,928) (Note 9) . . . . . . . . . . . . . . . . . . . . . . 34,588 Deferred cost of restricted stock plan (Note 5) . . . . . . . . . 501 ------- $59,264 ======= LIABILITIES AND STOCKHOLDER'S EQUITY Payable to funds for shares sold . . . . . . . . . . . . . . . . . $ 8,996 Accrued expenses and accounts payable . . . . . . . . . . . . . . 4,284 Deferred income taxes, net (Note 4) . . . . . . . . . . . . . . . 13,867 ------- Total liabilities . . . . . . . . . . . . . . . . . . . . . 27,147 COMMITMENTS (NOTE 8) STOCKHOLDER'S EQUITY: Common stock, $0.10 par value Authorized - 100,000 shares Issued and outstanding - 100 shares . . . . . . . . . . . . . . - Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . 97,200 Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . (65,083) ------- Total stockholder's equity . . . . . . . . . . . . . . . . . 32,117 ------- $59,264 =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. PIONEER FUNDS DISTRIBUTOR, INC. ------------------------------- CONSOLIDATED STATEMENT OF INCOME -------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------ (DOLLARS IN THOUSANDS)
REVENUES AND OTHER INCOME (NOTE 2): Underwriting commissions . . . . . . . . . . . . . . . . . . . . $ 6,781 Distribution and service fees . . . . . . . . . . . . . . . . . 7,746 Other income . . . . . . . . . . . . . . . . . . . . . . . . . . 2,348 --------- 16,875 DISTRIBUTION AND ADMINISTRATIVE EXPENSES: Sales and marketing . . . . . . . . . . . . . . . . . . . . . . 16,867 Salaries and related benefits . . . . . . . . . . . . . . . . . 7,735 Amortization of dealer advances . . . . . . . . . . . . . . . . 6,365 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,275 -------- 39,242 -------- Loss before benefit for income taxes . . . . . . . . . . . . . . (22,367) -------- BENEFIT (PROVISION) FOR INCOME TAXES (NOTE 4): State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,042 Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,808 Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88) -------- 8,762 -------- Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(13,605) ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. PIONEER FUNDS DISTRIBUTOR, INC. ------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY --------------------------------------------------------- FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------ (DOLLARS IN THOUSANDS)
Common Stock --------------- Total Shares Paid-in Accumulated Stockholder's Issued Amount Capital Deficit Equity ------ ------ ------- ------- ------ December 31, 1995 100 --- $71,700 ($51,478) $20,222 Net loss --- --- --- (13,605) (13,605) Capital contributions (Note 7) --- --- 25,500 --- 25,500 ------ ------ ------- -------- ------- December 31, 1996 100 --- $97,200 ($65,083) $32,117 ====== ====== ======= ======== =======
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. PIONEER FUNDS DISTRIBUTOR, INC. ------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------ FOR THE YEAR ENDED DECEMBER 31, 1996 ------------------------------------ (DOLLARS IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES: Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(13,605) -------- Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization . . . . . . . . . . . . . . . . . 6,737 Unrealized and realized gains on marketable securities, net . . (176) Restricted stock plan expense . . . . . . . . . . . . . . . . . 199 Changes in operating assets and liabilities: Receivable from securities brokers and dealers for sales of mutual fund shares . . . . . . . . . . . . . . . 3,375 Other receivables . . . . . . . . . . . . . . . . . . . . . . . (1,013) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (812) Dealer advances . . . . . . . . . . . . . . . . . . . . . . . . (23,858) Payable to funds for shares sold . . . . . . . . . . . . . . . . (3,372) Accrued expenses and accounts payable . . . . . . . . . . . . . 1,241 Accrued foreign income taxes . . . . . . . . . . . . . . . . . . 16 Deferred cost of restricted stock plan . . . . . . . . . . . . . (276) Deferred income taxes, net . . . . . . . . . . . . . . . . . . . 6,749 -------- TOTAL ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . (11,190) -------- NET CASH USED IN OPERATING ACTIVITIES . . . . . . . . . . . . (24,795) -------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to furniture, equipment and leasehold improvements . . 21 Investment in marketable securities . . . . . . . . . . . . . . (6,167) Proceeds from sale of marketable securities . . . . . . . . . . 5,667 -------- NET CASH USED IN INVESTING ACTIVITIES . . . . . . . . . . . . (479) -------- CASH FLOWS FROM FINANCING ACTIVITIES: Capital contribution . . . . . . . . . . . . . . . . . . . . . . 25,500 Due to affiliates, net . . . . . . . . . . . . . . . . . . . . . 2,034 -------- NET CASH PROVIDED BY FINANCING ACTIVITIES . . . . . . . . . . 27,534 -------- NET INCREASE IN CASH AND TEMPORARY INVESTMENTS . . . . . . . . . . 2,260 CASH AND TEMPORARY INVESTMENTS AT BEGINNING OF YEAR . . . . . . . 1,957 -------- CASH AND TEMPORARY INVESTMENTS AT END OF YEAR . . . . . . . . . . $ 4,217 ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL STATEMENTS. PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (1) NATURE OF OPERATIONS AND ORGANIZATION NATURE OF OPERATIONS Pioneer Funds Distributor, Inc. (the Company [or PFD]) serves as the principal underwriter of shares of the Pioneer Family of Mutual Funds, utilizing a large network of independent broker-dealers. In addition, the Company serves as the exclusive distributor [for] Pioneer [] Variable [] Contracts Trust. ORGANIZATION PFD is a wholly owned subsidiary of Pioneering Management Corporation (PMC). Pioneer Fonds Marketing GmbH (PFM) is a wholly owned subsidiary of PFD and performs marketing and distributor services in Germany. NOTE (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. Consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles requires the use of management estimates. The accompanying consolidated financial statements include the accounts of the Company and [PFM]. All intercompany balances and transactions between the Company and its subsidiary have been eliminated in consolidation. RECOGNITION OF REVENUE Underwriting commissions earned from the distribution of mutual fund shares are recorded as income on the trade (execution) date. Distribution fees and service fees are earned based on 0.75% and 0.25%, respectively, of certain mutual fund net assets (see Note 9). PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) VALUATION OF FINANCIAL INSTRUMENTS The Company considers the liquid nature and ready availability of market quotations when estimating fair value of financial instruments. CONSOLIDATED STATEMENT OF CASH FLOWS Cash and temporary investments consist primarily of cash on deposit in banks and amounts invested in the Pioneer Money Market Trust (PMMT). Generally, PMMT invests in securities with remaining lives to maturity of three months or less. The Company's net benefit for state and federal income taxes of approximately $8,850,000 in 1996 is reflected as a reduction of amounts due to affiliates. FURNITURE, EQUIPMENT AND LEASEHOLD IMPROVEMENTS Depreciation and amortization are provided for financial reporting purposes on a straight-line basis over the following estimated useful lives: furniture and equipment, 3-5 years; and leasehold improvements, over the term of the lease, not exceeding 10 years. In the event of retirement or other disposition of fixed assets, the cost of the assets and the related accumulated depreciation and amortization amounts are removed from the accounts, and any resulting gains or losses are reflected in earnings. NOTE (3) NET CAPITAL As a broker-dealer, the Company is subject to the Securities and Exchange Commission's regulations and operating guidelines, which require the Company to maintain a specified amount of net capital, as defined, and a ratio of aggregate indebtedness to net capital, as defined, not exceeding 15 to 1. Net capital and the related ratio of aggregate indebtedness to net capital may fluctuate on a daily basis. The Company's net capital, as computed under Rule 15c3-1, was $3,793,302 at December 31, 1996, which exceeded required net capital of $830,909 by $2,962,393. The ratio of aggregate indebtedness to net capital at December 31, 1996 was 3.29 to 1. The Company is exempt from the reserve requirements of Rule 15c3-3 since its broker-dealer transactions are limited to the purchase, sale and redemption of redeemable securities of registered investment companies. The Company promptly transmits all customer funds and delivers all securities received in connection with activities as a broker-dealer, and does not otherwise hold funds or securities for, or owe money or securities to, customers. PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (4) INCOME TAXES [The Pioneer Group, Inc. (PGI)] files a consolidated federal income tax return with its direct and indirect subsidiaries, including the Company. Consolidated income tax benefits (provisions) are allocated among the companies based on the income taxes that would have been benefited (accrued) had separate returns been filed for each entity or when subsidiary losses are utilized in consolidation. The 1996 overall income tax benefit rate differs from the statutory federal income tax rate primarily due to the benefit for state income taxes. The benefit for income taxes, as stated as a percentage of loss before income taxes, is comprised of the following: Federal statutory rate 34.0% Increases (decreases) in tax rate resulting from: State income tax, net of federal effect 6.3 Foreign income taxes (1.1) ---- Effective tax rate 39.2% ==== The components of deferred income taxes recognized in the accompanying consolidated balance sheet are comprised of deferred tax assets of approximately $129,000 and deferred tax liabilities of approximately $13,996,000. The approximate income tax effect of each type of temporary difference is as follows: Dealer advances $(13,810,000) Other (net) (57,000) ------------ Total deferred income taxes $(13,867,000) ============ PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (5) STOCK PLANS PGI has a restricted stock plan (the 1995 Plan) designed to provide incentives to certain employees who have contributed and are expected to contribute materially to the success of PGI and its subsidiaries. An aggregate total of 600,000 shares of PGI common stock may be awarded to participants under this Plan at a price to be determined by PGI's Board of Directors, generally $.10 per share. The cost of the 1995 Plan is borne by the entity employing the participant. Total shares awarded, net of forfeitures, under the 1995 Plan were 76,322 at December 31, 1996. The 1995 Plan expires in January 2000. PGI's 1990 restricted stock plan (the 1990 Plan) expired in 1995. Total shares awarded, net of forfeitures, under the 1990 Plan were 745,499 at December 31, 1996. The participant's right to resell the awarded stock is restricted to 100% of the shares awarded during the first two years following the award, 60% during the third year and 20% less each year thereafter. PGI may repurchase restricted shares at $.10 per share upon termination of the participant's employment. In 1996, certain employees of the Company were awarded 11,590 shares of PGI common stock under the 1995 Plan, with a fair market value on the award date of approximately $316,000. Total shares awarded to certain employees of the Company, net of forfeitures, under the 1995 Plan and 1990 Plan were 11,340 and 120,893, respectively, at December 31, 1996. Awards under these restricted stock plans are compensatory, and accordingly, the difference between the award price and market price of the shares under the plan on the award date, less the applicable tax benefit, is being amortized on a straight-line basis over a five-year period. Under PGI's 1988 Stock Option Plan (the Option Plan), options may be granted to key employees of PGI and its subsidiaries. PGI has reserved an aggregate of 2,400,000 shares for issuance under the Option Plan. Both incentive stock options intended to qualify under Section 422A of the Internal Revenue Code of 1986 (incentive stock options) and non-statutory options not intended to qualify for incentive stock option treatment (non-statutory options) may be granted under the Option Plan. The Option Plan is administered by the Board of Directors of PGI (the Board) or a committee of disinterested directors designated by the Board (the Committee), and unless the Option Plan is terminated earlier, no option may be granted after August 1, 1998. PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (5) STOCK PLANS (CONTINUED) The option price per share is determined by the Board or the Committee but (i) in the case of incentive stock options, may not be less than 100% of the fair market value of such shares on the date of option grant, and (ii) in the case of non-statutory options, may not be less than 90% of the fair market value on the date of option grant. Options issuable under the Option Plan become exercisable, as determined by the Board or the Committee, not to exceed ten years from the date of grant. During 1996, 17,500 stock options were granted at an exercise price of $24.25. As of December 31, 1996, non-statutory options to purchase 367,500 shares of PGI common stock at exercise prices ranging from $4.188 to $27.50, equal to fair market value at the dates of the grants, were granted to certain employees of the Company under the Option Plan. Of such options, 48,000 shares were exercised at $4.188, and 12,000 shares were forfeited as of December 31, 1996. On May 4, 1995, PGI adopted the 1995 Employee Stock Purchase Plan (the "1995 Purchase Plan"), which qualifies as an "Employee Stock Purchase Plan" within the meaning of Section 423 of the Internal Revenue Code of 1986. An aggregate total of 500,000 shares of common stock have been authorized for issuance under the 1995 Purchase Plan, to be implemented through one or more offerings, each approximately six months in length beginning on the first business day of each January and July. The price at which shares may be purchased during each offering will be the lower of (i) 85% of the closing price of the common stock as reported on the NASDAQ National Market (the "closing price") on the date that the offering commences or (ii) 85% of the closing price of the common stock on the date the offering terminates. In 1996, employees of the Company purchased 6,894 shares under the 1995 Purchase Plan. The Company has determined based on the analysis and assumptions prepared by management that the disclosure requirements pursuant to Statement of Financial Accounting Standards No. 123 (Accounting for Stock-Based Compensation) are immaterial to these financial statements taken as a whole. NOTE (6) BENEFIT PLANS PGI and its subsidiaries have two defined contribution benefit plans for eligible employees: a retirement benefit plan and a savings and investment plan (collectively, the Plans) qualified under section 401 of the Internal Revenue Code. PGI makes contributions to a trustee, on behalf of eligible employees, to fund both Plans. The Company's expenses under the Plans amounted to approximately $522,000 in 1996. PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (6) BENEFIT PLANS (CONTINUED) Both of the Company's Plans described above cover all full-time employees who have met certain age and length-of-service requirements. Regarding the retirement benefit plan, the Company contributes an amount that would purchase a certain targeted monthly pension benefit at the participant's normal retirement date. In connection with the savings and investment plan, participants may voluntarily contribute up to 10% of their compensation, and the Company will match this contribution up to 2%. NOTE (7) RELATED PARTY TRANSACTIONS Certain officers and/or directors of the Company are partners of Hale and Dorr, the Company's legal counsel. Amounts paid by the Company for legal services of Hale and Dorr amounted to approximately $11,000 in 1996. During 1996, the Company was charged by PGI for office rental, equipment expense, salaries and other operating expenses. These charges represent expenses directly attributable to the Company's operations or an allocation of its proportionate share of these expenses using formulas that management believes are reasonable. During 1996, obligations in the amount of $24 million owed by the Company to PMC were canceled. The forgiveness of debt was accounted for as a capital contribution in the accompanying consolidated financial statements. PMC also contributed an additional $1.5 million in cash, which was also accounted for as a capital contribution. Included in Other income is approximately $270,000 which the Company earned from an affiliate, Pioneer Management Ireland Limited, for underwriting fees on mutual funds. NOTE (8) COMMITMENTS In 1992, PGI entered into a 10 year lease agreement. In 1994, PGI entered into a direct lease agreement for office space rental on an additional floor. Future minimum payments under these agreements, which are expected to be allocated to the Company, amount to $469,000 in 1997, $481,000 in 1998, $500,000 in 1999, $513,000 in 2000, $525,000 in 2001 and $321,000, thereafter. These future minimum rental payments include estimated annual operating expenses of approximately $218,000. PIONEER FUNDS DISTRIBUTOR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ DECEMBER 31, 1996 ----------------- NOTE (9) DEALER ADVANCES Certain of the Pioneer Family of Mutual Funds maintain a multi-class share structure, whereby the participating funds offer both the traditional front-end load shares (Class A shares) and back-end load shares (Class B and Class C shares). Back-end load shares do not require the investor to pay any sales charge unless there is a redemption before the expiration of the minimum holding period which ranges from three to six years in the case of Class B shares and is one year in the case of Class C shares. However, the Company pays upfront sales commissions (dealer advances) to broker-dealers ranging from 2% to 4% of the sales transaction amount on Class B shares and 1% on Class C shares. The participating Funds pay the Company distribution fees of 0.75% and service fees of 0.25%, per annum of their net assets invested in Class B and Class C shares, subject to annual renewal by the participating Fund's Board of Trustees. In addition, the Company is paid a contingent deferred sales charge (CDSC) on Class B and C[]shares redeemed within the minimum holding period. The CDSC is paid based on declining rates ranging from 2% to 4% on the purchases of Class B shares and 1% for Class C shares. The Company capitalizes and amortizes Class B share dealer advances for financial statement purposes over periods which range from three to six years depending on the participating Fund. The Company capitalizes and amortizes Class C share dealer advances for financial statement purposes over a twelve month period. The Company deducts the dealer advances in full for tax purposes in the year such advances are paid. Distribution and service fees received by the Company from participating Funds are recorded in income as earned. CDSC received by the Company from redeeming shareholders reduce unamortized dealer advances directly. -----END PRIVACY-ENHANCED MESSAGE-----