-----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, WOE+Kbfwy435HZscWlZzI8pUe15yruyLGj4mdAeuKE0JQ7BkzdueqWR1XU7kLFZk KDs/Px5jtey2kI4dfcEawA== 0001145443-05-001811.txt : 20050819 0001145443-05-001811.hdr.sgml : 20050819 20050818173612 ACCESSION NUMBER: 0001145443-05-001811 CONFORMED SUBMISSION TYPE: N-14/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20050819 DATE AS OF CHANGE: 20050818 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PIONEER IBBOTSON ASSET ALLOCATION SERIES CENTRAL INDEX KEY: 0001288255 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-14/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-126370 FILM NUMBER: 051036645 BUSINESS ADDRESS: STREET 1: 60 STATE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174224947 MAIL ADDRESS: STREET 1: 60 STATE ST CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: PIONEER ASSET ALLOCATION SERIES DATE OF NAME CHANGE: 20040422 N-14/A 1 d17586_n14a.txt As filed with the Securities and Exchange Commission on August 18, 2005 File No. 333-126370 United States Securities and Exchange Commission Washington, D.C. 20549 FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. 1 --- Post-Effective Amendment No. ----- (Check appropriate box or boxes) PIONEER IBBOTSON ASSET ALLOCATION SERIES (Exact Name of Registrant as Specified in Charter) (617) 742-7825 (Area Code and Telephone Number) 60 State Street, Boston, Massachusetts 02109 (Address of Principal Executive Offices: Number, Street, City, State, Zip Code) Dorothy E. Bourassa, Esq. Pioneer Investment Management, Inc. 60 State Street Boston, Massachusetts 02109 (Name and Address of Agent for Service) Copies to: David C. Phelan, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, Massachusetts 02109 Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement. Calculation of Registration Fee under the Securities Act of 1933: No filing fee is due because of reliance on Section 24(f) of the Investment Company Act of 1940, which permits registration of an indefinite number of securities. Title of Securities Being Registered: Shares of beneficial interest of the Registrant. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment, which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall be effective on such date as the Commission, acting pursuant to Section 8(a), may determine. COMBINED PROXY STATEMENT OF AMSOUTH FUNDS on behalf of its Series: AMSOUTH BALANCED FUND AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO (each, an "AmSouth Fund" and collectively, the "AmSouth Funds") The address and telephone number of each AmSouth Fund is: 3435 Stelzer Road, Columbus, OH 43219 1-800-451-8382 PROSPECTUS FOR CLASS A, CLASS B AND CLASS Y SHARES OF PIONEER CLASSIC BALANCED FUND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each, a "Pioneer Fund" and collectively, the "Pioneer Funds") The address and telephone number of each Pioneer Fund is: 60 State Street, Boston, Massachusetts 02109 1-800-225-6292 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR SEPTEMBER 22, 2005 To the Shareholders of the AmSouth Funds: A joint special meeting of shareholders (the "Meeting") for each of the AmSouth Funds will be held at the offices of AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.m., local time, to consider the following: 1. With respect to each AmSouth Fund, a proposal to approve an Agreement and Plan of Reorganization. Under the Agreement and Plan of Reorganization applicable to your AmSouth Fund, it will transfer all of its assets to an investment company or a series thereof (each a "Pioneer Fund") managed by Pioneer Investment Management, Inc. ("Pioneer") in exchange for Class A, B and Y shares of the Pioneer Fund. Class A, B and Y shares of the Pioneer Fund will be distributed to each AmSouth Fund's shareholders in proportion to their Class A, B and I share holdings on the reorganization date. The Pioneer Fund also will assume, in the case of reorganizations into Pioneer Funds that have previously commenced investment operations, your AmSouth Fund's liabilities that are included in the calculation of your AmSouth Fund's net asset value on the closing date at the reorganization and, in the case of newly organized Pioneer Funds, all of your AmSouth Fund's liabilities. In the case of certain AmSouth Funds, the Pioneer Fund is an existing mutual fund with a substantially similar investment objective and similar investment policies as your AmSouth Fund. In the case of other AmSouth Funds, the Pioneer Fund is a newly organized mutual fund with a substantially similar investment objective and similar investment policies as your AmSouth Fund. Following the reorganization, your AmSouth Fund will be dissolved. As a result of the reorganization, you will become shareholders of the Pioneer Fund. Your board of trustees recommends that you vote FOR this proposal. 2. Any other business that may properly come before the Meeting. Shareholders of record as of the close of business on July 29, 2005 are entitled to vote at the Meeting and any related follow-up meetings. Whether or not you expect to attend the Meeting, please complete and return the enclosed proxy card. If shareholders do not return their proxies in sufficient numbers, your AmSouth Fund may be required to make additional solicitations. By order of the Board of Trustees, /s/ Michael C. Daniel Michael C. Daniel President [ ], 2005 COMBINED PROXY STATEMENT OF AMSOUTH FUNDS on behalf of its Series: AMSOUTH BALANCED FUND AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO (each, an "AmSouth Fund" and collectively, the "AmSouth Funds") The address and telephone number of each AmSouth Fund is: 3435 Stelzer Road, Columbus, OH 43219 1-800-451-8382 PROSPECTUS FOR CLASS A, CLASS B AND CLASS Y SHARES OF PIONEER CLASSIC BALANCED FUND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each, a "Pioneer Fund" and collectively, the "Pioneer Funds") The address and telephone number of each Pioneer Fund is: 60 State Street, Boston, Massachusetts 02109 1-800-225-6292 Shares of the Pioneer Funds have not been approved or disapproved by the Securities and Exchange Commission (the "SEC"). The SEC has not passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. An investment in any AmSouth Fund or Pioneer Fund (each sometimes referred to herein as a "Fund") is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1 This combined proxy statement and prospectus (the "Proxy Statement/Prospectus"), dated [ ], 2005, is being furnished to shareholders of the AmSouth Funds in connection with the solicitation by the board of trustees (the "Board," or the "Trustees") of the AmSouth Funds of proxies to be used at a joint meeting of shareholders of the AmSouth Funds (the "Meeting") to be held at the offices of AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.m., local time. Each AmSouth Fund is a series of AmSouth Funds, an open-end management investment company organized as a Massachusetts business trust. Each Pioneer Fund is an open-end management investment company, or a series thereof, organized as a Delaware statutory trust. The Proxy Statement/Prospectus contains information you should know before voting on the approval of a proposed Agreement and Plan of Reorganization (each a "Plan") that provides for the reorganization of each AmSouth Fund into a corresponding Pioneer Fund (each a "Reorganization"). The following table indicates (a) the corresponding Pioneer Fund shares that each AmSouth Fund shareholder would receive if each Plan is approved, (b) which AmSouth Fund shareholders may vote on which proposals and on what page of this Proxy Statement/Prospectus the discussion regarding each proposal begins. On each proposal, all shareholders of an AmSouth Fund, regardless of the class of shares held, will vote together as a single class. Although each Reorganization is similar in structure, you should read carefully the specific discussion regarding your AmSouth Fund's Reorganization. The Proxy Statement/Prospectus sets forth the information about the Pioneer Fund that a prospective investor ought to know before investing and should be retained for future reference. Additional information about each Pioneer Fund has been filed with the SEC and is available upon oral or written request and without charge. See "Where to Get More Information."
- ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(a) AmSouth Balanced Fund Pioneer Classic Balanced AmSouth Balanced Fund shareholders 8 Fund - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(b) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Aggressive Growth 22 Portfolios: Aggressive Aggressive Allocation Portfolio shareholders Growth Portfolio Fund - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(c) AmSouth Strategic Pioneer Ibbotson Growth AmSouth Strategic Portfolios: Growth Portfolio 48 Portfolios: Growth Allocation Fund shareholders Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(d) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Growth and Income 73 Portfolios: Growth and Moderate Allocation Fund Portfolio shareholders Income Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(e) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Moderate Growth 99 Portfolios: Moderate Moderate Allocation Fund and Income Portfolio shareholders Growth and Income Portfolio - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Where to Get More Information - ------------------------------------------------------------------------------------------------------------------------------------ The AmSouth Funds' prospectus dated December 1, 2004, Available to you free of charge by calling 1-800-451-8382. as supplemented January 12, 2005, April 26, 2005, Each prospectus is also on file with the SEC. June 1, 2005, June 27, 2005 and July 1, 2005. Available to you free of charge by calling 1-800-451-8382. The AmSouth Funds' statement of additional information Each statement of additional information is also on file dated December 1, 2004, as supplemented March 22, with the SEC. 2005. Available to you free of charge by calling 1-800-451-8382. The AmSouth Funds' annual report dated July 31, 2004 Also on file with the SEC. See "Available Information." and semiannual report dated January 31, 2005. - ------------------------------------------------------------------------------------------------------------------------------------ Each Pioneer Fund's current prospectus and each Pioneer Available to you free of charge by calling 1-800-225-6292. Fund's most recent annual and semiannual reports and These prospectuses and reports are also on file with the supplements (as they apply) to shareholders. SEC. - ------------------------------------------------------------------------------------------------------------------------------------ A statement of additional information for this joint Proxy Available to you free of charge by calling 1-800-225-6292. Statement/Prospectus (the "SAI"), dated August [ ], 2005. Also on file with the SEC. This SAI is incorporated by It contains additional information about your AmSouth reference into this Proxy Statement/Prospectus. Funds and the Pioneer Funds. - ------------------------------------------------------------------------------------------------------------------------------------ To ask questions about this Proxy Statement/Prospectus. Call your AmSouth Fund's toll-free telephone number: 1-800- 451-8382. - ------------------------------------------------------------------------------------------------------------------------------------
2 Background to the Reorganizations AmSouth Asset Management Inc. ("AAMI") is investment adviser to the AmSouth Funds and a wholly owned subsidiary of AmSouth Bank, which in turn is wholly owned by AmSouth Bancorporation. AmSouth Bank and AAMI have determined that engaging in the business of investment adviser to the AmSouth Funds is not a core business that AAMI intends to continue. After investigating and discussing several alternatives for ongoing investment management of the AmSouth Funds with the Trustees, AmSouth Bank and AAMI conducted a search for a buyer for AAMI's fund management business. Ultimately, AmSouth Bank and AAMI decided to recommend to the Board that the AmSouth Funds be reorganized into similar mutual funds managed by Pioneer Investment Management, Inc. ("Pioneer"). In early 2005, AmSouth Bank and AAMI conducted a search for a purchaser of AAMI's mutual fund investment advisory business. AmSouth Bancorporation engaged Goldman, Sachs & Co. to identify potential purchasers and solicited indications of interest. AmSouth Funds' management and AAMI reviewed proposals submitted by several investment advisory firms and selected a limited number to evaluate more carefully. Management and AAMI conducted, with respect to this selected group, a comparative evaluation of their investment processes and capabilities; availability of mutual funds with similar investment objectives and strategies; historical investment performance of the proposed funds into which the AmSouth Funds would be reorganized; expense ratios of the proposed counterpart funds to the historical gross and net expenses of the AmSouth Funds; their breadth of product line; their compliance culture and infrastructure; and reputation in the marketplace. Based upon this review, management and AAMI recommended that the Trustees approve the reorganization of the AmSouth Funds into the Pioneer Funds as being in the best interest of shareholders. Based on AAMI's recommendations, the Trustees met twice in May 2005, twice in June 2005 and again in August 2005 to consider the potential consolidation of the AmSouth Funds with the Pioneer Funds. At those meetings, the Trustees met with representatives of Pioneer and reviewed information provided by AAMI and Pioneer requested by the independent Trustees for the purposes of evaluating the Reorganizations. In the course of their evaluation of Pioneer and the Pioneer Funds, the Trustees reviewed various factors, including but not limited to, the impact of the Reorganizations on the shareholders of the AmSouth Funds, the comparability of the investment objectives and investment strategies of the AmSouth Funds and the Pioneer Funds; the expense ratios of the Pioneer Funds compared with those of the AmSouth Funds; the performance of the Pioneer Funds compared with that of the AmSouth Funds; the experience and qualifications of key personnel, including portfolio managers; and the financial resources, cash flow, and business reputation of the Pioneer Funds. In connection with their review of the Funds' existing and estimated pro forma expense ratios, the Trustees also considered that AmSouth Bank and its affiliates would no longer continue to subsidize the AmSouth Funds' operations by voluntarily capping expenses. In addition, the Trustees considered the background and reputation of the officers and members of the Board of Trustees of the Pioneer Funds. In conducting their review, the Trustees considered information provided by Pioneer relating to the education, experience and number of its investment professionals and other senior personnel. The Trustees received information concerning the investment philosophy and investment process applied by Pioneer in managing the Pioneer Funds. The Trustees concluded that Pioneer's investment processes, research capabilities and philosophy were well suited to the AmSouth Funds. The Trustees considered the quality of the services to be provided by Pioneer. The Trustees evaluated Pioneer's record with respect to regulatory compliance and compliance with the investment policies of the Pioneer Funds. The Trustees also evaluated the procedures of Pioneer designed to fulfill Pioneer's fiduciary duty to the Pioneer Funds with respect to possible conflicts of interest, including Pioneer's code of ethics (regulating the personal trading of its officers and employees), the procedures by which Pioneer allocates trades among its various investment advisory clients, the integrity of the systems in place to ensure compliance with the foregoing and the record of Pioneer in these matters. The Trustees also considered information relating to each Pioneer Fund's investment performance relative to its performance benchmark(s). The Trustees reviewed performance over various periods, including one, three, five and ten year periods when applicable, performance under different market conditions and during different legs of the market cycle, and the volatility of the Pioneer Funds' returns. The Trustees concluded that the scope and quality of Pioneer's services, including the investment performance of the Pioneer Funds, was sufficient, in light of market conditions, the resources brought to bear by Pioneer, Pioneer's integrity, its personnel and systems, and its financial resources to warrant recommending that AmSouth Funds' shareholders approve the proposed Reorganizations. In reaching that conclusion, the Trustees also gave substantial consideration to the proposed advisory fees. The Trustees considered possible economies of scale to Pioneer from the proposed consolidations with the AmSouth Funds. The Trustees also considered other alternatives for the ongoing management of AmSouth Funds. At a meeting on May 18, 2005, the Trustees met with representatives of Pioneer. In addition to these general factors, the Trustees also considered the factors discussed below in the context of each Reorganization. At the May 18, 2005 meeting, all of the Trustees who are not interested persons of AAMI (the "Independent Trustees") met separately in executive session with counsel to the Independent Trustees and requested and received such information from AAMI and Pioneer as 3 they determined to be necessary and appropriate to evaluate the proposed Reorganizations. On June 23, 2005, June 27, 2005 and August 1, 2005, the Board, including all of the Independent Trustees, unanimously voted to approve each of the Reorganizations. In approving the Reorganizations, the Board determined that the Reorganizations were in the best interests of the AmSouth Funds' shareholders and the interests of existing AmSouth Funds' shareholders will not be diluted as a result of the Reorganizations. Pioneer believes that it can offer capable management and favorable long-term investment performance to the AmSouth Funds' shareholders. The Reorganizations will, by combining the assets of two mutual funds and by increasing distribution capabilities, offer the potential for increased economies of scale. Increased economies of scale have the potential of benefiting the shareholders of your AmSouth Funds and the Pioneer Funds by spreading fixed costs over a larger asset base and reducing expenses on a per share basis. There can be no assurance that such economies of scale will be realized. Why the Trustees Are Recommending the Reorganizations The Trustees believe that reorganizing your AmSouth Fund into a portfolio with a substantially similar investment objective and similar investment policies that is part of the Pioneer family of funds offers you potential benefits. These potential benefits and considerations include: o AmSouth Bank and AAMI have determined that engaging in the business of investment adviser to the AmSouth Funds is not a core business that AAMI intends to continue. Therefore, a change in your AmSouth Fund's investment adviser is necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios; o The track record of Pioneer in managing the Pioneer Funds; o The transaction will qualify as a tax free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and therefore will not be treated as a taxable sale of your AmSouth Fund's shares; o The resources of Pioneer, including its infrastructure in shareholder services; and o The opportunity to be part of a significantly larger family of funds, with additional product offerings and enhanced shareholder servicing options, and a stronger compliance structure. For further information, please see the individual descriptions of the proposals contained in this Proxy Statement/Prospectus. How Each Reorganization Will Work o Each AmSouth Fund will transfer all of its assets to a corresponding Pioneer Fund. Each Pioneer Fund will assume the corresponding AmSouth Fund's liabilities that are included in the calculation of such AmSouth Fund's net asset value on the day on which each Reorganization closes (the "Closing Date"). Liabilities of each Fund to its shareholders not assumed by a corresponding Pioneer Fund will be assumed by AmSouth Bancorporation. o Each Pioneer Fund will issue Class A, B and Y shares to the corresponding AmSouth Fund in amounts equal to the aggregate net asset value of that AmSouth Fund's Class A, B and I shares. Shareholders of your AmSouth Fund will receive Class A, B and Y shares of the corresponding Pioneer Fund. These shares will be distributed to shareholders in proportion to the relative net asset value of their share holdings on the Closing Date. On the Closing Date, each shareholder will hold shares of the Pioneer Fund with the same aggregate net asset value as the shares of the AmSouth Fund that the shareholder held immediately prior to the Reorganization. o Each AmSouth Fund will be dissolved after the Closing Date. o For purposes of determining any contingent deferred sales charge ("CDSC"), the same commission schedule that applied to the shares of the AmSouth Fund will apply to the shares of the Pioneer Fund issued in the Reorganization and the holding period for determining the CDSC will be calculated from when the shares were initially purchased. o Following the Reorganizations, Pioneer will continue to act as investment adviser to each Pioneer Fund and AAMI will not be involved in the management of the Pioneer Funds. o The Reorganizations will not result in income, gain or loss being recognized for federal income tax purposes by any of the Pioneer Funds, the AmSouth Funds or the shareholders of the AmSouth Funds. 4 o In recommending each of the Reorganizations, the Trustees of your AmSouth Fund have determined that the Reorganization is in the best interest of your AmSouth Fund and will not dilute the interests of shareholders of your AmSouth Fund. The Trustees have made that determination on the basis of the factors listed above and discussed in more detail under each proposal. o If the Reorganizations are approved by the AmSouth Funds' shareholders, the AmSouth Funds will file with the SEC an application for deregistration on Form N-8F under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and will cease to exist as an investment company when such application is approved. Who Is Pioneer Pioneer is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and acts as investment adviser to mutual funds and institutional accounts. Pioneer or its predecessors have been managing mutual funds since 1928 and at December 31, 2004 had, together with its affiliates, over $42 billion in assets under management. Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., an Italian Bank. In addition to the Class A, B and Y shares to be issued in the Reorganizations, each Pioneer Fund also offers Class C shares (subject to a contingent deferred sales charge and a Rule 12b-1 Plan). In addition, most of the Pioneer Funds also offer Class R shares (which are offered only to certain retirement plans). Who Bears the Expenses Associated with the Reorganizations Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of the AmSouth Funds in connection with the Reorganizations. See "Information Concerning the Meeting." Will Pioneer and AmSouth Bancorporation Benefit from the Reorganizations Pioneer will benefit from managing a larger pool of assets which will produce increased advisory fees and, in the case of certain of the Pioneer Funds, eliminate or reduce Pioneer's obligation under its expense limitation agreement with the Pioneer Fund. Pioneer is also acquiring certain assets associated with AAMI's fund management business and the benefits of certain restrictive covenants on AAMI's and AmSouth Bancorporation's activities. In consideration for the acquisition of these assets, the opportunity to manage additional assets and covenants from AmSouth Bancorporation and AAMI, including their assistance in facilitating the Reorganizations, noncompetition covenants and their obligation to indemnify Pioneer against certain liabilities, Pioneer has agreed to pay AAMI $65 million. This amount is subject to partial repayment in the event that the assets attributable to the AmSouth Funds are redeemed (subject to certain conditions, including threshold amounts) from the Pioneer Funds within four years after the closing of the Reorganizations. Pioneer has also agreed to provide to AmSouth Bank, an affiliate of AAMI, ongoing servicing payments with respect to Class Y shares issued in the Reorganizations. This arrangement will remain in effect for as long as Class Y shares issued in the Reorganizations are held by clients of AmSouth Bank. The agreement requires AmSouth Bank to provide certain record keeping and shareholder communication services, including mailing prospectuses and other fund related materials to shareholders for which AmSouth Bank acts as shareholder of record, communicating to Pioneer Funds Distributor, Inc. requests for purchase, exchange and redemption transactions in shares of the Pioneer Funds and answering inquiries from beneficial holders of the Pioneer Funds' shares. Pioneer will also agree to provide an affiliate of AAMI with ongoing servicing payments with respect to the Class Y shares issued in the Reorganizations. This additional compensation will be equal on an annual basis to 0.10% of the average daily net assets attributable to the Class Y shares held by former AmSouth Funds' shareholders. This payment would be made by Pioneer and not the Pioneer Funds. No additional compensation would be paid with respect to Class A or Class B shares; however, if an affiliate of AAMI is the broker of record, that affiliate would receive the service fees under the Class A and Class B Rule 12b-1 Plans. What Are the Federal Income Tax Consequences of the Reorganizations The Reorganizations will not result in any income, gain or loss being recognized for federal income tax purposes by any of the AmSouth Funds, their shareholders or the Pioneer Funds as a direct result of the Reorganizations. However, in accordance with the AmSouth Funds' policy to distribute any net realized capital gains at least once each year (and thus to avoid federal income tax thereon at the Fund level), each AmSouth Fund that is being merged into an existing Pioneer Fund will declare and pay a distribution of such gains to its shareholders shortly before the Reorganizations. Each such distribution will be taxable to those shareholders. Additionally, following the Reorganizations, in accordance with the Pioneer Funds' similar policy, each Pioneer Fund will declare and pay before the end of 2005 a distribution of such 5 gains to its shareholders (including current shareholders of the AmSouth Funds who will be shareholders of the Pioneer Funds following the Reorganizations). Those distributions will be fully taxable to all shareholders of the Pioneer Funds, including those former AmSouth Funds shareholders, even though those distributions may include a portion of the Pioneer Fund's net capital gains that were realized before the Closing Date. What Happens if a Reorganization Is Not Approved If the required approval of shareholders is not obtained, the Meeting may be adjourned as more fully described in this Proxy Statement/ Prospectus, your AmSouth Fund will continue to engage in business as a separate mutual fund and the Board will consider what further action may be appropriate. Additional Information The staff of the SEC has been conducting an investigation into the mutual fund servicing business of BISYS Group, Inc., the parent company of ASO Services Company, the AmSouth Funds' administrator, and BISYS Fund Services, the AmSouth Funds' distributor and transfer agent (collectively, "BISYS"). In a press release dated April 19, 2005, BISYS stated that it believes that the SEC's investigation relates to the structure and accounting for certain arrangements pursuant to which BISYS agreed with the advisers of certain U.S. mutual funds, including AmSouth Funds, to use a portion of the fees paid to BISYS by the mutual funds to pay for, among other things, expenses relating to the marketing and distribution of fund shares, to make payments to certain advisers, and to pay for cerain other expenses. As part of its investigation of BISYS, the SEC is reviewing the relationships and agreements among BISYS, AmSouth Funds, AAMI and AmSouth Bank. AmSouth Funds, AAMI and AmSouth Bank are cooperating fully with the review. Additionally, AmSouth Bank and AAMI, in cooperation with a special review committee of the Board of Trustees of AmSouth Funds, are conducting a review of this matter and are taking appropriate steps to protect the interests of shareholders, including making payments to the AmSouth Funds. Who Is Eligible to Vote Shareholders of record on July 29, 2005 are entitled to attend and vote at the Meeting or any adjournment of the Meeting. On each proposal, all shareholders of an AmSouth Fund, regardless of the class of shares held, will vote together as a single class. Each share is entitled to one vote. Shares represented by properly executed proxies, unless revoked before or at the Meeting, will be voted according to shareholders' instructions. If you sign a proxy but do not fill in a vote, your shares will be voted to approve the Agreement and Plan of Reorganization. If any other business comes before the Meeting, your shares will be voted at the discretion of the persons named as proxies. 6 TABLE OF CONTENTS
Page ---- INTRODUCTION ........................................................................... 2 PROPOSAL 1(a) -- AMSOUTH BALANCED FUND ................................................. 8 PROPOSAL 1(b) -- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO ............. 22 PROPOSAL 1(c) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO ........................ 48 PROPOSAL 1(d) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO ............. 73 PROPOSAL 1(e) -- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO .... 99 TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION ..................................... 125 TAX STATUS OF EACH REORGANIZATION ...................................................... 125 VOTING RIGHTS AND REQUIRED VOTE ........................................................ 127 COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST ................ 127 ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS ......................................... 128 FINANCIAL HIGHLIGHTS ................................................................... 136 INFORMATION CONCERNING THE MEETING ..................................................... 139 OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS ............................................... 141 OWNERSHIP OF SHARES OF THE PIONEER FUNDS ............................................... 145 EXPERTS ................................................................................ 146 AVAILABLE INFORMATION .................................................................. 146 EXHIBIT A-1 FORM OF AGREEMENT AND PLAN OF REORGANIZATION (C/D REORGANIZATIONS) ......... A-1 EXHIBIT A-2 FORM OF AGREEMENT AND PLAN OF REORGANIZATION (F REORGANIZATIONS) ........... A-16 EXHIBIT B ADDITIONAL INFORMATION ABOUT PIONEER ....................................... B-1 EXHIBIT C PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE .............................. C-1
7 AmSouth Balanced Fund and Pioneer Classic Balanced Fund PROPOSAL 1(a) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-2 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of AmSouth Classic Balanced Fund's performance is attached as Exhibit C. Each Fund has an investment objective of obtaining capital growth and current income and, consequently, the Funds have similar investment policies and risks. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Balanced Fund to Pioneer Classic Balanced Fund
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, A newly created, diversified series of an open-end management investment Pioneer Series Trust IV, an open-end company organized as a Massachusetts management investment company organized business trust. as a Delaware statutory trust. - ------------------------------------------------------------------------------------------------------------------------- Net assets as of $182.74 million None. Pioneer Classic Balanced Fund is newly March 31, 2005 created and does not expect to commence investment operations until the Reorganization occurs. - ------------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Managers: Portfolio Managers: Day-to-day management of AmSouth Day-to-day management of the Fund's Balanced Fund's portfolio is the portfolio is the responsibility of John A. responsibility of John P. Boston, CFA, and Carey, portfolio manager, and Walter Brian B. Sullivan, CFA Mr. Boston has Hunnewell, Jr., assistant portfolio manager. co-managed the Balanced Fund since 1994. Mr. Carey and Mr. Hunnewell are supported Mr. Sullivan has co-managed the Balanced by the domestic equity team. Members of Fund since June 2004. Mr. Sullivan has this team manage other Pioneer mutual been an officer of AAMI since 1996 and funds investing primarily in U.S. equity joined AmSouth Bank in 1982. Prior to securities. The portfolio managers and the serving as Director of Fixed Income for team also draw upon the research and AmSouth Bank's Trust Department, investment management expertise of the Mr. Sullivan managed equity portfolios and global research team, which provides held the position of equity research fundamental research on companies and coordinator for AmSouth Bank's Trust includes members from Pioneer's affiliate, Department. Mr. Boston is Chief Fixed Pioneer Investment Management Limited. Income Officer for AmSouth Asset Management, Inc. Mr. Boston began his Mr. Carey is director of portfolio career in investment management with management and an executive vice AmSouth Bank in 1988 and has been president of Pioneer. Mr. Carey joined associated with AAMI since 1996. Pioneer as an analyst in 1979. Mr. Hunnewell is a vice president of Pioneer. He joined Pioneer in August 2001 and has been an investment professional since 1985. Prior to joining Pioneer, Mr. Hunnewell was an independent investment manager and a fiduciary of private asset portfolios from 2000 to 2001. - -------------------------------------------------------------------------------------------------------------------------
8
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Balanced Fund seeks to obtain Pioneer Classic Balanced Fund seeks to long-term capital growth and produce a obtain capital growth and current income. reasonable amount of current income through a moderately aggressive investment strategy. - ------------------------------------------------------------------------------------------------------------------------- Primary investments AmSouth Balanced Fund invests in a Pioneer allocates the Fund's assets between broadly diversified portfolio of equity and equity and debt securities based on its debt securities consisting primarily of assessment of current business, economic common stocks and bonds. and market conditions. Normally, equity and debt securities each represent 35% to 65% of The Fund normally invests between 45-75% the Fund's assets. of its assets in equity securities and at least 25% of its assets in fixed income securities. For purposes of the Fund's investment The portion of the Fund's assets invested in policies, equity investments include common equity and debt securities will vary stocks, convertible debt, equity interests in depending upon economic conditions, the real estate investment trusts (REITs), and general level of stock prices, interest rates securities with common stock characteristics, and other factors, including the risks such as preferred stocks. The Fund's associated with each investment. The Fund's investments in debt securities include U.S. equity investments consist primarily of government securities, corporate debt common stocks of companies that AAMI securities, mortgage- and asset-backed believes are undervalued and have a securities, short-term debt securities, cash favorable outlook or are reasonably priced and cash equivalents. Cash and cash with the potential to produce above-average equivalents include cash balances, accrued earnings growth. The Fund's fixed-income interest and receivables for items such as the investments consist primarily of "high- proceeds, not yet received, from the sale of grade" bonds, notes and debentures. The the Fund's portfolio investments. Debt Fund invests in securities issued by: (i) the securities in which the Fund invests may have Government National Mortgage Association fixed or variable principal payments and all ("GNMA"), which are supported by the full types of interest rate payment and reset faith and credit of the U.S. government; and terms, including fixed rate, adjustable rate, (ii) the Federal National Mortgage zero coupon, contingent, deferred, payment- Association ("FNMA") and the Federal Home in-kind and auction rate features. Loan Mortgage Corporation ("FHLMC") which are supported by the right of the The Fund may invest in U.S. government issuer to borrow from the U.S. Treasury. securities. U.S. government securities include The Fund also invests in U.S. Treasury obligations: directly issued by or supported by obligations. the full faith and credit of the U.S. government, like Treasury bills, notes and bonds and Government National Mortgage Association certificates; supported by the right of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks; supported by the discretionary authority of the U.S. government to purchase the agency's securities like those of the Federal National Mortgage Association; or supported only by the credit of the issuer itself, like the Tennessee Valley Authority. The Fund may invest in mortgage-backed and asset-backed securities. Mortgage-related securities may be issued by private companies or by agencies of the U.S. government and represent direct or indirect participation in, or are collateralized by and payable from, mortgage loans secured by real property. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. - -------------------------------------------------------------------------------------------------------------------------
9
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Investment strategies In managing the equity portion of the Fund, In selecting equity securities, Pioneer uses a the AAMI combines fundamental and value approach to select the Fund's quantitative analysis with risk management investments. Pioneer seeks securities selling to identify value opportunities, construct the at reasonable prices or substantial discounts portfolio and make sell decisions. AAMI to their underlying values and then holds selects investments believed to have basic these securities until the market values investment value that will eventually be reflect their intrinsic values. Pioneer recognized by other investors. In addition, evaluates a security's potential value, the AAMI may identify companies with a including the attractiveness of its market history of above-average growth or valuation, based on the company's assets companies that are expected to enter and prospects for earnings growth. In periods of above-average growth or are making that assessment, Pioneer employs positioned in emerging growth industries. due diligence and fundamental research, an evaluation of the issuer based on its AAMI's fixed income portfolio management financial statements and operations. Pioneer process focuses on the four key areas of also considers a security's potential to duration management, sector weights, provide a reasonable amount of income. position on the yield curve, and security Pioneer relies on the knowledge, experience selection; AAMI's goal is to add value in and judgment of its staff who have access each of these four areas through the active to a wide variety of research. Pioneer management of the Fund's portfolio. focuses on the quality and price of Beginning with rigorous fundamental individual issuers, not on economic sector analysis of the economy and taking into or market-timing strategies. Factors Pioneer account characteristics of the current looks for in selecting investments include: business and interest rate cycles, AAMI arrives at a projection of the likely trend in o Favorable expected returns relative to interest rates and adjusts duration perceived risk accordingly. Analysis of the shape of the o Above average potential for earnings and yield curve and yield spreads among bond revenue growth market sectors leads to further refinements o Low market valuations relative to in strategy for companies that appear earnings forecast, book value, cash flow undervalued. and sales o A sustainable competitive advantage, such as a brand name, customer base, proprietary technology or economies of scale In selecting debt securities, Pioneer considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the Fund's investment objectives. In assessing the appropriate maturity, rating and sector weighting of the Fund's portfolio, Pioneer considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy and the relative value of the U.S. dollar compared to other currencies. Once Pioneer determines the preferable portfolio characteristics, Pioneer selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issuers), liquidity and rating, sector and issuer diversification. - -------------------------------------------------------------------------------------------------------------------------
10
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Other investments AmSouth Balanced Fund may also invest in Up to 10% of Pioneer Classic Balanced debt securities, preferred stock and that Fund's total assets may be invested in debt portion of the value of securities convertible securities rated below investment grade, in to common stock, including convertible including convertible debt. A debt security is preferred stock and convertible debt, which investment grade if it is rated in one of the is attributable to the fixed income top four categories by a nationally characteristics of those securities. recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities. The Fund may invest up to 25% of its total assets in real estate investment trusts (REITs). REITs are companies that invest primarily in real estate or real estate related loans. The Fund may invest up to 25% of its total assets in equity and debt securities of non-U.S. issuers. The Fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. The Fund invests in non-U.S. securities to diversify its portfolio when they offer similar or greater potential for capital appreciation. - ------------------------------------------------------------------------------------------------------------------------- Temporary defensive When AAMI determines adverse market Normally, Pioneer Classic Balanced Fund strategies conditions exist, AmSouth Balanced Fund invests substantially all of its assets to meet may invest entirely in cash positions, its investment objective. The Fund may directly in U.S. government securities and invest the remainder of its assets in short-term paper, such as bankers' securities with remaining maturities of less acceptances. than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ------------------------------------------------------------------------------------------------------------------------- Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code"). - -------------------------------------------------------------------------------------------------------------------------
11
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Industry AmSouth Balanced Fund may not purchase Pioneer Classic Balanced Fund may not concentration any securities which would cause more than invest more than 25% of its assets in any 25% of the value of the Fund's total assets one industry. at the time of purchase to be invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities, and repurchase agreements secured by obligations of the U.S. government or its agencies or instrumentalities; (b) wholly owned finance companies will be considered to be in the industries of their parents if their activities are primarily related to financing the activities of their parents; and (c) utilities will be divided according to their services. For example, gas, gas transmission, electric and gas, electric, and telephone will each be considered a separate industry. - ------------------------------------------------------------------------------------------------------------------------- Restricted and AmSouth Balanced Fund may not invest Pioneer Classic Balanced Fund may not illiquid securities more than 15% of its net assets in invest more than 15% of its net assets in securities that are restricted as to resale, or securities that are illiquid and other for which no readily available market exists, securities that are not readily marketable. including repurchase agreements providing Repurchase agreements maturing in more for settlement more than seven days after than seven days will be included for notice. purposes of the foregoing limit. - ------------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Balanced Fund may not borrow Pioneer Classic Balanced Fund may not money or issue senior securities, except borrow money, except the Fund may: (a) that the Fund may borrow from banks or borrow from banks or through reverse enter into reverse repurchase agreements repurchase agreements in an amount up to for temporary emergency purposes in 33 1/3% of the Fund's total assets (including amounts up to 33 1/3% of the value of its the amount borrowed); (b) to the extent total assets at the time of such borrowing. permitted by applicable law, borrow up to The Fund will not purchase securities while an additional 5% of the Fund's assets for borrowings (including reverse repurchase temporary purposes; (c) obtain such short- agreements) in excess of 5% of its total term credits as are necessary for the assets are outstanding. clearance of portfolio transactions; (d) purchase securities on margin to the extent permitted by applicable law; and (e) engage in transactions in mortgage dollar rolls that are accounted for as financings. - -------------------------------------------------------------------------------------------------------------------------
12
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Lending AmSouth Balanced Fund may not make Pioneer Classic Balanced Fund may not make loans, except that the Fund may purchase or loans, except that the Fund may (i) lend hold debt instruments in accordance with its portfolio securities in accordance with the investment objective and policies, lend Fund Fund's investment policies, (ii) enter into securities in accordance with its investment repurchase agreements, (iii) purchase all or a objective and policies and enter into portion of an issue of publicly distributed debt repurchase agreements. securities, bank loan participation interests, bank certificates of deposit, bankers' In addition, the Fund is permitted to acceptances, debentures or other securities, participate in a credit facility whereby the whether or not the purchase is made upon the Fund may directly lend to and borrow original issuance of the securities, (iv) money from other AmSouth funds for participate in a credit facility whereby the Fund temporary purposes, provided that the loans may directly lend to and borrow money from are made in accordance with an order of other affiliated funds to the extent permitted exemption from the SEC and any conditions under the Investment Company Act or an thereto. exemption therefrom, and (v) make loans in any other manner consistent with applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction. - ------------------------------------------------------------------------------------------------------------------------- Derivative AmSouth Balanced Fund may invest in The Fund may use futures and options on instruments futures contracts and options thereon securities, indices and currencies, forward (interest rate futures contracts or index foreign currency exchange contracts and other futures contracts, as applicable) to commit derivatives. A derivative is a security or funds awaiting investment, to maintain cash instrument whose value is determined by liquidity or for other hedging purposes. The reference to the value or the change in value value of the Fund's contracts may equal or of one or more securities, currencies, indices exceed 100% of the Fund's total assets, or other financial instruments. Although there although the Fund will not purchase or sell is no specific limitation on investing in a futures contract unless immediately derivatives, the Fund does not use derivatives afterwards the aggregate amount of margin as a primary investment technique and deposits on its existing futures positions generally limits their use to hedging. However, plus the amount of premiums paid for the Fund may use derivatives for a variety of related futures options entered into for other non-principal purposes, including: than bona fide hedging purposes is 5% or less of its net assets. o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the Fund's return as a non- hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on the Fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the Fund's other investments, the Fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. The Fund will only invest in derivatives to the extent Pioneer believes these investments do not prevent the Fund from seeking its investment objective. - -------------------------------------------------------------------------------------------------------------------------
13
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Short-term trading The AmSouth Fund may engage in the Pioneer Classic Balanced Fund usually does technique of short-term trading. Such not trade for short-term profits. The Fund trading involves the selling of securities held will sell an investment, however, even if it for a short time, ranging from several has only been held for a short time, if it no months to less than a day. The object of longer meets the Fund's investment criteria. such short-term trading is to increase the potential for capital appreciation and/or income of the Fund in order to take advantage of what AAMI believes are changes in market, industry or individual company conditions or outlook. - ------------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ------------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ------------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 4% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - ------------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of up to 12b-1 fees up to 5%. For Class B shares held 4% if you sell your shares. The charge is continuously, the CDSC declines over six reduced over time and is not charged after five years, starting with year one and ending in years. Your investment firm may receive a year seven from: 5%, 4%, 3%, 2%, 1%. commission from PFD, the Fund's distributor, at Eight years after purchase Class B shares the time of your purchase of up to 4%. automatically convert to Class A shares. Class B shares are subject to distribution and Class B shares pay a shareholder servicing service (12b-1) fees of up to 1% of average fee (non 12b-1) of up to 0.25% of average daily net assets. daily net assets. This fee is in the form of a separate non-Rule 12b-1 fee. All Funds bear Class B shares acquired through the a distribution (12b-1) fee of up to 0.75%. Reorganization will retain the holding period, CDSC and commission schedules applicable to Maximum investment for all Class B the original purchase. purchases by a shareholder for the Fund's shares is $99,999. Maximum purchase of Class B shares in a single transaction is $49,999. Class B shares convert to Class A shares eight years after the date of purchase. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Balanced Fund does not impose The Fund does not impose any initial, sales charges and any initial or CDSC on Class I shares. contingent deferred or asset based sales Rule 12b-1 fees charge on Class Y shares. The Fund may impose a shareholder servicing fee (non 12b-1) of up to 0.15% of average daily net assets. The fee is The distributor incurs the expenses of computed daily and paid monthly. distributing the Fund's Class Y shares, none of which are reimbursed by the Fund or the Class Y shareowners. - ------------------------------------------------------------------------------------------------------------------------- Management and AmSouth Balanced Fund pays an advisory fee Pioneer Classic Balanced Fund will pay other fees on a monthly basis at an annual rate of Pioneer an advisory fee as follows: 0.65% 0.80% of the Fund's average daily net assets. of the Fund's average daily net assets on the first $1 billion, 0.60% on the next $4 ASO Services Company, Inc. ("ASO") serves billion, and 0.55% on assets over $5 billion. as administrator and fund accounting agent The fee is computed daily and paid monthly. for the Fund. The Fund pays ASO an administrative services fee of 0.15% of the In addition, the Fund will reimburse Pioneer Fund's average daily net assets. for certain fund accounting and legal expenses incurred on behalf of the Fund For the fiscal year ended July 31, 2004, other and pay a separate shareholder servicing/ expenses of the Fund were limited to 0.54% transfer agency fee to PIMSS, an affiliate of for Class A shares, 0.54% for Class B shares Pioneer. and 0.44% for Class I shares. Any fee waiver or expense reimbursement arrangement is The Fund's total annual fund operating voluntary and may be discontinued at any time. expenses are estimated to be 1.13% of average daily net assets for Class A shares, For the fiscal year ended July 31, 2004, the 1.99% for Class B shares, and 0.78% for Fund's annual operating expenses for Class A Class Y shares for the current fiscal year. shares, after giving effect to the expense limitation were 1.32%, and without giving effect to the expense limitation, were 1.34% of average daily net assets. For the fiscal year ended July 31, 2004, the Fund's annual operating expenses for Class B shares, after giving effect to the expense limitation were 2.07%, and without giving effect to the expense limitation, were 2.09% of average daily net assets. For the fiscal year ended July 31, 2004, the Fund's annual operating expenses for Class I shares, after giving effect to the expense limitation were 1.17%, and without giving effect to the expense limitation, were 1.21% of average daily net assets. - ------------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into selling If the account is established in the agreements with the Fund's distributor, as shareholder's own name, shareholders may described in the Fund's prospectus. also purchase additional shares of Pioneer Fund by telephone or online. Certain account transactions may be done by telephone. - -------------------------------------------------------------------------------------------------------------------------
15
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual Fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. The Fund allows you to investment requirements for the Fund into exchange your shares at net asset value which you are exchanging. Exchanges from without charging you either an initial or one Fund to another are taxable. Class A contingent deferred shares charge at the shares may be exchanged for Class I shares time of the exchange. Shares you acquire as of the same Fund or another AmSouth Fund if part of an exchange will continue to be you become eligible to purchase Class I subject to any contingent deferred sales shares. Class I shares may be exchanged for charge that applies to the shares you Class A shares of the same Fund. No originally purchased. When you ultimately transaction fees are currently charged for sell your shares, the date of your original exchanges. purchase will determine your contingent deferred sales charge. An exchange If you sell your shares or exchange them for generally is treated as a sale and a new shares of another AmSouth Fund within 7 purchase of shares for federal income tax days of the date of purchase, you will be purposes. charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The After you establish an eligible fund account, fee is paid to the Fund to offset the costs you can exchange Fund shares by telephone associated with short-term trading, such as or online. portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ------------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ------------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -------------------------------------------------------------------------------------------------------------------------
16 Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on your investment in either Fund or not make as much as if you invested elsewhere if: o The stock market goes down (this risk may be greater in the short term) o The adviser's judgment about the attractiveness, growth potential or potential appreciation of a particular stock proves to be incorrect o The market segment on which the Fund equity investment are focused -- value and growth stocks -- under performs other kinds of investments or market averages o The value of the Fund's fixed-income investments declines due to an increase in interest rates (generally, an increase in the average maturity of the fixed income portfolio of the Fund will make it more sensitive to interest rate risk) o During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o An issuer cannot make timely interest and principal payments on its debt securities, such as bonds (the lower a security's rating, the greater its credit risk) Each Fund may trade securities actively to achieve its principal investment strategies. Active trading of portfolio securities could increase each Fund's transaction costs (thereby lowering its performance) and may increase the amount of taxes that you pay (on distributions of net gains realized on those trades). If either Fund invests in securities with additional risk, that Fund's share price volatility accordingly could be greater and its performance lower. At times, more than 25% of the Fund's assets may be invested in the same market segment, such as financials or technology. To the extent the Fund emphasizes investments in a market segment, the Fund will be subject to a greater degree to the risks particular to the industries in that segment, and may experience greater market fluctuation, than a Fund without the same focus. For example, industries in the financial segment, such as banks, insurance companies, broker-dealers and REITs, may be sensitive to changes in interest rates and general economic activity and are subject to extensive government regulation. Industries in the technology segment, such as information technology, communications equipment, computer hardware and software, and office and scientific equipment, are subject to risks of rapidly evolving technology, short product lives, rates of corporate expenditures, falling prices and profits, competition from new market entrants, and general economic conditions. If the Fund does a lot of trading, it may incur additional operating expenses, which would reduce performance, and could cause shareowners to incur a higher level of taxable income or capital gains. Pioneer Classic Balanced Fund may be subject to the following additional risks associated with investing in non-U.S. issuers, which may involve unique risks compared to investing in securities of U.S. issuers. Some of these risks do not apply to larger, more developed non-U.S. countries. However, these risks are more pronounced for issuers of securities in emerging markets. These risks may include: o Less information about non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Many non-U.S. markets are smaller, less liquid and more volatile. In a changing market, Pioneer may not be able to sell the Fund's portfolio securities at times, in amounts and at prices it considers reasonable o Adverse effect of currency exchange rates or controls on the value of the Fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect the securities markets o Withholding and other non-U.S. taxes may decrease the Fund's return 17 Past Performance Set forth below is performance information for AmSouth Balanced Fund. The bar charts show how AmSouth Balanced Fund's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The tables show average annual total return for AmSouth Balanced Fund over time for each class of shares compared with a broad-based securities market index. The bar charts give an indication of the risks of investing in AmSouth Balanced Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance does not indicate future results. Pioneer Classic Balanced Fund has not commenced investment operations. AmSouth Balanced Fund -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 23.51 9.72 20.84 13.12 1.33 10.18 4.84 -6.86 15.69 6.60
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 10.62% for the quarter ended June 30, 2003, and the lowest quarterly return was -6.78% for the quarter ended September 30, 2002. AmSouth Balanced Fund Average Annual Total Returns (as of December 31, 2004)
- ----------------------------------------------------------------------------------------------------- 1 Year 5 Years 10 Years - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class A Shares - ----------------------------------------------------------------------------------------------------- Return Before Taxes(1) 1.68% 4.79% 9.02% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 0.89% 3.23% 6.71% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 1.07% 3.29% 6.64% - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class B Shares - ----------------------------------------------------------------------------------------------------- Return Before Taxes(1) 1.86% 4.87% 8.75% - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class I Shares(2) - ----------------------------------------------------------------------------------------------------- Return Before Taxes 7.76% 6.15% 9.78% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 6.88% 4.46% 7.38% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 5.02% 4.38% 7.27% - ----------------------------------------------------------------------------------------------------- S&P 500 Index 10.87% -2.30% 12.07% - ----------------------------------------------------------------------------------------------------- Lehman Government/Credit Bond Index 4.19% 8.00% 7.80% - -----------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 12/19/91. Performance for the Class B shares, which were first offered on 9/2/97, is based on the historical performance of the Fund's Class A shares (without sales charge) prior to that date. The historical performance of the Class B shares has been restated to reflect the Fund's Class B shares distribution (12b-1) fees and the contingent deferred sales charge. (2) Performance for the Class I shares, which were first offered on 9/1/97, is based on the historical performance of the Fund's Class A shares (without sales charge) prior to that date. The table shows the impact of taxes on the Fund's returns. After-tax returns are only shown for Class A shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect 18 the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The table below shows the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the table appearing below are based on (i) for the AmSouth Balanced Fund, the expenses of AmSouth Balanced Fund for the period ended January 31, 2005 and (ii) for the Pioneer Classic Balanced Fund, the estimated pro forma annual expenses assuming the Reorganization occurred on May 31, 2005.
Pioneer Pioneer Pioneer Classic Classic Classic AmSouth Balanced AmSouth Balanced AmSouth Balanced Balanced Fund Balanced Fund Balanced Fund Fund(1) (Pro Forma) Fund(1) (Pro Forma) Fund(1) (Pro Forma) Shareholder transaction fees Class A Class A Class B Class B Class I Class Y (paid directly from your investment) -------- ----------- -------- ----------- -------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ............................. 5.50%(2) 5.75%(2) None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................................ None None 5.00%(3) 4.00% None None Redemption fees ........................................... 2.00%(4) None 2.00%(4) None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............................................ 0.80 % 0.65% 0.80% 0.65% 0.80% 0.65% Distribution and service (12b-1) fee ...................... None 0.25% 0.75% 1.00% None None Other expenses ............................................ 0.60%(5) 0.23% 0.63%(5) 0.34% 0.50%(5) 0.13% Total fund operating expenses ............................. 1.40% 1.13%(6) 2.18% 1.99%(6) 1.30% 0.78%(6) Expense reimbursement/reduction ........................... 0.07% N/A 0.10% N/A 0.12% N/A Net fund operating expenses ............................... 1.33% 1.13% 2.08% 1.99% 1.18% 0.78%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) A CDSC on Class B shares held continuously declines over six years starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.53% for Class A shares, 0.53% for Class B shares and 0.38% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, (d) each Fund's gross operating expenses remain the same, and (e) the expense limitation for your Fund is in effect for year one. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future. 19
- -------------------------------------------------------------------------------- Pro Forma Pioneer AmSouth Classic Balanced Balanced Number of years you own your shares Fund Fund - -------------------------------------------------------------------------------- Class A - -------------------------------------------------------------------------------- Year 1 $ 685 $ 684 - -------------------------------------------------------------------------------- Year 3 $ 969 $ 913 - -------------------------------------------------------------------------------- Year 5 $1,274 $1,161 - -------------------------------------------------------------------------------- Year 10 $2,137 $1,871 - -------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - -------------------------------------------------------------------------------- Year 1 $ 721 $ 602 - -------------------------------------------------------------------------------- Year 3 $ 982 $ 924 - -------------------------------------------------------------------------------- Year 5 $1,369 $1,173 - -------------------------------------------------------------------------------- Year 10 $2,316 $2,095 - -------------------------------------------------------------------------------- Class B -- assuming no redemption - -------------------------------------------------------------------------------- Year 1 $ 221 $ 202 - -------------------------------------------------------------------------------- Year 3 $ 682 $ 624 - -------------------------------------------------------------------------------- Year 5 $1,169 $1,073 - -------------------------------------------------------------------------------- Year 10 $2,316 $2,095 - -------------------------------------------------------------------------------- Class I Class Y - -------------------------------------------------------------------------------- Year 1 $ 132 $ 80 - -------------------------------------------------------------------------------- Year 3 $ 412 $ 249 - -------------------------------------------------------------------------------- Year 5 $ 713 $ 433 - -------------------------------------------------------------------------------- Year 10 $1,568 $ 966 - --------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of Amsouth Balanced Fund. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, and AmSouth Bank informed the Trustees that they did not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. In addition, Pioneer offers shareholders additional options for their accounts, including the ability to transact and exchange shares over the telephone or online and the ability to access account values and transaction history in all of the shareholder's direct accounts in the Pioneer Funds over the telephone or online. Third, Pioneer Classic Balanced Fund's management fee (0.65% of average daily net assets on the first $1 billion, 0.60% on the next $4 billion, and 0.55% on assets over $5 billion) will be substantially lower than the advisory fee of your Fund (0.80% of average daily net assets). The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds will be the same. Moreover, your AmSouth Fund's Class I shares pay a non-12b-1 20 shareholder servicing fee that will not be paid by the Pioneer Fund's Class Y shares. On a pro forma basis, both the gross and net expenses of each class of the Pioneer Fund are estimated to be lower than the expenses of the corresponding class of your AmSouth Fund. In addition, the broader distribution arrangements of the Pioneer Fund offer greater potential for further asset growth and reduce per share expenses. Fourth, the Class A, B and Y shares of Pioneer Classic Balanced Fund received in the Reorganization will provide AmSouth Balanced Fund shareholders with exposure to substantially the same investment product as they have currently. Fifth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of the AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
(Pro Forma) AmSouth Pioneer Classic Pioneer Classic Balanced Fund Balanced Fund Balanced Fund May 31, 2005 May 31, 2005 May 31, 2005 ------------- --------------- --------------- Total Net Assets (in thousands) ......... $ 181,569 N/A $ 181,569 Class A shares ........................ $ 105,281 N/A $ 105,281 Class B shares ........................ $ 25,044 N/A $ 25,044 Class I/Y shares ...................... $ 51,244 N/A $ 51,244 Net Asset Value Per Share Class A shares ........................ $ 12.74 N/A $ 12.74 Class B shares ........................ $ 12.69 N/A $ 12.69 Class I/Y shares ...................... $ 12.74 N/A $ 12.74 Shares Outstanding Class A shares ........................ 8,265,238 N/A 8,265,238 Class B shares ........................ 1,973,093 N/A 1,973,093 Class I/Y shares ...................... 4,022,510 N/A 4,022,510
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 21 AmSouth Strategic Portfolios: Aggressive Growth Portfolio and Pioneer Ibbotson Aggressive Allocation Fund PROPOSAL 1(b) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Aggressive Growth Portfolio to Pioneer Ibbotson Aggressive Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ----------------------------------------------------------------------------------------------------------------------- Net assets as of $51.9 million $19.1 million March 31, 2005 - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Aggressive Growth ("Ibbotson") Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Aggressive Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Ph.D., managing director and chief Jason Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, and global financial markets. Dr. Chen joined - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for Ibbotson in 1997. Michael E. Annin, and portfolio AAMI. He began his career in investment managing director, manages the investment managers management with AmSouth Bank in 1987 management services and data products (continued) and has been associated with AAMI since group for Ibbotson. Scott Wentsel, senior 1996. Mr. Boston received his CFA charter portfolio manager, is responsible for in 1993 and is an active member and past management of the firm's fund-of-funds president of the Alabama Society of business which includes oversight of its Financial Analysts. He also serves as the investment management staff and process. portfolio manager for the AmSouth High Alexander E. Kaye, portfolio manager, is Quality Bond Fund. Mr. Boston is a Senior responsible for managing the delivery of Vice President of AmSouth Bank and Vice fund-of-funds programs for institutional and President of AAMI. retail clients, which includes asset allocation modeling, portfolio construction, fund Mr. Crown has been employed with classification and manager due diligence. AmSouth Bank since 1982 and AAMI since Brian Huckstep, portfolio manager, is 2001. He was an Institutional Fund Manager responsible for managing the delivery of with AAMI (2001-2003) and has been a fund-of-funds programs for institutional and Regional Manager since 2003. Mr. Crown is retail clients, which includes asset allocation a Senior Vice President of AmSouth Bank. modeling, portfolio construction, fund classification, and manager due diligence. Ms. Daniel has been employed with AmSouth Bank since 1999. She has been employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Lindquist has been employed with AAMI and portfolio since December 1999. Prior to December managers 1999, Mr. Lindquist was employed by First (continued) American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Williams has been employed with and portfolio AmSouth Bank since 2002. He has been managers employed as a Regional Manager with AAMI (continued) since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - ----------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund Growth Portfolio seeks to provide investors seeks long-term capital growth. with capital growth. - ----------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Aggressive Growth Portfolio: AmSouth Strategic Portfolios: Aggressive Growth Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-20% AmSouth Select Equity Fund 0-15% AmSouth Enhanced Market Fund 0-25% AmSouth Large Cap Fund 0-15% AmSouth Capital Growth Fund 0-20% AmSouth Mid Cap Fund 0-15% AmSouth Small Cap Fund 0-25% AmSouth International Equity Fund 0-15% AmSouth High Quality Bond Fund 0-35% AmSouth Limited Term Bond Fund 0-10% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Aggressive Growth Portfolio's shareholders. Pioneer Ibbotson Aggressive Allocation Fund: Because this is an aggressive allocation fund, the majority of Pioneer Ibbotson Aggressive Allocation Fund's assets will be invested in equity funds, although a portion of its assets will be invested in bond funds, cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Aggressive Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 75-95% 5-15% - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-25% Pioneer Research Fund 0-25% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-25% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-25% Pioneer Oak Ridge Large Cap Growth Fund 0-25% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-25% Pioneer Value Fund 0-25% Pioneer Mid Cap Growth Fund 0-25% Pioneer Mid Cap Value Fund 0-25% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-25% Pioneer Oak Ridge Small Cap Growth Fund 0-25% Pioneer Small Cap Value Fund 0-25% Pioneer International Equity Fund 0-25% Pioneer International Value Fund 0-25% Pioneer Europe Select Fund 0-25% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-20% Pioneer Strategic Income Fund 0-20% Pioneer Short Term Income Fund 0-20% Pioneer Cash Reserves Fund 0-15% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund Growth Portfolio may not borrow money or issue may not borrow money, except on a senior securities, except that the Fund may temporary basis and to the extent permitted borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow repurchase agreements for temporary emergency from banks or through reverse repurchase purposes in amounts up to 33 1/3% of the value agreements in an amount up to 33 1/3% of of its total assets at the time of such the Fund's total assets (including the borrowing. AmSouth Strategic Portfolios: amount borrowed); (b) borrow up to an Aggressive Growth Portfolio will not purchase additional 5% of the Fund's assets for securities while borrowings (including reverse temporary purposes; (c) obtain such short- repurchase agreements) in excess of 5% of its term credits as are necessary for the total assets are outstanding. In addition, clearance of portfolio transactions; (d) AmSouth Strategic Portfolios: Aggressive purchase securities on margin; and (e) Growth Portfolio is permitted to participate engage in transactions in mortgage dollar in a credit facility whereby the Fund may rolls that are accounted for as financings. directly lend to and borrow money from other AmSouth Funds for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ----------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ----------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ----------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of 12b-1 fees up to 5%. For Class B shares issued to up to 2% if you sell your shares. The former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after five years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily net Class B shares convert to Class A shares assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ----------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Aggressive The Fund does not impose any initial, sales charges and Growth Portfolio does not impose any initial contingent deferred or asset based sales Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% of distributing the Fund's Class Y shares, none average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Aggressive The management fee payable by Pioneer other fees Growth Portfolio pays an advisory fee on a Ibbotson Aggressive Allocation Fund is monthly basis at an annual rate of 0.20% of equal to 0.13% of average daily net assets the Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") serves cash and 0.17% of average daily net assets as administrator and fund accounting agent attributable to other investments, including for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of the Pioneer, with breakpoints at incremental Fund's average daily net assets. asset levels. Since Pioneer currently manages all of the underlying funds, the For the fiscal year ended July 31, 2004, management fee will initially be 0.13% of other expenses of the Fund were limited to average daily net assets. 0.36% for Class A shares, 0.35% for Class B shares and 0.31% for Class I shares. Any In addition, the Fund reimburses Pioneer for fee waiver or expense reimbursement certain fund accounting and legal expenses arrangement is voluntary and may be incurred on behalf of the Fund and pays a discontinued at any time. You also indirectly separate shareholder servicing/transfer bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer. expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.56%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.85% of the 0.79% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct and A shares and 1.64% of average daily net indirect expenses were 2.04% of average assets attributable to Class B shares. There daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.30%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.53% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct and expenses of the underlying funds indirectly indirect expenses were 2.78% of average incurred by a shareholder. daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.51%, and without giving effect to the expense limitation, were 0.74% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.94% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into If the account is established in the selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - ------------------------------------------------------------------------------------------------------------------------ Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. investment requirements for the Fund into which you are exchanging. Exchanges from one fund After you establish an eligible fund account, to another are taxable. Class A shares may be you can exchange Fund shares by telephone exchanged for Class I shares of the same Fund or online. or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - -----------------------------------------------------------------------------------------------------------------------
30
- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ----------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a Fund or a Fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the Fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the Fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the Fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 31 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return 32 High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Aggressive Growth Portfolio. The bar charts show how AmSouth Strategic Portfolios: Aggressive Growth Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Aggressive Growth Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 1.50 -9.40 -22.32 28.31 11.13
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 15.61% for the quarter ended June 30, 2003, and the lowest quarterly return was -19.18% for the quarter ended September 30, 2002. 33 Pioneer Ibbotson Aggressive Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Growth Allocation Portfolio began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The Fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Aggressive Growth Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ----------------------------------------------------------------------------------------------------------------------------- Since Inception 1 Year 5 Years (2/1/99) - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class A Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 5.01% -0.77% 1.99% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 4.96% -1.62% 1.77% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.25% -0.97% 1.38% - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class B Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 5.37% -0.74% 2.00% - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class I Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 11.14% 0.40% 2.93% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 11.08% -0.47% 2.08% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 7.24% 0.01% 2.17% - ----------------------------------------------------------------------------------------------------------------------------- S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - -----------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Aggressive Growth Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Aggressive Growth Portfolio, the expenses of AmSouth Strategic Portfolios: Aggressive Growth Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Aggressive Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. The tables also show the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005. 34
AmSouth AmSouth Strategic Pioneer Strategic Portfolios: Ibbotson Portfolios: Aggressive Aggressive Combined Aggressive Growth Allocation Fund Growth Portfolio(1) Fund (Pro Forma) Portfolio Shareholder transaction fees Class A Class A Class A Class B (paid directly from your investment) ----------- ---------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less .......................................... None None None 5.00%(3) Redemption fees ................................... 2.00%(4) None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee .................................... 0.20% 0.17% 0.17% 0.20% Distribution and service (12b-1) fee .............. None 0.25% 0.25% 0.75% Other expenses(5) ................................. 0.71% 0.78% 0.48% 0.68% Estimated indirect expenses ....................... 1.62% 0.81% 1.00%(8) 2.37% Total fund operating expenses ..................... 2.53% 2.01%(6) 1.90% 4.00% Expense reimbursement/reduction ................... 0.35% 0.27% 0.05% 0.38% Net fund operating expenses ....................... 2.18% 1.74% 1.85% 3.62% AmSouth Pioneer Strategic Ibbotson Portfolios: Aggressive Combined Aggressive Combined Allocation Fund Growth Fund Fund (Pro Forma) Portfolio (Pro Forma) Shareholder transaction fees Class B Class B Class I Class Y(7) (paid directly from your investment) ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less .......................................... 4.00% 4.00% None None Redemption fees ................................... None None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee .................................... 0.17% 0.17% 0.20% 0.17% Distribution and service (12b-1) fee .............. 1.00% 1.00% None None Other expenses(5) ................................. 0.92% 0.70% 0.59% 0.30% Estimated indirect expenses ....................... 0.81% 1.00%(8) 1.57% 1.00%(8) Total fund operating expenses ..................... 2.90%(6) 2.87% 2.36% 1.47% Expense reimbursement/reduction ................... 0.27% 0.23% 0.31% N/A Net fund operating expenses ....................... 2.63% 2.64% 2.05% 1.47%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Approximately eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.36% for Class A shares, 0.36% for Class B shares and 0.31% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.85% of the average daily net assets attributable to Class A shares and 1.64% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (7) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.85%, and the pro forma combined net expenses for the Pioneer Fund would be 1.70%, 2.49% and 1.32% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future. 35
- --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Pioneer Portfolios: Ibbotson Aggressive Aggressive Combined Growth Allocation Fund Number of years you own your shares Portfolio Fund (Pro Forma) - --------------------------------------------------------------------------------------------------------------------- Class A - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 758 $ 742 $ 752 - --------------------------------------------------------------------------------------------------------------------- Year 3 $1,192 $1,091 $1,123 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,650 N/A $1,529 - --------------------------------------------------------------------------------------------------------------------- Year 10 $2,916 N/A $2,657 - --------------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 798 $ 666 $ 667 - --------------------------------------------------------------------------------------------------------------------- Year 3 $1,213 $1,172 $1,167 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,752 N/A $1,693 - --------------------------------------------------------------------------------------------------------------------- Year 10 $3,087 N/A $2,948 - --------------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 298 $ 266 $ 267 - --------------------------------------------------------------------------------------------------------------------- Year 3 $ 913 $ 872 $ 867 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,552 N/A $1,493 - --------------------------------------------------------------------------------------------------------------------- Year 10 $3,087 N/A $2,948 - --------------------------------------------------------------------------------------------------------------------- Class I Class Y - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 211 N/A $ 150 - --------------------------------------------------------------------------------------------------------------------- Year 3 $ 652 N/A $ 465 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,119 N/A $ 803 - --------------------------------------------------------------------------------------------------------------------- Year 10 $2,410 N/A $1,757 - ---------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Aggressive Growth Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U. S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Aggressive Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B 36 shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. In addition, the broader distribution arrangements of the Pioneer Fund offer greater potential for further asset growth and reduce per share expenses. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, The transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
AmSouth Strategic Pioneer Portfolios: Pioneer Ibbotson Aggressive Ibbotson Aggressive Growth Aggressive Allocation Fund Portfolio Fund Allocation Fund (Pro Forma) May 31, 2005 May 31, 2005 May 31, 2005 -------------- --------------- --------------- Total Net Assets (in thousands) ......... $53,136 $24,987 $78,123 Class A shares ......................... $22,953 $14,975 $37,928 Class B shares ......................... $15,156 $ 4,269 $19,425 Class I/Y shares ....................... $15,028 N/A $15,028 Net Asset Value Per Share Class A shares ......................... $ 9.60 $ 11.21 $ 11.21 Class B shares ......................... $ 9.19 $ 10.82 $ 10.82 Class I shares ......................... $ 9.60 N/A $ 11.21 Shares Outstanding Class A shares ......................... 2,391,779 1,335,779 3,383,164 Class B shares ......................... 1,649,291 394,722 1,795,948 Class I/Y shares ....................... 1,565,894 N/A 1,340,485
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. 37 BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 38 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 39 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 40 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 41 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 42 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. 43 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer 44 Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. 45 Investment Adviser Pioneer Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 46 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 47 AmSouth Strategic Portfolios: Growth Portfolio and Pioneer Ibbotson Growth Allocation Fund PROPOSAL 1(c) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Growth Portfolio to Pioneer Ibbotson Growth Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ---------------------------------------------------------------------------------------------------------------------- Net assets as of $64.9 million $32.8 million March 31, 2005 - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of the AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Growth Portfolio is ("Ibbotson") the responsibility of the AmSouth Strategy Committee, and no person is primarily Portfolio Managers: responsible for making recommendations Day-to-day management of Pioneer to the Committee. The Committee members Ibbotson Growth Allocation Fund is the consist of John P. Boston, CFA, Fred Crown, responsibility of portfolio managers and CFA, Paige B. Daniel, David M. Dasari, CFA, members of Ibbotson's Investment Joseph T. Keating, Ronald E. Lindquist, Committee headed by Roger Ibbotson. John Mark McKenzie, Matt Smith, CFA, Roger Ibbotson founded Ibbotson in 1977 Brian B. Sullivan, CFA, Doug S. Williams and is the firm's Chairman. Peng Chen, and Jason Waters. Ph.D., managing director and chief investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 and managing director, manages the investment (continued) has been associated with AAMI since 1996. management services and data products Mr. Boston received his CFA charter in 1993 group for Ibbotson. Scott Wentsel, senior and is an active member and past president of portfolio manager, is responsible for the Alabama Society of Financial Analysts. He management of the firm's fund- of- also serves as the portfolio manager for the funds business which includes oversight AmSouth High Quality Bond Fund. Mr. Boston of its investment management staff and is a Senior Vice President of AmSouth Bank process. Alexander E. Kaye, portfolio and Vice President of AAMI. manager, is responsible for managing the delivery of fund-of-funds programs for Mr. Crown has been employed with AmSouth institutional and retail clients, which Bank since 1982 and AAMI since 2001. He includes asset allocation modeling, portfolio was an Institutional Fund Manager with AAMI construction, fund classification and (2001-2003) and has been a Regional manager due diligence. Brian Huckstep, Manager since 2003. Mr. Crown is a Senior portfolio manager, is responsible for Vice President of AmSouth Bank. managing the delivery of fund-of-funds programs for institutional and retail clients, Ms. Daniel has been employed with AmSouth which includes asset allocation modeling, Bank since 1999. She has been employed by portfolio construction, fund classification, AAMI as the Director of Alternative Strategies and manager due diligence. since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. Mr. Lindquist has been employed with AAMI since December 1999. Prior to December 1999, Mr. Lindquist was employed by First American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. McKenzie has been involved in and portfolio investment management since 1981, with managers portfolio management expertise in both (continued) equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. Mr. Williams has been employed with AmSouth Bank since 2002. He has been employed as a Regional Manager with AAMI since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund Portfolio seeks to provide investors with seeks long-term capital growth and income. long term capital growth. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Growth Portfolio: AmSouth Strategic Portfolios: Growth Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-15% AmSouth Enhanced Market Fund 0-20% AmSouth Large Cap Fund 0-15% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-15% AmSouth Small Cap Fund 0-15% AmSouth International Equity Fund 0-15% AmSouth Government Income Fund 0-15% AmSouth High Quality Bond Fund 0-45% AmSouth Limited Term Bond Fund 0-15% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Growth Portfolio's shareholders. Pioneer Ibbotson Growth Allocation Fund: Because this is a moderate growth allocation fund, Pioneer Ibbotson Growth Allocation Fund's assets will be invested in equity and bond funds, although a small portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Growth Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 70-80% 20-30% - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-25% Pioneer Research Fund 0-25% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-25% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-25% Pioneer Oak Ridge Large Cap Growth Fund 0-25% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-25% Pioneer Value Fund 0-25% Pioneer Mid Cap Growth Fund 0-25% Pioneer Mid Cap Value Fund 0-25% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-25% Pioneer Oak Ridge Small Cap Growth Fund 0-25% Pioneer Small Cap Value Fund 0-25% Pioneer International Equity Fund 0-25% Pioneer International Value Fund 0-25% Pioneer Europe Select Fund 0-25% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-20% Pioneer Cash Reserves Fund 0-20% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund Portfolio may not borrow money or issue may not borrow money, except on a senior securities, except that the Fund may temporary basis and to the extent permitted borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow repurchase agreements for temporary from banks or through reverse repurchase emergency purposes in amounts up to agreements in an amount up to 33 1/3% of 33 1/3% of the value of its total assets at the the Fund's total assets (including the time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an Portfolios: Growth Portfolio will not additional 5% of the Fund's assets for purchase securities while borrowings temporary purposes; (c) obtain such short- (including reverse repurchase agreements) term credits as are necessary for the in excess of 5% of its total assets are clearance of portfolio transactions; (d) outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e) Portfolios: Growth Portfolio is permitted to engage in transactions in mortgage dollar participate in a credit facility whereby the rolls that are accounted for as financings. Fund may directly lend to and borrow money from another AmSouth Fund for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ---------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ---------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ---------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year There is no CDSC, except in certain of purchase. circumstances when the initial sales charge is waived. Class A shares pay a shareholder servicing fee (non 12b-1) of up to 0.25% of average Class A shares are subject to distribution daily net assets. and service (12b-1) fees of up to 0.25% of average daily net assets. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to CDSC of up 12b-1 fees up to 5%. For Class B shares issued to to 2% if you sell your shares. The charge is former ISG Funds shareholders in reduced over time and is not charged after connection with the combination of five years. Your investment firm may receive AmSouth Funds with ISG Funds, the CDSC a commission from PFD, the Fund's on such Class B shares held continuously distributor, at the time of your purchase of declines over six years, starting with year up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ---------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Growth The Fund does not impose any initial, sales charges and Portfolio does not impose any initial or contingent deferred or asset based sales Rule 12b-1 fees CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of of average daily net assets. which are reimbursed by the Fund or the Class Y shareowners. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Growth The management fee payable by Pioneer other fees Portfolio pays an advisory fee on a monthly Ibbotson Growth Allocation Fund is equal to basis at an annual rate of 0.20% of the 0.13% of average daily net assets Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") serves cash and 0.17% of average daily net assets as administrator and fund accounting agent attributable to other investments, including for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of Pioneer, with breakpoints at incremental the Fund's average daily net assets. asset levels. Since currently all of the underlying funds are managed by Pioneer, For the fiscal year ended July 31, 2004, the management fee will initially be 0.13% other expenses of the Fund were limited to of average daily net assets. 0.30% for Class A shares, 0.29% for Class In addition, the Fund reimburses Pioneer for B shares and 0.25 % for Class I shares. certain fund accounting and legal expenses Any fee waiver or expense reimbursement incurred on behalf of the Fund and pays a arrangement is voluntary and may be separate shareholder servicing/transfer discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer. bear a pro rata share of the fees and expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.50%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.79% of the 0.73% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct A shares and 1.57% of average daily net and indirect expenses were 1.92% of assets attributable to Class B shares. There average daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.24%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.47% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct expenses of the underlying funds indirectly and indirect expenses were 2.66% of incurred by a shareholder. average daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.45%, and without giving effect to the expense limitation, were 0.68% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.82% of average daily net assets. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into selling If the account is established in the agreements with the Fund's distributor, as shareholder's own name, shareholders may described in the Fund's prospectus. also purchase additional shares of the Fund by telephone or online. Certain account transactions may be done by telephone. - ---------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. investment requirements for the Fund into which you are exchanging. Exchanges from After you establish an eligible fund account, one fund to another are taxable. Class A you can exchange fund shares by telephone shares may be exchanged for Class I shares or online. of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ----------------------------------------------------------------------------------------------------------------------
56
- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ---------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - ----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a fund or a fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the Fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 57 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the Fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the Fund's return 58 High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Growth Portfolio. The bar charts show how AmSouth Strategic Portfolios: Growth Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Growth Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 0.59 -5.77 -13.63 21.84 8.92
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 11.62% for the quarter ended June 30, 2003, and the lowest quarterly return was -12.73% for the quarter ended September 30, 2002. 59 Pioneer Ibbotson Growth Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Growth Allocation Portfolio began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Growth Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- --------------------------------------------------------------------------------------------------------------------- Since Inception 1 Year 5 Years (2/1/99) - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class A Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 2.89% 0.52% 1.90% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 2.61% -0.44% 0.94% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 1.88% -0.07% 1.10% - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class B Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 3.11% 0.55% 2.19% - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class I Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 9.13% 1.74% 2.90% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 8.83% 0.76% 1.91% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 5.93% 0.96% 1.94% - --------------------------------------------------------------------------------------------------------------------- S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ---------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only; it does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Growth Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth Portfolio, the expenses of AmSouth Strategic Portfolios: Growth Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Growth Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. The tables also show the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005. 60
AmSouth Pioneer AmSouth Strategic Ibbotson Strategic Portfolios Growth Combined Portfolios Growth Allocation Fund Growth Portfolio(1) Fund (Pro Forma) Portfolio Shareholder transaction fees Class A Class A Class A Class B (paid directly from your investment) ---------- ---------- ----------- ---------- Maximum sales charge (load) when you buy shares as a percentage of offering price ...... 5.50%(2) 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ....................................... None None None 5.00%(3) Redemption fees ................................ 2.00%(4) None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ................................. 0.20% 0.17% 0.17% 0.20% Distribution and service (12b-1) fee ........... None 0.25% 0.25% 0.75% Other expenses(5) .............................. 0.64% 0.70% 0.45% 0.65% Estimated indirect expenses .................... 1.52% 0.78% 0.99%(8) 2.26% Total fund operating expenses6 ................. 2.36% 1.90%(6) 1.86% 3.86% Expense reimbursement/reduction ................ 0.33% 0.19% 0.08% 0.35% Net fund operating expenses .................... 2.03% 1.71% 1.78% 3.51% Pioneer AmSouth Ibbotson Strategic Growth Combined Portfolios Combined Allocation Fund Growth Fund Fund (Pro Forma) Portfolio (Pro Forma) Shareholder transaction fees Class B Class B Class I Class Y(7) (paid directly from your investment) ---------- ----------- ---------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ...... None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ....................................... 4.00% 4.00% None None Redemption fees ................................ None None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ................................. 0.17% 0.17% 0.20% 0.17% Distribution and service (12b-1) fee ........... 1.00% 1.00% None None Other expenses(5) ............................. 0.86% 0.67% 0.60% 0.27% Estimated indirect expenses .................... 0.78% 0.99%(8) 1.47% 0.99%(8) Total fund operating expenses(6) ............... 2.81%(6) 2.83% 2.27% 1.43% Expense reimbursement/reduction ................ 0.19% 0.27% 0.34% N/A Net fund operating expenses .................... 2.62% 2.56% 1.93% 1.43%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.31% for Class A shares, 0.30% for Class B shares and 0.26% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.79% of the average daily net assets attributable to Class A shares and 1.57% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (7) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.81%, and the pro forma combined net expenses for the Pioneer Fund would be 1.60%, 2.38% and 1.25% for Class A, Class B and Class Y shares, respectively. 61 The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- -------------------------------------------------------------------------------------------------------------- AmSouth Pioneer Strategic Ibbotson Portfolios: Growth Combined Growth Allocation Fund Number of years you own your shares Portfolio Fund (Pro Forma) - -------------------------------------------------------------------------------------------------------------- Class A - -------------------------------------------------------------------------------------------------------------- Year 1 $ 747 $ 739 $ 745 - -------------------------------------------------------------------------------------------------------------- Year 3 $1,157 $1,120 $1,103 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,593 N/A $1,501 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,798 N/A $2,610 - -------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - -------------------------------------------------------------------------------------------------------------- Year 1 $ 784 $ 665 $ 659 - -------------------------------------------------------------------------------------------------------------- Year 3 $1,171 $1,153 $1,152 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,684 N/A $1,670 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,957 N/A $2,906 - -------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - -------------------------------------------------------------------------------------------------------------- Year 1 $ 284 $ 265 $ 259 - -------------------------------------------------------------------------------------------------------------- Year 3 $ 871 $ 853 $ 852 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,484 N/A $1,470 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,957 N/A $2,906 - -------------------------------------------------------------------------------------------------------------- Class I Class Y - -------------------------------------------------------------------------------------------------------------- Year 1 $ 204 N/A $ 146 - -------------------------------------------------------------------------------------------------------------- Year 3 $ 630 N/A $ 452 - -------------------------------------------------------------------------------------------------------------- Year 5 $ 1083 N/A $ 782 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,338 N/A $1,713 - --------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Growth Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Growth Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after 62 giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
Pioneer Ibbotson AmSouth Strategic Pioneer Ibbotson Growth Portfolios: Growth Growth Allocation Fund Portfolio Fund Allocation Fund (Pro Forma) May 31, 2005 May 31, 2005 May 31, 2005 ------------------ ---------------- ---------------- Total Net Assets (in thousands) $68,258 $44,509 $112,765 Class A shares .............. $30,461 $24,395 $ 54,855 Class B shares .............. $29,483 $ 7,898 $ 37,380 Class I/Y shares ............ $ 8,314 N/A $ 8,314 Net Asset Value Per Share Class A shares .............. $ 9.72 $ 10.99 $ 10.99 Class B shares .............. $ 9.59 $ 10.06 $ 10.06 Class I/Y shares ............ $ 9.76 N/A $ 10.99 Shares Outstanding Class A shares .............. 3,134,755 2,220,131 4,992,340 Class B shares .............. 3,075,573 785,240 3,716,617 Class I/Y shares ............ 851,792 N/A 756,607
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 63 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 64 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 65 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 66 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 67 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 68 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 69 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 70 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 71 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 72 AmSouth Strategic Portfolios: Growth and Income Portfolio and Pioneer Ibbotson Moderate Allocation Fund PROPOSAL 1(d) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Growth and Income Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ----------------------------------------------------------------------------------------------------------------------- Net assets as of $112.5 million $34.3 million March 31, 2005 - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Growth & Income ("Ibbotson") Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 managing director, manages the investment (continued) and has been associated with AAMI since management services and data products 1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior in 1993 and is an active member and past portfolio manager, is responsible for president of the Alabama Society of management of the firm's fund- of- Financial Analysts. He also serves as the funds business which includes oversight of portfolio manager for the AmSouth High its investment management staff and Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio Vice President of AmSouth Bank and Vice manager, is responsible for managing the President of AAMI. delivery of fund-of-funds programs for institutional and retail clients, which Mr. Crown has been employed with includes asset allocation modeling, portfolio AmSouth Bank since 1982 and AAMI since construction, fund classification and 2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep, with AAMI (2001-2003) and has been a portfolio manager, is responsible for Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds a Senior Vice President of AmSouth Bank. programs for institutional and retail clients, which includes asset allocation modeling, Ms. Daniel has been employed with portfolio construction, fund classification, AmSouth Bank since 1999. She has been and manager due diligence. employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. Mr. Lindquist has been employed with AAMI since December 1999. Prior to December 1999, Mr. Lindquist was employed by First American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers are predecessors of AmSouth Bank and and portfolio affiliates of AAMI. He also serves as the managers portfolio manager for the AmSouth Large (continued) Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. Mr. Williams has been employed with AmSouth Bank since 2002. He has been employed as a Regional Manager with AAMI since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund Income Portfolio seeks to provide investors seeks long-term capital growth and current with long-term capital growth and a income. moderate level of current income. - ----------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Growth and Income Portfolio: AmSouth Strategic Portfolios: Growth and Income Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-10% AmSouth Enhanced Market Fund 0-15% AmSouth Large Cap Fund 0-10% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-10% AmSouth Small Cap Fund 0-10% AmSouth International Equity Fund 0-10% AmSouth Government Income Fund 0-20% AmSouth High Quality Bond Fund 0-60% AmSouth Limited Term Bond Fund 0-20% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Growth and Income Portfolio's shareholders. Pioneer Ibbotson Moderate Allocation Fund: Because this is a moderate allocation fund, Pioneer Ibbotson Moderate Allocation Fund's assets will be invested in equity and bond funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Moderate Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 55-65% 35-45% - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-20% Pioneer Research Fund 0-20% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-20% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-20% Pioneer Oak Ridge Large Cap Growth Fund 0-20% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-20% Pioneer Value Fund 0-20% Pioneer Mid Cap Growth Fund 0-20% Pioneer Mid Cap Value Fund 0-20% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-20% Pioneer Oak Ridge Small Cap Growth Fund 0-20% Pioneer Small Cap Value Fund 0-20% Pioneer International Equity Fund 0-20% Pioneer International Value Fund 0-20% Pioneer Europe Select Fund 0-20% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-25% Pioneer Cash Reserves Fund 0-20% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund Income Portfolio may not borrow money or may not borrow money, except on a issue senior securities, except that the Fund temporary basis and to the extent permitted may borrow from banks or enter into by applicable law, the Fund may: (a) borrow reverse repurchase agreements for temporary from banks or through reverse repurchase emergency purposes in amounts up to 33 1/3% agreements in an amount up to 33 1/3% of of the value of its total assets at the the Fund's total assets (including the time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an Portfolios: Growth and Income Portfolio will additional 5% of the Fund's assets for not purchase securities while borrowings temporary purposes; (c) obtain such short- (including reverse repurchase agreements) term credits as are necessary for the in excess of 5% of its total assets are clearance of portfolio transactions; (d) outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e) Portfolios: Growth and Income Portfolio is engage in transactions in mortgage dollar permitted to participate in a credit facility rolls that are accounted for as financings. whereby the Fund may directly lend to and borrow money from other AmSouth funds for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ----------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ----------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ----------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of 12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The to former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after three years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of 0.75% of up to average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ----------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Growth and The Fund does not impose any initial, sales charges and Income Portfolio does not impose any initial contingent deferred or asset based sales Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Growth and The management fee payable by Pioneer other fees Income Portfolio pays an advisory fee on a Ibbotson Moderate Allocation Fund is equal monthly basis at an annual rate of 0.20% of to 0.13% of average daily net assets the Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") cash and 0.17% of average daily net assets serves as administrator and fund accounting attributable to other investments, including agent for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of the Pioneer, with breakpoints at incremental Fund's average daily net assets. asset levels. Since currently all of the underlying funds are managed by Pioneer, For the fiscal year ended July 31, 2004, the management fee will initially be 0.13% other expenses of the Fund were limited to of average daily net assets. 0.33% for Class A shares, 0.33% for Class B shares and 0.28% for Class I shares. Any In addition, the Fund reimburses Pioneer for fee waiver or expense reimbursement certain fund accounting and legal expenses arrangement is voluntary and may be incurred on behalf of the Fund and pays a discontinued at any time. You also indirectly separate shareholder servicing/transfer bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer. expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.53%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.74% of the 0.66% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct A shares and 1.64% of average daily net and indirect expenses were 1.81% of assets attributable to Class B shares. There average daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.28%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.41% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct expenses of the underlying funds indirectly and indirect expenses were 2.56% of incurred by a shareholder. average daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.48%, and without giving effect to the expense limitation, were 0.61% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.74% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered If the account is established in the into selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - ----------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares for shares of the same class of another of the same class of another Pioneer mutual AmSouth fund, usually without paying fund. Your exchange request must be for at additional sales charges. You must meet the least $1,000. minimum investment requirements for the Fund into which you are exchanging. After you establish an eligible fund account, Exchanges from one fund to another are you can exchange Fund shares by telephone taxable. Class A shares may be exchanged or online. for Class I shares of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ----------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a fund or a fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 82 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: 83 o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Growth and Income Portfolio. The bar charts show how AmSouth Strategic Portfolios: Growth and Income Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar charts give an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Growth and Income Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 4.21 -2.29 -8.54 17.38 7.39
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 9.52% for the quarter ended June 30, 2003, and the lowest quarterly return was -8.83% for the quarter ended September 30, 2002. 84 Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Moderate Allocation Fund began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Growth and Income Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------ Since Inception 1 Year 5 Years (1/27/99) - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class A Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 1.46% 2.10% 2.69% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 0.98% 0.95% 1.61% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 0.94% 1.18% 1.71% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class B Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 1.77% 2.16% 3.00% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class I Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 7.51% 3.32% 4.22% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 7.00% 2.14% 3.11% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 4.87% 2.21% 3.02% - ------------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ------------------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Growth and Income Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Growth and Income Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Moderate Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. Shareholders of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio are also being asked to approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund. The tables also show (1) the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005 and (2) the pro forma expenses of the combined Fund assuming the reorganization of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31, 2005. 85
Combined Fund (including AmSouth AmSouth AmSouth Strategic Pioneer Moderate Strategic Portfolios Ibbotson Growth Portfolios Growth Moderate Combined and Income Growth and Income Allocation Fund Portfolio) and Income Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio fees (paid directly Class A Class A Class A Class A Class B from your investment) ------------ ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... None None None None 5.00%(3) Redemption fees ............ 2.00%(4) None None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20% Distribution and service (12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75% Other expenses(5) .......... 0.57% 0.68% 0.38% 0.35% 0.61% Estimated indirect expenses .................. 1.50% 0.68% 0.92%(9) 0.92%(9) 2.24% Total fund operating expenses .................. 2.27% 1.78%(7) 1.72% 1.69% 3.05% Expense reimbursement/ reduction ................. 0.25% 0.20% 0.06% 0.03% 0.30% Net fund operating expenses .................. 2.02% 1.58% 1.66% 1.66% 2.75% Combined Combined Fund Fund (including (including AmSouth AmSouth AmSouth Pioneer Moderate Strategic Moderate Ibbotson Growth Portfolios Growth Moderate Combined and Income Growth Combined and Income Allocation Fund Portfolio) and Income Fund Portfolio) Shareholder transaction Fund (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma) fees (paid directly Class B Class B Class B Class I Class Y(8) Class Y(8) from your investment) ------------ ------------- ------------- ------------ ------------- ------------ Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... 4.00% 4.00% 4.00% None None None Redemption fees ............ None None None 2.00%(4) None None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6) Distribution and service (12b-1) fee ............... 1.00% 1.00% 1.00% None None None Other expenses(5) .......... 0.80% 0.60% 0.57% 0.47% 0.20% 0.15% Estimated indirect expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.45% 0.92%(9) 0.92%9 Total fund operating expenses .................. 2.65%(7) 2.69% 2.66% 2.12% 1.29% 1.24% Expense reimbursement/ reduction ................. 0.20% 0.25% 0.22% 0.20% N/A N/A Net fund operating expenses .................. 2.45% 2.44% 2.44% 1.92% 1.29% 1.24%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A Shares bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B Shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.32% for Class A shares, 0.31% for Class B shares and 0.27% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.74% of the average daily net assets attributable to Class A shares and 1.64% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The management fee payable by the Pioneer Fund is equal to 0.13% of average daily net assets attributable to the Pioneer Fund's investments in underlying funds managed by Pioneer and cash and 0.17% of average daily net assets attributable to other investments, including underlying funds that are not 86 managed by Pioneer, with breakpoints at incremental asset levels. Since initially all of the underlying funds are managed by Pioneer, the management fee will initially be 0.13% of average daily net assets. (7) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (8) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.73%, and the pro forma combined net expenses for the Pioneer Fund (assuming the reorganization of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- ---------------------------------------------------------------------------------------------------------------------------------- AmSouth Combined Fund Strategic Pioneer (including AmSouth Portfolios: Ibbotson Strategic Portfolios: Growth & Moderate Combined Moderate Growth & Income Allocation Fund Income Portfolio) Number of years you own your shares Portfolio Fund (Pro Forma) (Pro Forma) - ---------------------------------------------------------------------------------------------------------------------------------- Class A - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 737 $ 726 $ 734 $ 734 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $1,129 $1,085 $1.068 $1.068 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,544 N/A $1,432 $1,432 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,700 N/A $2,450 $2,450 - ---------------------------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 777 $ 648 $ 647 $ 647 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $1,150 $1,104 $1,106 $1,106 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,650 N/A $1,590 $1,590 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,881 N/A $2,741 $2,741 - ---------------------------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 277 $ 248 $ 247 $ 247 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $ 850 $ 804 $ 806 $ 806 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,450 N/A $1,390 $1,390 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,881 N/A $2,741 $2,741 - ---------------------------------------------------------------------------------------------------------------------------------- Class I Class Y - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 188 N/A $ 131 $ 126 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $ 582 N/A $ 409 $ 393 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $ 1001 N/A $ 708 $ 681 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,169 N/A $1,556 $1,500 - ----------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Growth & Income Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your Amsouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. 87 Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the Securities and Exchange Commission, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Although the Reorganization will result in a per share decrease in capital loss carryforwards, the potential negative tax consequences of this aspect of the Reorganization are outweighed by the advantages of the Reorganization. The Reorganization will also result in a per share decrease in net unrealized capital gains. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. 88 CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also sets forth the pro forma capitalization of the combined Fund as of May 31, 2005, assuming the shareholders of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund.
Pro Forma Pioneer Ibbotson Moderate Allocation Fund Pro Forma (including AmSouth AmSouth Strategic Pioneer Ibbotson Pioneer Ibbotson Strategic Portfolios: Portfolios: Growth and Moderate Moderate Moderate Growth and Income Portfolio Fund Allocation Fund Allocation Fund Income Portfolio) May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005 --------------------- ---------------- ---------------- --------------------- Total Net Assets (in thousands) ......... $113,640 $45,791 $159,430 $211,011 Class A shares ......................... $ 55,716 $26,035 $ 81,751 $105,349 Class B shares ......................... $ 19,098 $ 7,824 $ 26,923 $ 40,751 Class I/Y shares ....................... $ 38,825 N/A $ 38,825 $ 52,979 Net Asset Value Per Share Class A shares ......................... $ 10.09 $ 10.77 $ 10.77 $ 10.77 Class B shares ......................... $ 10.05 $ 10.42 $ 10.42 $ 10.42 Class I/Y shares ....................... $ 10.13 N/A $ 10.77 $ 10.77 Shares Outstanding Class A shares ......................... 5,521,241 2,417,639 7,591,546 9,782,884 Class B shares ......................... 1,900,376 751,050 2,584,294 3,911,684 Class I/Y shares ....................... 3,832,756 N/A 3,605,325 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 89 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 90 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 91 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 92 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 93 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 94 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 95 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 96 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 97 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 98 AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio and Pioneer Ibbotson Moderate Allocation Fund PROPOSAL 1(e) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent that Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - --------------------------------------------------------------------------------------------------------------------------- Net assets as of $50.6 million $34.3 million March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Moderate Growth & ("Ibbotson") Income Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 managing director, manages the investment (continued) and has been associated with AAMI since management services and data products 1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior in 1993 and is an active member and past portfolio manager, is responsible for president of the Alabama Society of management of the firm's fund- of- Financial Analysts. He also serves as the funds business which includes oversight portfolio manager for the AmSouth High of its investment management staff and Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio Vice President of AmSouth Bank and Vice manager, is responsible for managing the President of AAMI. delivery of fund-of-funds programs for institutional and retail clients, which Mr. Crown has been employed with includes asset allocation modeling, portfolio AmSouth Bank since 1982 and AAMI since construction, fund classification and 2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep, with AAMI (2001-2003) and has been a portfolio manager, is responsible for Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds a Senior Vice President of AmSouth Bank. programs for institutional and retail clients, which includes asset allocation modeling, Ms. Daniel has been employed with portfolio construction, fund classification, AmSouth Bank since 1999. She has been and manager due diligence. employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Lindquist has been employed with AAMI and portfolio since December 1999. Prior to December managers 1999, Mr. Lindquist was employed by First (continued) American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Williams has been employed with and portfolio AmSouth Bank since 2002. He has been managers employed as a Regional Manager with AAMI (continued) since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - --------------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund Growth and Income Portfolio seeks to seeks long-term capital growth and current provide investors with current income income. and a moderate level of capital growth. - --------------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio: AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-10% AmSouth Enhanced Market Fund 0-15% AmSouth Large Cap Fund 0-10% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-10% AmSouth Small Cap Fund 0-10% AmSouth International Equity Fund 0-10% AmSouth Government Income Fund 0-25% AmSouth High Quality Bond Fund 0-70% AmSouth Limited Term Bond Fund 0-25% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's shareholders. Pioneer Ibbotson Moderate Allocation Fund: Because this is a moderate allocation fund, the majority of Pioneer Ibbotson Moderate Allocation Fund's assets will be invested in equity and bond funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Moderate Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 55-65% 35-45% - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-20% Pioneer Research Fund 0-20% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-20% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-20% Pioneer Oak Ridge Large Cap Growth Fund 0-20% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-20% Pioneer Value Fund 0-20% Pioneer Mid Cap Growth Fund 0-20% Pioneer Mid Cap Value Fund 0-20% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-20% Pioneer Oak Ridge Small Cap Growth Fund 0-20% Pioneer Small Cap Value Fund 0-20% Pioneer International Equity Fund 0-20% Pioneer International Value Fund 0-20% Pioneer Europe Select Fund 0-20% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-25% Pioneer Cash Reserves Fund 0-20% The Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund Growth and Income Portfolio may not borrow may not borrow money, except on a money or issue senior securities, except temporary basis and to the extent permitted that the Fund may borrow from banks or by applicable law, the Fund may: (a) borrow enter into reverse repurchase agreements from banks or through reverse repurchase for temporary emergency purposes in agreements in an amount up to 33 1/3% of amounts up to 33 1/3% of the value of its the Fund's total assets (including the total assets at the time of such borrowing. amount borrowed); (b) borrow up to an AmSouth Strategic Portfolios: Moderate additional 5% of the Fund's assets for Growth and Income Portfolio will not temporary purposes; (c) obtain such short- purchase securities while borrowings term credits as are necessary for the (including reverse repurchase agreements) clearance of portfolio transactions; (d) in excess of 5% of its total assets are purchase securities on margin; and (e) outstanding. In addition, AmSouth Strategic engage in transactions in mortgage dollar Portfolios: Moderate Growth and Income rolls that are accounted for as financings. Portfolio is permitted to participate in a credit facility whereby the Fund may directly lend to and borrow money from another AmSouth Fund for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - --------------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - --------------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - --------------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with initial sales charges and Rule sales charge of up to 5.50% of the offering charges up to 5.75% of the offering price, 12b-1 Fees price, which is reduced depending upon the which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of 12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The to former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after five years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding period, in the ISG combination), Class B shares CDSC and commission schedules applicable automatically convert to Class A shares. to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - --------------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Moderate The Fund does not impose any initial, sales charges and Growth and Income Portfolio does not impose contingent deferred or asset based sales Rule 12b-1 fees any initial or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Moderate The management fee payable by Pioneer other fees Growth and Income Portfolio pays an Ibbotson Moderate Allocation Fund is equal advisory fee on a monthly basis at an to 0.13% of average daily net assets annual rate of 0.20% of the Fund's average attributable to the Fund's investments in daily net assets. underlying funds managed by Pioneer and cash and 0.17% of average daily net assets ASO Services Company, Inc. ("ASO") attributable to other investments, including serves as administrator and fund accounting underlying funds that are not managed by agent for the Fund. The Fund pays ASO an Pioneer, with breakpoints at incremental administrative services fee of 0.15% of the asset levels. Since currently all of the Fund's average daily net assets. underlying funds are managed by Pioneer, the management fee will initially be 0.13% For the fiscal year ended July 31, 2004, of average daily net assets. other expenses of the Fund were limited to 0.38% for Class A shares, 0.37% for Class In addition, the Fund reimburses Pioneer for B shares and 0.33% for Class I shares. Any certain fund accounting and legal expenses fee waiver or expense reimbursement incurred on behalf of the Fund and pays a arrangement is voluntary and may be separate shareholder servicing/transfer discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer. bear a pro rata share of the fees and expenses of the underlying funds. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit For the fiscal year ended July 31, 2004, the other direct ordinary operating expenses to Fund's annual operating expenses for Class the extent required to reduce expenses, A shares, after giving effect to the expense other than "Estimated average expense ratio limitation were 0.58%, and without giving of underlying funds," to 0.74% of the effect to the expense limitation, were average daily net assets attributable to Class 0.81% of average daily net assets. As of A shares and 1.52% of average daily net January 12, 2005, estimated total direct assets attributable to Class B shares. There and indirect expenses were 1.94% of is no expense limitation with respect to the average daily net assets. Class Y shares. This expense limitation is in effect for Class A shares until December 1, For the fiscal year ended July 31, 2004, the 2008 and in effect for Class B shares until Fund's annual operating expenses for Class December 1, 2006. There can be no B shares, after giving effect to the expense assurance that Pioneer will extend these limitation were 1.32%, and without giving expense limitations past such dates. The effect to the expense limitation, were expense limitation does not limit the 1.55% of average daily net assets. As of expenses of the underlying funds indirectly January 12, 2005, estimated total direct incurred by a shareholder. and indirect expenses were 2.68% of average daily net assets. Class Y shares of the Pioneer Fund are being offered for the first time in connection For the fiscal year ended July 31, 2004, the with the Reorganization. Fund's annual operating expenses for Class I shares, after giving effect to the expense limitation were 0.53%, and without giving effect to the expense limitation, were 0.76% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.84% of average daily net assets. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into If the account is established in the selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - --------------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares for shares of the same class of another of the same class of another Pioneer mutual AmSouth Fund, usually without paying fund. Your exchange request must be for at additional sales charges. You must meet least $1,000. the minimum investment requirements for the Fund into which you are exchanging. After you establish an eligible fund account, Exchanges from one Fund to another are you can exchange fund shares by telephone taxable. Class A shares may be exchanged or online. for Class I shares of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - --------------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Pioneer Fund by telephone or online. - ---------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a Fund or a Fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the Fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 108 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: 109 o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio. The bar chart shows how AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION FOR THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 0.59 -5.77 -13.33 21.81 2.89
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 7.94% for the quarter ended June 30, 2003, and the lowest quarterly return was -6.80% for the quarter ended September 30, 2002. 110 Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Moderate Allocation Fund began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The Fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------ Since Inception 1 Year 5 Years (1/28/99) - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class A Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 0.59% 2.90% 3.04% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 0.00% 1.70% 1.87% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 0.37% 1.80% 1.93% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class B Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 0.75% 2.96% 2.90% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class I Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 6.59% 4.14% 4.13% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 5.95% 2.90% 2.91% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 4.26% 2.85% 2.81% - ------------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ------------------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Moderate Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. Shareholders of AmSouth Strategic Portfolios: Growth and Income Portfolio are also being asked to approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund. The tables also show (1) the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005 and (2) the pro forma expenses of the combined Fund assuming the reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31, 2005. 111
Combined AmSouth Fund AmSouth Strategic (including Strategic Portfolios Pioneer AmSouth Portfolios Moderate Ibbotson Growth and Moderate Growth and Moderate Combined Income Growth and Income Allocation Fund Portfolio) Income Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio fees (paid directly Class A Class A Class A Class A Class B from your investment) ------------ ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... None None None None 5.00%(3) Redemption fees ............ 2.00%(4) None None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20% Distribution and service (12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75% Other expenses(5) .......... 0.68% 0.68% 0.52% 0.35%(5) 0.71% Estimated indirect expenses .................. 1.49% 0.68% 0.92%(9) 0.92%(9) 2.24% Total fund operating expenses .................. 2.37% 1.78%(7) 1.86% 1.69% 3.90% Expense reimbursement/ reduction ................. 0.35% 0.20% 0.20% 0.03% 0.38% Net fund operating expenses .................. 2.02% 1.58% 1.66% 1.66% 3.52% Combined Combined Fund AmSouth Fund (including Strategic (including AmSouth Portfolios AmSouth Pioneer Growth and Moderate Growth and Ibbotson Combined Income Growth and Combined Income Moderate Fund Portfolio) Income Fund Portfolio) Shareholder transaction Allocation (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma) fees (paid directly Fund Class B Class B Class I Class Y(8) Class Y(8) from your investment) ---------- ----------- ----------- ---------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... 4.00% 4.00% 4.00% None None None Redemption fees ............ None None None 2.00%(4) None None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6) Distribution and service (12b-1) fee ............... 1.00% 1.00% 1.00% None None None Other expenses(5) .......... 0.80% 0.74% 0.57% 0.59% 0.34% 0.15% Estimated indirect expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.44% 0.92%(9) 0.92%(9) Total fund operating expenses .................. 2.65%(7) 2.83% 2.66% 2.23% 1.43% 1.24% Expense reimbursement/ reduction ................. 0.45% 0.39% 0.22% 0.31% N/A N/A Net fund operating expenses .................. 2.20% 2.44% 2.44% 1.92% 1.43% 1.24%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.33% for Class A shares, 0.33% for Class B shares and 0.28% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.74% of the average daily net assets attributable to Class A shares and 1.52% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The management fee payable by the Pioneer Fund is equal to 0.13% of average daily net assets attributable to the Pioneer Fund's investments in underlying funds managed by Pioneer and cash and 0.17% of average daily net assets attributable to other investments, including underlying funds that are not 112 managed by Pioneer, with breakpoints at incremental asset levels. Since initially all of the underlying funds are managed by Pioneer, the management fee will initially be 0.13% of average daily net assets. (7) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (8) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.73%, and the pro forma combined net expenses for the Pioneer Fund (assuming the reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- ------------------------------------------------------------------------------------------------------------------------------------ Combined Fund Pioneer (including AmSouth AmSouth Strategic Ibbotson Strategic Portfolios: Portfolios: Moderate Moderate Growth and Income Number of years you own Growth and Income Allocation Combined Fund Portfolio) your shares Portfolio Fund (Pro Forma) (Pro Forma) - ------------------------------------------------------------------------------------------------------------------------------------ Class A - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 747 $ 726 $ 714 $ 734 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $1,157 $1,085 $1,007 $1,068 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,593 N/A $1,349 $1,432 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,798 N/A $2,312 $2,450 - ------------------------------------------------------------------------------------------------------------------------------------ Class B -- assuming redemption at end of period - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 786 $ 648 $ 734 $ 647 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $1,177 $1,104 $1,106 $1,106 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,694 N/A $1,590 $1,590 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,971 N/A $2,741 $2,741 - ------------------------------------------------------------------------------------------------------------------------------------ Class B -- assuming no redemption - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 286 $ 248 $ 247 $ 247 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $ 877 $ 804 $ 806 $ 806 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,494 N/A $1,390 $1,390 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,971 N/A $2,741 $2,741 - ------------------------------------------------------------------------------------------------------------------------------------ Class I Class Y - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 199 N/A $ 146 $ 126 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $ 615 N/A $ 452 $ 393 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $ 1057 N/A $ 782 $ 681 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,285 N/A $1,713 $1,500 - ------------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. 113 Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. 114 CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also sets forth the pro forma capitalization of the combined Fund as of May 31, 2005, assuming the shareholders of AmSouth Strategic Portfolios: Growth and Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund.
Pro Forma Pioneer Ibbotson Moderate Allocation Fund (including AmSouth Strategic Pro Forma AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Pioneer Ibbotson Portfolios: Growth and Income Moderate Moderate Growth and Income Portfolio Allocation Fund Allocation Fund Portfolio) May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005 -------------------- ---------------- ---------------- ----------------- Total Net Assets (in thousands) ......... $51,581 $45,791 $97,372 $211,011 Class A shares ......................... $23,598 $26,035 $49,633 $105,349 Class B shares ......................... $13,828 $ 7,824 $21,653 $ 40,751 Class I/Y shares ....................... $14,154 N/A $14,154 $ 52,979 Net Asset Value Per Share Class A shares ......................... $ 10.01 $ 10.77 $ 10.77 $ 10.77 Class B shares ......................... $ 9.96 $ 10.42 $ 10.42 $ 10.42 Class I/Y shares ....................... $ 10.04 N/A $ 10.77 $ 10.77 Shares Outstanding Class A shares ......................... 2,356,370 2,417,639 4,608,977 9,782,884 Class B shares ......................... 1,389,040 751,050 2,078,440 3,911,684 Class I/Y shares ....................... 1,409,269 N/A 1,314,394 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 115 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 116 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 117 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 118 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 119 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 120 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 121 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 122 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 123 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 124 TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION The Reorganizations o Each Reorganization is scheduled to occur at 4:00 p.m., Eastern time, on September 23, 2005, unless your AmSouth Fund and the corresponding Pioneer Fund agree in writing to a later date. Your AmSouth Fund will transfer all of its assets to the corresponding Pioneer Fund. The corresponding Pioneer Fund will assume, in the case of reorganizations into Pioneer Funds that have previously commenced investment operations, your AmSouth Fund's liabilities that are included in the calculation of your AmSouth Fund's net asset value on the Closing Date and, in the case of newly organized Pioneer Funds, all of your AmSouth Fund's liabilities. The net asset value of both Funds will be computed as of 4:00 p.m., Eastern time, on the Closing Date. o Each Pioneer Fund will issue to the corresponding AmSouth Fund Class A, B and Y shares with an aggregate net asset value equal to the net assets attributable to the corresponding AmSouth Fund's Class A, B and I shares. These shares will immediately be distributed to your AmSouth Fund's shareholders in proportion to the relative net asset value of their holdings of your AmSouth Fund's shares on the Closing Date. As a result, each AmSouth Fund's shareholders will end up as Class A, B, or Y class shareholders of the corresponding Pioneer Fund. o After the distribution of shares, your AmSouth Fund will be liquidated and dissolved. o Each Reorganization is intended to result in no income, gain or loss being recognized for federal income tax purposes and will not take place unless both Funds involved in the Reorganization receive a satisfactory opinion concerning the tax consequences of the Reorganization from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds. Agreement and Plan of Reorganization The shareholders of each AmSouth Fund are being asked to approve an Agreement and Plan of Reorganization substantially in the form attached as EXHIBIT A-1 or A-2 (each, a "Plan"). The description of the Plan contained herein includes the material provisions of the Plan but this description is qualified in its entirety by the attached copies, as appropriate. Conditions to Closing Each Reorganization. The obligation of each Fund to consummate each Reorganization is subject to the satisfaction of certain conditions, including each Fund's performance of all of its obligations under the Plan, the receipt of certain documents and financial statements from your AmSouth Fund and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Sections 7 and 8 of the Plan). The consummation of each Reorganization is not contingent on consummation of any other Reorganization. The obligations of both Funds are subject to the approval of the Plan by the necessary vote of the outstanding shares of your AmSouth Fund, in accordance with the provisions of AmSouth Funds' declaration of trust and by-laws. The Funds' obligations are also subject to the receipt of a favorable opinion of Wilmer Cutler Pickering Hale and Dorr LLP as to the United States federal income tax consequences of each Reorganization (see Section 8.5 of the Plan). Termination of the Plan. The board of either the AmSouth Funds or the corresponding Pioneer Fund may terminate the Plan (even if the shareholders of your AmSouth Fund have already approved it) at any time before the Closing Date, if that board believes in good faith that proceeding with the Reorganization would no longer be in the best interests of shareholders. TAX STATUS OF EACH REORGANIZATION Each Reorganization will not result in any income, gain or loss being recognized for United States federal income tax purposes and will not take place unless both Funds involved in the Reorganization receive a satisfactory opinion from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds, substantially to the effect that each Reorganization will be a "reorganization" within the meaning of Section 368(a) of the Code. As a result, for federal income tax purposes: o No gain or loss will be recognized by your AmSouth Fund upon (1) the transfer of all of its assets to the corresponding Pioneer Fund as described in this Proxy Statement/Prospectus or (2) the distribution by your AmSouth Fund of Pioneer Fund shares to your AmSouth Fund's shareholders; o No gain or loss will be recognized by the corresponding Pioneer Fund upon the receipt of your AmSouth Fund's assets solely in exchange for the issuance of Pioneer Fund shares to your AmSouth Fund and the assumption of your AmSouth Fund's liabilities by the Pioneer Fund; 125 o The basis of the assets of your AmSouth Fund acquired by the corresponding Pioneer Fund will be the same as the basis of those assets in the hands of your AmSouth Fund immediately before the transfer; o The tax holding period of the assets of your AmSouth Fund in the hands of the corresponding Pioneer Fund will include your AmSouth Fund's tax holding period for those assets; o You will not recognize gain or loss upon the exchange of your shares of your AmSouth Fund solely for the Pioneer Fund shares as part of the Reorganization; o The basis of the Pioneer Fund shares received by you in the Reorganization will be the same as the basis of your shares of your AmSouth Fund surrendered in the exchange; and o The tax holding period of the Pioneer Fund shares you receive will include the tax holding period of the shares of your AmSouth Fund surrendered in the exchange, provided that you held the shares of your AmSouth Fund as capital assets on the date of the exchange. In rendering such opinions, counsel shall rely upon, among other things, reasonable assumptions as well as representations of your AmSouth Fund and the Pioneer Fund. No tax ruling has been or will be received from the Internal Revenue Service ("IRS") in connection with the Reorganizations. An opinion of counsel is not binding on the IRS or a court, and no assurance can be given that the IRS would not assert, or a court would not sustain, a contrary position. The foregoing consequences may not apply to certain classes of taxpayers who are subject to special tax circumstances, such as shareholders who are not citizens or residents of the United States, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or foreign currencies, or persons who hold their shares as part of a straddle or conversion transaction. You should consult your tax adviser for the particular tax consequences to you of the Reorganizations, including the applicability of any state, local or foreign tax laws. 126 VOTING RIGHTS AND REQUIRED VOTE Each share of your AmSouth Fund is entitled to one vote and each fractional share shall be entitled to a proportionate fractional vote. A quorum is required to conduct business at the Meeting. With respect to each AmSouth Fund, the presence in person or by proxy of a majority of the outstanding shares of an AmSouth Fund entitled to cast votes at the Meeting will constitute a quorum with respect to that AmSouth Fund. A favorable vote of a "majority of the outstanding voting securities" of the applicable AmSouth Fund is required to approve each Proposal. Under the Investment Company Act, the vote of a majority of the outstanding voting securities means the affirmative vote of the lesser of (i) 67% or more of the shares of the applicable AmSouth Fund represented at the meeting, if at least 50% of all outstanding shares of the AmSouth Fund are represented at the meeting, or (ii) 50% or more of the outstanding shares of the AmSouth Fund entitled to vote at the meeting.
- ------------------------------------------------------------------------------------------------------------------------------ Shares Quorum Voting - ------------------------------------------------------------------------------------------------------------------------------ In General All shares "present" in person or by proxy Shares "present" in person will be voted in are counted towards a quorum. person at the Meeting. Shares present by proxy will be voted in accordance with instructions. - ------------------------------------------------------------------------------------------------------------------------------ Broker Non-Vote (where the Considered "present" at Meeting for Broker non-votes do not count as a vote underlying holder has not purposes of quorum. "for" and effectively result in a vote voted and the broker does "against" Proposals 1(a)-(e). not have discretionary authority to vote the shares) - ------------------------------------------------------------------------------------------------------------------------------ Proxy with No Voting Considered "present" at Meeting for Voted "for" the Proposals. Instruction (other than Broker purposes of quorum. Non-Vote) - ------------------------------------------------------------------------------------------------------------------------------ Vote to Abstain Considered "present" at Meeting for Abstentions do not constitute a vote "for" purposes of quorum. and effectively result in a vote "against" Proposals 1(a)-(e). - ------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST Each of the AmSouth Funds is a series of a Massachusetts business trust. The Pioneer Funds are series of Delaware statutory trusts. The following is a summary of the principal differences between Delaware statutory trusts and Massachusetts business trusts. Limitation of Shareholders' and Series' Liability Delaware law provides that the shareholders of a Delaware statutory trust shall not be subject to liability for the debts or obligations of the trust. Under Massachusetts law, shareholders of a Massachusetts business trust may, under certain circumstances, be liable for the debts and obligations of that trust. Although the risk of liability of shareholders of a Massachusetts business trust who do not participate in the management of the trust may be remote, Delaware law affords greater protection against potential shareholder liability. Similarly, Delaware law provides that, to the extent that a Delaware statutory trust issues multiple series of shares, each series shall not be liable for the debts or obligations of any other series, another potential, although remote, risk in the case of a Massachusetts business trust. While the trustees believe that a series of a Massachusetts business trust will only be liable for its own obligations, there is no direct statutory or judicial support for that position. Limitation of Trustee Liability Delaware law provides that, except to the extent otherwise provided in a trust's declaration of trust or by-laws, trustees will not be personally liable to any person (other than the statutory trust or a shareholder thereof) for any act, omission or obligation of the statutory trust or any trustee thereof. Delaware law also provides that a trustee's actions under a Delaware statutory trust's declaration of trust or by-laws will not subject the trustee to liability to the statutory trust or its shareholders if the trustee takes such action in good faith reliance on the provisions of the statutory trust's declaration of trust or bylaws. The declaration of trust of a Massachusetts business trust may limit the liability of a trustee, who is not also an officer of the corporation, for breach of fiduciary duty except for, among other things, any act or omission not in good faith which involves intentional misconduct or a knowing violation of law or any transaction from which such trustee derives an improper direct or indirect financial benefit. The trustees believe that such limitations on liability under Delaware 127 law and under the Pioneer Funds' declarations of trust are consistent with those applicable to directors of a corporation under Delaware law and will be beneficial in attracting and retaining in the future qualified persons to act as trustees. Shareholder Voting Delaware law provides that a Delaware statutory trust's declaration of trust or by-laws may set forth provisions related to voting in any manner. This provision appears to permit trustee and shareholder voting through computer or electronic media. For an investment company with a significant number of institutional shareholders, all with access to computer or electronic networks, the use of such voting methods could significantly reduce the costs of shareholder voting. However, the advantage of such methods may not be realizable unless the SEC modifies its proxy rules. Also, as required by the Investment Company Act, votes on certain matters by trustees would still need to be taken at actual in-person meetings. Board Composition Delaware law explicitly provides that separate boards of trustees may be authorized for each series of a Delaware statutory trust. Whether separate boards of trustees can be authorized for series of a Massachusetts business trust is unclear under Massachusetts law. As always, the establishment of any board of trustees of a registered investment company must comply with applicable securities laws, including the provision of the 1940 Act regarding the election of trustees by shareholders. Establishing separate boards of trustees would, among other things, enable the series of a Delaware statutory trust to be governed by individuals who are more familiar with such series' particular operations. ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS Investment Adviser Pioneer serves as the investment adviser to each Pioneer Fund. Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. Pioneer is part of the global asset management group providing investment management and financial services to mutual funds, institutions and other clients. As of December 31, 2004, assets under management were approximately $175 billion worldwide, including over $42 billion in assets under management by Pioneer. Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. Pioneer's U.S. mutual fund investment history includes creating one of the first mutual funds in 1928. The Board of Trustees of the Pioneer Funds is responsible for overseeing the performance of each of Pioneer Fund's investment adviser and subadviser, if any, and determining whether to approve and renew the fund's investment advisory agreement and the subadvisory agreements. Pioneer has received an order (the "Exemptive Order") from the SEC that permits Pioneer, subject to the approval of the Pioneer Funds' Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory agreement for a Pioneer Fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the SEC adopts a rule that would supersede the Exemptive Order, Pioneer and the Pioneer Funds intend to rely on such rule to permit Pioneer, subject to the approval of the Pioneer Funds' Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory agreement for a Pioneer Fund without shareholder approval. Buying, Exchanging and Selling Shares of the Pioneer Funds Net Asset Value. Each Pioneer Fund's net asset value is the value of its portfolio of securities plus any other assets minus its operating expenses and any other liabilities. Each Pioneer Fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time). In connection with its approval of the Reorganizations, the Board of the AmSouth Funds adopted the valuation procedures of the Pioneer Funds. This change did not have a material effect on the valuation methodology employed by the AmSouth Funds. Each Pioneer Fund generally values its portfolio securities using closing market prices or readily available market quotations. When closing market prices or market quotations are not available or are considered by Pioneer to be unreliable, a Pioneer Fund will use a security's fair value. Fair value is the valuation of a security determined on the basis of factors other than market value in accordance with procedures approved by the Pioneer Funds' trustees. Each Pioneer Fund also may use the fair value of a security, including a non-U.S. security, when Pioneer determines that the closing market price on the primary exchange where the security is traded no longer accurately reflects the 128 value of the security due to factors affecting one or more relevant securities markets or the specific issuer. The use of fair value pricing by a Pioneer Fund may cause the net asset value of its shares to differ from the net asset value that would be calculated using closing market prices. International securities markets may be open on days when the U.S. markets are closed. For this reason, the value of any international securities owned by a Pioneer Fund could change on a day you cannot buy or sell shares of the fund. Each Pioneer Fund may use a pricing service or a pricing matrix to value some of its assets. Debt securities with remaining maturities of 60 days or less are valued at amortized cost, which is a method of determining a security's fair value. You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge unless you qualify for a waiver or reduced sales charge. However, the Class A shares of the Pioneer Funds you receive in the Reorganizations will not be subject to any sales charge. When you buy Class B shares, you do not pay an initial sales charge. However, if you sell Class B shares within five years of purchase, you will pay a contingent deferred sales charge. The Class B shares of the Pioneer Funds you receive in the transaction will retain the holding periods and be subject to the same contingent deferred sales charge as your Class B shares of the AmSouth Funds. Class B shares convert to Class A shares eight years after the original date of purchase. Class B shares issued to the former ISG Fund shareholders will convert to Class A shares seven years after the date of purchase. Class Y shares do not impose a sales charge. Opening Your Account. If your shares are held in your investment firm's name, the options and services available to you may be different from those described herein or in the Pioneer Fund's prospectus. Ask your investment professional for more information. If you invest in a Pioneer Fund through investment professionals or other financial intermediaries, including wrap programs and fund supermarkets, additional conditions may apply to your investment in a Pioneer Fund, and the investment professional or intermediary may charge you a transaction-based or other fee for its services. These conditions and fees are in addition to those imposed by the Pioneer Fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees. Account Options. Use your account application to select options and privileges for your account. You can change your selections at any time by sending a completed account options form to the transfer agent. You may be required to obtain a signature guarantee to make certain changes to an existing account. Call or write to the Pioneer Funds' transfer agent for account applications, account options forms and other account information: PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. P.O. Box 55014 Boston, Massachusetts 02205-5014 Telephone 1-800-225-6292 Telephone Transaction Privileges. If your account is registered in your name, you can buy, exchange or sell shares of the Pioneer Funds by telephone. If you do not want your account to have telephone transaction privileges, you must indicate that choice on your account application or by writing to the transfer agent. When you request a telephone transaction, the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide the personal identification number for the account and sends you a written confirmation. Each Pioneer Fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. Online Transaction Privileges. If your account is registered in your name, you may be able to buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your Pioneer Fund shares online. To establish online transaction privileges, complete an account options form, write to the transfer agent or complete the online authorization screen on: www.pioneerfunds.com. To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction, the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The Pioneer Funds may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts. Share Price. If you place an order with your investment firm before the New York Stock Exchange closes and your investment firm submits the order to PFD prior to PFD's close of business (usually 5:30 p.m. Eastern time), your share price will be calculated that day. Otherwise, your price per share will be calculated at the close of the New York Stock Exchange after the distributor receives your order. Your investment firm is responsible for submitting your order to the distributor. 129 Buying Pioneer Fund Shares. You may buy shares of each Pioneer Fund from any investment firm that has a sales agreement with PFD. If you do not have an investment firm, please call 1-800-225-6292 for information on how to locate an investment professional in your area. You can buy shares of the Pioneer Funds at the offering price. The distributor may reject any order until it has confirmed the order in writing and received payment. The fund reserves the right to stop offering any class of shares. Minimum Investment Amounts. Your initial investment must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class B shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. The minimum investment amount does not apply for purposes of the Reorganization. Exchanging Pioneer Fund Shares. You may exchange your shares in a Pioneer Fund for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000 unless the fund you are exchanging into has a different minimum. Each Pioneer Fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. Before you request an exchange, consider each Fund's investment objective and policy as described in each fund's prospectus. Selling Pioneer Fund Shares. Your shares will be sold at net asset value per share next calculated after the Pioneer Fund, or authorized agent, such as a broker-dealer, receives your request in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. Each Pioneer Fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing. You may have to pay federal income taxes on a sale or an exchange. Good order means that: o You have provided adequate instructions o There are no outstanding claims against your account o There are no transaction limitations on your account o If you have any Pioneer Fund share certificates, you submit them and they are signed by each record owner exactly as the shares are registered o Your request includes a signature guarantee if you: o Are selling over $100,000 or exchanging over $500,000 worth of shares o Changed your account registration or address within the last 30 days o Instruct the transfer agent to mail the check to an address different from the one on your account o Want the check paid to someone other than the account owner(s) o Are transferring the sale proceeds to a Pioneer mutual fund account with a different registration 130 Buying, Exchanging and Selling Pioneer Fund Shares
------------------------------------------------------------------------------------------ Buying Shares Exchanging Shares ------------------------------------------------------------------------------------------ Through Normally, your investment firm will send Normally, your investment firm will send your investment your purchase request to the Pioneer your exchange request to the Pioneer firm Funds' transfer agent. Consult your Fund's transfer agent. Consult your investment professional for more investment professional for more information. Your investment firm may information about exchanging your receive a commission from the distributor shares. for your purchase of fund shares. The distributor or its affiliates may pay additional compensation, out of their own assets, to certain investment firms or their affiliates based on objective criteria established by the distributor. By phone or online You can use the telephone or online After you establish your Pioneer Fund privilege if you have an existing non- account, you can exchange Fund retirement account or certain IRAs. You shares by phone or online if: can purchase additional fund shares by o You are exchanging into an existing phone if: account or using the exchange to o You established your bank account of establish a new account, provided the record at least 30 days ago new account has a registration o Your bank information has not identical to the original account changed for at least 30 days o The fund into which you are o You are not purchasing more than exchanging offers the same class of $25,000 worth of shares per account shares per day o You are not exchanging more than o You can provide the proper account $500,000 worth of shares per account identification information per day o You can provide the proper account When you request a telephone or online identification information purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase Pioneer Fund shares for the amount of the debit at the offering price determined after the transfer agent receives your telephone or online purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment. In writing, by mail You can purchase Pioneer Fund shares You can exchange fund shares by or by fax for an existing fund account by mailing mailing or faxing a letter of instruction a check to the transfer agent. Make to the transfer agent. You can exchange your check payable to the Pioneer Fund. Pioneer Fund shares directly through the Neither initial nor subsequent Pioneer Fund only if your account is investments should be made by third registered in your name. However, you party check. Your check must be in U.S. may not fax an exchange request for dollars and drawn on a U.S. bank. more than $500,000. Include in your Include in your purchase request the letter: fund's name, the account number and o The name, social security number and the name or names in the account signature of all registered owners registration. o A signature guarantee for each registered owner if the amount of the exchange is more than $500,000 o The name of the fund out of which you are exchanging and the name of the fund into which you are exchanging o The class of shares you are exchanging o The dollar amount or number of shares you are exchanging
131
--------------------------------------------------------------------------------------- Selling Shares How to Contact Pioneer --------------------------------------------------------------------------------------- Normally, your investment firm will send By phone your request to sell shares to the For information or to request a Pioneer Fund's transfer agent. Consult telephone transaction between 8:00 a.m. your investment professional for more and 7:00 p.m. (Eastern time) by information. Each Pioneer Fund has speaking with a shareholder services authorized PFD to act as its agent in the representative call 1-800-225-6292 repurchase of Pioneer Fund shares from To request a transaction using qualified investment firms. Each Pioneer FactFone(SM) call 1-800-225-4321 Fund reserves the right to terminate this Telecommunications Device for the Deaf procedure at any time. (TDD) 1-800-225-1997 You may sell up to $100,000 per By mail account per day by phone or online. Send your written instructions to: You may sell Pioneer Fund shares held Pioneer Investment Management in a retirement plan account by phone Shareholder Services, Inc. only if your account is an eligible IRA P.O. Box 55014 (tax penalties may apply). You may not Boston, Massachusetts 02205-5014 sell your shares by phone or online if you have changed your address (for By fax checks) or your bank information (for Fax your exchange and sale requests to: wires and transfers) in the last 30 days. 1-800-225-4240 You may receive your sale proceeds: Exchange Privilege o By check, provided the check is made You may make up to four exchange payable exactly as your account is redemptions of $25,000 or more per registered account per calendar year. o By bank wire or by electronic funds transfer, provided the sale proceeds are being sent to your bank address of record You can sell some or all of your Pioneer Fund shares by writing directly to the Pioneer Fund only if your account is registered in your name. Include in your request your name, your social security number, the fund's name and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. You may not sell more than $100,000 per account per day by fax.
Pioneer Fund Shareholder Account Policies Signature Guarantees and Other Requirements. You are required to obtain a signature guarantee when you are: o Requesting certain types of exchanges or sales of Pioneer Fund shares o Redeeming shares for which you hold a share certificate o Requesting certain types of changes for your existing account You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public. All Pioneer Funds will accept only medallion signature guarantees. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution that is participating in a medallion program recognized by the Securities Transfer Association. Signature guarantees from financial institutions that are not participating in one of these programs are not accepted. Fiduciaries and corporations are required to submit additional documents to sell Pioneer Fund shares. Exchange Limitation. You may only make up to four exchange redemptions of $25,000 or more per account per calendar year out of a Pioneer Fund. Each Fund's exchange limitation is intended to discourage short-term trading in fund shares. Short-term trading can increase the expenses incurred by the Fund and make portfolio management less efficient. In determining whether the exchange redemption limit has been reached, Pioneer may aggregate a series of exchanges (each valued at less than $25,000) and/or fund accounts that appear to be under common ownership or control. Pioneer may view accounts for which one person gives instructions or accounts that act on advice provided by a single source to be under common control. The exchange limitation does not apply to automatic exchange transactions or to exchanges made by participants in employer-sponsored retirement plans qualified under Section 401(a) of the Code. While financial intermediaries that maintain omnibus accounts that invest in the fund are requested to apply the exchange limitation policy to shareholders who hold shares through such accounts, we do not impose the exchange limitation policy at the level of the omnibus account and are not able to monitor compliance by the financial intermediary with this policy. Excessive Trading. Frequent trading into and out of the fund can disrupt portfolio management strategies, harm fund performance by forcing the Fund to hold excess cash or to liquidate certain portfolio securities prematurely and increase expenses for all investors, 132 including long-term investors who do not generate these costs. An investor may use short-term trading as a strategy, for example, if the investor believes that the valuation of the Fund's portfolio securities for purposes of calculating its net asset value does not fully reflect the then current fair market value of those holdings. The Fund discourages, and does not take any intentional action to accommodate, excessive and short-term trading practices, such as market timing. Although there is no generally applied standard in the marketplace as to what level of trading activity is excessive, we may consider trading in the Fund's shares to be excessive for a variety of reasons, such as if: o You sell shares within a short period of time after the shares were purchased; o You make two or more purchases and redemptions within a short period of time; o You enter into a series of transactions that is indicative of a timing pattern or strategy; or o We reasonably believe that you have engaged in such practices in connection with other mutual funds. The Fund's Board of Trustees has adopted policies and procedures with respect to frequent purchases and redemptions of fund shares by fund investors. Pursuant to these policies and procedures, we monitor selected trades on a daily basis in an effort to detect excessive short-term trading. If we determine that an investor or a client of a broker has engaged in excessive short-term trading that we believe may be harmful to the fund, we will ask the investor or broker to cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker or accounts that we believe are under their control. In determining whether to take such actions, we seek to act in a manner that is consistent with the best interests of the fund's shareholders. While we use our reasonable efforts to detect excessive trading activity, there can be no assurance that our efforts will be successful or that market timers will not employ tactics designed to evade detection. If we are not successful, your return from an investment in the fund may be adversely affected. Frequently, fund shares are held through omnibus accounts maintained by financial intermediaries such as brokers and retirement plan administrators, where the holdings of multiple shareholders, such as all the clients of a particular broker, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts is limited and dependent upon the cooperation of the financial intermediary in observing the fund's policies. In addition to monitoring trades, the policies and procedures provide that: o The fund imposes limitations on the number of exchanges out of an account holding the fund's Class A, Class B or Class C shares that may occur in any calendar year. o Certain funds managed by Pioneer have adopted redemption fees that are incurred if you redeem shares within a short period after purchase, including exchanges. These redemption fees are described in the applicable prospectuses under "Fees and expenses." The fund may reject a purchase or exchange order before its acceptance or an order prior to issuance of shares. The fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken, for any reason, without prior notice, including transactions that the fund believes are requested on behalf of market timers. The fund reserves the right to reject any purchase request by any investor or financial institution if the fund believes that any combination of trading activity in the account or related accounts is potentially disruptive to the fund. A prospective investor whose purchase or exchange order is rejected will not achieve the investment results, whether gain or loss, that would have been realized if the order were accepted and an investment made in the fund. The fund and its shareholders do not incur any gain or loss as a result of a rejected order. The fund may impose further restrictions on trading activities by market timers in the future. The fund's prospectus will be amended or supplemented to reflect any material additional restrictions on trading activities intended to prevent excessive trading. Minimum Account Size. Each Pioneer Fund requires that you maintain a minimum account value of $500. If you hold less than the minimum in your account because you have sold or exchanged some of your shares, the Pioneer Fund will notify you of its intent to sell your shares and close your account. You may avoid this by increasing the value of your account to at least the minimum within six months of the notice from the Pioneer Fund. Telephone Access. You may have difficulty contacting the Pioneer Fund by telephone during times of market volatility or disruption in telephone service. If you are unable to reach the Pioneer Fund by telephone, you should communicate with the Pioneer Fund in writing. Share Certificates. Normally, your shares will remain on deposit with the transfer agent and certificates will not be issued. If you are legally required to obtain a certificate, you may request one for your Class A shares only. A fee may be charged for this service. Any share certificates of the AmSouth Funds outstanding at the Closing Date of the Reorganizations will be deemed to be cancelled and will no longer represent shares of the Funds. 133 Other Policies. Each Pioneer Fund may suspend transactions in shares when trading on the New York Stock Exchange is closed or restricted, when an emergency exists that makes it impracticable, as determined by the SEC, for the Fund to sell or value its portfolio securities or with the permission of the SEC. Each Pioneer Fund or PFD may revise, suspend or terminate the account options and services available to shareholders at any time. Each Pioneer Fund reserves the right to redeem in kind by delivering portfolio securities to a redeeming shareholder, provided that the Pioneer Fund must pay redemptions in cash if a shareholder's aggregate redemptions in a 90 day period are less than $250,000 or 1% of the fund's net assets. Dividends and Capital Gains Each Pioneer Fund generally pays any distributions of net short- and long-term capital gains and dividends from any net investment income at least annually. Each Pioneer Fund may also pay dividends and capital gain distributions at other times if necessary for the Fund to avoid U.S. federal income or excise tax. If you invest in a Pioneer Fund close to the time that the Fund makes a distribution, generally you will pay a higher price per share and you will pay taxes on the amount of the distribution whether you reinvest the distribution or receive it as cash. Taxes For U.S. federal income tax purposes, distributions from each Pioneer Fund's net long-term capital gains (if any) are considered long-term capital gains and may be taxable to you at different maximum rates depending upon their source and other factors. Short-term capital gain distributions for each Pioneer Fund are taxable as ordinary income. Dividends from net investment income are taxable either as ordinary income or, if so designated by the Fund and certain other conditions, including holding period requirements, are met by the Fund and the shareholder, as "qualified dividend income" taxable to individual shareholders at the maximum 15% U.S. federal tax rate. Dividends and distributions generally are taxable, whether you take payment in cash or reinvest them to buy additional Pioneer Fund shares. When you sell or exchange Pioneer Fund shares you will generally recognize a capital gain or capital loss in an amount equal to the difference between the net amount of sale proceeds (or, in the case of an exchange, the fair market value of the shares) that you receive and your tax basis for the shares that you sell or exchange. In January of each year, each Pioneer Fund will mail to you information about your dividends, distributions and any shares you sold in the previous calendar year. You must provide your social security number or other taxpayer identification number to the Fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the Pioneer Fund will withhold 28% "backup withholding" tax from your dividends and distributions, sale proceeds and any other payments to you. You should ask your tax adviser about any federal, state and foreign tax considerations, including possible additional withholding taxes for non-U.S. shareholders. You may also consult the "Tax Status" section of each Pioneer Fund's statement of additional information for a more detailed discussion of U.S. federal income tax considerations, including qualified dividend income considerations that may affect the Pioneer Fund and its shareholders. Pioneer Funds' Rule 12b-1 Plans. As described above, each Pioneer Fund has adopted a Rule 12b-1 plan for its Class A shares and Class B shares (each, a "Plan"). Because the Rule 12b-1 fees payable under each Plan are an ongoing expense, over time they may increase the cost of your investment and your shares may cost more than shares that are not subject to a distribution or service fee or sales charge. Compensation and Services. Each Class A Plan is a reimbursement plan, and distribution expenses of PFD are expected to substantially exceed the distribution fees paid by the Fund in a given year. Pursuant to each Class A Plan the Fund reimburses PFD for its actual expenditures to finance any activity primarily intended to result in the sale of Class A shares or to provide services to holders of Class A shares, provided the categories of expenses for which reimbursement is made are approved by the Board of Trustees. The expenses of the Fund pursuant to the Class A Plan are accrued daily at a rate which may not exceed the annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares. The Class B Plan provides that the Fund shall pay to PFD, as the Fund's distributor for its Class B shares a distribution fee equal on an annual basis to 0.75% of the Fund's average daily net assets attributable to Class B shares and a service fee equal to 0.25% of the Fund's average daily net assets attributable to Class B shares. The distribution fee compensates PFD for its distribution services with respect to Class B shares. PFD also pays commissions to broker-dealers and the cost of printing prospectuses and reports used for sales 134 purposes and the preparation and printing of sales literature and other distribution-related expenses. The plan authorizes PFD to pay a service fee to broker-dealers at a rate of up to 0.25% of the fund's average daily net assets attributable to Class B shares owned by shareholders for whom that broker-dealer is the holder or dealer of record. This service fee compensates the broker-dealer for providing personal services and/or account maintenance services rendered by the broker-dealer with respect to Class B shares. The Class B Plan is a compensation plan, which provides for a fixed level of fees. Payments under this plan are not tied exclusively to actual distribution and service expenses, and may exceed (or may be less than) the expenses actually incurred. Trustee Approval and Oversight. Each Plan was last approved by the Board of Trustees of each Pioneer Fund, including a majority of the independent trustees, by votes cast in person at meetings called for the purpose of voting on the Plans on December 2, 2004. Pursuant to the Plans, at least quarterly, PFD will provide each Fund with a written report of the amounts expended under the Plans and the purpose for which these expenditures were made. The Trustees review these reports on a quarterly basis to determine their continued appropriateness. Term, Termination and Amendment. Each Plan's adoption, terms, continuance and termination are governed by Rule 12b-1 under the Investment Company Act. The Board of Trustees believes that there is a reasonable likelihood that the Plans will benefit each Fund and its current and future shareholders. The Plans may not be amended to increase materially the annual percentage limitation of average net assets which may be spent for the services described therein without approval of the shareholders of the Fund affected thereby, and material amendments of the Plans must also be approved by the Trustees as provided in Rule 12b-1. 135 FINANCIAL HIGHLIGHTS The following tables show the financial performance of each Pioneer Fund for the past five fiscal years and, if applicable, for any recent semiannual period (or the period during which each Pioneer Fund has been in operation, if less than five years). Certain information reflects financial results for a single Pioneer Fund share. "Total return" shows how much an investment in a Pioneer Fund would have increased or decreased during each period, assuming you had reinvested all dividends and other distributions. In the case of each Pioneer Fund, each fiscal year ended on or after the fiscal year ended June 30, 2002 has been audited by Ernst & Young LLP, each Pioneer Fund's independent registered public accounting firm, as stated in their reports incorporated by reference in this registration statement. For fiscal years prior to the fiscal year ended June 30, 2002, the financial statements of each Pioneer Fund were audited by Arthur Andersen LLP, the Pioneer Funds' previous independent accountants. Arthur Andersen ceased operations in 2002. The information for any semiannual period has not been audited. PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period .................................. $10.00 $10.00 ------ ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ..................................... $ - $ 0.01 Net realized and unrealized gain (loss) on investments ............... 1.36 0.97 ------ ------ Net increase (decrease) from investment operations ................... $ 1.36 $ 0.98 ------ ------ Distributions to shareowners: Net investment income ................................................ $(0.02) $ - Net realized gain .................................................... (0.30) (0.30) ------ ------- Net increase (decrease) in net asset value ........................... $ 1.04 $ 0.68 ------ ------- Net asset value, end of period ....................................... $11.04 $10.68 ====== ======= Total return* ......................................................... 13.54% 9.73% Ratio of net expenses to average net assets**++ ....................... 0.93% 1.83% Ratio of net investment income (loss) to average net assets** ......... (0.02)% 0.18% Portfolio turnover rate** ............................................. 12% 12% Net assets, end of period (in thousands) .............................. $6,604 $1,962
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 6.66% and 9.32% of average net assets, respectively, for Class A and Class B shares. 136 PIONEER IBBOTSON GROWTH ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period ............................ $ 10.00 $10.00 ------- ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ............................... $ 0.03 $ 0.04 Net realized and unrealized gain (loss) on investments ......... 1.09 0.16 ------- ------ Net increase (decrease) from investment operations ............. $ 1.12 $ 0.20 ------- ------ Distributions to shareowners: Net investment income .......................................... $ (0.03) $ - Net realized gain .............................................. (0.25) (0.25) ------- ------ Net increase (decrease) in net asset value ..................... $ 0.84 $(0.05) ------- ------ Net asset value, end of period ................................. $ 10.84 $ 9.95 ======= ====== Total return* ................................................... 11.19% 1.95% Ratio of net expenses to average net assets**++ ................. 0.93% 1.83% Ratio of net investment income to average net assets** .......... 0.62% 0.72% Portfolio turnover rate** ....................................... 13% 13% Net assets, end of period (in thousands) ........................ $11,580 $3,226
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 3.73% and 5.34% of average net assets, respectively, for Class A and Class B shares. 137 PIONEER IBBOTSON MODERATE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period ............................ $ 10.00 $10.00 ------- ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ............................... $ 0.06 $ 0.01 Net realized and unrealized gain (loss) on investments ......... 0.84 0.54 ------- ------ Net increase (decrease) from investment operations ............. $ 0.90 $ 0.55 ------- ------ Distributions to shareowners: Net investment income .......................................... $ (0.04) $ - Net realized gain .............................................. (0.23) (0.23) ------- ------- Net increase (decrease) in net asset value ..................... $ 0.63 $ 0.32 ------- ------- Net asset value, end of period ................................. $ 10.63 $10.32 ======= ======= Total return* ................................................... 9.04% 5.51% Ratio of net expenses to average net assets**++ ................. 0.90% 1.80% Ratio of net investment income to average net assets** .......... 1.15% 0.19% Portfolio turnover rate** ....................................... 20% 20% Net assets, end of period (in thousands) ........................ $13,612 $3,274
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 2.84% and 4.35% of average net assets, respectively, for Class A and Class B shares. 138 INFORMATION CONCERNING THE MEETING Solicitation of Proxies In addition to the mailing of these proxy materials, proxies may be solicited by telephone, by fax or in person by the Trustees and officers of your AmSouth Fund or its affiliates, including personnel of your AmSouth Fund's transfer agent, Pioneer Funds' investment adviser, Pioneer, Pioneer Funds' transfer agent, PIMSS, or by broker-dealer firms. ComputerShare Fund Services has been retained to provide proxy solicitation services to the Funds at a cost of approximately $70,000. Pioneer and AmSouth Bancorporation will bear the cost of such solicitation. Revoking Proxies An AmSouth Fund shareholder signing and returning a proxy has the power to revoke it at any time before it is exercised: o by filing a written notice of revocation with your AmSouth Fund's transfer agent, BISYS Fund Services, at P.O. Box 182733, Columbus, Ohio 43218-2733, or o by returning a duly executed proxy with a later date before the time of the Meeting, or o if a shareholder has executed a proxy but is present at the Meeting and wishes to vote in person, by notifying the secretary of your AmSouth Fund (without complying with any formalities) at any time before it is voted. Being present at the Meeting alone does NOT revoke a previously executed and returned proxy. Outstanding Shares Only shareholders of record on July 29, 2005 (the "record date") are entitled to notice of and to vote at the Meeting. As of the record date, the following shares of each AmSouth Fund were outstanding.
Shares Outstanding AmSouth Fund (as of July 29, 2005) - ------------ ---------------------- AmSouth Balanced Fund Class A ........................................ 8,239,735.118 Class B ........................................ 1,947,581.903 Class I ........................................ 4,078,106.501 AmSouth Strategic Portfolios: Aggressive Growth Portfolio Class A ........................................ 2,314,936.570 Class B ........................................ 1,678,844.581 Class I ........................................ 1,508,323.999 AmSouth Strategic Portfolios: Growth Portfolio Class A ........................................ 3,157,976.420 Class B ........................................ 3,190,213.840 Class I ........................................ 802,043.030 AmSouth Strategic Portfolios: Growth and Income Portfolio Class A ........................................ 4,991,158.141 Class B ........................................ 1,944,651.410 Class I ........................................ 3,907,604.281 AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Class A ........................................ 2,173,088.324 Class B ........................................ 1,411,005.230 Class I ........................................ 1,371,469.350
139 Other Business Your AmSouth Fund's Board of Trustees knows of no business to be presented for consideration at the Meeting other than Proposals 1(a)-(e). If other business is properly brought before the Meeting, proxies will be voted according to the best judgment of the persons named as proxies. Adjournments If, by the time scheduled for the Meeting, a quorum of shareholders of a Fund is not present or if a quorum is present but sufficient votes "for" the proposals have not been received, the persons named as proxies may propose to adjourn the Meeting with respect to one or more of the Funds to another date and time, and the Meeting may be held as adjourned within a reasonable time after the date set for the original Meeting for that Fund without further notice. Any such adjournment will require the affirmative vote of a majority of the votes cast on the question of adjournment in person or by proxy at the session of the Meeting to be adjourned. The persons named as proxies will vote all proxies in favor of the adjournment that voted in favor of the proposal or that abstained. They will vote against such adjournment those proxies required to be voted against the proposal. Broker non-votes will be disregarded in the vote for adjournment. If the adjournment requires setting a new record date or the adjournment is for more than 120 days of the original Meeting (in which case the Board of Trustees of your AmSouth Fund will set a new record date), your AmSouth Fund will give notice of the adjourned meeting to its shareholders. Telephone Voting In addition to soliciting proxies by mail, by fax or in person, your AmSouth Fund may also arrange to have votes recorded by telephone by officers and employees of your AmSouth Fund or by personnel of the adviser or transfer agent or a third party solicitation firm. The telephone voting procedure is designed to verify a shareholder's identity, to allow a shareholder to authorize the voting of shares in accordance with the shareholder's instructions and to confirm that the voting instructions have been properly recorded. If these procedures were subject to a successful legal challenge, these telephone votes would not be counted at the Meeting. Your AmSouth Fund has not obtained an opinion of counsel about telephone voting, but is currently not aware of any challenge. o A shareholder will be called on a recorded line at the telephone number in the Fund's account records and will be asked to provide the shareholder's social security number or other identifying information. o The shareholder will then be given an opportunity to authorize proxies to vote his or her shares at the Meeting in accordance with the shareholder's instructions. o To ensure that the shareholder's instructions have been recorded correctly, the shareholder will also receive a confirmation of the voting instructions by mail. o A toll-free number will be available in case the voting information contained in the confirmation is incorrect. o If the shareholder decides after voting by telephone to attend the Meeting, the shareholder can revoke the proxy at that time and vote the shares at the Meeting. o Touchtone telephone voting information is noted on the enclosed proxy card(s). Internet Voting You will also have the opportunity to submit your voting instructions via the Internet by utilizing a program provided through the tabulator. Voting via the Internet will not affect your right to vote in person if you decide to attend the Meeting. Do not mail the proxy card if you are voting via the Internet. To vote via the Internet, you will need the "control number" that appears on your proxy card. These Internet voting procedures are designed to authenticate shareholder identities, to allow shareholders to give their voting instructions, and to confirm that shareholders' instructions have been recorded properly. If you are voting via the Internet, you should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, that must be borne by you. o Read the proxy statement and have your proxy card at hand. o Go to the Web site listed on your proxy card. o Enter control number found on your proxy card. o Follow the simple instructions on the Web site. Please call AmSouth Funds at 1-800-451-8382 if you have any problems. 140 o To insure that your instructions have been recorded correctly you will receive a confirmation of your voting instructions immediately after your submission and also by e-mail if chosen. o Internet voting information is noted on the enclosed proxy card(s). Shareholders' Proposals Your AmSouth Fund is not required, and does not intend, to hold meetings of shareholders each year. Instead, meetings will be held only when and if required. Any shareholders desiring to present a proposal for consideration at the next meeting for shareholders must submit the proposal in writing, so that it is received by your AmSouth Fund to Michael C. Daniel, President, AmSouth Funds, c/o AmSouth Bank, 1900 Fifth Avenue North, Birmingham, AL 35203 within a reasonable time before any meeting. If the Reorganization is completed, your AmSouth Fund will not hold another shareholder meeting. Appraisal Rights If the Reorganization of your AmSouth Fund is approved at the Meeting, shareholders of your AmSouth Fund will not have the right to dissent and obtain payment of the fair value of their shares because the exercise of appraisal rights is subject to the forward pricing requirements of Rule 22c-1 under the Investment Company Act, which supersede state law. Shareholders of your AmSouth Funds, however, have the right to redeem their Fund shares until the closing date of the Reorganizations. OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS To the knowledge of your AmSouth Fund, as of May 31, 2005, the following persons owned of record or beneficially 5% or more of the outstanding shares of each of the AmSouth Funds.
- --------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------- AMSOUTH BALANCED FUND -- CLASS A - --------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR AM 1,715,208.626 20.75% BANK FBO AMSOUTH THRIFT PLAN PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST CO AS AGENT 1,471,810.189 17.80% FOR AMSOUTH BANK FBO BCBS ALABAMA PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR AM 516,827.177 6.25% BANK FBO BRASFIELD GORRIE EMPLOYE PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMSOUTH BALANCED FUND -- CLASS I - --------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 1,699,127.878 42.24% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST COMPANY 410,690.141 10.21% AS AGENT FOR AMSOUTH BANK PO BOX 105779 ATLANTA GA 303485779 - ---------------------------------------------------------------------------------
141
- ----------------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 398,294.497 9.90% WARRIOR TRACTOR EQUIPMENT 401 K SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 388,726.276 9.66% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR 275,539.796 6.85% AMSOUTH FBO TRACTOR EQUIPMENT PO BOX 105779 ATLANTA GA 30348 - ----------------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO 977,512.782 6.94% 3435 STELZER RD ATTN FUND ACCOUNTING COLUMBUS OH 43219 - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 875,083.106 6.21% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND -- CLASS I - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 466,778.020 29.81% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 229,924.893 14.68% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 144,952.998 9.26% WALKER-J-WALKER INC PROFIT SHARIN SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 92,304.222 5.89% SEABROOK EES PROFIT SHARING RETIREM SUITE 300 DENVER CO 80202 - -----------------------------------------------------------------------------------------------------------------------
142
- --------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 551,605.180 10.00% THE WOMEN S CLINIC AMC P S PLAN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 450,593.183 8.17% ACE BOLT SCREW CO INC PROFIT SHA SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 431,874.127 7.83% HEART CNTR CARDIOVASC SPECIALISTS 4 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 392,323.861 7.11% EAR NOSE THROAT PHYS N MISS 4 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 2,021,724.353 52.75% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 493,107.625 12.87% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 324,655.761 8.47% EAR NOSE THROAT CENTER RET SAVIN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST COMPANY 320,083.181 10.22% AS AGENT FOR AMSOUTH BANK PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 249,833.742 7.98% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 177,625.115 5.67% NORTH MISSISSIPPI ORAL 401 K PS PL SUITE 300 DENVER CO 80202 - ---------------------------------------------------------------------------------------------------------------
143
- --------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 338,956.524 39.79% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH BANK 180,856.121 21.23% COOK YANCEY KING GALLOWAY PO BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 61,057.862 7.17% SEABROOK EES PROFIT SHARING RETIREM SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 54,070.165 6.35% WALKER-J-WALKER INC PROFIT SHARIN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- MCB TRUST SERVICES AS AGENT FOR 258,695.800 10.98% FRONTIER TRUST CO AS TRUSTEE SUITE 300 700 17TH STREET DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 159,234.626 6.76% WEST QUALITY FOOD SERVICE INC 401 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- HARTFORD LIFE INSURANCE COMPANY 122,492.770 5.20% 200 HOPMEADOW STREET SIMSBURY CT 06089 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 924,772.196 65.62% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 125,779.661 8.93% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - ---------------------------------------------------------------------------------------------------------------
As of May 31, 2005, the Trustees and officers of your AmSouth Fund, as a group, owned in the aggregate less than 1% of the outstanding shares of your AmSouth Fund. Any shares beneficially owned by AmSouth Bank or other companies controlled by AmSouth Bancorporation (the "AmSouth Companies") and shares over which AmSouth Companies have discretionary voting power will be voted in the manner determined by a special fiduciary independent of the AmSouth Companies. 144 OWNERSHIP OF SHARES OF THE PIONEER FUNDS To the knowledge of your Pioneer Fund, as of May 31, 2005, the following persons owned of record or beneficially 5% or more of the outstanding shares of each of the Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------- Percentage of Class Held by Fund/Class Shareholder Name and Address Shareholder - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 5.83% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class B MLPF&S 18.33% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 31.43% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 5.33% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 30.10% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Moderate Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 17.48% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class B MLPF&S 7.51% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - -------------------------------------------------------------------------------------------------------------
145
- ------------------------------------------------------------------------------------------------------------- Percentage of Class Held by Fund/Class Shareholder Name and Address Shareholder - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 28.89% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - -------------------------------------------------------------------------------------------------------------
As of May 31, 2005, the Trustees and officers of each Pioneer Fund owned less than 1% of the outstanding shares of each Pioneer Fund. EXPERTS AmSouth Funds The financial statements and financial highlights of each AmSouth Fund incorporated by reference in the respective AmSouth Funds' Annual Report for the most recent fiscal year end have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon incorporated by reference into this registration statement. Such financial statements and financial highlights are incorporated herein by reference in reliance on such reports given on the authority of such firm as experts in accounting and auditing. Pioneer Funds The financial statements and financial highlights of each Pioneer Fund incorporated by reference in the respective Pioneer Fund's Annual Report for the most recent fiscal year end have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon incorporated by reference into this registration statement. Such financial statements and financial highlights are incorporated herein by reference in reliance on such reports given on the authority of such firm as experts in accounting and auditing. AVAILABLE INFORMATION The AmSouth Funds and the Pioneer Funds are subject to the informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act and file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information filed by the Funds can be inspected and copied (for a duplication fee) at the public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. Copies of these materials can also be obtained by mail from the Public Reference Branch, Office of Consumer Affairs and Information Services, SEC, Washington, D.C. 20549, at prescribed rates. In addition, copies of these documents may be viewed on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. 146 Exhibit A-1 -- Form of Agreement and Plan of Reorganization (C/D Reorganizations) AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the day of [ ] 2005, by and between Pioneer [ ] Fund, a Delaware statutory trust (the "Acquiring Trust"), on behalf of its sole series Pioneer [ ] Fund (the "Acquiring Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust (the "AmSouth Trust"), on behalf of its series [ ] Fund (the "Acquired Fund"), with its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. The Acquiring Fund and the Acquired Fund are sometimes referred to collectively herein as the "Funds" and individually as a "Fund." This Agreement is intended to be and is adopted as a plan of a "reorganization" as defined in Section 368(a)(1)[(C)/(D)] of the United States Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations thereunder. The reorganization (the "Reorganization") will consist of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y shares of beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of the liabilities of the Acquired Fund that are both set forth on the Statement of Assets and Liabilities (as defined below) and also included in the calculation of net asset value ("NAV") on the closing date of the Reorganization (the "Closing Date") (collectively, the "Assumed Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly after the Closing Date as provided herein, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation and dissolution of the Acquired Fund, all upon the terms and conditions hereinafter set forth in this Agreement. WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered investment companies classified as management companies of the open-end type. WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial interest. WHEREAS, the Board of Trustees of the AmSouth Trust and the Board of Trustees of the Acquiring Trust have determined that the Reorganization is in the best interests of the Acquired Fund shareholders and the Acquiring Fund shareholders, respectively, and is not dilutive of the interests of those shareholders. NOW, THEREFORE, in consideration of the premises of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the Acquiring Fund free and clear of all liens and encumbrances (other than those arising under the Securities Act of 1933, as amended (the "Securities Act"), liens for taxes not yet due and contractual restrictions on the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, of each class with an aggregate NAV equal to the NAV of the Acquired Fund attributable to the corresponding class of the Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities. Such transactions shall take place at the Closing (as defined in Paragraph 3.1 below). 1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's property, including, without limitation, all portfolio securities and instruments, dividends and interest receivables, cash, goodwill, contractual rights and choses in action of the Acquired Fund or the AmSouth Trust in respect of the Acquired Fund, all other intangible property owned by the Acquired Fund, originals or copies of all books and records of the Acquired Fund, and all other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also be entitled to receive (or, to the extent agreed upon between the AmSouth Trust and the Acquiring Trust, be provided access to) copies of all records that the AmSouth Trust is required to maintain under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules of the Securities and Exchange Commission (the "Commission") thereunder to the extent such records pertain to the Acquired Fund. (b) The Acquired Fund has provided the Acquiring Fund with a list of all of the Acquired Fund's securities and other assets as of the date of execution of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of the current fundamental investment policies and restrictions and fair value procedures applicable to the Acquiring Fund. The Acquired Fund reserves the right to A-1 sell any of such securities or other assets before the Closing Date (except to the extent sales may be limited by representations of the Acquired Fund contained herein and made in connection with the issuance of the tax opinion provided for in Paragraph 8.5 hereof) and agrees not to acquire any portfolio security that is not an eligible investment for, or that would violate an investment policy or restriction of, the Acquiring Fund. 1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations that are or will become due prior to the Closing. 1.4 On or as soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and distribute pro rata to its shareholders of record, determined as of the close of regular trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number of Acquiring Fund Shares of the class corresponding to the class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares held of record by such Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution will be accomplished by the AmSouth Trust instructing the Acquiring Trust to transfer the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund established and maintained by the Acquiring Fund's transfer agent in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with evidence of such liquidation and distribution. All issued and outstanding Acquired Fund Shares will simultaneously be cancelled on the books of the Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.5 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Any certificates representing ownership of Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed to be cancelled and shall no longer evidence ownership of Acquired Fund Shares. 1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund Shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.7 Any reporting responsibility of the AmSouth Trust with respect to the Acquired Fund for taxable periods ending on or before the Closing Date, including, but not limited to, the responsibility for filing of regulatory reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the Commission, any state securities commissions, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the AmSouth Trust. 2. VALUATION 2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund shall, in each case, be determined as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the "Valuation Time"). The NAV of each Acquiring Fund Share shall be computed by Pioneer Investment Management, Inc. (the "Acquiring Fund Adviser") in the manner set forth in the Acquiring Trust's Declaration of Trust (the "Declaration"), or By-Laws, and the Acquiring Fund's then-current prospectus and statement of additional information. The NAV of the Acquired Fund shall be computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws, and the Acquiring Fund's then-current prospectus and statement of additional information. The Acquiring Fund Adviser shall confirm to the Acquiring Fund the NAV of the Acquired Fund. 2.2 The number of Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Assets and the assumption of the Assumed Liabilities shall be determined by the Acquiring Fund Adviser by dividing the NAV of the Acquired Fund, as determined in accordance with Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in accordance with Paragraph 2.1. 2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund Adviser and the Acquired Fund Administrator, respectively, to deliver a copy of its valuation report to the other party at Closing. All computations of value shall be made by the Acquiring Fund Adviser and the Acquired Fund Administrator in accordance with its regular practice as pricing agent for the Acquiring Fund and the Acquired Fund, respectively. A-2 3. CLOSING AND CLOSING DATE 3.1 The Closing Date shall be [ ], 2005, or such later date as the parties may agree to in writing. All acts necessary to consummate the Reorganization (the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The Closing shall be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, or at such other place as the parties may agree. 3.2 Portfolio securities that are held other than in book-entry form in the name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than three business days preceding the Closing Date. Such portfolio securities shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the account of the Acquiring Fund on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund shall be delivered by the Acquired Fund Custodian through the Depository Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian transmitting immediately available funds by wire transfer to the Acquiring Fund Custodian the cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount to the account of the Acquiring Fund. 3.3 The Acquiring Fund Custodian shall deliver within one business day after the Closing a certificate of an authorized officer stating that: (a) the Acquired Assets have been delivered in proper form to the Acquiring Fund on the Closing Date, and (b) all necessary transfer taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment has been made in conjunction with the delivery of portfolio securities as part of the Acquired Assets. 3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere is disrupted so that accurate appraisal of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 3.5 The Acquired Fund shall deliver at the Closing a list of the names, addresses, federal taxpayer identification numbers and backup withholding and nonresident alien withholding status and certificates of the Acquired Fund Shareholders and the number and percentage ownership of outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time, certified by the President or a Secretary of the AmSouth Trust and its Treasurer, Secretary or other authorized officer (the "Shareholder List") as being an accurate record of the information (a) provided by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from the AmSouth Trust's records by such officers or one of the AmSouth Trust's service providers. The Acquiring Fund shall issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES 4.1 Except as set forth on a disclosure schedule previously provided by the AmSouth Trust to the Acquiring Trust, the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquired Fund is a series of the AmSouth Trust. The AmSouth Trust is a business trust validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to own all of its properties and assets and, subject to approval by the Acquired Fund's shareholders, to perform its obligations under this Agreement. The Acquired Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the AmSouth Trust and the Acquired Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The AmSouth Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The AmSouth Trust is not in violation of, and the execution and delivery of this Agreement and the performance of its obligations under this Agreement in respect of the Acquired Fund will not result in a violation of, any provision of the AmSouth Trust's A-3 Declaration of Trust or By-Laws or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquired Fund to which the AmSouth Trust is a party or by which the Acquired Fund or any of its assets are bound; (d) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of the Acquired Fund's properties or assets. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquired Fund's business or its ability to consummate the transactions contemplated herein or would be binding upon the Acquiring Fund as the successor to the Acquired Fund; (e) The Acquired Fund has no material contracts or other commitments (other than this Agreement or agreements for the purchase and sale of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) which will not be terminated at or prior to the Closing Date and no such termination will result in liability to the Acquired Fund (or the Acquiring Fund); (f) The statement of assets and liabilities of the Acquired Fund, and the related statements of operations and changes in net assets, as of and for the fiscal year ended July 31, 2005, have been audited by an independent registered public accounting firm retained by the Acquired Fund, and are in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquired Fund as of the date thereof are disclosed therein. The Statement of Assets and Liabilities will be in accordance with GAAP consistently applied and will fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended. Except for the Assumed Liabilities, the Acquired Fund will not have any known or contingent liabilities on the Closing Date. No significant deficiency, material weakness, fraud, significant change or other factor that could significantly affect the internal controls of the Acquired Fund has been disclosed or is required to be disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief executive officer and chief financial officer or other officers of the Acquired Fund to make the certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness, fraud, change, event or other factor exists that will be required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date; (g) Since the most recent fiscal year end, except as specifically disclosed in the Acquired Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the period ended January 31, 2005, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquired Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (g) (but not for any other purpose of this Agreement), a decline in NAV per Acquired Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquired Fund's portfolio or a decline in net assets of the Acquired Fund as a result of redemptions shall not constitute a material adverse change; (h) (A) For each taxable year of its operation since its inception, the Acquired Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company. The Acquired Fund will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquired Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquired Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquired Fund has properly filed on a timely basis all Tax Returns (as defined below) that it was required to file, and all such Tax Returns were complete and accurate in all material respects. The Acquired Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquired Fund was required to file any Tax Return that was not filed; and the Acquired Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquired Fund has timely paid, in the manner prescribed by law, all Taxes (as defined below), which were due and payable or which were claimed to be due; (D) All Tax Returns filed by the Acquired Fund constitute complete and accurate reports of the respective Tax liabilities and all attributes of the Acquired Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns; A-4 (E) The Acquired Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquired Fund has not been notified that any examinations of the Tax Returns of the Acquired Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquired Fund as a result of any audit by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquired Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquired Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquired Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquired Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Statement of Assets and Liabilities, as defined in paragraph 5.7, rather than in any notes thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquired Fund has delivered to the Acquiring Fund or made available to the Acquiring Fund complete and accurate copies of all Tax Returns of the Acquired Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquired Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquired Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquired Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex B; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquired Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquired Fund are accurately reflected on the Acquired Fund's Tax books and records; (N) The Acquired Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law; and (O) For purposes of this Agreement, "Taxes" or "Tax" shall mean all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof; and "Tax Returns" shall mean all reports, returns, declarations, statements or other A-5 information required to be supplied to a governmental or regulatory authority or agency, or to any other person, in connection with Taxes and any associated schedules or work papers produced in connection with such items; (i) All issued and outstanding Acquired Fund Shares are, and at the Closing Date will be, legally issued and outstanding, fully paid and nonassessable by the Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at the time of Closing, be held of record by the persons and in the amounts set forth in the Shareholder List submitted to the Acquiring Fund pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding any security convertible into any Acquired Fund Shares; (j) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Assets, and full right, power and authority to sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the Securities Act; (k) The AmSouth Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the AmSouth Trust's Board of Trustees, and, subject to the approval of the Acquired Fund's shareholders, assuming due authorization, execution and delivery by the Acquiring Fund, this Agreement will constitute a valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (l) The information to be furnished by the Acquired Fund to the Acquiring Fund for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby and any information necessary to compute the total return of the Acquired Fund shall be accurate and complete and shall comply in all material respects with federal securities and other laws and regulations applicable thereto; (m) The information included in the proxy statement (the "Proxy Statement") forming part of the Acquiring Fund's Registration Statement on Form N-14 filed in connection with this Agreement (the "Registration Statement") that has been furnished in writing by the Acquired Fund to the Acquiring Fund for inclusion in the Registration Statement, on the effective date of that Registration Statement and on the Closing Date, will conform in all material respects to the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment Company Act and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (n) Upon the effectiveness of the Registration Statement, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by the AmSouth Trust or the Acquired Fund of the transactions contemplated by this Agreement; (o) All of the issued and outstanding Acquired Fund Shares have been offered for sale and sold in compliance in all material respects with all applicable federal and state securities laws, except as may have been previously disclosed in writing to the Acquiring Fund; (p) The prospectus and statement of additional information of the Acquired Fund and any amendments or supplements thereto, furnished to the Acquiring Fund, did not as of their dates or the dates of their distribution to the public contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which such statements were made, not materially misleading; (q) The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the AmSouth Trust with respect to the Acquired Fund. All advertising and sales material used by the Acquired Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD") and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquired Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, A-6 prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (r) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of the Acquired Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (s) The tax representation certificate to be delivered by AmSouth Trust on behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 4.2 Except as set forth on a disclosure schedule previously provided by the Acquiring Trust to the AmSouth Trust, the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring Trust is a statutory trust duly organized, validly existing and in good standing under the laws of the State of Delaware. The Acquiring Trust has the power to own all of its properties and assets and to perform the obligations under this Agreement. The Acquiring Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the Acquiring Trust and the Acquiring Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Acquiring Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The current prospectus and statement of additional information of the Acquiring Fund and each prospectus and statement of additional information for the Acquiring Fund used during the three years previous to the date of this Agreement, and any amendment or supplement to any of the foregoing, conform or conformed at the time their distribution to the public in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder and do not or did not at the time of their distribution to the public include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading; (d) The Acquiring Fund's registration statement on Form N-1A that will be in effect on the Closing Date, and the prospectus and statement of additional information of the Acquiring Fund included therein, will conform in all material respects with the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder, and did not as of the effective date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (e) The Registration Statement, the Proxy Statement and statement of additional information with respect to the Acquiring Fund, and any amendments or supplements thereto in effect on or prior to the Closing Date included in the Registration Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder. Neither the Registration Statement nor the Proxy Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (f) The Acquiring Trust is not in violation of, and the execution and delivery of this Agreement and performance of its obligations under this Agreement will not result in a violation of, any provisions of the Declaration of Trust or by-laws of the Acquiring Trust A-7 or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquiring Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or any of its assets is bound; (g) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or threatened against the Acquiring Fund or any of the Acquiring Fund's properties or assets. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquiring Fund's business or its ability to consummate the transactions contemplated herein; (h) The statement of assets and liabilities of the Acquiring Fund, and the related statements of income and changes in NAV, as of and for the fiscal year ended [____] have been audited by Ernst & Young LLP, independent registered public accounting firm, and are in accordance with GAAP consistently applied and fairly reflect, in all material respects, the financial condition of the Acquiring Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquiring Fund as of the date thereof are disclosed therein; (i) Since the most recent fiscal year end, except as specifically disclosed in the Acquiring Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, [or its semi-annual report for the period ended ____, 2005], there has not been any material adverse change in the Acquiring Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquiring Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (i) (but not for any other purpose of this Agreement), a decline in NAV per Acquiring Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquiring Fund's portfolio or a decline in net assets of the Acquiring Fund as a result of redemptions shall not constitute a material adverse change; (j) (A) For each taxable year of its operation since its inception, the Acquiring Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company and will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquiring Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquiring Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquiring Fund has properly filed on a timely basis all Tax Returns that it was required to file, and all such Tax Returns were complete and accurate in all material respects. The Acquiring Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquiring Fund was required to file any Tax Return that was not filed; and the Acquiring Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquiring Fund has timely paid, in the manner prescribed by law, all Taxes that were due and payable or that were claimed to be due; (D) All Tax Returns filed by the Acquiring Fund constitute complete and accurate reports of the respective liabilities for Taxes and all attributes of the Acquiring Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns; (E) The Acquiring Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquiring Fund has not been notified that any examinations of the Tax Returns of the Acquiring Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquiring Fund as a result of any audit by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquiring Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquiring Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquiring Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquiring Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth in the financial statements referred to in paragraph 4.2(h). All Taxes that the Acquiring Fund is or was required A-8 by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquiring Trust has delivered to AmSouth Trust or made available to AmSouth Trust complete and accurate copies of all Tax Returns of the Acquiring Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquiring Fund. The Acquiring Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquiring Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquiring Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquiring Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex A; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquiring Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquiring Fund are accurately reflected on the Acquiring Fund's Tax books and records; (N) The Acquiring Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law, except as set forth on Schedule 4.2; (k) The authorized capital of the Acquiring Fund consists of an unlimited number of shares of beneficial interest, no par value per share. As of the Closing Date, the Acquiring Fund will be authorized to issue an unlimited number of shares of beneficial interest, no par value per share. The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will have been duly authorized on the Closing Date and, when so issued and delivered, will be legally issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor is there outstanding any security convertible into any Acquiring Fund shares; (l) All issued and outstanding Acquiring Fund Shares are, and on the Closing Date will be, legally issued, fully paid and non-assessable and have been offered and sold in every state and the District of Columbia in compliance in all material respects with all applicable federal and state securities laws; (m) The Acquiring Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquiring Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Acquired Fund, this Agreement will constitute a valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (n) The information to be furnished in writing by the Acquiring Fund or the Acquiring Fund Adviser for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; A-9 (o) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by the Agreement by the Acquiring Fund, except for the registration of the Acquiring Fund Shares under the Securities Act and the Investment Company Act; (p) The Acquiring Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquiring Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the Acquiring Trust with respect to the Acquiring Fund. All advertising and sales material used by the Acquiring Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the NASD and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquiring Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (q) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of the Acquiring Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (r) The tax representation certificate to be delivered by the Acquiring Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 5. COVENANTS OF THE FUNDS 5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary course of business between the date hereof and the Closing Date. It is understood that such ordinary course of business will include the declaration and payment of customary dividends and other distributions and any other dividends and other distributions necessary or advisable (except to the extent dividends or other distributions that are not customary may be limited by representations made in connection with the issuance of the tax opinion described in Paragraph 8.5 hereof), in each case payable either in cash or in additional shares. 5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's shareholders to consider approval of this Agreement and act upon the matters set forth in the Proxy Statement. 5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and Proxy Statement (collectively, "Proxy Materials") to be used in connection with such meeting, and will promptly prepare and file with the Commission the Registration Statement. The AmSouth Trust will provide the Acquiring Fund with information reasonably requested for the preparation of the Registration Statement in compliance with the Securities Act, the Exchange Act, and the Investment Company Act. 5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired by the Acquired Fund for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement. 5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requires concerning the beneficial ownership of the Acquired Fund Shares. 5.6 Subject to the provisions of this Agreement, each Fund will take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement. A-10 5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date a statement of assets and liabilities of the Acquired Fund ("Statement of Assets and Liabilities") as of the Closing Date setting forth the NAV (as computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation Time, which statement shall be prepared in accordance with GAAP consistently applied and certified by the AmSouth Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but in any case within 30 days after the Closing Date, the AmSouth Trust shall furnish to the Acquiring Trust, in such form as is reasonably satisfactory to the Acquiring Trust, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, and of any capital loss carryovers and other items that will be carried over to the Acquiring Fund under the Code, and which statement will be certified by the Treasurer of the AmSouth Trust. 5.8 Neither Fund shall take any action that is inconsistent with the representations set forth in, with respect to the Acquired Fund, the Acquired Fund Tax Representation Certificate and, with respect to the Acquiring Fund, the Acquiring Fund Tax Representation Certificate. 5.9 From and after the date of this Agreement and until the Closing Date, each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its commercially reasonable efforts to cause the Reorganization to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent the Reorganization from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the Code. Unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code, the parties hereto shall treat and report the transactions contemplated hereby as a reorganization within the meaning of Section [368(a)(1)(C)/(D)] of the Code and shall not take any position inconsistent with such treatment. 5.10 From and after the date of this Agreement and through the time of the Closing, each Fund shall use its commercially reasonable efforts to cause it to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent it from qualifying as a regulated investment company under the provisions of Subchapter M of the Code. 5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns for taxable periods that end on or before the Closing Date and shall timely file, or cause to be timely filed, all such Tax Returns. Each Fund shall make any payments of Taxes required to be made by it with respect to any such Tax Returns. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions, unless waived by the Acquired Fund in writing: 6.1 All representations and warranties by the Acquiring Trust on behalf of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring Fund executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust and dated as of the Closing Date, to the effect that the representations and warranties of the Acquiring Trust made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 6 have been met, and as to such other matters as the AmSouth Trust shall reasonably request; 6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquiring Fund; 6.4 With respect to the Acquiring Fund, the Board of Trustees of the Acquiring Trust shall have determined that the Reorganization is in the best interests of the Acquiring Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby; and 6.5 The AmSouth Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the Acquiring Trust and related matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing Date, in a form reasonably satisfactory to the AmSouth Trust. A-11 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions, unless waived by the Acquiring Fund in writing: 7.1 All representations and warranties of the AmSouth Trust on behalf of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 7.2 The AmSouth Trust shall have delivered to the Acquiring Fund the Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.7, together with a list of its portfolio securities showing the federal income tax bases and holding periods of such securities, as of the Closing Date, certified by the AmSouth Trust's Treasurer or Assistant Treasurer; 7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund executed in its name by its President or Vice President and a Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the Acquiring Trust and dated as of the Closing Date, to the effect that the representations and warranties of the AmSouth Trust contained in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 7 have been met, and as to such other matters as the Acquiring Trust shall reasonably request; 7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the AmSouth Trust and the Acquiring Trust, concerning certain tax-related matters with respect to the Acquired Fund; 7.5 The Acquiring Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the AmSouth Trust and related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and 7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth Trust shall have determined that the Reorganization is in the best interests of the Acquired Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 8. FURTHER CONDITIONS PRECEDENT If any of the conditions set forth below does not exist on or before the Closing Date with respect to either party hereto, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the Acquired Fund's shareholders in accordance with the provisions of the AmSouth Trust's Declaration of Trust and By-Laws, and certified copies of the resolutions evidencing such approval by the Acquired Fund's shareholders shall have been delivered by the Acquired Fund to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither party hereto may waive the conditions set forth in this Paragraph 8.1; 8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein; 8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by either party hereto to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party hereto, provided that either party may waive any such conditions for itself; 8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have become effective under the Securities Act and no stop orders suspending the effectiveness of such Registration Statement shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act; 8.5 The parties shall have received an opinion of Wilmer Cutler Pickering Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and subject to customary assumptions and qualifications, substantially to the effect that for federal income tax purposes A-12 the acquisition by the Acquiring Fund of the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring Fund, followed by the distribution by the Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for their Acquired Fund Shares and the termination of the Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code; 8.6 The Acquired Fund shall have distributed to its shareholders, in a distribution or distributions qualifying for the deduction for dividends paid under Section 561 of the Code, all of its investment company taxable income (as defined in Section 852(b)(2) of the Code determined without regard to Section 852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all of the excess of (i) its interest income excludable from gross income under Section 103(a) of the Code over (ii) its deductions disallowed under Sections 265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date, and all of its net capital gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code), after reduction by any available capital loss carryforward, for its taxable year ending on the Closing Date; and 8.7 The Acquiring Fund shall have made a distribution of at least 80% of its accumulated undistributed realized net capital gains as of seven business days before the Closing Date (the "Determination Date") to its shareholders on or about three business days before the Closing Date; provided that the Acquiring Fund shall not be required to make such distribution if (i) such gains do not exceed 3% of the net assets of the Acquiring Fund on such date, both as determined in accordance with GAAP consistently applied and certified by the Acquiring Fund's Treasurer or Assistant Treasurer, or (ii) the Acquiring Fund shall have been notified by the staff of the Commission in response to a request in accordance with Rule 19b-1(e) under the Investment Company Act that the staff objects to the proposed distribution. If the Acquiring Fund distributes income monthly, the dividend distribution that the Acquiring Fund would make in September 2005 shall have been made to shareholders of record prior to closing. 9. BROKERAGE FEES AND EXPENSES 9.1 Each party hereto represents and warrants to the other party hereto that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI") and the Acquiring Fund Adviser -- and the parties have entered into this Agreement in reliance on such information -- that certain non-parties will pay (with each of AmSouth Bancorporation or AAMI and the Acquiring Fund Adviser being responsible for 50% of such amounts) all proxy statement and solicitation costs of the Funds associated with the Reorganization including, but not limited to, the expenses associated with the preparation, printing and mailing of any and all shareholder notices, communications, proxy statements, and necessary filings with the SEC or any other governmental authority in connection with the transactions contemplated by this Agreement and the fees and expenses of any proxy solicitation firm retained in connection with the Reorganization. Except for the foregoing, the AAMI shall bear the expenses of the Acquired Fund in connection with the transactions contemplated by this Agreement. 10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES 10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party has made any representation, warranty or covenant not set forth herein or referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the entire agreement between the parties. 10.2 The representations and warranties contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder. 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Acquiring Trust and the AmSouth Trust. In addition, either party may at its option terminate this Agreement at or prior to the Closing Date: (a) because of a material breach by the other of any representation, warranty, covenant or agreement contained herein to be performed at or prior to the Closing Date; (b) because of a condition herein expressed to be precedent to the obligations of the terminating party which has not been met and which reasonably appears will not or cannot be met; (c) by resolution of the Acquiring Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquiring Fund's shareholders; (d) by resolution of the AmSouth Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquired Fund's shareholders; or A-13 (e) if the transactions contemplated by this Agreement shall not have occurred on or prior to December 31, 2005 or such other date as the parties may mutually agree upon in writing. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it incidental to the preparation and carrying out of this Agreement. 12. AMENDMENTS This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the AmSouth Trust and the Acquiring Trust; provided, however, that following the meeting of the Acquired Fund's shareholders called by the AmSouth Trust pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the effect of changing the provisions regarding the method for determining the number of Acquiring Fund Shares to be received by the Acquired Fund Shareholders under this Agreement to their detriment without their further approval; provided that nothing contained in this Section 12 shall be construed to prohibit the parties from amending this Agreement to change the Closing Date. 13. NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o AmSouth Asset Management Inc., 1900 Fifth Avenue North, 10th Floor, Birmingham, Alabama 35203, Attention: Andrew Chambless, with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800 Massachusetts Avenue, N.W., Washington, DC, 20036-1221, Attention: Clifford J. Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc., 60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa, Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: David C. Phelan. 14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 14.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 14.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 14.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to conflict of laws principles (other than Delaware Code Title 6 [sec] 2708); provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern. 14.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the prior written consent of the other party hereto. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, or other entity, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 14.5 It is expressly agreed that the obligations of the Acquiring Trust and the AmSouth Trust shall not be binding upon any of their respective trustees, shareholders, nominees, officers, agents or employees personally, but bind only to the property of the Acquiring Fund or the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. The execution and delivery of this Agreement have been authorized by the trustees of the Acquiring Trust and of the AmSouth Trust and this Agreement has been executed by authorized officers of the Acquiring Trust and the AmSouth Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to imposed any liability on any of them personally, but shall bind only the property of the Acquiring Fund and the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. A-14 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first set forth above by its President or Vice President and attested by its Secretary or Assistant Secretary. Attest: AMSOUTH FUNDS on behalf of AMSOUTH [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Name: Title: [Assistant] Secretary Title: [Vice] President Attest: PIONEER [______] FUND on behalf of PIONEER [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Christopher J. Kelley Name: Osbert M. Hood Title: Assistant Secretary Title: Executive Vice President A-15 Exhibit A-2 -- Form of Agreement and Plan of Reorganization (F Reorganizations) AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the day of [ ], 2005, by and between Pioneer [ ] Fund, a Delaware statutory trust (the "Acquiring Trust"), on behalf of its series Pioneer [ ] Fund (the "Acquiring Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust (the "AmSouth Trust"), on behalf of its series AmSouth [ ] Fund (the "Acquired Fund"), with its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. The Acquiring Fund and the Acquired Fund are sometimes referred to collectively herein as the "Funds" and individually as a "Fund." This Agreement is intended to be and is adopted as a plan of a "reorganization" as defined in Section 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations thereunder. The reorganization (the "Reorganization") will consist of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y shares of beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of all liabilities of the Acquired Fund (collectively, the "Assumed Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly after the closing date of the Reorganization (the "Closing Date") as provided herein, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation and dissolution of the Acquired Fund, all upon the terms and conditions hereinafter set forth in this Agreement. WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered investment companies classified as management companies of the open-end type. WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial interest. WHEREAS, the Board of Trustees of the AmSouth Trust has determined that the Reorganization is in the best interests of the Acquired Fund shareholders and is not dilutive of the interests of those shareholders. NOW, THEREFORE, in consideration of the premises of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the Acquiring Fund free and clear of all liens and encumbrances (other than those arising under the Securities Act of 1933, as amended (the "Securities Act"), liens for taxes not yet due and contractual restrictions on the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, of each class with an aggregate net asset value ("NAV") equal to the NAV of the Acquired Fund attributable to the corresponding class of the Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities. Such transactions shall take place at the Closing (as defined in Paragraph 3.1 below). 1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's property, including, without limitation, all portfolio securities and instruments, dividends and interest receivables, cash, goodwill, contractual rights and choses in action of the Acquired Fund or the AmSouth Trust in respect of the Acquired Fund, all other intangible property owned by the Acquired Fund, originals or copies of all books and records of the Acquired Fund, and all other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also be entitled to receive (or, to the extent agreed upon between the AmSouth Trust and the Acquiring Trust, be provided access to) copies of all records that the AmSouth Trust is required to maintain under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules of the Securities and Exchange Commission (the "Commission") thereunder to the extent such records pertain to the Acquired Fund. (b) The Acquired Fund has provided the Acquiring Fund with a list of all of the Acquired Fund's securities and other assets as of the date of execution of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of the current fundamental investment policies and restrictions and fair value procedures applicable to the Acquiring Fund. The Acquired Fund reserves the right to sell any of such securities or other assets before the Closing Date (except to the extent sales may be limited by representations of the Acquired Fund contained herein and made in connection with the issuance of the tax opinion provided for in Paragraph 8.5 hereof) and A-16 agrees not to acquire any portfolio security that is not an eligible investment for, or that would violate an investment policy or restriction of, the Acquiring Fund. 1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations that are or will become due prior to the Closing. 1.4 On or as soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and distribute pro rata to its shareholders of record, determined as of the close of regular trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number of Acquiring Fund Shares of the class corresponding to the class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares held of record by such Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution will be accomplished by the AmSouth Trust instructing the Acquiring Trust to transfer the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund established and maintained by the Acquiring Fund's transfer agent in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with evidence of such liquidation and distribution. All issued and outstanding Acquired Fund Shares will simultaneously be cancelled on the books of the Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.5 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Any certificates representing ownership of Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed to be cancelled and shall no longer evidence ownership of Acquired Fund Shares. 1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund Shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.7 Any reporting responsibility of the AmSouth Trust with respect to the Acquired Fund for taxable periods ending on or before the Closing Date, including, but not limited to, the responsibility for filing of regulatory reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the Commission, any state securities commissions, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the AmSouth Trust. 2. VALUATION 2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund shall, in each case, be determined as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the "Valuation Time"). The NAV of each class of Acquiring Fund Shares shall be equal to the NAV of the corresponding class of the Acquired Fund Shares as of the Valuation Time. The NAV of the Acquired Fund and of each Class A, B and I share thereof shall be computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws, and the Acquiring Fund's then-current prospectus and statement of additional information. Pioneer Investment Management, Inc. (the "Acquiring Fund Adviser") shall confirm to the Acquiring Fund the NAV of the Acquired Fund. 2.2 The number of Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Assets and the assumption of the Assumed Liabilities shall be determined by Acquiring Fund Adviser by dividing the NAV of the Acquired Fund, as determined in accordance with Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in accordance with Paragraph 2.1. 2.3 The Acquired Fund shall cause the Acquired Fund Administrator to deliver a copy of its valuation report to the Acquiring Fund at Closing. All computations of value shall be made by the Acquired Fund Administrator in accordance with its regular practice as pricing agent for the Acquired Fund. 3. CLOSING AND CLOSING DATE 3.1 The Closing Date shall be [ ], 2005, or such later date as the parties may agree to in writing. All acts necessary to consummate the Reorganization (the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The Closing shall be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, or at such other place as the parties may agree. A-17 3.2 Portfolio securities that are held other than in book-entry form in the name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than three business days preceding the Closing Date. Such portfolio securities shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the account of the Acquiring Fund on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund shall be delivered by the Acquired Fund Custodian through the Depository Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian transmitting immediately available funds by wire transfer to the Acquiring Fund Custodian the cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount to the account of the Acquiring Fund. 3.3 The Acquiring Fund Custodian shall deliver within one business day after the Closing a certificate of an authorized officer stating that: (a) the Acquired Assets have been delivered in proper form to the Acquiring Fund on the Closing Date, and (b) all necessary transfer taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment has been made in conjunction with the delivery of portfolio securities as part of the Acquired Assets. 3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere is disrupted so that accurate appraisal of the NAV of the Acquired Fund pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 3.5 The Acquired Fund shall deliver at the Closing a list of the names, addresses, federal taxpayer identification numbers and backup withholding and nonresident alien withholding status and certificates of the Acquired Fund Shareholders and the number and percentage ownership of outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time, certified by the President or a Secretary of the AmSouth Trust and its Treasurer, Secretary or other authorized officer (the "Shareholder List") as being an accurate record of the information (a) provided by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from the AmSouth Trust's records by such officers or one of the AmSouth Trust's service providers. The Acquiring Fund shall issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES 4.1 Except as set forth on a disclosure schedule previously provided by the AmSouth Trust to the Acquiring Trust, the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquired Fund is a series of the AmSouth Trust. The AmSouth Trust is a business trust validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to own all of its properties and assets and, subject to approval by the Acquired Fund's shareholders, to perform its obligations under this Agreement. The Acquired Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the AmSouth Trust and the Acquired Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The AmSouth Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The AmSouth Trust is not in violation of, and the execution and delivery of this Agreement and the performance of its obligations under this Agreement in respect of the Acquired Fund will not result in a violation of, any provision of the AmSouth Trust's Declaration of Trust or By-Laws or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquired Fund to which the AmSouth Trust is a party or by which the Acquired Fund or any of its assets are bound; (d) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of the Acquired Fund's properties or assets. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely A-18 affects the Acquired Fund's business or its ability to consummate the transactions contemplated herein or would be binding upon the Acquiring Fund as the successor to the Acquired Fund; (e) The Acquired Fund has no material contracts or other commitments (other than this Agreement or agreements for the purchase and sale of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) which will not be terminated at or prior to the Closing Date and no such termination will result in liability to the Acquired Fund (or the Acquiring Fund); (f) The statement of assets and liabilities of the Acquired Fund, and the related statements of operations and changes in net assets, as of and for the fiscal year ended July 31, 2005, have been audited by an independent registered public accounting firm retained by the Acquired Fund, and are in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquired Fund as of the date thereof are disclosed therein. The Statement of Assets and Liabilities will be in accordance with GAAP consistently applied and will fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended. Except for the Assumed Liabilities, the Acquired Fund will not have any known or contingent liabilities on the Closing Date. No significant deficiency, material weakness, fraud, significant change or other factor that could significantly affect the internal controls of the Acquired Fund has been disclosed or is required to be disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief executive officer and chief financial officer or other officers of the Acquired Fund to make the certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness, fraud, change, event or other factor exists that will be required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date; (g) Since the most recent fiscal year end, except as specifically disclosed in the Acquired Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the period ended January 31, 2005, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquired Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (g) (but not for any other purpose of this Agreement), a decline in NAV per Acquired Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquired Fund's portfolio or a decline in net assets of the Acquired Fund as a result of redemptions shall not constitute a material adverse change; (h) (A) For each taxable year of its operation since its inception, the Acquired Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company and will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquired Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquired Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquired Fund has properly filed on a timely basis all Tax Returns (as defined below) that it was required to file, and all such Tax Returns were complete and accurate in all material respects. [The Agreement for the AmSouth International Equity Fund will include an exception for Forms 1099-DIV distributed in January 2005.] The Acquired Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquired Fund was required to file any Tax Return that was not filed; and the Acquired Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquired Fund has timely paid, in the manner prescribed by law, all Taxes (as defined below), which were due and payable or which were claimed to be due; (D) All Tax Returns filed by the Acquired Fund constitute complete and accurate reports of the respective Tax liabilities and all attributes of the Acquired Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns [The Agreement for the AmSouth International Equity Fund will include an exception for Forms 1099-DIV distributed in January 2005.]; (E) The Acquired Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquired Fund has not been notified that any examinations of the Tax Returns of the Acquired Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquired Fund as a result of any audit A-19 by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquired Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquired Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquired Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquired Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Statement of Assets and Liabilities, as defined in paragraph 5.7, rather than in any notes thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquired Fund has delivered to the Acquiring Fund or made available to the Acquiring Fund complete and accurate copies of all Tax Returns of the Acquired Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquired Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquired Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquired Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex B; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquired Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquired Fund are accurately reflected on the Acquired Fund's Tax books and records; (N) The Acquired Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law; and (O) For purposes of this Agreement, "Taxes" or "Tax" shall mean all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof; and "Tax Returns" shall mean all reports, returns, declarations, statements or other information required to be supplied to a governmental or regulatory authority or agency, or to any other person, in connection with Taxes and any associated schedules or work papers produced in connection with such items; (i) All issued and outstanding Acquired Fund Shares are, and at the Closing Date will be, legally issued and outstanding, fully paid and nonassessable by the Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at the time of Closing, be held of record by the persons and in the amounts set forth in the Shareholder List submitted to the Acquiring Fund pursuant to A-20 Paragraph 3.5 hereof. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding any security convertible into any Acquired Fund Shares; (j) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Assets, and full right, power and authority to sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the Securities Act; (k) The AmSouth Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the AmSouth Trust's Board of Trustees, and, subject to the approval of the Acquired Fund's shareholders, assuming due authorization, execution and delivery by the Acquiring Fund, this Agreement will constitute a valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (l) The information to be furnished by the Acquired Fund to the Acquiring Fund for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby and any information necessary to compute the total return of the Acquired Fund shall be accurate and complete and shall comply in all material respects with federal securities and other laws and regulations applicable thereto; (m) The information included in the proxy statement (the "Proxy Statement") forming part of the Acquiring Fund's Registration Statement on Form N-14 filed in connection with this Agreement (the "Registration Statement") that has been furnished in writing by the Acquired Fund to the Acquiring Fund for inclusion in the Registration Statement, on the effective date of that Registration Statement and on the Closing Date, will conform in all material respects to the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment Company Act and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (n) Upon the effectiveness of the Registration Statement, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by the AmSouth Trust or the Acquired Fund of the transactions contemplated by this Agreement; (o) All of the issued and outstanding Acquired Fund Shares have been offered for sale and sold in compliance in all material respects with all applicable federal and state securities laws, except as may have been previously disclosed in writing to the Acquiring Fund; (p) The prospectus and statement of additional information of the Acquired Fund, and any amendments or supplements thereto, furnished to the Acquiring Fund, did not as of their dates or the dates of their distribution to the public contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which such statements were made, not materially misleading; (q) The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the AmSouth Trust with respect to the Acquired Fund. All advertising and sales material used by the Acquired Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD") and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquired Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (r) The Acquired Fund has previously provided to the Acquiring Fund (and at the Closing will provide an update through the Closing Date of such information) data which supports a calculation of the Acquired Fund's total return for all periods since the A-21 organization of the Acquired Fund. Such data has been prepared in accordance in all material respects with the requirements of the Investment Company Act and the regulations thereunder and the rules of the NASD; (s) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of the Acquired Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (t) The tax representation certificate to be delivered by AmSouth Trust on behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 4.2 Except as set forth on a disclosure schedule previously provided by the Acquiring Trust to the AmSouth Trust, the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring Fund has not commenced operations and will not do so until the Closing. The Acquiring Trust is a statutory trust duly organized, validly existing and in good standing under the laws of the State of Delaware. The Acquiring Trust has the power to own all of its properties and assets and to perform the obligations under this Agreement. The Acquiring Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the Acquiring Trust and the Acquiring Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Acquiring Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The Acquiring Fund's registration statement on Form N-1A that will be in effect on the Closing Date, and the prospectus and statement of additional information of the Acquiring Fund included therein, will conform in all material respects with the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder, and did not as of the effective date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (d) The Registration Statement, the Proxy Statement and statement of additional information with respect to the Acquiring Fund and any amendments or supplements thereto in effect on or prior to the Closing Date included in the Registration Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder. Neither the Registration Statement nor the Proxy Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (e) The Acquiring Trust is not in violation of, and the execution and delivery of this Agreement and performance of its obligations under this Agreement will not result in a violation of, any provisions of the Declaration of Trust or by-laws of the Acquiring Trust or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquiring Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or any of its assets is bound; (f) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or threatened against the Acquiring Fund or any of the Acquiring Fund's properties or assets. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquiring Fund's business or its ability to consummate the transactions contemplated herein; A-22 (g) The Acquiring Fund has no actual or potential liability for any Tax obligation of any taxpayer. The Acquiring Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquiring Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (h) The Acquiring Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex A; (i) The authorized capital of the Acquiring Fund consists of an unlimited number of shares of beneficial interest, no par value per share. As of the Closing Date, the Acquiring Fund will be authorized to issue an unlimited number of shares of beneficial interest, no par value per share. The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will have been duly authorized on the Closing Date and, when so issued and delivered, will be legally issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor is there outstanding any security convertible into any Acquiring Fund shares, nor will the Acquiring Fund have any issued or outstanding shares on or before the Closing Date other than those issued to the Acquiring Fund Adviser or one of its affiliates, which shares shall be redeemed, for an amount equal to the price paid therefor, at or before the Closing; (j) The Acquiring Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquiring Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Acquired Fund, this Agreement will constitute a valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (k) The information to be furnished in writing by the Acquiring Fund or the Acquiring Fund Adviser for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; (l) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by the Agreement by the Acquiring Fund, except for the registration of the Acquiring Fund Shares under the Securities Act and the Investment Company Act; (m) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of the Acquiring Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (n) The tax representation certificate to be delivered by the Acquiring Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 5. COVENANTS OF THE FUNDS 5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary course of business between the date hereof and the Closing Date. It is understood that such ordinary course of business will include the declaration and payment of customary dividends and other distributions and any other dividends and other distributions necessary or advisable (except to the extent dividends or other distributions that are not customary may be limited by representations made in connection with the issuance of the tax opinion described in Paragraph 8.5 hereof), in each case payable either in cash or in additional shares. 5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's shareholders to consider approval of this Agreement and act upon the matters set forth in the Proxy Statement. A-23 5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and Proxy Statement (collectively, "Proxy Materials") to be used in connection with such meeting, and will promptly prepare and file with the Commission the Registration Statement. The AmSouth Trust will provide the Acquiring Fund with information reasonably requested for the preparation of the Registration Statement in compliance with the Securities Act, the Exchange Act, and the Investment Company Act. 5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired by the Acquired Fund for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement. 5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requires concerning the beneficial ownership of the Acquired Fund Shares. 5.6 Subject to the provisions of this Agreement, each Fund will take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement. 5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date a statement of assets and liabilities of the Acquired Fund ("Statement of Assets and Liabilities") as of the Closing Date setting forth the NAV of the Acquired Fund as of the Valuation Time, which statement shall be prepared in accordance with GAAP consistently applied and certified by the AmSouth Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but in any case within 30 days after the Closing Date, the AmSouth Trust shall furnish to the Acquiring Trust, in such form as is reasonably satisfactory to the Acquiring Trust, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, and of any capital loss carryovers and other items that will be carried over to the Acquiring Fund under the Code, and which statement will be certified by the Treasurer of the AmSouth Trust. 5.8 Neither Fund shall take any action that is inconsistent with the representations set forth in, with respect to the Acquired Fund, the Acquired Fund Tax Representation Certificate and, with respect to the Acquiring Fund, the Acquiring Fund Tax Representation Certificate. 5.9 From and after the date of this Agreement and until the Closing Date, each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its commercially reasonable efforts to cause the Reorganization to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent the Reorganization from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the Code. Unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code, the parties hereto shall treat and report the transactions contemplated hereby as a reorganization within the meaning of Section 368(a)(1)(F) of the Code and shall not take any position inconsistent with such treatment. 5.10 From and after the date of this Agreement and through the time of the Closing, each Fund shall use its commercially reasonable efforts to cause it to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent it from qualifying, as a regulated investment company under the provisions of Subchapter M of the Code. 5.11 The Acquired Fund shall prepare, or cause to be prepared, all Tax Returns of the Acquired Fund for taxable periods that end on or before the Closing Date and shall timely file, or cause to be timely filed, all such Tax Returns. The Acquired Fund shall make any payments of Taxes required to be made by such Fund with respect to any such Tax Returns. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions, unless waived by the Acquired Fund in writing: 6.1 All representations and warranties by the Acquiring Trust on behalf of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring Fund executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust and dated as of the Closing Date, to the effect that the representations and warranties of the Acquiring Trust made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected A-24 by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 6 have been met, and as to such other matters as the AmSouth Trust shall reasonably request; 6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquiring Fund; 6.4 With respect to the Acquiring Fund, the Board of Trustees of the Acquiring Trust shall have determined that the Reorganization is in the best interests of the Acquiring Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby; and 6.5 The AmSouth Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the Acquiring Trust and related matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing Date, in a form reasonably satisfactory to the AmSouth Trust. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions, unless waived by the Acquiring Fund in writing: 7.1 All representations and warranties of the AmSouth Trust on behalf of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 7.2 The AmSouth Trust shall have delivered to the Acquiring Fund the Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.7, together with a list of its portfolio securities showing the federal income tax bases and holding periods of such securities, as of the Closing Date, certified by the AmSouth Trust's Treasurer or Assistant Treasurer; 7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund executed in its name by its President or Vice President and a Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the Acquiring Trust and dated as of the Closing Date, to the effect that the representations and warranties of the AmSouth Trust contained in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to closing in this Article 7 have been met, and as to such other matters as the Acquiring Trust shall reasonably request; 7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquired Fund; 7.5 The Acquiring Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the AmSouth Trust and related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and 7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth Trust shall have determined that the Reorganization is in the best interests of the Acquired Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 8. FURTHER CONDITIONS PRECEDENT If any of the conditions set forth below does not exist on or before the Closing Date with respect to either party hereto, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the Acquired Fund's shareholders in accordance with the provisions of the AmSouth Trust's Declaration of Trust and By-Laws, and certified copies of the resolutions evidencing such approval by the Acquired Fund's shareholders shall have been delivered by the Acquired Fund to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither party hereto may waive the conditions set forth in this Paragraph 8.1; A-25 8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein; 8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by either party hereto to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party hereto, provided that either party may waive any such conditions for itself; 8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have become effective under the Securities Act and no stop orders suspending the effectiveness of such Registration Statement shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act; and 8.5 The parties shall have received an opinion of Wilmer Cutler Pickering Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and subject to customary assumptions and qualifications, substantially to the effect that for federal income tax purposes the acquisition by the Acquiring Fund of the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring Fund, followed by the distribution by the Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for their Acquired Fund Shares and the termination of the Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code 9. BROKERAGE FEES AND EXPENSES 9.1 Each party hereto represents and warrants to the other party hereto that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI") and the Acquiring Fund Adviser -- and the parties have entered into this Agreement in reliance on such information -- that certain non-parties will pay (with each of AmSouth Bancorporation or AAMI and the Acquiring Fund Adviser being responsible for 50% of such amounts) all proxy statement and solicitation costs of the Funds associated with the Reorganization including, but not limited to, the expenses associated with the preparation, printing and mailing of any and all shareholder notices, communications, proxy statements, and necessary filings with the SEC or any other governmental authority in connection with the transactions contemplated by this Agreement, and the fees and expenses of any proxy solicitation firm retained in connection with the Reorganization. Except for the foregoing, AAMI shall bear the expenses of the Acquired Fund in connection with the transactions contemplated by this Agreement. 10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES 10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party has made any representation, warranty or covenant not set forth herein or referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the entire agreement between the parties. 10.2 The representations and warranties contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder. 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Acquiring Trust and the AmSouth Trust. In addition, either party may at its option terminate this Agreement at or prior to the Closing Date: (a) because of a material breach by the other of any representation, warranty, covenant or agreement contained herein to be performed at or prior to the Closing Date; (b) because of a condition herein expressed to be precedent to the obligations of the terminating party which has not been met and which reasonably appears will not or cannot be met; (c) by resolution of the Acquiring Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquiring Fund's shareholders; (d) by resolution of the AmSouth Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquired Fund's shareholders; or A-26 (e) if the transactions contemplated by this Agreement shall not have occurred on or prior to December 31, 2005 or such other date as the parties may mutually agree upon in writing. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it incidental to the preparation and carrying out of this Agreement. 12. AMENDMENTS This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the AmSouth Trust and the Acquiring Trust; provided, however, that following the meeting of the Acquired Fund's shareholders called by the AmSouth Trust pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the effect of changing the provisions regarding the method for determining the number of Acquiring Fund Shares to be received by the Acquired Fund Shareholders under this Agreement to their detriment without their further approval; provided that nothing contained in this Section 12 shall be construed to prohibit the parties from amending this Agreement to change the Closing Date. 13. NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o AmSouth Asset Management Inc., 1900 Fifth Avenue North, 10th Floor, Birmingham, Alabama 35203, Attention: Andrew Chambless, with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800 Massachusetts Avenue, N.W., Washington, DC 20036-1221, Attention: Clifford J. Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc., 60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa, Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: David C. Phelan. 14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 14.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 14.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 14.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to conflict of laws principles (other than Delaware Code Title 6 [sec] 2708); provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern. 14.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the prior written consent of the other party hereto. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, or other entity, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 14.5 It is expressly agreed that the obligations of the Acquiring Trust and the AmSouth Trust shall not be binding upon any of their respective trustees, shareholders, nominees, officers, agents or employees personally, but bind only to the property of the Acquiring Fund or the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. The execution and delivery of this Agreement have been authorized by the trustees of the Acquiring Trust and of the AmSouth Trust and this Agreement has been executed by authorized officers of the Acquiring Trust and the AmSouth Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to imposed any liability on any of them personally, but shall bind only the property of the Acquiring Fund and the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. A-27 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first set forth above by its President or Vice President and attested by its Secretary or Assistant Secretary. Attest: AMSOUTH FUNDS on behalf of AMSOUTH [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Name: Title: [Assistant] Secretary Title: [Vice] President Attest: PIONEER [_______] FUND on behalf of PIONEER [_______] FUND By: By: ----------------------------------- ----------------------------------- Name: Christopher J. Kelley Name: Osbert M. Hood Title: Assistant Secretary Title: Executive Vice President A-28 Exhibit B -- Additional Information Pertaining to Pioneer PORTFOLIO TRANSACTION POLICIES All orders for the purchase or sale of portfolio securities are placed on behalf of each fund by Pioneer pursuant to authority contained in the fund's management contract. Pioneer seeks to obtain the best execution on portfolio trades. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability and financial condition of the dealer; the dealer's execution services rendered on a continuing basis; and the reasonableness of any dealer spreads. Transactions in non-U.S. equity securities are executed by broker-dealers in non-U.S. countries in which commission rates may not be negotiable (as such rates are in the U.S.). Pioneer may select broker-dealers that provide brokerage and/or research services to a fund and/or other investment companies or other accounts managed by Pioneer. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934 as amended, if Pioneer determines in good faith that the amount of commissions charged by a broker-dealer is reasonable in relation to the value of the brokerage and research services provided by such broker, the fund may pay commissions to such broker-dealer in an amount greater than the amount another firm may charge. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer maintains a listing of broker-dealers who provide such services on a regular basis. However, because many transactions on behalf of a fund and other investment companies or accounts managed by Pioneer are placed with broker-dealers (including broker-dealers on the listing) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such dealers solely because such services were provided. Pioneer believes that no exact dollar value can be calculated for such services. The research received from broker-dealers may be useful to Pioneer in rendering investment management services to any of the funds as well as other investment companies or other accounts managed by Pioneer, although not all such research may be useful to any of the funds. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to Pioneer in carrying out its obligations to any of the funds. The receipt of such research has not reduced Pioneer's normal independent research activities; however, it enables Pioneer to avoid the additional expenses which might otherwise be incurred if it were to attempt to develop comparable information through its own staff. None of the funds used any brokers affiliated with Pioneer during its most recently completed fiscal year in connection with its portfolio transactions. SIMILAR FUNDS Pioneer serves as the investment adviser to each fund in the Pioneer Family of Funds. The following table identifies other funds in the Pioneer Family of Funds that have similar investment objectives to the Funds described in this Proxy Statement/Prospectus and provides other information regarding the similar funds.
- ------------------------------------------------------------------------------------------------------------------ Net assets of Fund Management fee rate (as a percentage of average Fund (as of March 31, 2005) daily net assets) - ------------------------------------------------------------------------------------------------------------------ Pioneer Balanced Fund $138,289,597 0.65% of the Fund's average net assets up to $1 billion, 0.60% of the next $4 billion; and 0.55% of the excess over $5 billion. - ------------------------------------------------------------------------------------------------------------------ Pioneer Balanced VCT Portfolio $ 45,294,667 0.65% - ------------------------------------------------------------------------------------------------------------------
B-1 Exhibit C -- Portfolio Manager's Discussion of Performance PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 11.07 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0218 $ -- $ 0.2979
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10702 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 13.54% 7.02%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-1 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.68 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.2979
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10573 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - --------------------------------------------------- Life-of-Class (8/9/04) 9.73% 5.73%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-2 Pioneer Ibbotson Allocation Series Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-3 PIONEER IBBOTSON GROWTH ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.84 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0342 $ -- $ 0.249
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10480 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 11.19% 4.80%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-4 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 9.95 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.249
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 9797 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - ------------------------------------------------------ Life-of-Class (8/9/04) 1.95% -2.03%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-5 Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-6 PIONEER IBBOTSON MODERATE ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.63 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0433 $ -- $ 0.2339
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10277 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 9.04% 2.77%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-7 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.32 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.2339
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10151 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - ------------------------------------------ Life-of-Class (8/9/04) 5.51% 1.51%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-8 Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-9 - -------------------------------------------------------------------------------- AmSouth Balanced Fund - -------------------------------------------------------------------------------- Brian B. Sullivan, CFA Director, Value Equity Strategies John P. Boston, CFA Chief Fixed Income Officer AmSouth Bank AmSouth Asset Investment Management, Inc. Brian Sullivan has been the portfolio manager for the AmSouth Value and AmSouth Balanced Fund since June 2004. Mr. Sullivan has more than 18 years of investment management experience and holds an MBA in finance and a bachelor's degree in economics. John Boston manages the AmSouth High Quality Bond Fund and co-manages the AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr. Boston earned his B.S. in Finance and Political Science from the University of North Alabama. He is a member and past president of the Alabama Society of Financial Analysts and holds the Chartered Financial Analyst designation. PORTFOLIO MANAGERS' PERSPECTIVE "The AmSouth Balanced Fund is a diversified fund that offers investors a simple and easy way to balance their investments between stocks and bonds. Within the equity component, our diversified equity strategy invests in a broad array of high quality stocks to provide long term growth. The fixed income component contains a mix of investment grade bonds to generate income. We assess market opportunities between the two asset classes and allocate assets in the Fund to potentially achieve high risk-adjusted returns." INVESTMENT CONCERNS Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. - -------------------------------------------------------------------------------- [Q&A GRAPHIC] Q. How did the Fund perform during the six-month period ended January 31, 2005? A. The Fund delivered a total return of 6.26% (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower). The Fund's benchmarks, the S&P 500 Stock Index(1) and the Lehman Brothers Government/Credit Bond Index(1), returned 8.15% and 4.02%, respectively. The Fund's total return does not reflect the deduction of a sales charge on Class A Shares. If reflected, the sales charge would reduce the performance quoted. The Fund held an average of approximately 60% of its assets in stocks and roughly 40% of its assets in bonds. Stocks significantly outperformed bonds during the period, so the Fund's emphasis on stocks helped boost returns. With the maximum sales charge of 5.50% and recurring fees, the Fund's six month, 1 Year, 5 Year and 10 Year average annual total returns for the periods ended January 31, 2005, were 0.44%, -1.15%, 5.15% and 8.72%, respectively, for Class A Shares. The returns quoted assume the reinvestment of dividends and capital gains distributions. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and does not reflect the deduction of taxes that a shareholder would pay on distributions and redemptions. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. For performance data current to the most recent month end please visit www.amsouthfunds.com. + The Fund's portfolio is current to January 31, 2005 and subject to change. (1)See Glossary of Terms for additional information. Q. What factors affected the Fund's performance? A. Stocks posted solid returns during the period, particularly during the fourth calendar quarter of 2004. That trend boosted the returns of the Fund's equity allocation. Yields on long-term bonds declined, while yields on short-term bonds rose. The Fund's fixed-income portion generated modest gains in that environment.+ We maintained a higher-than-neutral stock allocation throughout the period. The Fund held 60% of its assets in stocks, compared to its neutral position of 50%. The emphasis on equities boosted the Fund's returns relative to its neutral weightings, as stocks significantly outperformed bonds.+ Stock selection helped the Fund's equity allocation outperform the S&P 500. Selection in the health care sector was especially beneficial: The Fund's health care stake out-gained the health care stocks in the S&P 500 by approximately eight percentage points, largely because we avoided or under-weighted several stocks that suffered very poor returns. The Fund's superior performance in the health care sector made a significant impact on relative performance, because health care stocks comprise a sizable portion of the index and this Fund. Stock selection in the technology sector weighed on the equity allocation's returns against the stock benchmark, largely due to weak returns among certain hardware and networking stocks in the Fund's portfolio.+ The Fund's bond allocation lagged its benchmark for the period. We maintained a short average duration relative to the fixed-income index, to protect against rising interest rates. That strategy left the Fund underexposed to long-term bonds, which saw their yields decline and their prices rise. We increased the Fund's average duration late in the period.+ The bond allocation's returns relative to the fixed-income benchmark benefited from an emphasis on corporate bonds, which outperformed government credit. The Fund's high-quality focus prevented it from benefiting from even stronger performance among lower-quality issues, however.+ C-10 - -------------------------------------------------------------------------------- AmSouth Strategic Portfolios - -------------------------------------------------------------------------------- Aggressive Growth Growth Growth and Income Moderate Growth and Income The AmSouth Strategic Portfolios are managed by a team of AmSouth investment managers, including both equity and fixed income specialists. The team has more than 40 years of combined investment management experience. INVESTMENT CONCERNS The Funds invest in underlying funds, so the investment performance is directly related to the performance of those underlying funds. Before investing in the Fund, investors should assess the risks associated with and types of investments made by each of the underlying funds in which the Funds invests. PORTFOLIO MANAGERS' PERSPECTIVE The Portfolios seek to provide investors with the potential to achieve a variety of long- and short-term goals, commensurate with investors' specific time horizons and tolerance for risk. Each of our four Strategic Portfolios invests in a combination of underlying mutual funds from the AmSouth fund family. Based on each Portfolio's asset-allocation target, the managers periodically rebalance stock, bond and money market holdings--based on analysis of economic and market trends. - -------------------------------------------------------------------------------- [Q&A GRAPHIC] Q. How did the Funds perform during the period? A. During the six-month period ended January 31, 2005, the Funds' total returns, benchmark returns and other comparative returns were as follows: AmSouth Aggressive Growth Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 9.87% S&P 500 Stock Index(1): 8.15% Lipper Multi-Cap Core Funds Average(1): 9.47% AmSouth Growth Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 7.91% S&P 500 Stock Index(1): 8.15% Lipper Multi-Cap Growth Funds Average(1): 10.47% AmSouth Growth and Income Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 6.73% S&P 500 Stock Index(1): 8.15% Merrill Lynch Government/Corporate Master Index(1): 3.98% Lipper Large Cap Value Funds Average(1): 8.99% AmSouth Moderate Growth and Income Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 6.03% S&P 500 Stock Index(1): 8.15% Merrill Lynch Government/Corporate Master Index(1): 3.98% Lipper Flexible Portfolio Funds Average(1): 7.54% With the maximum sales charge of 5.50% and recurring fees, the six-month, 1 Year, 5 Year and Since Inceptions average annual total returns for the Class A Shares for the periods ended January 31, 2005 were 3.87%, 1.11%, -0.53% and 1.60%, respectively, for the Aggressive Growth Portfolio; 2.00%, 0.06%, 0.73% and 1.61%, respectively, for the Growth Portfolio; 0.88%, -0.81%, 2.21% and 2.44%, respectively, for the Growth and Income Portfolio; and 0.22%, -1.28%, 2.95% and 2.83%, respectively, for the Moderate Growth and Income Portfolio. The returns quoted assume reinvestment of dividends and capital gains distributions. (1) See Glossary of Terms for additional information. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and does not reflect the deduction of taxes that a shareholder would pay on distributions and redemptions. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. For performance data current to the most recent month end please visit www.amsouthfunds.com. Q. What factors affected the Portfolios' performance? A. The stock market staged a strong rally during the fourth quarter of 2004, helping the Strategic Portfolios generate gains for the six-month period. The Portfolios' returns benefited from their broad diversification in the stock market, including funds that invest in various styles and market-cap sizes as well as international shares. Above-neutral allocations to stocks throughout the period boosted the Portfolios' returns. The Aggressive Growth Portfolio held 99% of its assets in stock during the period, compared to its neutral allocation of 85%. The Growth, Growth and Income and Moderate Growth and Income Portfolios all held equity allocations ten percentage points higher than their neutral positions.+ The diversification of the Portfolios' equity holdings helped those equity stakes outperform the broad market, as measured by the Standard & Poor's 500 Index. In particular, the Portfolios benefited from their allocations to small and medium-sized stocks, value shares and international equities, all of which generated strong gains during the six-month period. The bond funds in which the Portfolios invested lagged their benchmarks, weighing down relative returns. + The Fund's portfolio is current to January 31, 2005 and subject to change. C-11 S88568 17973-00-0805 COMBINED PROXY STATEMENT OF AMSOUTH FUNDS on behalf of its Series: AMSOUTH BALANCED FUND AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO (each, an "AmSouth Fund" and collectively, the "AmSouth Funds") The address and telephone number of each AmSouth Fund is: 3435 Stelzer Road, Columbus, OH 43219 1-800-451-8382 PROSPECTUS FOR CLASS A, CLASS B AND CLASS Y SHARES OF PIONEER CLASSIC BALANCED FUND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each, a "Pioneer Fund" and collectively, the "Pioneer Funds") The address and telephone number of each Pioneer Fund is: 60 State Street, Boston, Massachusetts 02109 1-800-225-6292 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS SCHEDULED FOR SEPTEMBER 22, 2005 To the Shareholders of the AmSouth Funds: A joint special meeting of shareholders (the "Meeting") for each of the AmSouth Funds will be held at the offices of AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.m., local time, to consider the following: 1. With respect to each AmSouth Fund, a proposal to approve an Agreement and Plan of Reorganization. Under the Agreement and Plan of Reorganization applicable to your AmSouth Fund, it will transfer all of its assets to an investment company or a series thereof (each a "Pioneer Fund") managed by Pioneer Investment Management, Inc. ("Pioneer") in exchange for Class A, B and Y shares of the Pioneer Fund. Class A, B and Y shares of the Pioneer Fund will be distributed to each AmSouth Fund's shareholders in proportion to their Class A, B and I share holdings on the reorganization date. The Pioneer Fund also will assume, in the case of reorganizations into Pioneer Funds that have previously commenced investment operations, your AmSouth Fund's liabilities that are included in the calculation of your AmSouth Fund's net asset value on the closing date at the reorganization and, in the case of newly organized Pioneer Funds, all of your AmSouth Fund's liabilities. In the case of certain AmSouth Funds, the Pioneer Fund is an existing mutual fund with a substantially similar investment objective and similar investment policies as your AmSouth Fund. In the case of other AmSouth Funds, the Pioneer Fund is a newly organized mutual fund with a substantially similar investment objective and similar investment policies as your AmSouth Fund. Following the reorganization, your AmSouth Fund will be dissolved. As a result of the reorganization, you will become shareholders of the Pioneer Fund. Your board of trustees recommends that you vote FOR this proposal. 2. Any other business that may properly come before the Meeting. Shareholders of record as of the close of business on July 29, 2005 are entitled to vote at the Meeting and any related follow-up meetings. Whether or not you expect to attend the Meeting, please complete and return the enclosed proxy card. If shareholders do not return their proxies in sufficient numbers, your AmSouth Fund may be required to make additional solicitations. By order of the Board of Trustees, /s/ Michael C. Daniel Michael C. Daniel President [ ], 2005 COMBINED PROXY STATEMENT OF AMSOUTH FUNDS on behalf of its Series: AMSOUTH BALANCED FUND AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO (each, an "AmSouth Fund" and collectively, the "AmSouth Funds") The address and telephone number of each AmSouth Fund is: 3435 Stelzer Road, Columbus, OH 43219 1-800-451-8382 PROSPECTUS FOR CLASS A, CLASS B AND CLASS Y SHARES OF PIONEER CLASSIC BALANCED FUND PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each, a "Pioneer Fund" and collectively, the "Pioneer Funds") The address and telephone number of each Pioneer Fund is: 60 State Street, Boston, Massachusetts 02109 1-800-225-6292 Shares of the Pioneer Funds have not been approved or disapproved by the Securities and Exchange Commission (the "SEC"). The SEC has not passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. An investment in any AmSouth Fund or Pioneer Fund (each sometimes referred to herein as a "Fund") is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. 1 This combined proxy statement and prospectus (the "Proxy Statement/Prospectus"), dated [ ], 2005, is being furnished to shareholders of the AmSouth Funds in connection with the solicitation by the board of trustees (the "Board," or the "Trustees") of the AmSouth Funds of proxies to be used at a joint meeting of shareholders of the AmSouth Funds (the "Meeting") to be held at the offices of AmSouth Bank, AmSouth Center, 1900 Fifth Avenue North, Birmingham, AL 35203, on Thursday, September 22, 2005 at 9:00 a.m., local time. Each AmSouth Fund is a series of AmSouth Funds, an open-end management investment company organized as a Massachusetts business trust. Each Pioneer Fund is an open-end management investment company, or a series thereof, organized as a Delaware statutory trust. The Proxy Statement/Prospectus contains information you should know before voting on the approval of a proposed Agreement and Plan of Reorganization (each a "Plan") that provides for the reorganization of each AmSouth Fund into a corresponding Pioneer Fund (each a "Reorganization"). The following table indicates (a) the corresponding Pioneer Fund shares that each AmSouth Fund shareholder would receive if each Plan is approved, (b) which AmSouth Fund shareholders may vote on which proposals and on what page of this Proxy Statement/Prospectus the discussion regarding each proposal begins. On each proposal, all shareholders of an AmSouth Fund, regardless of the class of shares held, will vote together as a single class. Although each Reorganization is similar in structure, you should read carefully the specific discussion regarding your AmSouth Fund's Reorganization. The Proxy Statement/Prospectus sets forth the information about the Pioneer Fund that a prospective investor ought to know before investing and should be retained for future reference. Additional information about each Pioneer Fund has been filed with the SEC and is available upon oral or written request and without charge. See "Where to Get More Information."
- ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Fund Pioneer Fund Shareholders Entitled to Vote Page - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(a) AmSouth Balanced Fund Pioneer Classic Balanced AmSouth Balanced Fund shareholders 8 Fund - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(b) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Aggressive Growth 22 Portfolios: Aggressive Aggressive Allocation Portfolio shareholders Growth Portfolio Fund - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(c) AmSouth Strategic Pioneer Ibbotson Growth AmSouth Strategic Portfolios: Growth Portfolio 48 Portfolios: Growth Allocation Fund shareholders Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(d) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Growth and Income 73 Portfolios: Growth and Moderate Allocation Fund Portfolio shareholders Income Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ PROPOSAL 1(e) AmSouth Strategic Pioneer Ibbotson AmSouth Strategic Portfolios: Moderate Growth 99 Portfolios: Moderate Moderate Allocation Fund and Income Portfolio shareholders Growth and Income Portfolio - ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Where to Get More Information - ------------------------------------------------------------------------------------------------------------------------------------ The AmSouth Funds' prospectus dated December 1, 2004, Available to you free of charge by calling 1-800-451-8382. as supplemented January 12, 2005, April 26, 2005, Each prospectus is also on file with the SEC. June 1, 2005, June 27, 2005 and July 1, 2005. Available to you free of charge by calling 1-800-451-8382. The AmSouth Funds' statement of additional information Each statement of additional information is also on file dated December 1, 2004, as supplemented March 22, with the SEC. 2005. Available to you free of charge by calling 1-800-451-8382. The AmSouth Funds' annual report dated July 31, 2004 Also on file with the SEC. See "Available Information." and semiannual report dated January 31, 2005. - ------------------------------------------------------------------------------------------------------------------------------------ Each Pioneer Fund's current prospectus and each Pioneer Available to you free of charge by calling 1-800-225-6292. Fund's most recent annual and semiannual reports and These prospectuses and reports are also on file with the supplements (as they apply) to shareholders. SEC. - ------------------------------------------------------------------------------------------------------------------------------------ A statement of additional information for this joint Proxy Available to you free of charge by calling 1-800-225-6292. Statement/Prospectus (the "SAI"), dated August [ ], 2005. Also on file with the SEC. This SAI is incorporated by It contains additional information about your AmSouth reference into this Proxy Statement/Prospectus. Funds and the Pioneer Funds. - ------------------------------------------------------------------------------------------------------------------------------------ To ask questions about this Proxy Statement/Prospectus. Call your AmSouth Fund's toll-free telephone number: 1-800- 451-8382. - ------------------------------------------------------------------------------------------------------------------------------------
2 Background to the Reorganizations AmSouth Asset Management Inc. ("AAMI") is investment adviser to the AmSouth Funds and a wholly owned subsidiary of AmSouth Bank, which in turn is wholly owned by AmSouth Bancorporation. AmSouth Bank and AAMI have determined that engaging in the business of investment adviser to the AmSouth Funds is not a core business that AAMI intends to continue. After investigating and discussing several alternatives for ongoing investment management of the AmSouth Funds with the Trustees, AmSouth Bank and AAMI conducted a search for a buyer for AAMI's fund management business. Ultimately, AmSouth Bank and AAMI decided to recommend to the Board that the AmSouth Funds be reorganized into similar mutual funds managed by Pioneer Investment Management, Inc. ("Pioneer"). In early 2005, AmSouth Bank and AAMI conducted a search for a purchaser of AAMI's mutual fund investment advisory business. AmSouth Bancorporation engaged Goldman, Sachs & Co. to identify potential purchasers and solicited indications of interest. AmSouth Funds' management and AAMI reviewed proposals submitted by several investment advisory firms and selected a limited number to evaluate more carefully. Management and AAMI conducted, with respect to this selected group, a comparative evaluation of their investment processes and capabilities; availability of mutual funds with similar investment objectives and strategies; historical investment performance of the proposed funds into which the AmSouth Funds would be reorganized; expense ratios of the proposed counterpart funds to the historical gross and net expenses of the AmSouth Funds; their breadth of product line; their compliance culture and infrastructure; and reputation in the marketplace. Based upon this review, management and AAMI recommended that the Trustees approve the reorganization of the AmSouth Funds into the Pioneer Funds as being in the best interest of shareholders. Based on AAMI's recommendations, the Trustees met twice in May 2005, twice in June 2005 and again in August 2005 to consider the potential consolidation of the AmSouth Funds with the Pioneer Funds. At those meetings, the Trustees met with representatives of Pioneer and reviewed information provided by AAMI and Pioneer requested by the independent Trustees for the purposes of evaluating the Reorganizations. In the course of their evaluation of Pioneer and the Pioneer Funds, the Trustees reviewed various factors, including but not limited to, the impact of the Reorganizations on the shareholders of the AmSouth Funds, the comparability of the investment objectives and investment strategies of the AmSouth Funds and the Pioneer Funds; the expense ratios of the Pioneer Funds compared with those of the AmSouth Funds; the performance of the Pioneer Funds compared with that of the AmSouth Funds; the experience and qualifications of key personnel, including portfolio managers; and the financial resources, cash flow, and business reputation of the Pioneer Funds. In connection with their review of the Funds' existing and estimated pro forma expense ratios, the Trustees also considered that AmSouth Bank and its affiliates would no longer continue to subsidize the AmSouth Funds' operations by voluntarily capping expenses. In addition, the Trustees considered the background and reputation of the officers and members of the Board of Trustees of the Pioneer Funds. In conducting their review, the Trustees considered information provided by Pioneer relating to the education, experience and number of its investment professionals and other senior personnel. The Trustees received information concerning the investment philosophy and investment process applied by Pioneer in managing the Pioneer Funds. The Trustees concluded that Pioneer's investment processes, research capabilities and philosophy were well suited to the AmSouth Funds. The Trustees considered the quality of the services to be provided by Pioneer. The Trustees evaluated Pioneer's record with respect to regulatory compliance and compliance with the investment policies of the Pioneer Funds. The Trustees also evaluated the procedures of Pioneer designed to fulfill Pioneer's fiduciary duty to the Pioneer Funds with respect to possible conflicts of interest, including Pioneer's code of ethics (regulating the personal trading of its officers and employees), the procedures by which Pioneer allocates trades among its various investment advisory clients, the integrity of the systems in place to ensure compliance with the foregoing and the record of Pioneer in these matters. The Trustees also considered information relating to each Pioneer Fund's investment performance relative to its performance benchmark(s). The Trustees reviewed performance over various periods, including one, three, five and ten year periods when applicable, performance under different market conditions and during different legs of the market cycle, and the volatility of the Pioneer Funds' returns. The Trustees concluded that the scope and quality of Pioneer's services, including the investment performance of the Pioneer Funds, was sufficient, in light of market conditions, the resources brought to bear by Pioneer, Pioneer's integrity, its personnel and systems, and its financial resources to warrant recommending that AmSouth Funds' shareholders approve the proposed Reorganizations. In reaching that conclusion, the Trustees also gave substantial consideration to the proposed advisory fees. The Trustees considered possible economies of scale to Pioneer from the proposed consolidations with the AmSouth Funds. The Trustees also considered other alternatives for the ongoing management of AmSouth Funds. At a meeting on May 18, 2005, the Trustees met with representatives of Pioneer. In addition to these general factors, the Trustees also considered the factors discussed below in the context of each Reorganization. At the May 18, 2005 meeting, all of the Trustees who are not interested persons of AAMI (the "Independent Trustees") met separately in executive session with counsel to the Independent Trustees and requested and received such information from AAMI and Pioneer as 3 they determined to be necessary and appropriate to evaluate the proposed Reorganizations. On June 23, 2005, June 27, 2005 and August 1, 2005, the Board, including all of the Independent Trustees, unanimously voted to approve each of the Reorganizations. In approving the Reorganizations, the Board determined that the Reorganizations were in the best interests of the AmSouth Funds' shareholders and the interests of existing AmSouth Funds' shareholders will not be diluted as a result of the Reorganizations. Pioneer believes that it can offer capable management and favorable long-term investment performance to the AmSouth Funds' shareholders. The Reorganizations will, by combining the assets of two mutual funds and by increasing distribution capabilities, offer the potential for increased economies of scale. Increased economies of scale have the potential of benefiting the shareholders of your AmSouth Funds and the Pioneer Funds by spreading fixed costs over a larger asset base and reducing expenses on a per share basis. There can be no assurance that such economies of scale will be realized. Why the Trustees Are Recommending the Reorganizations The Trustees believe that reorganizing your AmSouth Fund into a portfolio with a substantially similar investment objective and similar investment policies that is part of the Pioneer family of funds offers you potential benefits. These potential benefits and considerations include: o AmSouth Bank and AAMI have determined that engaging in the business of investment adviser to the AmSouth Funds is not a core business that AAMI intends to continue. Therefore, a change in your AmSouth Fund's investment adviser is necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios; o The track record of Pioneer in managing the Pioneer Funds; o The transaction will qualify as a tax free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code") and therefore will not be treated as a taxable sale of your AmSouth Fund's shares; o The resources of Pioneer, including its infrastructure in shareholder services; and o The opportunity to be part of a significantly larger family of funds, with additional product offerings and enhanced shareholder servicing options, and a stronger compliance structure. For further information, please see the individual descriptions of the proposals contained in this Proxy Statement/Prospectus. How Each Reorganization Will Work o Each AmSouth Fund will transfer all of its assets to a corresponding Pioneer Fund. Each Pioneer Fund will assume the corresponding AmSouth Fund's liabilities that are included in the calculation of such AmSouth Fund's net asset value on the day on which each Reorganization closes (the "Closing Date"). Liabilities of each Fund to its shareholders not assumed by a corresponding Pioneer Fund will be assumed by AmSouth Bancorporation. o Each Pioneer Fund will issue Class A, B and Y shares to the corresponding AmSouth Fund in amounts equal to the aggregate net asset value of that AmSouth Fund's Class A, B and I shares. Shareholders of your AmSouth Fund will receive Class A, B and Y shares of the corresponding Pioneer Fund. These shares will be distributed to shareholders in proportion to the relative net asset value of their share holdings on the Closing Date. On the Closing Date, each shareholder will hold shares of the Pioneer Fund with the same aggregate net asset value as the shares of the AmSouth Fund that the shareholder held immediately prior to the Reorganization. o Each AmSouth Fund will be dissolved after the Closing Date. o For purposes of determining any contingent deferred sales charge ("CDSC"), the same commission schedule that applied to the shares of the AmSouth Fund will apply to the shares of the Pioneer Fund issued in the Reorganization and the holding period for determining the CDSC will be calculated from when the shares were initially purchased. o Following the Reorganizations, Pioneer will continue to act as investment adviser to each Pioneer Fund and AAMI will not be involved in the management of the Pioneer Funds. o The Reorganizations will not result in income, gain or loss being recognized for federal income tax purposes by any of the Pioneer Funds, the AmSouth Funds or the shareholders of the AmSouth Funds. 4 o In recommending each of the Reorganizations, the Trustees of your AmSouth Fund have determined that the Reorganization is in the best interest of your AmSouth Fund and will not dilute the interests of shareholders of your AmSouth Fund. The Trustees have made that determination on the basis of the factors listed above and discussed in more detail under each proposal. o If the Reorganizations are approved by the AmSouth Funds' shareholders, the AmSouth Funds will file with the SEC an application for deregistration on Form N-8F under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and will cease to exist as an investment company when such application is approved. Who Is Pioneer Pioneer is registered as an investment adviser under the Investment Advisers Act of 1940, as amended, and acts as investment adviser to mutual funds and institutional accounts. Pioneer or its predecessors have been managing mutual funds since 1928 and at December 31, 2004 had, together with its affiliates, over $42 billion in assets under management. Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., an Italian Bank. In addition to the Class A, B and Y shares to be issued in the Reorganizations, each Pioneer Fund also offers Class C shares (subject to a contingent deferred sales charge and a Rule 12b-1 Plan). In addition, most of the Pioneer Funds also offer Class R shares (which are offered only to certain retirement plans). Who Bears the Expenses Associated with the Reorganizations Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the AmSouth Funds' proxy statements and solicitation costs incurred by the AmSouth Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of the AmSouth Funds in connection with the Reorganizations. See "Information Concerning the Meeting." Will Pioneer and AmSouth Bancorporation Benefit from the Reorganizations Pioneer will benefit from managing a larger pool of assets which will produce increased advisory fees and, in the case of certain of the Pioneer Funds, eliminate or reduce Pioneer's obligation under its expense limitation agreement with the Pioneer Fund. Pioneer is also acquiring certain assets associated with AAMI's fund management business and the benefits of certain restrictive covenants on AAMI's and AmSouth Bancorporation's activities. In consideration for the acquisition of these assets, the opportunity to manage additional assets and covenants from AmSouth Bancorporation and AAMI, including their assistance in facilitating the Reorganizations, noncompetition covenants and their obligation to indemnify Pioneer against certain liabilities, Pioneer has agreed to pay AAMI $65 million. This amount is subject to partial repayment in the event that the assets attributable to the AmSouth Funds are redeemed (subject to certain conditions, including threshold amounts) from the Pioneer Funds within four years after the closing of the Reorganizations. Pioneer has also agreed to provide to AmSouth Bank, an affiliate of AAMI, ongoing servicing payments with respect to Class Y shares issued in the Reorganizations. This arrangement will remain in effect for as long as Class Y shares issued in the Reorganizations are held by clients of AmSouth Bank. The agreement requires AmSouth Bank to provide certain record keeping and shareholder communication services, including mailing prospectuses and other fund related materials to shareholders for which AmSouth Bank acts as shareholder of record, communicating to Pioneer Funds Distributor, Inc. requests for purchase, exchange and redemption transactions in shares of the Pioneer Funds and answering inquiries from beneficial holders of the Pioneer Funds' shares. Pioneer will also agree to provide an affiliate of AAMI with ongoing servicing payments with respect to the Class Y shares issued in the Reorganizations. This additional compensation will be equal on an annual basis to 0.10% of the average daily net assets attributable to the Class Y shares held by former AmSouth Funds' shareholders. This payment would be made by Pioneer and not the Pioneer Funds. No additional compensation would be paid with respect to Class A or Class B shares; however, if an affiliate of AAMI is the broker of record, that affiliate would receive the service fees under the Class A and Class B Rule 12b-1 Plans. What Are the Federal Income Tax Consequences of the Reorganizations The Reorganizations will not result in any income, gain or loss being recognized for federal income tax purposes by any of the AmSouth Funds, their shareholders or the Pioneer Funds as a direct result of the Reorganizations. However, in accordance with the AmSouth Funds' policy to distribute any net realized capital gains at least once each year (and thus to avoid federal income tax thereon at the Fund level), each AmSouth Fund that is being merged into an existing Pioneer Fund will declare and pay a distribution of such gains to its shareholders shortly before the Reorganizations. Each such distribution will be taxable to those shareholders. Additionally, following the Reorganizations, in accordance with the Pioneer Funds' similar policy, each Pioneer Fund will declare and pay before the end of 2005 a distribution of such 5 gains to its shareholders (including current shareholders of the AmSouth Funds who will be shareholders of the Pioneer Funds following the Reorganizations). Those distributions will be fully taxable to all shareholders of the Pioneer Funds, including those former AmSouth Funds shareholders, even though those distributions may include a portion of the Pioneer Fund's net capital gains that were realized before the Closing Date. What Happens if a Reorganization Is Not Approved If the required approval of shareholders is not obtained, the Meeting may be adjourned as more fully described in this Proxy Statement/ Prospectus, your AmSouth Fund will continue to engage in business as a separate mutual fund and the Board will consider what further action may be appropriate. Additional Information The staff of the SEC has been conducting an investigation into the mutual fund servicing business of BISYS Group, Inc., the parent company of ASO Services Company, the AmSouth Funds' administrator, and BISYS Fund Services, the AmSouth Funds' distributor and transfer agent (collectively, "BISYS"). In a press release dated April 19, 2005, BISYS stated that it believes that the SEC's investigation relates to the structure and accounting for certain arrangements pursuant to which BISYS agreed with the advisers of certain U.S. mutual funds, including AmSouth Funds, to use a portion of the fees paid to BISYS by the mutual funds to pay for, among other things, expenses relating to the marketing and distribution of fund shares, to make payments to certain advisers, and to pay for cerain other expenses. As part of its investigation of BISYS, the SEC is reviewing the relationships and agreements among BISYS, AmSouth Funds, AAMI and AmSouth Bank. AmSouth Funds, AAMI and AmSouth Bank are cooperating fully with the review. Additionally, AmSouth Bank and AAMI, in cooperation with a special review committee of the Board of Trustees of AmSouth Funds, are conducting a review of this matter and are taking appropriate steps to protect the interests of shareholders, including making payments to the AmSouth Funds. Who Is Eligible to Vote Shareholders of record on July 29, 2005 are entitled to attend and vote at the Meeting or any adjournment of the Meeting. On each proposal, all shareholders of an AmSouth Fund, regardless of the class of shares held, will vote together as a single class. Each share is entitled to one vote. Shares represented by properly executed proxies, unless revoked before or at the Meeting, will be voted according to shareholders' instructions. If you sign a proxy but do not fill in a vote, your shares will be voted to approve the Agreement and Plan of Reorganization. If any other business comes before the Meeting, your shares will be voted at the discretion of the persons named as proxies. 6 TABLE OF CONTENTS
Page ---- INTRODUCTION ........................................................................... 2 PROPOSAL 1(a) -- AMSOUTH BALANCED FUND ................................................. 8 PROPOSAL 1(b) -- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH PORTFOLIO ............. 22 PROPOSAL 1(c) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO ........................ 48 PROPOSAL 1(d) -- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH AND INCOME PORTFOLIO ............. 73 PROPOSAL 1(e) -- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH AND INCOME PORTFOLIO .... 99 TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION ..................................... 125 TAX STATUS OF EACH REORGANIZATION ...................................................... 125 VOTING RIGHTS AND REQUIRED VOTE ........................................................ 127 COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST ................ 127 ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS ......................................... 128 FINANCIAL HIGHLIGHTS ................................................................... 136 INFORMATION CONCERNING THE MEETING ..................................................... 139 OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS ............................................... 141 OWNERSHIP OF SHARES OF THE PIONEER FUNDS ............................................... 145 EXPERTS ................................................................................ 146 AVAILABLE INFORMATION .................................................................. 146 EXHIBIT A-1 FORM OF AGREEMENT AND PLAN OF REORGANIZATION (C/D REORGANIZATIONS) ......... A-1 EXHIBIT A-2 FORM OF AGREEMENT AND PLAN OF REORGANIZATION (F REORGANIZATIONS) ........... A-16 EXHIBIT B ADDITIONAL INFORMATION ABOUT PIONEER ....................................... B-1 EXHIBIT C PORTFOLIO MANAGER'S DISCUSSION OF PERFORMANCE .............................. C-1
7 AmSouth Balanced Fund and Pioneer Classic Balanced Fund PROPOSAL 1(a) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-2 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of AmSouth Classic Balanced Fund's performance is attached as Exhibit C. Each Fund has an investment objective of obtaining capital growth and current income and, consequently, the Funds have similar investment policies and risks. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Balanced Fund to Pioneer Classic Balanced Fund
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, A newly created, diversified series of an open-end management investment Pioneer Series Trust IV, an open-end company organized as a Massachusetts management investment company organized business trust. as a Delaware statutory trust. - ------------------------------------------------------------------------------------------------------------------------- Net assets as of $182.74 million None. Pioneer Classic Balanced Fund is newly March 31, 2005 created and does not expect to commence investment operations until the Reorganization occurs. - ------------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Managers: Portfolio Managers: Day-to-day management of AmSouth Day-to-day management of the Fund's Balanced Fund's portfolio is the portfolio is the responsibility of John A. responsibility of John P. Boston, CFA, and Carey, portfolio manager, and Walter Brian B. Sullivan, CFA Mr. Boston has Hunnewell, Jr., assistant portfolio manager. co-managed the Balanced Fund since 1994. Mr. Carey and Mr. Hunnewell are supported Mr. Sullivan has co-managed the Balanced by the domestic equity team. Members of Fund since June 2004. Mr. Sullivan has this team manage other Pioneer mutual been an officer of AAMI since 1996 and funds investing primarily in U.S. equity joined AmSouth Bank in 1982. Prior to securities. The portfolio managers and the serving as Director of Fixed Income for team also draw upon the research and AmSouth Bank's Trust Department, investment management expertise of the Mr. Sullivan managed equity portfolios and global research team, which provides held the position of equity research fundamental research on companies and coordinator for AmSouth Bank's Trust includes members from Pioneer's affiliate, Department. Mr. Boston is Chief Fixed Pioneer Investment Management Limited. Income Officer for AmSouth Asset Management, Inc. Mr. Boston began his Mr. Carey is director of portfolio career in investment management with management and an executive vice AmSouth Bank in 1988 and has been president of Pioneer. Mr. Carey joined associated with AAMI since 1996. Pioneer as an analyst in 1979. Mr. Hunnewell is a vice president of Pioneer. He joined Pioneer in August 2001 and has been an investment professional since 1985. Prior to joining Pioneer, Mr. Hunnewell was an independent investment manager and a fiduciary of private asset portfolios from 2000 to 2001. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Balanced Fund seeks to obtain Pioneer Classic Balanced Fund seeks to long-term capital growth and produce a obtain capital growth and current income. reasonable amount of current income through a moderately aggressive investment strategy. - ------------------------------------------------------------------------------------------------------------------------- Primary investments AmSouth Balanced Fund invests in a Pioneer allocates the Fund's assets between broadly diversified portfolio of equity and equity and debt securities based on its debt securities consisting primarily of assessment of current business, economic common stocks and bonds. and market conditions. Normally, equity and debt securities each represent 35% to 65% of The Fund normally invests between 45-75% the Fund's assets. of its assets in equity securities and at least 25% of its assets in fixed income securities. For purposes of the Fund's investment The portion of the Fund's assets invested in policies, equity investments include common equity and debt securities will vary stocks, convertible debt, equity interests in depending upon economic conditions, the real estate investment trusts (REITs), and general level of stock prices, interest rates securities with common stock characteristics, and other factors, including the risks such as preferred stocks. The Fund's associated with each investment. The Fund's investments in debt securities include U.S. equity investments consist primarily of government securities, corporate debt common stocks of companies that AAMI securities, mortgage- and asset-backed believes are undervalued and have a securities, short-term debt securities, cash favorable outlook or are reasonably priced and cash equivalents. Cash and cash with the potential to produce above-average equivalents include cash balances, accrued earnings growth. The Fund's fixed-income interest and receivables for items such as the investments consist primarily of "high- proceeds, not yet received, from the sale of grade" bonds, notes and debentures. The the Fund's portfolio investments. Debt Fund invests in securities issued by: (i) the securities in which the Fund invests may have Government National Mortgage Association fixed or variable principal payments and all ("GNMA"), which are supported by the full types of interest rate payment and reset faith and credit of the U.S. government; and terms, including fixed rate, adjustable rate, (ii) the Federal National Mortgage zero coupon, contingent, deferred, payment- Association ("FNMA") and the Federal Home in-kind and auction rate features. Loan Mortgage Corporation ("FHLMC") which are supported by the right of the The Fund may invest in U.S. government issuer to borrow from the U.S. Treasury. securities. U.S. government securities include The Fund also invests in U.S. Treasury obligations: directly issued by or supported by obligations. the full faith and credit of the U.S. government, like Treasury bills, notes and bonds and Government National Mortgage Association certificates; supported by the right of the issuer to borrow from the U.S. Treasury, like those of the Federal Home Loan Banks; supported by the discretionary authority of the U.S. government to purchase the agency's securities like those of the Federal National Mortgage Association; or supported only by the credit of the issuer itself, like the Tennessee Valley Authority. The Fund may invest in mortgage-backed and asset-backed securities. Mortgage-related securities may be issued by private companies or by agencies of the U.S. government and represent direct or indirect participation in, or are collateralized by and payable from, mortgage loans secured by real property. Asset-backed securities represent participations in, or are secured by and payable from, assets such as installment sales or loan contracts, leases, credit card receivables and other categories of receivables. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Investment strategies In managing the equity portion of the Fund, In selecting equity securities, Pioneer uses a the AAMI combines fundamental and value approach to select the Fund's quantitative analysis with risk management investments. Pioneer seeks securities selling to identify value opportunities, construct the at reasonable prices or substantial discounts portfolio and make sell decisions. AAMI to their underlying values and then holds selects investments believed to have basic these securities until the market values investment value that will eventually be reflect their intrinsic values. Pioneer recognized by other investors. In addition, evaluates a security's potential value, the AAMI may identify companies with a including the attractiveness of its market history of above-average growth or valuation, based on the company's assets companies that are expected to enter and prospects for earnings growth. In periods of above-average growth or are making that assessment, Pioneer employs positioned in emerging growth industries. due diligence and fundamental research, an evaluation of the issuer based on its AAMI's fixed income portfolio management financial statements and operations. Pioneer process focuses on the four key areas of also considers a security's potential to duration management, sector weights, provide a reasonable amount of income. position on the yield curve, and security Pioneer relies on the knowledge, experience selection; AAMI's goal is to add value in and judgment of its staff who have access each of these four areas through the active to a wide variety of research. Pioneer management of the Fund's portfolio. focuses on the quality and price of Beginning with rigorous fundamental individual issuers, not on economic sector analysis of the economy and taking into or market-timing strategies. Factors Pioneer account characteristics of the current looks for in selecting investments include: business and interest rate cycles, AAMI arrives at a projection of the likely trend in o Favorable expected returns relative to interest rates and adjusts duration perceived risk accordingly. Analysis of the shape of the o Above average potential for earnings and yield curve and yield spreads among bond revenue growth market sectors leads to further refinements o Low market valuations relative to in strategy for companies that appear earnings forecast, book value, cash flow undervalued. and sales o A sustainable competitive advantage, such as a brand name, customer base, proprietary technology or economies of scale In selecting debt securities, Pioneer considers both broad economic and issuer specific factors in selecting a portfolio designed to achieve the Fund's investment objectives. In assessing the appropriate maturity, rating and sector weighting of the Fund's portfolio, Pioneer considers a variety of factors that are expected to influence economic activity and interest rates. These factors include fundamental economic indicators, such as the rates of economic growth and inflation, Federal Reserve monetary policy and the relative value of the U.S. dollar compared to other currencies. Once Pioneer determines the preferable portfolio characteristics, Pioneer selects individual securities based upon the terms of the securities (such as yields compared to U.S. Treasuries or comparable issuers), liquidity and rating, sector and issuer diversification. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Other investments AmSouth Balanced Fund may also invest in Up to 10% of Pioneer Classic Balanced debt securities, preferred stock and that Fund's total assets may be invested in debt portion of the value of securities convertible securities rated below investment grade, in to common stock, including convertible including convertible debt. A debt security is preferred stock and convertible debt, which investment grade if it is rated in one of the is attributable to the fixed income top four categories by a nationally characteristics of those securities. recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher quality debt securities. The Fund may invest up to 25% of its total assets in real estate investment trusts (REITs). REITs are companies that invest primarily in real estate or real estate related loans. The Fund may invest up to 25% of its total assets in equity and debt securities of non-U.S. issuers. The Fund will not invest more than 5% of its total assets in the securities of emerging markets issuers. The Fund invests in non-U.S. securities to diversify its portfolio when they offer similar or greater potential for capital appreciation. - ------------------------------------------------------------------------------------------------------------------------- Temporary defensive When AAMI determines adverse market Normally, Pioneer Classic Balanced Fund strategies conditions exist, AmSouth Balanced Fund invests substantially all of its assets to meet may invest entirely in cash positions, its investment objective. The Fund may directly in U.S. government securities and invest the remainder of its assets in short-term paper, such as bankers' securities with remaining maturities of less acceptances. than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ------------------------------------------------------------------------------------------------------------------------- Diversification Each Fund is diversified for the purpose of the Investment Company Act and is subject to diversification requirements under the Internal Revenue Code of 1986, as amended (the "Code"). - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Industry AmSouth Balanced Fund may not purchase Pioneer Classic Balanced Fund may not concentration any securities which would cause more than invest more than 25% of its assets in any 25% of the value of the Fund's total assets one industry. at the time of purchase to be invested in securities of one or more issuers conducting their principal business activities in the same industry, provided that (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. government or its agencies or instrumentalities, and repurchase agreements secured by obligations of the U.S. government or its agencies or instrumentalities; (b) wholly owned finance companies will be considered to be in the industries of their parents if their activities are primarily related to financing the activities of their parents; and (c) utilities will be divided according to their services. For example, gas, gas transmission, electric and gas, electric, and telephone will each be considered a separate industry. - ------------------------------------------------------------------------------------------------------------------------- Restricted and AmSouth Balanced Fund may not invest Pioneer Classic Balanced Fund may not illiquid securities more than 15% of its net assets in invest more than 15% of its net assets in securities that are restricted as to resale, or securities that are illiquid and other for which no readily available market exists, securities that are not readily marketable. including repurchase agreements providing Repurchase agreements maturing in more for settlement more than seven days after than seven days will be included for notice. purposes of the foregoing limit. - ------------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Balanced Fund may not borrow Pioneer Classic Balanced Fund may not money or issue senior securities, except borrow money, except the Fund may: (a) that the Fund may borrow from banks or borrow from banks or through reverse enter into reverse repurchase agreements repurchase agreements in an amount up to for temporary emergency purposes in 33 1/3% of the Fund's total assets (including amounts up to 33 1/3% of the value of its the amount borrowed); (b) to the extent total assets at the time of such borrowing. permitted by applicable law, borrow up to The Fund will not purchase securities while an additional 5% of the Fund's assets for borrowings (including reverse repurchase temporary purposes; (c) obtain such short- agreements) in excess of 5% of its total term credits as are necessary for the assets are outstanding. clearance of portfolio transactions; (d) purchase securities on margin to the extent permitted by applicable law; and (e) engage in transactions in mortgage dollar rolls that are accounted for as financings. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Lending AmSouth Balanced Fund may not make Pioneer Classic Balanced Fund may not make loans, except that the Fund may purchase or loans, except that the Fund may (i) lend hold debt instruments in accordance with its portfolio securities in accordance with the investment objective and policies, lend Fund Fund's investment policies, (ii) enter into securities in accordance with its investment repurchase agreements, (iii) purchase all or a objective and policies and enter into portion of an issue of publicly distributed debt repurchase agreements. securities, bank loan participation interests, bank certificates of deposit, bankers' In addition, the Fund is permitted to acceptances, debentures or other securities, participate in a credit facility whereby the whether or not the purchase is made upon the Fund may directly lend to and borrow original issuance of the securities, (iv) money from other AmSouth funds for participate in a credit facility whereby the Fund temporary purposes, provided that the loans may directly lend to and borrow money from are made in accordance with an order of other affiliated funds to the extent permitted exemption from the SEC and any conditions under the Investment Company Act or an thereto. exemption therefrom, and (v) make loans in any other manner consistent with applicable law, as amended and interpreted or modified from time to time by any regulatory authority having jurisdiction. - ------------------------------------------------------------------------------------------------------------------------- Derivative AmSouth Balanced Fund may invest in The Fund may use futures and options on instruments futures contracts and options thereon securities, indices and currencies, forward (interest rate futures contracts or index foreign currency exchange contracts and other futures contracts, as applicable) to commit derivatives. A derivative is a security or funds awaiting investment, to maintain cash instrument whose value is determined by liquidity or for other hedging purposes. The reference to the value or the change in value value of the Fund's contracts may equal or of one or more securities, currencies, indices exceed 100% of the Fund's total assets, or other financial instruments. Although there although the Fund will not purchase or sell is no specific limitation on investing in a futures contract unless immediately derivatives, the Fund does not use derivatives afterwards the aggregate amount of margin as a primary investment technique and deposits on its existing futures positions generally limits their use to hedging. However, plus the amount of premiums paid for the Fund may use derivatives for a variety of related futures options entered into for other non-principal purposes, including: than bona fide hedging purposes is 5% or less of its net assets. o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the Fund's return as a non- hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on the Fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the Fund's other investments, the Fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. The Fund will only invest in derivatives to the extent Pioneer believes these investments do not prevent the Fund from seeking its investment objective. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Short-term trading The AmSouth Fund may engage in the Pioneer Classic Balanced Fund usually does technique of short-term trading. Such not trade for short-term profits. The Fund trading involves the selling of securities held will sell an investment, however, even if it for a short time, ranging from several has only been held for a short time, if it no months to less than a day. The object of longer meets the Fund's investment criteria. such short-term trading is to increase the potential for capital appreciation and/or income of the Fund in order to take advantage of what AAMI believes are changes in market, industry or individual company conditions or outlook. - ------------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ------------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ------------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 4% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - ------------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of up to 12b-1 fees up to 5%. For Class B shares held 4% if you sell your shares. The charge is continuously, the CDSC declines over six reduced over time and is not charged after five years, starting with year one and ending in years. Your investment firm may receive a year seven from: 5%, 4%, 3%, 2%, 1%. commission from PFD, the Fund's distributor, at Eight years after purchase Class B shares the time of your purchase of up to 4%. automatically convert to Class A shares. Class B shares are subject to distribution and Class B shares pay a shareholder servicing service (12b-1) fees of up to 1% of average fee (non 12b-1) of up to 0.25% of average daily net assets. daily net assets. This fee is in the form of a separate non-Rule 12b-1 fee. All Funds bear Class B shares acquired through the a distribution (12b-1) fee of up to 0.75%. Reorganization will retain the holding period, CDSC and commission schedules applicable to Maximum investment for all Class B the original purchase. purchases by a shareholder for the Fund's shares is $99,999. Maximum purchase of Class B shares in a single transaction is $49,999. Class B shares convert to Class A shares eight years after the date of purchase. - -------------------------------------------------------------------------------------------------------------------------
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- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Balanced Fund does not impose The Fund does not impose any initial, sales charges and any initial or CDSC on Class I shares. contingent deferred or asset based sales Rule 12b-1 fees charge on Class Y shares. The Fund may impose a shareholder servicing fee (non 12b-1) of up to 0.15% of average daily net assets. The fee is The distributor incurs the expenses of computed daily and paid monthly. distributing the Fund's Class Y shares, none of which are reimbursed by the Fund or the Class Y shareowners. - ------------------------------------------------------------------------------------------------------------------------- Management and AmSouth Balanced Fund pays an advisory fee Pioneer Classic Balanced Fund will pay other fees on a monthly basis at an annual rate of Pioneer an advisory fee as follows: 0.65% 0.80% of the Fund's average daily net assets. of the Fund's average daily net assets on the first $1 billion, 0.60% on the next $4 ASO Services Company, Inc. ("ASO") serves billion, and 0.55% on assets over $5 billion. as administrator and fund accounting agent The fee is computed daily and paid monthly. for the Fund. The Fund pays ASO an administrative services fee of 0.15% of the In addition, the Fund will reimburse Pioneer Fund's average daily net assets. for certain fund accounting and legal expenses incurred on behalf of the Fund For the fiscal year ended July 31, 2004, other and pay a separate shareholder servicing/ expenses of the Fund were limited to 0.54% transfer agency fee to PIMSS, an affiliate of for Class A shares, 0.54% for Class B shares Pioneer. and 0.44% for Class I shares. Any fee waiver or expense reimbursement arrangement is The Fund's total annual fund operating voluntary and may be discontinued at any time. expenses are estimated to be 1.13% of average daily net assets for Class A shares, For the fiscal year ended July 31, 2004, the 1.99% for Class B shares, and 0.78% for Fund's annual operating expenses for Class A Class Y shares for the current fiscal year. shares, after giving effect to the expense limitation were 1.32%, and without giving effect to the expense limitation, were 1.34% of average daily net assets. For the fiscal year ended July 31, 2004, the Fund's annual operating expenses for Class B shares, after giving effect to the expense limitation were 2.07%, and without giving effect to the expense limitation, were 2.09% of average daily net assets. For the fiscal year ended July 31, 2004, the Fund's annual operating expenses for Class I shares, after giving effect to the expense limitation were 1.17%, and without giving effect to the expense limitation, were 1.21% of average daily net assets. - ------------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into selling If the account is established in the agreements with the Fund's distributor, as shareholder's own name, shareholders may described in the Fund's prospectus. also purchase additional shares of Pioneer Fund by telephone or online. Certain account transactions may be done by telephone. - -------------------------------------------------------------------------------------------------------------------------
15
- ------------------------------------------------------------------------------------------------------------------------- AmSouth Balanced Fund Pioneer Classic Balanced Fund - ------------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual Fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. The Fund allows you to investment requirements for the Fund into exchange your shares at net asset value which you are exchanging. Exchanges from without charging you either an initial or one Fund to another are taxable. Class A contingent deferred shares charge at the shares may be exchanged for Class I shares time of the exchange. Shares you acquire as of the same Fund or another AmSouth Fund if part of an exchange will continue to be you become eligible to purchase Class I subject to any contingent deferred sales shares. Class I shares may be exchanged for charge that applies to the shares you Class A shares of the same Fund. No originally purchased. When you ultimately transaction fees are currently charged for sell your shares, the date of your original exchanges. purchase will determine your contingent deferred sales charge. An exchange If you sell your shares or exchange them for generally is treated as a sale and a new shares of another AmSouth Fund within 7 purchase of shares for federal income tax days of the date of purchase, you will be purposes. charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The After you establish an eligible fund account, fee is paid to the Fund to offset the costs you can exchange Fund shares by telephone associated with short-term trading, such as or online. portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ------------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ------------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -------------------------------------------------------------------------------------------------------------------------
16 Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on your investment in either Fund or not make as much as if you invested elsewhere if: o The stock market goes down (this risk may be greater in the short term) o The adviser's judgment about the attractiveness, growth potential or potential appreciation of a particular stock proves to be incorrect o The market segment on which the Fund equity investment are focused -- value and growth stocks -- under performs other kinds of investments or market averages o The value of the Fund's fixed-income investments declines due to an increase in interest rates (generally, an increase in the average maturity of the fixed income portfolio of the Fund will make it more sensitive to interest rate risk) o During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o An issuer cannot make timely interest and principal payments on its debt securities, such as bonds (the lower a security's rating, the greater its credit risk) Each Fund may trade securities actively to achieve its principal investment strategies. Active trading of portfolio securities could increase each Fund's transaction costs (thereby lowering its performance) and may increase the amount of taxes that you pay (on distributions of net gains realized on those trades). If either Fund invests in securities with additional risk, that Fund's share price volatility accordingly could be greater and its performance lower. At times, more than 25% of the Fund's assets may be invested in the same market segment, such as financials or technology. To the extent the Fund emphasizes investments in a market segment, the Fund will be subject to a greater degree to the risks particular to the industries in that segment, and may experience greater market fluctuation, than a Fund without the same focus. For example, industries in the financial segment, such as banks, insurance companies, broker-dealers and REITs, may be sensitive to changes in interest rates and general economic activity and are subject to extensive government regulation. Industries in the technology segment, such as information technology, communications equipment, computer hardware and software, and office and scientific equipment, are subject to risks of rapidly evolving technology, short product lives, rates of corporate expenditures, falling prices and profits, competition from new market entrants, and general economic conditions. If the Fund does a lot of trading, it may incur additional operating expenses, which would reduce performance, and could cause shareowners to incur a higher level of taxable income or capital gains. Pioneer Classic Balanced Fund may be subject to the following additional risks associated with investing in non-U.S. issuers, which may involve unique risks compared to investing in securities of U.S. issuers. Some of these risks do not apply to larger, more developed non-U.S. countries. However, these risks are more pronounced for issuers of securities in emerging markets. These risks may include: o Less information about non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Many non-U.S. markets are smaller, less liquid and more volatile. In a changing market, Pioneer may not be able to sell the Fund's portfolio securities at times, in amounts and at prices it considers reasonable o Adverse effect of currency exchange rates or controls on the value of the Fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect the securities markets o Withholding and other non-U.S. taxes may decrease the Fund's return 17 Past Performance Set forth below is performance information for AmSouth Balanced Fund. The bar charts show how AmSouth Balanced Fund's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The tables show average annual total return for AmSouth Balanced Fund over time for each class of shares compared with a broad-based securities market index. The bar charts give an indication of the risks of investing in AmSouth Balanced Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance does not indicate future results. Pioneer Classic Balanced Fund has not commenced investment operations. AmSouth Balanced Fund -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 23.51 9.72 20.84 13.12 1.33 10.18 4.84 -6.86 15.69 6.60
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 10.62% for the quarter ended June 30, 2003, and the lowest quarterly return was -6.78% for the quarter ended September 30, 2002. AmSouth Balanced Fund Average Annual Total Returns (as of December 31, 2004)
- ----------------------------------------------------------------------------------------------------- 1 Year 5 Years 10 Years - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class A Shares - ----------------------------------------------------------------------------------------------------- Return Before Taxes(1) 1.68% 4.79% 9.02% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 0.89% 3.23% 6.71% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 1.07% 3.29% 6.64% - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class B Shares - ----------------------------------------------------------------------------------------------------- Return Before Taxes(1) 1.86% 4.87% 8.75% - ----------------------------------------------------------------------------------------------------- AmSouth Balanced Fund, Class I Shares(2) - ----------------------------------------------------------------------------------------------------- Return Before Taxes 7.76% 6.15% 9.78% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 6.88% 4.46% 7.38% - ----------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 5.02% 4.38% 7.27% - ----------------------------------------------------------------------------------------------------- S&P 500 Index 10.87% -2.30% 12.07% - ----------------------------------------------------------------------------------------------------- Lehman Government/Credit Bond Index 4.19% 8.00% 7.80% - -----------------------------------------------------------------------------------------------------
(1) Class A shares were first offered on 12/19/91. Performance for the Class B shares, which were first offered on 9/2/97, is based on the historical performance of the Fund's Class A shares (without sales charge) prior to that date. The historical performance of the Class B shares has been restated to reflect the Fund's Class B shares distribution (12b-1) fees and the contingent deferred sales charge. (2) Performance for the Class I shares, which were first offered on 9/1/97, is based on the historical performance of the Fund's Class A shares (without sales charge) prior to that date. The table shows the impact of taxes on the Fund's returns. After-tax returns are only shown for Class A shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect 18 the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The table below shows the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the table appearing below are based on (i) for the AmSouth Balanced Fund, the expenses of AmSouth Balanced Fund for the period ended January 31, 2005 and (ii) for the Pioneer Classic Balanced Fund, the estimated pro forma annual expenses assuming the Reorganization occurred on May 31, 2005.
Pioneer Pioneer Pioneer Classic Classic Classic AmSouth Balanced AmSouth Balanced AmSouth Balanced Balanced Fund Balanced Fund Balanced Fund Fund(1) (Pro Forma) Fund(1) (Pro Forma) Fund(1) (Pro Forma) Shareholder transaction fees Class A Class A Class B Class B Class I Class Y (paid directly from your investment) -------- ----------- -------- ----------- -------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ............................. 5.50%(2) 5.75%(2) None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................................ None None 5.00%(3) 4.00% None None Redemption fees ........................................... 2.00%(4) None 2.00%(4) None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............................................ 0.80 % 0.65% 0.80% 0.65% 0.80% 0.65% Distribution and service (12b-1) fee ...................... None 0.25% 0.75% 1.00% None None Other expenses ............................................ 0.60%(5) 0.23% 0.63%(5) 0.34% 0.50%(5) 0.13% Total fund operating expenses ............................. 1.40% 1.13%(6) 2.18% 1.99%(6) 1.30% 0.78%(6) Expense reimbursement/reduction ........................... 0.07% N/A 0.10% N/A 0.12% N/A Net fund operating expenses ............................... 1.33% 1.13% 2.08% 1.99% 1.18% 0.78%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) A CDSC on Class B shares held continuously declines over six years starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.53% for Class A shares, 0.53% for Class B shares and 0.38% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, (d) each Fund's gross operating expenses remain the same, and (e) the expense limitation for your Fund is in effect for year one. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future. 19
- -------------------------------------------------------------------------------- Pro Forma Pioneer AmSouth Classic Balanced Balanced Number of years you own your shares Fund Fund - -------------------------------------------------------------------------------- Class A - -------------------------------------------------------------------------------- Year 1 $ 685 $ 684 - -------------------------------------------------------------------------------- Year 3 $ 969 $ 913 - -------------------------------------------------------------------------------- Year 5 $1,274 $1,161 - -------------------------------------------------------------------------------- Year 10 $2,137 $1,871 - -------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - -------------------------------------------------------------------------------- Year 1 $ 721 $ 602 - -------------------------------------------------------------------------------- Year 3 $ 982 $ 924 - -------------------------------------------------------------------------------- Year 5 $1,369 $1,173 - -------------------------------------------------------------------------------- Year 10 $2,316 $2,095 - -------------------------------------------------------------------------------- Class B -- assuming no redemption - -------------------------------------------------------------------------------- Year 1 $ 221 $ 202 - -------------------------------------------------------------------------------- Year 3 $ 682 $ 624 - -------------------------------------------------------------------------------- Year 5 $1,169 $1,073 - -------------------------------------------------------------------------------- Year 10 $2,316 $2,095 - -------------------------------------------------------------------------------- Class I Class Y - -------------------------------------------------------------------------------- Year 1 $ 132 $ 80 - -------------------------------------------------------------------------------- Year 3 $ 412 $ 249 - -------------------------------------------------------------------------------- Year 5 $ 713 $ 433 - -------------------------------------------------------------------------------- Year 10 $1,568 $ 966 - --------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of Amsouth Balanced Fund. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, and AmSouth Bank informed the Trustees that they did not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. In addition, Pioneer offers shareholders additional options for their accounts, including the ability to transact and exchange shares over the telephone or online and the ability to access account values and transaction history in all of the shareholder's direct accounts in the Pioneer Funds over the telephone or online. Third, Pioneer Classic Balanced Fund's management fee (0.65% of average daily net assets on the first $1 billion, 0.60% on the next $4 billion, and 0.55% on assets over $5 billion) will be substantially lower than the advisory fee of your Fund (0.80% of average daily net assets). The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds will be the same. Moreover, your AmSouth Fund's Class I shares pay a non-12b-1 20 shareholder servicing fee that will not be paid by the Pioneer Fund's Class Y shares. On a pro forma basis, both the gross and net expenses of each class of the Pioneer Fund are estimated to be lower than the expenses of the corresponding class of your AmSouth Fund. In addition, the broader distribution arrangements of the Pioneer Fund offer greater potential for further asset growth and reduce per share expenses. Fourth, the Class A, B and Y shares of Pioneer Classic Balanced Fund received in the Reorganization will provide AmSouth Balanced Fund shareholders with exposure to substantially the same investment product as they have currently. Fifth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of the AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
(Pro Forma) AmSouth Pioneer Classic Pioneer Classic Balanced Fund Balanced Fund Balanced Fund May 31, 2005 May 31, 2005 May 31, 2005 ------------- --------------- --------------- Total Net Assets (in thousands) ......... $ 181,569 N/A $ 181,569 Class A shares ........................ $ 105,281 N/A $ 105,281 Class B shares ........................ $ 25,044 N/A $ 25,044 Class I/Y shares ...................... $ 51,244 N/A $ 51,244 Net Asset Value Per Share Class A shares ........................ $ 12.74 N/A $ 12.74 Class B shares ........................ $ 12.69 N/A $ 12.69 Class I/Y shares ...................... $ 12.74 N/A $ 12.74 Shares Outstanding Class A shares ........................ 8,265,238 N/A 8,265,238 Class B shares ........................ 1,973,093 N/A 1,973,093 Class I/Y shares ...................... 4,022,510 N/A 4,022,510
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 21 AmSouth Strategic Portfolios: Aggressive Growth Portfolio and Pioneer Ibbotson Aggressive Allocation Fund PROPOSAL 1(b) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Aggressive Growth Portfolio to Pioneer Ibbotson Aggressive Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ----------------------------------------------------------------------------------------------------------------------- Net assets as of $51.9 million $19.1 million March 31, 2005 - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Aggressive Growth ("Ibbotson") Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Aggressive Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Ph.D., managing director and chief Jason Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, and global financial markets. Dr. Chen joined - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for Ibbotson in 1997. Michael E. Annin, and portfolio AAMI. He began his career in investment managing director, manages the investment managers management with AmSouth Bank in 1987 management services and data products (continued) and has been associated with AAMI since group for Ibbotson. Scott Wentsel, senior 1996. Mr. Boston received his CFA charter portfolio manager, is responsible for in 1993 and is an active member and past management of the firm's fund-of-funds president of the Alabama Society of business which includes oversight of its Financial Analysts. He also serves as the investment management staff and process. portfolio manager for the AmSouth High Alexander E. Kaye, portfolio manager, is Quality Bond Fund. Mr. Boston is a Senior responsible for managing the delivery of Vice President of AmSouth Bank and Vice fund-of-funds programs for institutional and President of AAMI. retail clients, which includes asset allocation modeling, portfolio construction, fund Mr. Crown has been employed with classification and manager due diligence. AmSouth Bank since 1982 and AAMI since Brian Huckstep, portfolio manager, is 2001. He was an Institutional Fund Manager responsible for managing the delivery of with AAMI (2001-2003) and has been a fund-of-funds programs for institutional and Regional Manager since 2003. Mr. Crown is retail clients, which includes asset allocation a Senior Vice President of AmSouth Bank. modeling, portfolio construction, fund classification, and manager due diligence. Ms. Daniel has been employed with AmSouth Bank since 1999. She has been employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Lindquist has been employed with AAMI and portfolio since December 1999. Prior to December managers 1999, Mr. Lindquist was employed by First (continued) American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Williams has been employed with and portfolio AmSouth Bank since 2002. He has been managers employed as a Regional Manager with AAMI (continued) since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - ----------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund Growth Portfolio seeks to provide investors seeks long-term capital growth. with capital growth. - ----------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Aggressive Growth Portfolio: AmSouth Strategic Portfolios: Aggressive Growth Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-20% AmSouth Select Equity Fund 0-15% AmSouth Enhanced Market Fund 0-25% AmSouth Large Cap Fund 0-15% AmSouth Capital Growth Fund 0-20% AmSouth Mid Cap Fund 0-15% AmSouth Small Cap Fund 0-25% AmSouth International Equity Fund 0-15% AmSouth High Quality Bond Fund 0-35% AmSouth Limited Term Bond Fund 0-10% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Aggressive Growth Portfolio's shareholders. Pioneer Ibbotson Aggressive Allocation Fund: Because this is an aggressive allocation fund, the majority of Pioneer Ibbotson Aggressive Allocation Fund's assets will be invested in equity funds, although a portion of its assets will be invested in bond funds, cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Aggressive Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 75-95% 5-15% - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-25% Pioneer Research Fund 0-25% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-25% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-25% Pioneer Oak Ridge Large Cap Growth Fund 0-25% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-25% Pioneer Value Fund 0-25% Pioneer Mid Cap Growth Fund 0-25% Pioneer Mid Cap Value Fund 0-25% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-25% Pioneer Oak Ridge Small Cap Growth Fund 0-25% Pioneer Small Cap Value Fund 0-25% Pioneer International Equity Fund 0-25% Pioneer International Value Fund 0-25% Pioneer Europe Select Fund 0-25% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-20% Pioneer Strategic Income Fund 0-20% Pioneer Short Term Income Fund 0-20% Pioneer Cash Reserves Fund 0-15% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Aggressive Pioneer Ibbotson Aggressive Allocation Fund Growth Portfolio may not borrow money or issue may not borrow money, except on a senior securities, except that the Fund may temporary basis and to the extent permitted borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow repurchase agreements for temporary emergency from banks or through reverse repurchase purposes in amounts up to 33 1/3% of the value agreements in an amount up to 33 1/3% of of its total assets at the time of such the Fund's total assets (including the borrowing. AmSouth Strategic Portfolios: amount borrowed); (b) borrow up to an Aggressive Growth Portfolio will not purchase additional 5% of the Fund's assets for securities while borrowings (including reverse temporary purposes; (c) obtain such short- repurchase agreements) in excess of 5% of its term credits as are necessary for the total assets are outstanding. In addition, clearance of portfolio transactions; (d) AmSouth Strategic Portfolios: Aggressive purchase securities on margin; and (e) Growth Portfolio is permitted to participate engage in transactions in mortgage dollar in a credit facility whereby the Fund may rolls that are accounted for as financings. directly lend to and borrow money from other AmSouth Funds for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ----------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ----------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ----------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to a CDSC of 12b-1 fees up to 5%. For Class B shares issued to up to 2% if you sell your shares. The former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after five years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily net Class B shares convert to Class A shares assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ----------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Aggressive The Fund does not impose any initial, sales charges and Growth Portfolio does not impose any initial contingent deferred or asset based sales Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% of distributing the Fund's Class Y shares, none average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Aggressive The management fee payable by Pioneer other fees Growth Portfolio pays an advisory fee on a Ibbotson Aggressive Allocation Fund is monthly basis at an annual rate of 0.20% of equal to 0.13% of average daily net assets the Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") serves cash and 0.17% of average daily net assets as administrator and fund accounting agent attributable to other investments, including for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of the Pioneer, with breakpoints at incremental Fund's average daily net assets. asset levels. Since Pioneer currently manages all of the underlying funds, the For the fiscal year ended July 31, 2004, management fee will initially be 0.13% of other expenses of the Fund were limited to average daily net assets. 0.36% for Class A shares, 0.35% for Class B shares and 0.31% for Class I shares. Any In addition, the Fund reimburses Pioneer for fee waiver or expense reimbursement certain fund accounting and legal expenses arrangement is voluntary and may be incurred on behalf of the Fund and pays a discontinued at any time. You also indirectly separate shareholder servicing/transfer bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer. expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.56%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.85% of the 0.79% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct and A shares and 1.64% of average daily net indirect expenses were 2.04% of average assets attributable to Class B shares. There daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.30%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.53% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct and expenses of the underlying funds indirectly indirect expenses were 2.78% of average incurred by a shareholder. daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.51%, and without giving effect to the expense limitation, were 0.74% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.94% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into If the account is established in the selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - ------------------------------------------------------------------------------------------------------------------------ Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. investment requirements for the Fund into which you are exchanging. Exchanges from one fund After you establish an eligible fund account, to another are taxable. Class A shares may be you can exchange Fund shares by telephone exchanged for Class I shares of the same Fund or online. or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Pioneer Ibbotson Aggressive Aggressive Growth Portfolio Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ----------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a Fund or a Fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the Fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the Fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the Fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 31 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return 32 High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Aggressive Growth Portfolio. The bar charts show how AmSouth Strategic Portfolios: Aggressive Growth Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Aggressive Growth Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 1.50 -9.40 -22.32 28.31 11.13
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 15.61% for the quarter ended June 30, 2003, and the lowest quarterly return was -19.18% for the quarter ended September 30, 2002. 33 Pioneer Ibbotson Aggressive Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Growth Allocation Portfolio began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The Fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Aggressive Growth Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ----------------------------------------------------------------------------------------------------------------------------- Since Inception 1 Year 5 Years (2/1/99) - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class A Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 5.01% -0.77% 1.99% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 4.96% -1.62% 1.77% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 3.25% -0.97% 1.38% - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class B Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 5.37% -0.74% 2.00% - ----------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Aggressive Growth Portfolio, Class I Shares - ----------------------------------------------------------------------------------------------------------------------------- Return Before Taxes 11.14% 0.40% 2.93% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 11.08% -0.47% 2.08% - ----------------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 7.24% 0.01% 2.17% - ----------------------------------------------------------------------------------------------------------------------------- S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - -----------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Aggressive Growth Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Aggressive Growth Portfolio, the expenses of AmSouth Strategic Portfolios: Aggressive Growth Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Aggressive Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. The tables also show the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005. 34
AmSouth AmSouth Strategic Pioneer Strategic Portfolios: Ibbotson Portfolios: Aggressive Aggressive Combined Aggressive Growth Allocation Fund Growth Portfolio(1) Fund (Pro Forma) Portfolio Shareholder transaction fees Class A Class A Class A Class B (paid directly from your investment) ----------- ---------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less .......................................... None None None 5.00%(3) Redemption fees ................................... 2.00%(4) None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee .................................... 0.20% 0.17% 0.17% 0.20% Distribution and service (12b-1) fee .............. None 0.25% 0.25% 0.75% Other expenses(5) ................................. 0.71% 0.78% 0.48% 0.68% Estimated indirect expenses ....................... 1.62% 0.81% 1.00%(8) 2.37% Total fund operating expenses ..................... 2.53% 2.01%(6) 1.90% 4.00% Expense reimbursement/reduction ................... 0.35% 0.27% 0.05% 0.38% Net fund operating expenses ....................... 2.18% 1.74% 1.85% 3.62% AmSouth Pioneer Strategic Ibbotson Portfolios: Aggressive Combined Aggressive Combined Allocation Fund Growth Fund Fund (Pro Forma) Portfolio (Pro Forma) Shareholder transaction fees Class B Class B Class I Class Y(7) (paid directly from your investment) ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less .......................................... 4.00% 4.00% None None Redemption fees ................................... None None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee .................................... 0.17% 0.17% 0.20% 0.17% Distribution and service (12b-1) fee .............. 1.00% 1.00% None None Other expenses(5) ................................. 0.92% 0.70% 0.59% 0.30% Estimated indirect expenses ....................... 0.81% 1.00%(8) 1.57% 1.00%(8) Total fund operating expenses ..................... 2.90%(6) 2.87% 2.36% 1.47% Expense reimbursement/reduction ................... 0.27% 0.23% 0.31% N/A Net fund operating expenses ....................... 2.63% 2.64% 2.05% 1.47%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Approximately eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.36% for Class A shares, 0.36% for Class B shares and 0.31% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.85% of the average daily net assets attributable to Class A shares and 1.64% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (7) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.85%, and the pro forma combined net expenses for the Pioneer Fund would be 1.70%, 2.49% and 1.32% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future. 35
- --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Pioneer Portfolios: Ibbotson Aggressive Aggressive Combined Growth Allocation Fund Number of years you own your shares Portfolio Fund (Pro Forma) - --------------------------------------------------------------------------------------------------------------------- Class A - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 758 $ 742 $ 752 - --------------------------------------------------------------------------------------------------------------------- Year 3 $1,192 $1,091 $1,123 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,650 N/A $1,529 - --------------------------------------------------------------------------------------------------------------------- Year 10 $2,916 N/A $2,657 - --------------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 798 $ 666 $ 667 - --------------------------------------------------------------------------------------------------------------------- Year 3 $1,213 $1,172 $1,167 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,752 N/A $1,693 - --------------------------------------------------------------------------------------------------------------------- Year 10 $3,087 N/A $2,948 - --------------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 298 $ 266 $ 267 - --------------------------------------------------------------------------------------------------------------------- Year 3 $ 913 $ 872 $ 867 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,552 N/A $1,493 - --------------------------------------------------------------------------------------------------------------------- Year 10 $3,087 N/A $2,948 - --------------------------------------------------------------------------------------------------------------------- Class I Class Y - --------------------------------------------------------------------------------------------------------------------- Year 1 $ 211 N/A $ 150 - --------------------------------------------------------------------------------------------------------------------- Year 3 $ 652 N/A $ 465 - --------------------------------------------------------------------------------------------------------------------- Year 5 $1,119 N/A $ 803 - --------------------------------------------------------------------------------------------------------------------- Year 10 $2,410 N/A $1,757 - ---------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Aggressive Growth Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U. S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Aggressive Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B 36 shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. In addition, the broader distribution arrangements of the Pioneer Fund offer greater potential for further asset growth and reduce per share expenses. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, The transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
AmSouth Strategic Pioneer Portfolios: Pioneer Ibbotson Aggressive Ibbotson Aggressive Growth Aggressive Allocation Fund Portfolio Fund Allocation Fund (Pro Forma) May 31, 2005 May 31, 2005 May 31, 2005 -------------- --------------- --------------- Total Net Assets (in thousands) ......... $53,136 $24,987 $78,123 Class A shares ......................... $22,953 $14,975 $37,928 Class B shares ......................... $15,156 $ 4,269 $19,425 Class I/Y shares ....................... $15,028 N/A $15,028 Net Asset Value Per Share Class A shares ......................... $ 9.60 $ 11.21 $ 11.21 Class B shares ......................... $ 9.19 $ 10.82 $ 10.82 Class I shares ......................... $ 9.60 N/A $ 11.21 Shares Outstanding Class A shares ......................... 2,391,779 1,335,779 3,383,164 Class B shares ......................... 1,649,291 394,722 1,795,948 Class I/Y shares ....................... 1,565,894 N/A 1,340,485
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. 37 BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 38 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 39 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 40 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 41 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 42 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. 43 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer 44 Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. 45 Investment Adviser Pioneer Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 46 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 47 AmSouth Strategic Portfolios: Growth Portfolio and Pioneer Ibbotson Growth Allocation Fund PROPOSAL 1(c) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Growth Portfolio to Pioneer Ibbotson Growth Allocation Fund
- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ---------------------------------------------------------------------------------------------------------------------- Net assets as of $64.9 million $32.8 million March 31, 2005 - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of the AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Growth Portfolio is ("Ibbotson") the responsibility of the AmSouth Strategy Committee, and no person is primarily Portfolio Managers: responsible for making recommendations Day-to-day management of Pioneer to the Committee. The Committee members Ibbotson Growth Allocation Fund is the consist of John P. Boston, CFA, Fred Crown, responsibility of portfolio managers and CFA, Paige B. Daniel, David M. Dasari, CFA, members of Ibbotson's Investment Joseph T. Keating, Ronald E. Lindquist, Committee headed by Roger Ibbotson. John Mark McKenzie, Matt Smith, CFA, Roger Ibbotson founded Ibbotson in 1977 Brian B. Sullivan, CFA, Doug S. Williams and is the firm's Chairman. Peng Chen, and Jason Waters. Ph.D., managing director and chief investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 and managing director, manages the investment (continued) has been associated with AAMI since 1996. management services and data products Mr. Boston received his CFA charter in 1993 group for Ibbotson. Scott Wentsel, senior and is an active member and past president of portfolio manager, is responsible for the Alabama Society of Financial Analysts. He management of the firm's fund- of- also serves as the portfolio manager for the funds business which includes oversight AmSouth High Quality Bond Fund. Mr. Boston of its investment management staff and is a Senior Vice President of AmSouth Bank process. Alexander E. Kaye, portfolio and Vice President of AAMI. manager, is responsible for managing the delivery of fund-of-funds programs for Mr. Crown has been employed with AmSouth institutional and retail clients, which Bank since 1982 and AAMI since 2001. He includes asset allocation modeling, portfolio was an Institutional Fund Manager with AAMI construction, fund classification and (2001-2003) and has been a Regional manager due diligence. Brian Huckstep, Manager since 2003. Mr. Crown is a Senior portfolio manager, is responsible for Vice President of AmSouth Bank. managing the delivery of fund-of-funds programs for institutional and retail clients, Ms. Daniel has been employed with AmSouth which includes asset allocation modeling, Bank since 1999. She has been employed by portfolio construction, fund classification, AAMI as the Director of Alternative Strategies and manager due diligence. since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. Mr. Lindquist has been employed with AAMI since December 1999. Prior to December 1999, Mr. Lindquist was employed by First American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. McKenzie has been involved in and portfolio investment management since 1981, with managers portfolio management expertise in both (continued) equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. Mr. Williams has been employed with AmSouth Bank since 2002. He has been employed as a Regional Manager with AAMI since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund Portfolio seeks to provide investors with seeks long-term capital growth and income. long term capital growth. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Growth Portfolio: AmSouth Strategic Portfolios: Growth Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-15% AmSouth Enhanced Market Fund 0-20% AmSouth Large Cap Fund 0-15% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-15% AmSouth Small Cap Fund 0-15% AmSouth International Equity Fund 0-15% AmSouth Government Income Fund 0-15% AmSouth High Quality Bond Fund 0-45% AmSouth Limited Term Bond Fund 0-15% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Growth Portfolio's shareholders. Pioneer Ibbotson Growth Allocation Fund: Because this is a moderate growth allocation fund, Pioneer Ibbotson Growth Allocation Fund's assets will be invested in equity and bond funds, although a small portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Growth Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 70-80% 20-30% - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-25% Pioneer Research Fund 0-25% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-25% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-25% Pioneer Oak Ridge Large Cap Growth Fund 0-25% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-25% Pioneer Value Fund 0-25% Pioneer Mid Cap Growth Fund 0-25% Pioneer Mid Cap Value Fund 0-25% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-25% Pioneer Oak Ridge Small Cap Growth Fund 0-25% Pioneer Small Cap Value Fund 0-25% Pioneer International Equity Fund 0-25% Pioneer International Value Fund 0-25% Pioneer Europe Select Fund 0-25% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-20% Pioneer Cash Reserves Fund 0-20% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Growth Pioneer Ibbotson Growth Allocation Fund Portfolio may not borrow money or issue may not borrow money, except on a senior securities, except that the Fund may temporary basis and to the extent permitted borrow from banks or enter into reverse by applicable law, the Fund may: (a) borrow repurchase agreements for temporary from banks or through reverse repurchase emergency purposes in amounts up to agreements in an amount up to 33 1/3% of 33 1/3% of the value of its total assets at the the Fund's total assets (including the time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an Portfolios: Growth Portfolio will not additional 5% of the Fund's assets for purchase securities while borrowings temporary purposes; (c) obtain such short- (including reverse repurchase agreements) term credits as are necessary for the in excess of 5% of its total assets are clearance of portfolio transactions; (d) outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e) Portfolios: Growth Portfolio is permitted to engage in transactions in mortgage dollar participate in a credit facility whereby the rolls that are accounted for as financings. Fund may directly lend to and borrow money from another AmSouth Fund for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ---------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ---------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ---------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year There is no CDSC, except in certain of purchase. circumstances when the initial sales charge is waived. Class A shares pay a shareholder servicing fee (non 12b-1) of up to 0.25% of average Class A shares are subject to distribution daily net assets. and service (12b-1) fees of up to 0.25% of average daily net assets. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC of sales charge, but are subject to CDSC of up 12b-1 fees up to 5%. For Class B shares issued to to 2% if you sell your shares. The charge is former ISG Funds shareholders in reduced over time and is not charged after connection with the combination of five years. Your investment firm may receive AmSouth Funds with ISG Funds, the CDSC a commission from PFD, the Fund's on such Class B shares held continuously distributor, at the time of your purchase of declines over six years, starting with year up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ---------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Growth The Fund does not impose any initial, sales charges and Portfolio does not impose any initial or contingent deferred or asset based sales Rule 12b-1 fees CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of of average daily net assets. which are reimbursed by the Fund or the Class Y shareowners. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Growth The management fee payable by Pioneer other fees Portfolio pays an advisory fee on a monthly Ibbotson Growth Allocation Fund is equal to basis at an annual rate of 0.20% of the 0.13% of average daily net assets Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") serves cash and 0.17% of average daily net assets as administrator and fund accounting agent attributable to other investments, including for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of Pioneer, with breakpoints at incremental the Fund's average daily net assets. asset levels. Since currently all of the underlying funds are managed by Pioneer, For the fiscal year ended July 31, 2004, the management fee will initially be 0.13% other expenses of the Fund were limited to of average daily net assets. 0.30% for Class A shares, 0.29% for Class In addition, the Fund reimburses Pioneer for B shares and 0.25 % for Class I shares. certain fund accounting and legal expenses Any fee waiver or expense reimbursement incurred on behalf of the Fund and pays a arrangement is voluntary and may be separate shareholder servicing/transfer discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer. bear a pro rata share of the fees and expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.50%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.79% of the 0.73% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct A shares and 1.57% of average daily net and indirect expenses were 1.92% of assets attributable to Class B shares. There average daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.24%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.47% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct expenses of the underlying funds indirectly and indirect expenses were 2.66% of incurred by a shareholder. average daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.45%, and without giving effect to the expense limitation, were 0.68% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.82% of average daily net assets. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into selling If the account is established in the agreements with the Fund's distributor, as shareholder's own name, shareholders may described in the Fund's prospectus. also purchase additional shares of the Fund by telephone or online. Certain account transactions may be done by telephone. - ---------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund for You may exchange your shares for shares shares of the same class of another AmSouth of the same class of another Pioneer mutual fund, usually without paying additional sales fund. Your exchange request must be for at charges. You must meet the minimum least $1,000. investment requirements for the Fund into which you are exchanging. Exchanges from After you establish an eligible fund account, one fund to another are taxable. Class A you can exchange fund shares by telephone shares may be exchanged for Class I shares or online. of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ----------------------------------------------------------------------------------------------------------------------
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- ---------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio Pioneer Ibbotson Growth Allocation Fund - ---------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ---------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - ----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a fund or a fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the Fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 57 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the Fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the Fund's return 58 High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Growth Portfolio. The bar charts show how AmSouth Strategic Portfolios: Growth Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Growth Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 0.59 -5.77 -13.63 21.84 8.92
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 11.62% for the quarter ended June 30, 2003, and the lowest quarterly return was -12.73% for the quarter ended September 30, 2002. 59 Pioneer Ibbotson Growth Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Growth Allocation Portfolio began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Growth Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- --------------------------------------------------------------------------------------------------------------------- Since Inception 1 Year 5 Years (2/1/99) - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class A Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 2.89% 0.52% 1.90% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 2.61% -0.44% 0.94% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 1.88% -0.07% 1.10% - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class B Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 3.11% 0.55% 2.19% - --------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth Portfolio, Class I Shares - --------------------------------------------------------------------------------------------------------------------- Return Before Taxes 9.13% 1.74% 2.90% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions 8.83% 0.76% 1.91% - --------------------------------------------------------------------------------------------------------------------- Return After Taxes on Distributions and Sale of Fund Shares 5.93% 0.96% 1.94% - --------------------------------------------------------------------------------------------------------------------- S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ---------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only; it does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Growth Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth Portfolio, the expenses of AmSouth Strategic Portfolios: Growth Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Growth Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. The tables also show the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005. 60
AmSouth Pioneer AmSouth Strategic Ibbotson Strategic Portfolios Growth Combined Portfolios Growth Allocation Fund Growth Portfolio(1) Fund (Pro Forma) Portfolio Shareholder transaction fees Class A Class A Class A Class B (paid directly from your investment) ---------- ---------- ----------- ---------- Maximum sales charge (load) when you buy shares as a percentage of offering price ...... 5.50%(2) 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ....................................... None None None 5.00%(3) Redemption fees ................................ 2.00%(4) None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ................................. 0.20% 0.17% 0.17% 0.20% Distribution and service (12b-1) fee ........... None 0.25% 0.25% 0.75% Other expenses(5) .............................. 0.64% 0.70% 0.45% 0.65% Estimated indirect expenses .................... 1.52% 0.78% 0.99%(8) 2.26% Total fund operating expenses6 ................. 2.36% 1.90%(6) 1.86% 3.86% Expense reimbursement/reduction ................ 0.33% 0.19% 0.08% 0.35% Net fund operating expenses .................... 2.03% 1.71% 1.78% 3.51% Pioneer AmSouth Ibbotson Strategic Growth Combined Portfolios Combined Allocation Fund Growth Fund Fund (Pro Forma) Portfolio (Pro Forma) Shareholder transaction fees Class B Class B Class I Class Y(7) (paid directly from your investment) ---------- ----------- ---------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ...... None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ....................................... 4.00% 4.00% None None Redemption fees ................................ None None 2.00%(4) None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ................................. 0.17% 0.17% 0.20% 0.17% Distribution and service (12b-1) fee ........... 1.00% 1.00% None None Other expenses(5) ............................. 0.86% 0.67% 0.60% 0.27% Estimated indirect expenses .................... 0.78% 0.99%(8) 1.47% 0.99%(8) Total fund operating expenses(6) ............... 2.81%(6) 2.83% 2.27% 1.43% Expense reimbursement/reduction ................ 0.19% 0.27% 0.34% N/A Net fund operating expenses .................... 2.62% 2.56% 1.93% 1.43%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.31% for Class A shares, 0.30% for Class B shares and 0.26% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.79% of the average daily net assets attributable to Class A shares and 1.57% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (7) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (8) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.81%, and the pro forma combined net expenses for the Pioneer Fund would be 1.60%, 2.38% and 1.25% for Class A, Class B and Class Y shares, respectively. 61 The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- -------------------------------------------------------------------------------------------------------------- AmSouth Pioneer Strategic Ibbotson Portfolios: Growth Combined Growth Allocation Fund Number of years you own your shares Portfolio Fund (Pro Forma) - -------------------------------------------------------------------------------------------------------------- Class A - -------------------------------------------------------------------------------------------------------------- Year 1 $ 747 $ 739 $ 745 - -------------------------------------------------------------------------------------------------------------- Year 3 $1,157 $1,120 $1,103 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,593 N/A $1,501 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,798 N/A $2,610 - -------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - -------------------------------------------------------------------------------------------------------------- Year 1 $ 784 $ 665 $ 659 - -------------------------------------------------------------------------------------------------------------- Year 3 $1,171 $1,153 $1,152 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,684 N/A $1,670 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,957 N/A $2,906 - -------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - -------------------------------------------------------------------------------------------------------------- Year 1 $ 284 $ 265 $ 259 - -------------------------------------------------------------------------------------------------------------- Year 3 $ 871 $ 853 $ 852 - -------------------------------------------------------------------------------------------------------------- Year 5 $1,484 N/A $1,470 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,957 N/A $2,906 - -------------------------------------------------------------------------------------------------------------- Class I Class Y - -------------------------------------------------------------------------------------------------------------- Year 1 $ 204 N/A $ 146 - -------------------------------------------------------------------------------------------------------------- Year 3 $ 630 N/A $ 452 - -------------------------------------------------------------------------------------------------------------- Year 5 $ 1083 N/A $ 782 - -------------------------------------------------------------------------------------------------------------- Year 10 $2,338 N/A $1,713 - --------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Growth Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Growth Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after 62 giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005.
Pioneer Ibbotson AmSouth Strategic Pioneer Ibbotson Growth Portfolios: Growth Growth Allocation Fund Portfolio Fund Allocation Fund (Pro Forma) May 31, 2005 May 31, 2005 May 31, 2005 ------------------ ---------------- ---------------- Total Net Assets (in thousands) $68,258 $44,509 $112,765 Class A shares .............. $30,461 $24,395 $ 54,855 Class B shares .............. $29,483 $ 7,898 $ 37,380 Class I/Y shares ............ $ 8,314 N/A $ 8,314 Net Asset Value Per Share Class A shares .............. $ 9.72 $ 10.99 $ 10.99 Class B shares .............. $ 9.59 $ 10.06 $ 10.06 Class I/Y shares ............ $ 9.76 N/A $ 10.99 Shares Outstanding Class A shares .............. 3,134,755 2,220,131 4,992,340 Class B shares .............. 3,075,573 785,240 3,716,617 Class I/Y shares ............ 851,792 N/A 756,607
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 63 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 64 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 65 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 66 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 67 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 68 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 69 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 70 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 71 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 72 AmSouth Strategic Portfolios: Growth and Income Portfolio and Pioneer Ibbotson Moderate Allocation Fund PROPOSAL 1(d) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer Funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Growth and Income Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - ----------------------------------------------------------------------------------------------------------------------- Net assets as of $112.5 million $34.3 million March 31, 2005 - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Growth & Income ("Ibbotson") Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 managing director, manages the investment (continued) and has been associated with AAMI since management services and data products 1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior in 1993 and is an active member and past portfolio manager, is responsible for president of the Alabama Society of management of the firm's fund- of- Financial Analysts. He also serves as the funds business which includes oversight of portfolio manager for the AmSouth High its investment management staff and Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio Vice President of AmSouth Bank and Vice manager, is responsible for managing the President of AAMI. delivery of fund-of-funds programs for institutional and retail clients, which Mr. Crown has been employed with includes asset allocation modeling, portfolio AmSouth Bank since 1982 and AAMI since construction, fund classification and 2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep, with AAMI (2001-2003) and has been a portfolio manager, is responsible for Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds a Senior Vice President of AmSouth Bank. programs for institutional and retail clients, which includes asset allocation modeling, Ms. Daniel has been employed with portfolio construction, fund classification, AmSouth Bank since 1999. She has been and manager due diligence. employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. Mr. Lindquist has been employed with AAMI since December 1999. Prior to December 1999, Mr. Lindquist was employed by First American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment advisers are predecessors of AmSouth Bank and and portfolio affiliates of AAMI. He also serves as the managers portfolio manager for the AmSouth Large (continued) Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. Mr. Williams has been employed with AmSouth Bank since 2002. He has been employed as a Regional Manager with AAMI since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund Income Portfolio seeks to provide investors seeks long-term capital growth and current with long-term capital growth and a income. moderate level of current income. - ----------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Growth and Income Portfolio: AmSouth Strategic Portfolios: Growth and Income Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-10% AmSouth Enhanced Market Fund 0-15% AmSouth Large Cap Fund 0-10% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-10% AmSouth Small Cap Fund 0-10% AmSouth International Equity Fund 0-10% AmSouth Government Income Fund 0-20% AmSouth High Quality Bond Fund 0-60% AmSouth Limited Term Bond Fund 0-20% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Growth and Income Portfolio's shareholders. Pioneer Ibbotson Moderate Allocation Fund: Because this is a moderate allocation fund, Pioneer Ibbotson Moderate Allocation Fund's assets will be invested in equity and bond funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Moderate Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 55-65% 35-45% - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the Fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-20% Pioneer Research Fund 0-20% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-20% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-20% Pioneer Oak Ridge Large Cap Growth Fund 0-20% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-20% Pioneer Value Fund 0-20% Pioneer Mid Cap Growth Fund 0-20% Pioneer Mid Cap Value Fund 0-20% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-20% Pioneer Oak Ridge Small Cap Growth Fund 0-20% Pioneer Small Cap Value Fund 0-20% Pioneer International Equity Fund 0-20% Pioneer International Value Fund 0-20% Pioneer Europe Select Fund 0-20% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-25% Pioneer Cash Reserves Fund 0-20% The Pioneer Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Growth and Pioneer Ibbotson Moderate Allocation Fund Income Portfolio may not borrow money or may not borrow money, except on a issue senior securities, except that the Fund temporary basis and to the extent permitted may borrow from banks or enter into by applicable law, the Fund may: (a) borrow reverse repurchase agreements for temporary from banks or through reverse repurchase emergency purposes in amounts up to 33 1/3% agreements in an amount up to 33 1/3% of of the value of its total assets at the the Fund's total assets (including the time of such borrowing. AmSouth Strategic amount borrowed); (b) borrow up to an Portfolios: Growth and Income Portfolio will additional 5% of the Fund's assets for not purchase securities while borrowings temporary purposes; (c) obtain such short- (including reverse repurchase agreements) term credits as are necessary for the in excess of 5% of its total assets are clearance of portfolio transactions; (d) outstanding. In addition, AmSouth Strategic purchase securities on margin; and (e) Portfolios: Growth and Income Portfolio is engage in transactions in mortgage dollar permitted to participate in a credit facility rolls that are accounted for as financings. whereby the Fund may directly lend to and borrow money from other AmSouth funds for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - ----------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - ----------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - ----------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with an initial charges and Rule sales charge of up to 5.50% of the offering sales charge of up to 5.75% of the offering 12b-1 fees price, which is reduced depending upon the price, which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of 12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The to former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after three years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding in the ISG combination), Class B shares period, CDSC and commission schedules automatically convert to Class A shares. applicable to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of 0.75% of up to average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - ----------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Growth and The Fund does not impose any initial, sales charges and Income Portfolio does not impose any initial contingent deferred or asset based sales Rule 12b-1 fees or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Growth and The management fee payable by Pioneer other fees Income Portfolio pays an advisory fee on a Ibbotson Moderate Allocation Fund is equal monthly basis at an annual rate of 0.20% of to 0.13% of average daily net assets the Fund's average daily net assets. attributable to the Fund's investments in underlying funds managed by Pioneer and ASO Services Company, Inc. ("ASO") cash and 0.17% of average daily net assets serves as administrator and fund accounting attributable to other investments, including agent for the Fund. The Fund pays ASO an underlying funds that are not managed by administrative services fee of 0.15% of the Pioneer, with breakpoints at incremental Fund's average daily net assets. asset levels. Since currently all of the underlying funds are managed by Pioneer, For the fiscal year ended July 31, 2004, the management fee will initially be 0.13% other expenses of the Fund were limited to of average daily net assets. 0.33% for Class A shares, 0.33% for Class B shares and 0.28% for Class I shares. Any In addition, the Fund reimburses Pioneer for fee waiver or expense reimbursement certain fund accounting and legal expenses arrangement is voluntary and may be incurred on behalf of the Fund and pays a discontinued at any time. You also indirectly separate shareholder servicing/transfer bear a pro rata share of the fees and agency fee to PIMSS, an affiliate of Pioneer. expenses of the underlying funds. Pioneer has contractually agreed not to For the fiscal year ended July 31, 2004, the impose all or a portion of its fees or to limit Fund's annual operating expenses for Class other direct ordinary operating expenses to A shares, after giving effect to the expense the extent required to reduce expenses, limitation were 0.53%, and without giving other than "Estimated average expense ratio effect to the expense limitation, were of underlying funds," to 0.74% of the 0.66% of average daily net assets. As of average daily net assets attributable to Class January 12, 2005, estimated total direct A shares and 1.64% of average daily net and indirect expenses were 1.81% of assets attributable to Class B shares. There average daily net assets. is no expense limitation with respect to the Class Y shares. This expense limitation is in For the fiscal year ended July 31, 2004, the effect for Class A shares until December 1, Fund's annual operating expenses for Class 2008 and in effect for Class B shares until B shares, after giving effect to the expense December 1, 2006. There can be no limitation were 1.28%, and without giving assurance that Pioneer will extend these effect to the expense limitation, were expense limitations past such dates. The 1.41% of average daily net assets. As of expense limitation does not limit the January 12, 2005, estimated total direct expenses of the underlying funds indirectly and indirect expenses were 2.56% of incurred by a shareholder. average daily net assets. Class Y shares of the Pioneer Fund are For the fiscal year ended July 31, 2004, the being offered for the first time in connection Fund's annual operating expenses for Class with the Reorganization. I shares, after giving effect to the expense limitation were 0.48%, and without giving effect to the expense limitation, were 0.61% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.74% of average daily net assets. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered If the account is established in the into selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - ----------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares for shares of the same class of another of the same class of another Pioneer mutual AmSouth fund, usually without paying fund. Your exchange request must be for at additional sales charges. You must meet the least $1,000. minimum investment requirements for the Fund into which you are exchanging. After you establish an eligible fund account, Exchanges from one fund to another are you can exchange Fund shares by telephone taxable. Class A shares may be exchanged or online. for Class I shares of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - -----------------------------------------------------------------------------------------------------------------------
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- ----------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - ----------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - ----------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Fund by telephone or online. - -----------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a fund or a fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 82 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: 83 o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Growth and Income Portfolio. The bar charts show how AmSouth Strategic Portfolios: Growth and Income Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar charts give an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Growth and Income Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION OF THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 4.21 -2.29 -8.54 17.38 7.39
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 9.52% for the quarter ended June 30, 2003, and the lowest quarterly return was -8.83% for the quarter ended September 30, 2002. 84 Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Moderate Allocation Fund began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Growth and Income Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------ Since Inception 1 Year 5 Years (1/27/99) - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class A Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 1.46% 2.10% 2.69% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 0.98% 0.95% 1.61% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 0.94% 1.18% 1.71% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class B Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 1.77% 2.16% 3.00% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Growth and Income Portfolio, Class I Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 7.51% 3.32% 4.22% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 7.00% 2.14% 3.11% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 4.87% 2.21% 3.02% - ------------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ------------------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500 Index, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Growth and Income Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Growth and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Growth and Income Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Moderate Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. Shareholders of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio are also being asked to approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund. The tables also show (1) the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005 and (2) the pro forma expenses of the combined Fund assuming the reorganization of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31, 2005. 85
Combined Fund (including AmSouth AmSouth AmSouth Strategic Pioneer Moderate Strategic Portfolios Ibbotson Growth Portfolios Growth Moderate Combined and Income Growth and Income Allocation Fund Portfolio) and Income Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio fees (paid directly Class A Class A Class A Class A Class B from your investment) ------------ ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... None None None None 5.00%(3) Redemption fees ............ 2.00%(4) None None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20% Distribution and service (12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75% Other expenses(5) .......... 0.57% 0.68% 0.38% 0.35% 0.61% Estimated indirect expenses .................. 1.50% 0.68% 0.92%(9) 0.92%(9) 2.24% Total fund operating expenses .................. 2.27% 1.78%(7) 1.72% 1.69% 3.05% Expense reimbursement/ reduction ................. 0.25% 0.20% 0.06% 0.03% 0.30% Net fund operating expenses .................. 2.02% 1.58% 1.66% 1.66% 2.75% Combined Combined Fund Fund (including (including AmSouth AmSouth AmSouth Pioneer Moderate Strategic Moderate Ibbotson Growth Portfolios Growth Moderate Combined and Income Growth Combined and Income Allocation Fund Portfolio) and Income Fund Portfolio) Shareholder transaction Fund (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma) fees (paid directly Class B Class B Class B Class I Class Y(8) Class Y(8) from your investment) ------------ ------------- ------------- ------------ ------------- ------------ Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... 4.00% 4.00% 4.00% None None None Redemption fees ............ None None None 2.00%(4) None None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6) Distribution and service (12b-1) fee ............... 1.00% 1.00% 1.00% None None None Other expenses(5) .......... 0.80% 0.60% 0.57% 0.47% 0.20% 0.15% Estimated indirect expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.45% 0.92%(9) 0.92%9 Total fund operating expenses .................. 2.65%(7) 2.69% 2.66% 2.12% 1.29% 1.24% Expense reimbursement/ reduction ................. 0.20% 0.25% 0.22% 0.20% N/A N/A Net fund operating expenses .................. 2.45% 2.44% 2.44% 1.92% 1.29% 1.24%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A Shares bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B Shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.32% for Class A shares, 0.31% for Class B shares and 0.27% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.74% of the average daily net assets attributable to Class A shares and 1.64% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The management fee payable by the Pioneer Fund is equal to 0.13% of average daily net assets attributable to the Pioneer Fund's investments in underlying funds managed by Pioneer and cash and 0.17% of average daily net assets attributable to other investments, including underlying funds that are not 86 managed by Pioneer, with breakpoints at incremental asset levels. Since initially all of the underlying funds are managed by Pioneer, the management fee will initially be 0.13% of average daily net assets. (7) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (8) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.73%, and the pro forma combined net expenses for the Pioneer Fund (assuming the reorganization of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- ---------------------------------------------------------------------------------------------------------------------------------- AmSouth Combined Fund Strategic Pioneer (including AmSouth Portfolios: Ibbotson Strategic Portfolios: Growth & Moderate Combined Moderate Growth & Income Allocation Fund Income Portfolio) Number of years you own your shares Portfolio Fund (Pro Forma) (Pro Forma) - ---------------------------------------------------------------------------------------------------------------------------------- Class A - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 737 $ 726 $ 734 $ 734 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $1,129 $1,085 $1.068 $1.068 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,544 N/A $1,432 $1,432 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,700 N/A $2,450 $2,450 - ---------------------------------------------------------------------------------------------------------------------------------- Class B -- assuming redemption at end of period - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 777 $ 648 $ 647 $ 647 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $1,150 $1,104 $1,106 $1,106 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,650 N/A $1,590 $1,590 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,881 N/A $2,741 $2,741 - ---------------------------------------------------------------------------------------------------------------------------------- Class B -- assuming no redemption - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 277 $ 248 $ 247 $ 247 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $ 850 $ 804 $ 806 $ 806 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $1,450 N/A $1,390 $1,390 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,881 N/A $2,741 $2,741 - ---------------------------------------------------------------------------------------------------------------------------------- Class I Class Y - ---------------------------------------------------------------------------------------------------------------------------------- Year 1 $ 188 N/A $ 131 $ 126 - ---------------------------------------------------------------------------------------------------------------------------------- Year 3 $ 582 N/A $ 409 $ 393 - ---------------------------------------------------------------------------------------------------------------------------------- Year 5 $ 1001 N/A $ 708 $ 681 - ---------------------------------------------------------------------------------------------------------------------------------- Year 10 $2,169 N/A $1,556 $1,500 - ----------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Growth & Income Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your Amsouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. 87 Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the Securities and Exchange Commission, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Although the Reorganization will result in a per share decrease in capital loss carryforwards, the potential negative tax consequences of this aspect of the Reorganization are outweighed by the advantages of the Reorganization. The Reorganization will also result in a per share decrease in net unrealized capital gains. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. 88 CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also sets forth the pro forma capitalization of the combined Fund as of May 31, 2005, assuming the shareholders of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund.
Pro Forma Pioneer Ibbotson Moderate Allocation Fund Pro Forma (including AmSouth AmSouth Strategic Pioneer Ibbotson Pioneer Ibbotson Strategic Portfolios: Portfolios: Growth and Moderate Moderate Moderate Growth and Income Portfolio Fund Allocation Fund Allocation Fund Income Portfolio) May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005 --------------------- ---------------- ---------------- --------------------- Total Net Assets (in thousands) ......... $113,640 $45,791 $159,430 $211,011 Class A shares ......................... $ 55,716 $26,035 $ 81,751 $105,349 Class B shares ......................... $ 19,098 $ 7,824 $ 26,923 $ 40,751 Class I/Y shares ....................... $ 38,825 N/A $ 38,825 $ 52,979 Net Asset Value Per Share Class A shares ......................... $ 10.09 $ 10.77 $ 10.77 $ 10.77 Class B shares ......................... $ 10.05 $ 10.42 $ 10.42 $ 10.42 Class I/Y shares ....................... $ 10.13 N/A $ 10.77 $ 10.77 Shares Outstanding Class A shares ......................... 5,521,241 2,417,639 7,591,546 9,782,884 Class B shares ......................... 1,900,376 751,050 2,584,294 3,911,684 Class I/Y shares ....................... 3,832,756 N/A 3,605,325 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 89 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 90 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 91 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 92 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 93 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 94 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 95 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 96 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 97 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 98 AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio and Pioneer Ibbotson Moderate Allocation Fund PROPOSAL 1(e) Approval of Agreement and Plan of Reorganization SUMMARY The following is a summary of more complete information appearing later in this Proxy Statement/Prospectus or incorporated herein. You should read carefully the entire Proxy Statement/Prospectus, including the exhibits, which include additional information that is not included in the summary and are a part of the Proxy Statement/Prospectus. Exhibit A-1 is the form of Agreement and Plan of Reorganization. Exhibit B includes some additional information regarding Pioneer. The most recent portfolio manager's discussion of each Fund's performance is attached as Exhibit C. Each Fund is structured as a "fund of funds," which means all of its assets are invested in other mutual funds ("underlying funds"). Your Fund invests only in other AmSouth funds. Currently, the Pioneer Fund only invests in other Pioneer funds but is seeking an exemptive order from the Securities and Exchange Commission that would permit the Pioneer Fund to invest, in addition, in mutual funds that are not managed by Pioneer. To the extent that Pioneer receives an order from the Securities and Exchange Commission that permits Pioneer to invest in such other non-Pioneer underlying funds, Pioneer and the Pioneer Fund intend to rely on such order, subject to any applicable conditions of the order. In the table below, if a row extends across the entire table, the policy disclosed applies to both your AmSouth Fund and the Pioneer Fund. Comparison of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio to Pioneer Ibbotson Moderate Allocation Fund
- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Business A diversified series of AmSouth Funds, an A series of Pioneer Ibbotson Asset open-end management investment company Allocation Series, a diversified open-end organized as a Massachusetts business management investment company organized trust. as a Delaware statutory trust. - --------------------------------------------------------------------------------------------------------------------------- Net assets as of $50.6 million $34.3 million March 31, 2005 - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Investment Adviser: Investment Adviser: and portfolio AAMI Pioneer managers Portfolio Manager: Investment Subadviser: Day-to-day management of AmSouth Ibbotson Associates Advisors, LLC Strategic Portfolios: Moderate Growth & ("Ibbotson") Income Portfolio is the responsibility of the AmSouth Strategy Committee, and no Portfolio Managers: person is primarily responsible for making Day-to-day management of Pioneer recommendations to the Committee. The Ibbotson Moderate Allocation Fund is the Committee members consist of John P. responsibility of portfolio managers and Boston, CFA, Fred Crown, CFA, Paige B. members of Ibbotson's Investment Daniel, David M. Dasari, CFA, Joseph T. Committee headed by Roger Ibbotson. Keating, Ronald E. Lindquist, John Mark Roger Ibbotson founded Ibbotson in 1977 McKenzie, Matt Smith, CFA, Brian B. and is the firm's Chairman. Peng Chen, Sullivan, CFA, Doug S. Williams and Jason Ph.D., managing director and chief Waters. investment officer at Ibbotson, conducts research projects on asset allocation, portfolio risk measurement, nontraditional assets, - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Boston is Chief Fixed Income Officer for and global financial markets. Dr. Chen and portfolio AAMI. He began his career in investment joined Ibbotson in 1997. Michael E. Annin, managers management with AmSouth Bank in 1987 managing director, manages the investment (continued) and has been associated with AAMI since management services and data products 1996. Mr. Boston received his CFA charter group for Ibbotson. Scott Wentsel, senior in 1993 and is an active member and past portfolio manager, is responsible for president of the Alabama Society of management of the firm's fund- of- Financial Analysts. He also serves as the funds business which includes oversight portfolio manager for the AmSouth High of its investment management staff and Quality Bond Fund. Mr. Boston is a Senior process. Alexander E. Kaye, portfolio Vice President of AmSouth Bank and Vice manager, is responsible for managing the President of AAMI. delivery of fund-of-funds programs for institutional and retail clients, which Mr. Crown has been employed with includes asset allocation modeling, portfolio AmSouth Bank since 1982 and AAMI since construction, fund classification and 2001. He was an Institutional Fund Manager manager due diligence. Brian Huckstep, with AAMI (2001-2003) and has been a portfolio manager, is responsible for Regional Manager since 2003. Mr. Crown is managing the delivery of fund-of-funds a Senior Vice President of AmSouth Bank. programs for institutional and retail clients, which includes asset allocation modeling, Ms. Daniel has been employed with portfolio construction, fund classification, AmSouth Bank since 1999. She has been and manager due diligence. employed by AAMI as the Director of Alternative Strategies since 2003. She is an Assistant Vice President with AmSouth Bank. Mr. Dasari has been employed with AmSouth Bank since 2002 and AAMI since 2003. He is Director of Individual Security Management for AAMI. Prior to joining AmSouth Bank, he was Assistant Vice President at Fifth Third Bank. Mr. Dasari is a Vice President of AmSouth Bank. Mr. Keating has been employed with AmSouth Bank since 2001 and AAMI since 2002. He is the Chairman and Chief Investment Officer of AAMI. Prior to 2001, he was employed as the Chief Market Strategist and Chief Fixed Income Officer of Fifth Third Bank. Mr. Keating is an Executive Vice-President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Lindquist has been employed with AAMI and portfolio since December 1999. Prior to December managers 1999, Mr. Lindquist was employed by First (continued) American National Bank (since May 1998), and by Deposit Guaranty National Bank, and Commercial National Bank (since 1978). First American National Bank, Deposit Guaranty National Bank and Commercial National Bank are predecessors of AmSouth Bank and affiliates of AAMI. He also serves as the portfolio manager for the AmSouth Large Cap Fund. Mr. Lindquist is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. McKenzie has been involved in investment management since 1981, with portfolio management expertise in both equity and fixed income securities. Mr. McKenzie co-managed the AmSouth Government Income Fund from 1999 to 2002 and managed it from 2003 to 2004. Mr. McKenzie has been associated with the Trust Investment Department of AmSouth Bank, and banks acquired by AmSouth Bank, since 1984 and joined AAMI in 2003. Mr. McKenzie is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Smith has been employed with AmSouth Bank since 1988. He has been employed by AAMI as a Regional Manager since 2004. He is a Senior Vice President with AmSouth Bank. Mr. Sullivan has been an officer of AAMI since 1996 and joined AmSouth Bank in 1984. Prior to serving as Director of Fixed Income for AmSouth Bank's Trust Department, Mr. Sullivan managed equity portfolios and held the position of equity research coordinator for AmSouth Bank's Trust Department. Mr. Sullivan is a Senior Vice President of AmSouth Bank and Vice President of AAMI. Mr. Waters has been employed with AmSouth Bank since 1999. He has been employed as an Institutional Portfolio Manager with AAMI since 2001. Mr. Williams is a Senior Vice President of AmSouth Bank. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Investment advisers Mr. Williams has been employed with and portfolio AmSouth Bank since 2002. He has been managers employed as a Regional Manager with AAMI (continued) since 2004. Prior to 2002, Mr. Williams was a Director of Portfolio Management with Fifth Third Bank (1988-2002). Mr. Williams is a Senior Vice President of AmSouth Bank. - --------------------------------------------------------------------------------------------------------------------------- Investment objective AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund Growth and Income Portfolio seeks to seeks long-term capital growth and current provide investors with current income income. and a moderate level of capital growth. - --------------------------------------------------------------------------------------------------------------------------- Primary investments Each Fund allocates its investments among underlying funds within pre-determined strategy ranges. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio: AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio allocates its assets among the following underlying funds within the ranges set forth below based upon AAMI's outlook for the economy, financial markets and relative market valuations of the underlying AmSouth Funds. Underlying Fund Allocation Range AmSouth Value Fund 0-15% AmSouth Select Equity Fund 0-10% AmSouth Enhanced Market Fund 0-15% AmSouth Large Cap Fund 0-10% AmSouth Capital Growth Fund 0-15% AmSouth Mid Cap Fund 0-10% AmSouth Small Cap Fund 0-10% AmSouth International Equity Fund 0-10% AmSouth Government Income Fund 0-25% AmSouth High Quality Bond Fund 0-70% AmSouth Limited Term Bond Fund 0-25% AmSouth Prime Money Market Fund 0-5% The selection of the underlying funds and their ranges are not fundamental and may be changed without the prior approval of AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's shareholders. Pioneer Ibbotson Moderate Allocation Fund: Because this is a moderate allocation fund, the majority of Pioneer Ibbotson Moderate Allocation Fund's assets will be invested in equity and bond funds, although a portion of its assets will be invested in cash, cash equivalents, or in money market funds. Under normal circumstances, Pioneer Ibbotson Moderate Allocation Fund initially expects to invest its assets among asset classes in the following ranges: Short-Term Equity Fund Fixed Income Fund Investments Allocation Allocation Allocation 0-5% 55-65% 35-45% - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Primary investments Based upon the analysis described under "Asset allocation process," the fund initially expects (continued) to invest its assets in underlying mutual funds within the following ranges: Fund Name Percentage of Fund Holdings Pioneer Fund 0-20% Pioneer Research Fund 0-20% Pioneer Growth Leaders Fund (formerly Pioneer Papp Stock Fund) 0-20% Pioneer Strategic Growth Fund (formerly Pioneer Papp Strategic Growth Fund) 0-20% Pioneer Oak Ridge Large Cap Growth Fund 0-20% Pioneer AmPac Growth Fund (formerly Pioneer Papp America-Pacific Rim Fund) 0-20% Pioneer Value Fund 0-20% Pioneer Mid Cap Growth Fund 0-20% Pioneer Mid Cap Value Fund 0-20% Pioneer Small and Mid Cap Growth Fund (formerly Pioneer Papp Small and Mid Cap Growth Fund) 0-20% Pioneer Oak Ridge Small Cap Growth Fund 0-20% Pioneer Small Cap Value Fund 0-20% Pioneer International Equity Fund 0-20% Pioneer International Value Fund 0-20% Pioneer Europe Select Fund 0-20% Pioneer Emerging Markets Fund 0-20% Pioneer Real Estate Shares 0-20% Pioneer High Yield Fund 0-20% Pioneer Bond Fund 0-25% Pioneer Strategic Income Fund 0-25% Pioneer Short Term Income Fund 0-25% Pioneer Cash Reserves Fund 0-20% The Fund may change its target allocation to each asset class, the underlying fund in each asset class (including adding or deleting funds) or target allocations to each underlying fund without prior approval from or notice to shareholders. Certain of the Pioneer Funds into which the AmSouth Funds are being reorganized are not currently included in the above list of funds underlying the Pioneer Fund. Pioneer and Ibbotson may determine to include such additional Pioneer Funds in the list of permitted investments for the Pioneer Fund into which your Fund is being reorganized. Alternatively, Pioneer and Ibbotson may determine to hold those additional Pioneer Funds temporarily until the Pioneer Fund's portfolio is rebalanced. Appendix A contains a summary description of each of the underlying Pioneer funds. Normally, the Fund invests substantially all of its assets in underlying funds to meet its investment objective. However, the Fund may invest a portion of its assets in cash, cash equivalents or in money market funds. The underlying funds may also invest a portion of their assets in money market funds, securities with remaining maturities of less than one year, cash equivalents or may hold cash. For temporary defensive purposes, including during periods of unusual cash flows, the Fund and each of the underlying funds may depart from its principal investment strategies and invest part or all of its assets in these securities or may hold cash. During such periods, the Fund may not be able to achieve its investment objective. The Fund intends to adopt a defensive strategy when Pioneer or Ibbotson believes securities in which the Fund normally invests have extraordinary risks due to political or economic factors and in other extraordinary circumstances. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Borrowing AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Moderate Allocation Fund Growth and Income Portfolio may not borrow may not borrow money, except on a money or issue senior securities, except temporary basis and to the extent permitted that the Fund may borrow from banks or by applicable law, the Fund may: (a) borrow enter into reverse repurchase agreements from banks or through reverse repurchase for temporary emergency purposes in agreements in an amount up to 33 1/3% of amounts up to 33 1/3% of the value of its the Fund's total assets (including the total assets at the time of such borrowing. amount borrowed); (b) borrow up to an AmSouth Strategic Portfolios: Moderate additional 5% of the Fund's assets for Growth and Income Portfolio will not temporary purposes; (c) obtain such short- purchase securities while borrowings term credits as are necessary for the (including reverse repurchase agreements) clearance of portfolio transactions; (d) in excess of 5% of its total assets are purchase securities on margin; and (e) outstanding. In addition, AmSouth Strategic engage in transactions in mortgage dollar Portfolios: Moderate Growth and Income rolls that are accounted for as financings. Portfolio is permitted to participate in a credit facility whereby the Fund may directly lend to and borrow money from another AmSouth Fund for temporary purposes, provided that the loans are made in accordance with an order of exemption from the SEC and any conditions thereto. - --------------------------------------------------------------------------------------------------------------------------- Other investment As described above, the Funds have substantially similar principal investment strategies policies and and policies. Certain of the non-principal investment policies and restrictions are different. restrictions For a more complete discussion of each Fund's other investment policies and fundamental and non-fundamental investment restrictions, see the SAI. - --------------------------------------------------------------------------------------------------------------------------- Buying, Selling and Exchanging Shares - --------------------------------------------------------------------------------------------------------------------------- Class A sales Class A shares are offered with an initial Class A shares are offered with initial sales charges and Rule sales charge of up to 5.50% of the offering charges up to 5.75% of the offering price, 12b-1 Fees price, which is reduced depending upon the which is reduced or waived for large amount invested or, in certain purchases and certain types of investors. At circumstances, waived. Class A shares the time of your purchase, your investment bought as part of an investment of $1 firm may receive a commission from million or more are not subject to an initial Pioneer Funds Distributor, Inc. ("PFD"), the sales charge, but may be charged a Fund's distributor, of up to 2% declining as contingent deferred sales charge ("CDSC") the size of your investment increases. of 1.00% if sold within one year of purchase. There is no CDSC, except in certain circumstances when the initial sales charge Class A shares pay a shareholder servicing is waived. fee (non 12b-1) of up to 0.25% of average daily net assets. Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average daily net assets. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Class B sales Class B shares are offered without an initial Class B shares are offered without an initial charges and Rule sales charge, but are subject to a CDSC sales charge, but are subject to a CDSC of 12b-1 fees of up to 5%. For Class B shares issued up to 2% if you sell your shares. The to former ISG Funds shareholders in charge is reduced over time and is not connection with the combination of charged after five years. Your investment AmSouth Funds with ISG Funds, the CDSC firm may receive a commission from PFD, on such Class B shares held continuously the Fund's distributor, at the time of your declines over six years, starting with year purchase of up to 2%. one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B Class B shares are subject to distribution shares held continuously, the CDSC declines and service (12b-1) fees of up to 1% of over six years, starting with year one and average daily net assets. ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase Class B shares acquired through the (seven years in the case of shares acquired Reorganization will retain the holding period, in the ISG combination), Class B shares CDSC and commission schedules applicable automatically convert to Class A shares. to the original purchase. Class B shares pay a shareholder servicing Maximum purchase of Class B shares in a fee (non 12b-1) of up to 0.25% of average single transaction is $49,999. daily net assets and a distribution (12b-1) fee of up to 0.75% of average daily Class B shares convert to Class A shares net assets. eight years after the date of purchase. Class B shares issued to former ISG Funds Maximum investment for all Class B shareholders will convert to Class A shares purchases by a shareholder for the Fund's seven years after the date of purchase. shares is $99,999. - --------------------------------------------------------------------------------------------------------------------------- Class I and Class Y AmSouth Strategic Portfolios: Moderate The Fund does not impose any initial, sales charges and Growth and Income Portfolio does not impose contingent deferred or asset based sales Rule 12b-1 fees any initial or CDSC on Class I shares. charge on Class Y shares. The Fund may impose a shareholder The distributor incurs the expenses of servicing fee (non 12b-1) of up to 0.15% distributing the Fund's Class Y shares, none of average daily net assets. of which are reimbursed by the Fund or the Class Y shareowners. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Management and AmSouth Strategic Portfolios: Moderate The management fee payable by Pioneer other fees Growth and Income Portfolio pays an Ibbotson Moderate Allocation Fund is equal advisory fee on a monthly basis at an to 0.13% of average daily net assets annual rate of 0.20% of the Fund's average attributable to the Fund's investments in daily net assets. underlying funds managed by Pioneer and cash and 0.17% of average daily net assets ASO Services Company, Inc. ("ASO") attributable to other investments, including serves as administrator and fund accounting underlying funds that are not managed by agent for the Fund. The Fund pays ASO an Pioneer, with breakpoints at incremental administrative services fee of 0.15% of the asset levels. Since currently all of the Fund's average daily net assets. underlying funds are managed by Pioneer, the management fee will initially be 0.13% For the fiscal year ended July 31, 2004, of average daily net assets. other expenses of the Fund were limited to 0.38% for Class A shares, 0.37% for Class In addition, the Fund reimburses Pioneer for B shares and 0.33% for Class I shares. Any certain fund accounting and legal expenses fee waiver or expense reimbursement incurred on behalf of the Fund and pays a arrangement is voluntary and may be separate shareholder servicing/transfer discontinued at any time. You also indirectly agency fee to PIMSS, an affiliate of Pioneer. bear a pro rata share of the fees and expenses of the underlying funds. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit For the fiscal year ended July 31, 2004, the other direct ordinary operating expenses to Fund's annual operating expenses for Class the extent required to reduce expenses, A shares, after giving effect to the expense other than "Estimated average expense ratio limitation were 0.58%, and without giving of underlying funds," to 0.74% of the effect to the expense limitation, were average daily net assets attributable to Class 0.81% of average daily net assets. As of A shares and 1.52% of average daily net January 12, 2005, estimated total direct assets attributable to Class B shares. There and indirect expenses were 1.94% of is no expense limitation with respect to the average daily net assets. Class Y shares. This expense limitation is in effect for Class A shares until December 1, For the fiscal year ended July 31, 2004, the 2008 and in effect for Class B shares until Fund's annual operating expenses for Class December 1, 2006. There can be no B shares, after giving effect to the expense assurance that Pioneer will extend these limitation were 1.32%, and without giving expense limitations past such dates. The effect to the expense limitation, were expense limitation does not limit the 1.55% of average daily net assets. As of expenses of the underlying funds indirectly January 12, 2005, estimated total direct incurred by a shareholder. and indirect expenses were 2.68% of average daily net assets. Class Y shares of the Pioneer Fund are being offered for the first time in connection For the fiscal year ended July 31, 2004, the with the Reorganization. Fund's annual operating expenses for Class I shares, after giving effect to the expense limitation were 0.53%, and without giving effect to the expense limitation, were 0.76% of average daily net assets. As of January 12, 2005, estimated total direct and indirect expenses were 1.84% of average daily net assets. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Buying shares You may buy shares of the Fund directly You may buy shares from any investment through BISYS Fund Services, the Fund's firm that has a sales agreement with PFD, distributor, or through brokers, registered the Pioneer Fund's distributor. investment advisers, banks and other financial institutions that have entered into If the account is established in the selling agreements with the Fund's shareholder's own name, shareholders may distributor, as described in the Fund's also purchase additional shares of the Fund prospectus. by telephone or online. Certain account transactions may be done by telephone. - --------------------------------------------------------------------------------------------------------------------------- Exchanging shares You can exchange your shares in the Fund You may exchange your shares for shares for shares of the same class of another of the same class of another Pioneer mutual AmSouth Fund, usually without paying fund. Your exchange request must be for at additional sales charges. You must meet least $1,000. the minimum investment requirements for the Fund into which you are exchanging. After you establish an eligible fund account, Exchanges from one Fund to another are you can exchange fund shares by telephone taxable. Class A shares may be exchanged or online. for Class I shares of the same Fund or another AmSouth Fund if you become eligible to purchase Class I shares. Class I shares may be exchanged for Class A shares of the same Fund. No transaction fees are currently charged for exchanges. If you sell your shares or exchange them for shares of another AmSouth Fund within 7 days of the date of purchase, you will be charged a 2.00% fee on the current net asset value of the shares sold or exchanged. The fee is paid to the Fund to offset the costs associated with short-term trading, such as portfolio transaction and administrative costs. The Fund uses a "first-in, first-out" method to determine how long you have held your shares. This means that if you purchased shares on different days, the shares purchased first will be considered redeemed first for purposes of determining whether the redemption fee will be charged. The fee will be charged on all covered redemptions and exchanges, including those made through retirement plan, brokerage and other types of omnibus accounts (except where it is not practical for the plan administrator or brokerage firm to implement the fee). The Fund will not impose the redemption fee on a redemption or exchange of shares purchased upon the reinvestment of dividend and capital gain distributions. - ---------------------------------------------------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------------------------------------------------- AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Pioneer Ibbotson Moderate Allocation Fund - --------------------------------------------------------------------------------------------------------------------------- Selling shares Shares of each Fund are sold at the net asset value per share next calculated after the Fund receives your request in good order. - --------------------------------------------------------------------------------------------------------------------------- You may sell your shares by contacting the Normally, your investment firm will send Fund directly in writing or by telephone or your request to sell shares to PIMSS. You by contacting a financial intermediary as can also sell your shares by contacting the described in the Fund's prospectus. Fund directly if your account is registered in your name. If the account is established in the shareholder's own name, shareholders may also redeem shares of the Pioneer Fund by telephone or online. - ---------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds Because each Fund has a similar investment objective, primary investment policies and strategies, the Funds are subject to the same principal risks. You could lose money on an investment in a Fund or a Fund may not perform as well as other investment options. Fund of funds structure and layering of fees Each Fund is structured as a fund of funds. Each Fund's investments are focused in the underlying funds, so the Fund's investment performance is directly related to the performance of the underlying funds. Each Fund's net asset value will be affected by the performance of the equity and bond markets and the value of the mutual funds in which the fund invests. Since the Funds mainly invest in the underlying funds, as opposed to other types of securities, the Funds do not have the same flexibility in their portfolio holdings as many mutual funds. In addition, each Fund indirectly pays a portion of the expenses incurred by the underlying funds. Consequently, an investment in a Fund entails more direct and indirect expenses than a direct investment in the underlying funds. For instance, you will pay management fees and operating expenses of both the Fund and the underlying funds. The underlying funds will not necessarily make consistent investment decisions, which may also increase your costs. One underlying fund may buy the same security that another underlying fund is selling. You would indirectly bear the costs of both trades without achieving any investment purpose. These transactions may also generate taxable gains. You may receive taxable gains from portfolio transactions by the underlying funds as well as taxable gains from the Fund's transactions in shares of the underlying funds. Currently, Pioneer manages all of the funds underlying the Pioneer Fund. Because the portfolio management teams of each of the underlying Pioneer funds may draw upon the resources of the same equity and fixed income analyst team or may share common investment management styles or approaches, the underlying funds may hold many common portfolio positions, reducing the diversification benefits of an asset allocation style. Equity investments Equity funds invest primarily in equity securities (such as stocks), which are more volatile and carry more risks than some other forms of investment. When the value of the stocks held by an underlying equity fund goes down, the value of your investment in the fund will be affected. The underlying equity funds have risks associated with investing in equity securities. An equity fund could underperform other investments if: o The stock market goes down (this risk may be greater in the short term) o The fund's equity investments do not have the growth potential or value characteristics originally expected o Stocks selected for income do not achieve the same return as securities selected for capital growth o The types of stocks in which the fund invests or the fund's investment approach fall out of favor with investors Fixed income investments Fixed income funds primarily invest in debt securities, such as government securities, investment grade corporate securities, junk bonds, mortgaged backed securities, asset-backed securities, and money market securities. The value of your investment in the fund will change as the value of investments of the underlying funds increases and decreases. 108 The underlying fixed income funds have risks associated with investing in debt securities. A fund could underperform other investments if: o Interest rates go up causing the value of the fund's portfolio to decline o The issuer of a debt security owned by the fund defaults on its obligation to pay principal or interest or has its credit rating downgraded o During periods of declining interest rates, the issuer of a security may exercise its option to prepay earlier than scheduled, forcing the fund to reinvest in lower yielding securities. This is known as call or prepayment risk o During periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below market interest rate, increase the security's duration (the estimated period until the security is paid in full) and reduce the value of the security. This is known as extension risk o The investment manager's judgment about the attractiveness, relative value or potential appreciation of a particular sector, security or investment strategy proves to be incorrect Equity securities of smaller companies Compared to large companies, small and mid-sized companies, and the market for their equity securities, are likely to: o Be more sensitive to changes in the economy, earnings results and investor expectations o Have more limited product lines and capital resources o Experience sharper swings in market values o Be harder to sell at the times and prices Pioneer thinks appropriate o Offer greater potential for loss than other U.S. equity securities Equity securities of real estate industry issuers Specific risks associated with the real estate industry include: o The U.S. or a local real estate market declines due to adverse economic conditions, overbuilding and high vacancy rates, reduced or regulated rents or other causes o Interest rates go up. Rising interest rates can adversely affect the availability and cost of financing for property acquisitions and other purposes and reduce the value of a REIT's fixed income investments o The values of properties owned by a REIT or the prospects of other real estate industry issuers may be hurt by property tax increases, zoning changes, other governmental actions, environmental liabilities, natural disasters or increased operating expenses o A REIT in an underlying fund's portfolio is, or is perceived by the market to be, poorly managed Non-U.S. securities Investing in non-U.S. issuers, including emerging market issuers, may involve unique risks compared to investing in securities of issuers in the U.S. These risks are more pronounced to the extent the fund invests in issuers in the lesser-developed emerging markets or in one region, such as Europe or the Pacific Rim. These risks may include: o Less information about the non-U.S. issuers or markets may be available due to less rigorous disclosure or accounting standards or regulatory practices o Adverse effect of currency exchange rates or controls on the value of the fund's investments o The economies of non-U.S. countries may grow at slower rates than expected or may experience a downturn or recession o Economic, political and social developments may adversely affect securities markets o Withholding and other non-U.S. taxes may decrease the fund's return High yield/below investment grade debt securities Investment in high yield securities involves substantial risk of loss. These securities are considered speculative with respect to the issuer's ability to pay interest and principal and are susceptible to default or decline in market value due to adverse economic and business developments. The market values for high yield securities tend to be very volatile, and these securities are less liquid than investment grade debt securities. For these reasons, your investment in the fund is subject to the following specific risks: 109 o Increased price sensitivity to changing interest rates and deteriorating economic environment o Greater risk of loss due to default or declining credit quality o Adverse company specific events are more likely to render the issuer unable to make interest and/or principal payments o A negative perception of the high yield market develops, depressing the price and liquidity of high yield securities. This negative perception could last for a significant period of time Derivatives Certain underlying funds may use futures and options on securities, indices and currencies, forward foreign currency exchange contracts and other derivatives. A derivative is a security or instrument whose value is determined by reference to the value or the change in value of one or more securities, currencies, indices or other financial instruments. The underlying funds may use derivatives for a variety of purposes, including: o As a hedge against adverse changes in stock market prices, interest rates or currency exchange rates o As a substitute for purchasing or selling securities o To increase the fund's return as a non-hedging strategy that may be considered speculative Even a small investment in derivatives can have a significant impact on a fund's exposure to stock market values, interest rates or currency exchange rates. If changes in a derivative's value do not correspond to changes in the value of the fund's other investments, the fund may not fully benefit from or could lose money on the derivative position. In addition, some derivatives involve risk of loss if the person who issued the derivative defaults on its obligation. Certain derivatives may be less liquid and more difficult to value. Past Performance Set forth below is performance information for AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio. The bar chart shows how AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio's total return (not including any deduction for sales charges) has varied from year to year for each full calendar year. The table shows average annual total return (before and after taxes) for each Fund over time for each class of shares (including deductions for sales charges) compared with a broad-based securities market index. The bar chart gives an indication of the risks of investing in each Fund, including the fact that you could incur a loss and experience volatility of returns year to year. Past performance before and after taxes does not indicate future results. AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio -- Class A Shares Calendar Year Total Returns* [THE BAR CHART IS A REPRESENTATION FOR THE PRINTED MATERIAL]
'00 '01 '02 '03 '04 0.59 -5.77 -13.33 21.81 2.89
* During the period shown in the bar chart, your AmSouth Fund's highest quarterly return was 7.94% for the quarter ended June 30, 2003, and the lowest quarterly return was -6.80% for the quarter ended September 30, 2002. 110 Pioneer Ibbotson Moderate Allocation Fund -- Class A Shares Calendar Year Total Returns Pioneer Ibbotson Moderate Allocation Fund began investment operations in August 2004. Since the Pioneer Fund has conducted investment operations for less than one calendar year, it may not disclose any performance information in this prospectus. The Fund's performance will vary from year to year. Past performance does not necessarily indicate how a fund will perform in the future. As a shareowner, you may lose or make money on your investment. AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Average Annual Total Returns (for the periods ending December 31, 2004)
- ------------------------------------------------------------------------------------------------------------------------------------ Since Inception 1 Year 5 Years (1/28/99) - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class A Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 0.59% 2.90% 3.04% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 0.00% 1.70% 1.87% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 0.37% 1.80% 1.93% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class B Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 0.75% 2.96% 2.90% - ------------------------------------------------------------------------------------------------------------------------------------ AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, Class I Shares - ------------------------------------------------------------------------------------------------------------------------------------ Return Before Taxes 6.59% 4.14% 4.13% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions 5.95% 2.90% 2.91% - ------------------------------------------------------------------------------------------------------------------------------------ Return After Taxes on Distributions and Sale of Fund Shares 4.26% 2.85% 2.81% - ------------------------------------------------------------------------------------------------------------------------------------ S&P 500 Index(1) (reflects no deduction for fees, expenses or taxes) 10.87% -2.30% 0.66% - ------------------------------------------------------------------------------------------------------------------------------------
(1) The S&P 500, an unmanaged index of 500 stocks, is for reference only, does not mirror the Fund's investments, and reflects no deduction for fees, expenses or taxes. The table above shows the impact of taxes on AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio's returns. After-tax returns are only shown for Class A shares and Class I shares and may vary for Class B shares. The Fund's after-tax returns are calculated using the highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases, the figure representing "Return After Taxes on Distributions and Sale of Fund Shares" may be higher than the other return figures for the same period. A higher after-tax return results when a capital loss occurs upon redemption and translates into an assumed tax deduction that benefits the shareholder. Please note that actual after-tax returns depend on an investor's tax situation and may differ from those shown. Also note that after-tax returns shown are not relevant to shareholders who hold Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The Funds' Fees and Expenses Shareholders of both Funds pay various fees and expenses, either directly or indirectly. The tables below show the fees and expenses that you would pay if you were to buy and hold shares of each Fund. The expenses in the tables appearing below are based on (i) for the AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio, the expenses of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio for the period ended January 31, 2005 and (ii) for Pioneer Ibbotson Moderate Allocation Fund, the estimated expenses for the period ended January 31, 2005. Future expenses for all share classes may be greater or less. Shareholders of AmSouth Strategic Portfolios: Growth and Income Portfolio are also being asked to approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund. The tables also show (1) the pro forma expenses of the combined Fund assuming the Reorganization occurred on January 31, 2005 and (2) the pro forma expenses of the combined Fund assuming the reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio into Pioneer Ibbotson Moderate Allocation Fund also occurred on January 31, 2005. 111
Combined AmSouth Fund AmSouth Strategic (including Strategic Portfolios Pioneer AmSouth Portfolios Moderate Ibbotson Growth and Moderate Growth and Moderate Combined Income Growth and Income Allocation Fund Portfolio) Income Shareholder transaction Portfolio(1) Fund (Pro Forma) (Pro Forma) Portfolio fees (paid directly Class A Class A Class A Class A Class B from your investment) ------------ ---------- ----------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... 5.50%(2) 5.75% 5.75% 5.75% None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... None None None None 5.00%(3) Redemption fees ............ 2.00%(4) None None None 2.00%(4) Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.20% 0.17%(6) 0.17%(6) 0.17%(6) 0.20% Distribution and service (12b-1) fee ............... None 0.25% 0.25% 0.25% 0.75% Other expenses(5) .......... 0.68% 0.68% 0.52% 0.35%(5) 0.71% Estimated indirect expenses .................. 1.49% 0.68% 0.92%(9) 0.92%(9) 2.24% Total fund operating expenses .................. 2.37% 1.78%(7) 1.86% 1.69% 3.90% Expense reimbursement/ reduction ................. 0.35% 0.20% 0.20% 0.03% 0.38% Net fund operating expenses .................. 2.02% 1.58% 1.66% 1.66% 3.52% Combined Combined Fund AmSouth Fund (including Strategic (including AmSouth Portfolios AmSouth Pioneer Growth and Moderate Growth and Ibbotson Combined Income Growth and Combined Income Moderate Fund Portfolio) Income Fund Portfolio) Shareholder transaction Allocation (Pro Forma) (Pro Forma) Portfolio (Pro Forma) (Pro Forma) fees (paid directly Fund Class B Class B Class I Class Y(8) Class Y(8) from your investment) ---------- ----------- ----------- ---------- ----------- ----------- Maximum sales charge (load) when you buy shares as a percentage of offering price ......... None None None None None None Maximum deferred sales charge (load) as a percentage of purchase price or the amount you receive when you sell shares, whichever is less ................... 4.00% 4.00% 4.00% None None None Redemption fees ............ None None None 2.00%(4) None None Annual fund operating expenses (deducted from fund assets) (as a % of average net assets) Management fee ............. 0.17%(6) 0.17%(6) 0.17%(6) 0.20% 0.17%(6) 0.17%(6) Distribution and service (12b-1) fee ............... 1.00% 1.00% 1.00% None None None Other expenses(5) .......... 0.80% 0.74% 0.57% 0.59% 0.34% 0.15% Estimated indirect expenses .................. 0.68% 0.92%(9) 0.92%(9) 1.44% 0.92%(9) 0.92%(9) Total fund operating expenses .................. 2.65%(7) 2.83% 2.66% 2.23% 1.43% 1.24% Expense reimbursement/ reduction ................. 0.45% 0.39% 0.22% 0.31% N/A N/A Net fund operating expenses .................. 2.20% 2.44% 2.44% 1.92% 1.43% 1.24%
(1) AmSouth Bank or other financial institutions may charge their customer account fees for automatic investment and other cash management services provided in connection with investment in the Fund. (2) Sales charges may be reduced depending upon the amount invested or, in certain circumstances, waived. Class A shares of the Pioneer Fund bought as part of an investment of $1 million or more are not subject to an initial sales charge, but may be charged a CDSC of 1.00% if sold within one year of purchase. (3) For Class B shares purchased prior to the combination of AmSouth Funds with ISG Funds, the CDSC on such Class B shares held continuously declines over six years, starting with year one and ending in year seven from: 4%, 3%, 3%, 2%, 2%, 1%. For all other Class B shares held continuously, the CDSC declines over six years, starting with year one and ending in year seven from: 5%, 4%, 3%, 3%, 2%, 1%. Eight years after purchase (seven years in the case of shares acquired in the ISG combination), Class B shares automatically convert to Class A shares. (4) To discourage short-term trading, a redemption fee of 2.00% will be charged on sales or exchanges of Class A, Class B and Class I shares of your AmSouth Fund made within 7 days of the date of purchase. A wire transfer fee of $7.00 will be deducted from the amount of your redemption if you request a wire transfer. (5) For the period ended January 31, 2005, other expenses for your AmSouth Fund were limited to 0.33% for Class A shares, 0.33% for Class B shares and 0.28% for Class I shares. Any fee waiver or expense reimbursement arrangement is voluntary and may be discontinued at any time. Pioneer has contractually agreed not to impose all or a portion of its fees or to limit other direct ordinary operating expenses to the extent required to reduce expenses, other than "Estimated indirect expenses," to 0.74% of the average daily net assets attributable to Class A shares and 1.52% of average daily net assets attributable to Class B shares. This expense limitation is in effect for Class A shares until December 1, 2008 and in effect for Class B until December 1, 2006. There can be no assurance that Pioneer will extend these expense limitations past such dates. The expense limitation does not limit the expenses of the underlying funds indirectly incurred by a shareholder. (6) The management fee payable by the Pioneer Fund is equal to 0.13% of average daily net assets attributable to the Pioneer Fund's investments in underlying funds managed by Pioneer and cash and 0.17% of average daily net assets attributable to other investments, including underlying funds that are not 112 managed by Pioneer, with breakpoints at incremental asset levels. Since initially all of the underlying funds are managed by Pioneer, the management fee will initially be 0.13% of average daily net assets. (7) The Pioneer Fund's total annual operating expenses in the table have not been reduced by any expense offset arrangements. (8) Class Y shares of the Pioneer Fund are being offered for the first time in connection with the Reorganization. (9) "Estimated indirect expenses" for the Pioneer Funds reflect the estimated gross indirect expenses as of the most recent fiscal period for the underlying funds. Several of the underlying funds are subject to expense limitations, which expire as of various dates. Giving effect to such expense limitations, the estimated indirect expenses would be 0.73%, and the pro forma combined net expenses for the Pioneer Fund (assuming the reorganization of AmSouth Strategic Portfolios: Growth and Income Portfolio into the Pioneer Fund also occurs) would be 1.47%, 2.25% and 1.05% for Class A, Class B and Class Y shares, respectively. The hypothetical example below helps you compare the cost of investing in each Fund. It assumes that: (a) you invest $10,000 in each Fund for the time periods shown, (b) you reinvest all dividends and distributions, (c) your investment has a 5% return each year, and (d) each Fund's gross operating expenses remain the same. The examples are for comparison purposes only and are not a representation of either Fund's actual expenses or returns, either past or future.
- ------------------------------------------------------------------------------------------------------------------------------------ Combined Fund Pioneer (including AmSouth AmSouth Strategic Ibbotson Strategic Portfolios: Portfolios: Moderate Moderate Growth and Income Number of years you own Growth and Income Allocation Combined Fund Portfolio) your shares Portfolio Fund (Pro Forma) (Pro Forma) - ------------------------------------------------------------------------------------------------------------------------------------ Class A - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 747 $ 726 $ 714 $ 734 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $1,157 $1,085 $1,007 $1,068 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,593 N/A $1,349 $1,432 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,798 N/A $2,312 $2,450 - ------------------------------------------------------------------------------------------------------------------------------------ Class B -- assuming redemption at end of period - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 786 $ 648 $ 734 $ 647 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $1,177 $1,104 $1,106 $1,106 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,694 N/A $1,590 $1,590 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,971 N/A $2,741 $2,741 - ------------------------------------------------------------------------------------------------------------------------------------ Class B -- assuming no redemption - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 286 $ 248 $ 247 $ 247 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $ 877 $ 804 $ 806 $ 806 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $1,494 N/A $1,390 $1,390 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,971 N/A $2,741 $2,741 - ------------------------------------------------------------------------------------------------------------------------------------ Class I Class Y - ------------------------------------------------------------------------------------------------------------------------------------ Year 1 $ 199 N/A $ 146 $ 126 - ------------------------------------------------------------------------------------------------------------------------------------ Year 3 $ 615 N/A $ 452 $ 393 - ------------------------------------------------------------------------------------------------------------------------------------ Year 5 $ 1057 N/A $ 782 $ 681 - ------------------------------------------------------------------------------------------------------------------------------------ Year 10 $2,285 N/A $1,713 $1,500 - ------------------------------------------------------------------------------------------------------------------------------------
Reasons for the Proposed Reorganization The Trustees believe that the proposed Reorganization is in the best interests of AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio. The Trustees considered the following matters, among others, in approving the proposal. First, AAMI, the investment adviser to your AmSouth Fund, informed the Trustees that it does not intend to continue to provide investment advisory services to the AmSouth Funds. Consequently, a change in your Fund's investment adviser was necessary. In the absence of the Reorganization, such a change would be more likely to motivate shareholders invested in reliance on AAMI's role to withdraw from the Fund, thereby reducing fund size and increasing fund expense ratios. 113 Second, the resources of Pioneer. At December 31, 2004, Pioneer managed over 80 investment companies and accounts with approximately $42 billion in assets, including $15.7 billion in fixed income securities. Pioneer is the U.S. advisory subsidiary of Pioneer Global Asset Management, S.p.A. ("PGAM"), a global asset management group and wholly-owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. The PGAM companies provide investment management and financial services to mutual funds, institutional and other clients. As of December 31, 2004, assets under management of the PGAM companies were approximately $175 billion worldwide. Shareholders of your AmSouth Fund would become part of a significantly larger family of funds that offers a more diverse array of investment options and enhanced shareholder account options. The Pioneer family of mutual funds offers over 80 funds, including domestic and international equity and fixed income funds and money market funds that will be available to your AmSouth Fund's shareholders through exchanges. Third, Pioneer Ibbotson Moderate Allocation Fund's management fee (0.17% of average daily net assets) is lower than the advisory fee of your Fund (0.20% of average daily net assets). Both the historical and estimated pro forma expenses of the Pioneer Fund, after giving effect to the Reorganization, on a gross and net basis are lower than your Fund's gross and net operating expenses. The aggregate Rule 12b-1 distribution and shareholder servicing fees and non-Rule 12b-1 shareholder servicing fees paid by the Class A and Class B shares of both Funds are the same. Moreover, your AmSouth Fund's Class I shares pay a non 12b-1 shareholder servicing fee that is not paid by the Pioneer Fund's Class Y shares. Fourth, because of Pioneer distribution arrangements, Pioneer Fund has greater potential to further increase the assets compared to your Fund. Further assets growth is anticipated to further reduce the combined Fund's gross operating expenses per share. Fifth, the Class A, B and Y shares of the Pioneer Fund received in the Reorganization will provide AmSouth Fund shareholders with exposure to a similar investment product as they have currently. The Trustees also noted that the allocation decisions are made by Ibbotson, a leading asset allocation adviser, and that the Pioneer Fund intends, as soon as permitted by the SEC, to include unaffiliated mutual funds as underlying funds. Sixth, the transaction is structured to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986 and therefore will not be treated as a taxable sale of your AmSouth shares. Pioneer and AmSouth Bancorporation will pay all costs of preparing and printing the Funds' proxy statements and solicitation costs incurred by the Funds in connection with the Reorganizations. AAMI or an affiliate will otherwise be responsible for all costs and expenses of AmSouth Fund in connection with the Reorganizations. The Trustees also considered that Pioneer and AmSouth Bank will benefit from the Reorganization. See "Will Pioneer and AmSouth Bank Benefit from the Reorganizations." The Board of Trustees of the Pioneer Fund also considered that the Reorganization presents an opportunity for the Pioneer Fund to acquire investment assets without the obligation to pay commissions or other transaction costs that a fund normally incurs when purchasing securities. This opportunity provides an economic benefit to the Pioneer Fund and its shareholders. 114 CAPITALIZATION The following table sets forth the capitalization of each Fund as of May 31, 2005, and the pro forma combined Fund as of May 31, 2005. The table also sets forth the pro forma capitalization of the combined Fund as of May 31, 2005, assuming the shareholders of AmSouth Strategic Portfolios: Growth and Income Portfolio approve the reorganization of their fund into Pioneer Ibbotson Moderate Allocation Fund.
Pro Forma Pioneer Ibbotson Moderate Allocation Fund (including AmSouth Strategic Pro Forma AmSouth Strategic Portfolios: Moderate Pioneer Ibbotson Pioneer Ibbotson Portfolios: Growth and Income Moderate Moderate Growth and Income Portfolio Allocation Fund Allocation Fund Portfolio) May 31, 2005 May 31, 2005 May 31, 2005 May 31, 2005 -------------------- ---------------- ---------------- ----------------- Total Net Assets (in thousands) ......... $51,581 $45,791 $97,372 $211,011 Class A shares ......................... $23,598 $26,035 $49,633 $105,349 Class B shares ......................... $13,828 $ 7,824 $21,653 $ 40,751 Class I/Y shares ....................... $14,154 N/A $14,154 $ 52,979 Net Asset Value Per Share Class A shares ......................... $ 10.01 $ 10.77 $ 10.77 $ 10.77 Class B shares ......................... $ 9.96 $ 10.42 $ 10.42 $ 10.42 Class I/Y shares ....................... $ 10.04 N/A $ 10.77 $ 10.77 Shares Outstanding Class A shares ......................... 2,356,370 2,417,639 4,608,977 9,782,884 Class B shares ......................... 1,389,040 751,050 2,078,440 3,911,684 Class I/Y shares ....................... 1,409,269 N/A 1,314,394 4,919,719
It is impossible to predict how many shares of the Pioneer Fund will actually be received and distributed by your AmSouth Fund on the Reorganization date. The table should not be relied upon to determine the amount of the Pioneer Fund's shares that will actually be received and distributed. BOARD'S EVALUATION AND RECOMMENDATION For the reasons described above, the Trustees, including the Independent Trustees, approved the Reorganization. In particular, the Trustees determined that the Reorganization is in the best interests of your AmSouth Fund. Similarly, the Board of Trustees of the Pioneer Fund, including its Independent Trustees, approved the Reorganization. They also determined that the Reorganization is in the best interests of the Pioneer Fund. The Trustees recommend that the shareholders of your AmSouth Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. 115 Appendix A Information about the underlying funds The following is intended to summarize the investment objectives and primary strategies of, and to provide you with certain other information about, the underlying funds. These summaries do not reflect all of the investment policies and strategies that are disclosed in each underlying fund's prospectus, and are not an offer of the underlying funds' shares. The underlying funds in which the funds intend to invest may change from time to time and the funds may invest in underlying funds in addition to those described below at the discretion of Pioneer without prior notice to or approval of shareholders. The prospectus and SAI for each underlying fund is available on the SEC's website as well as on our website at www.pioneerfunds.com. Each underlying fund normally will be invested according to its investment strategy. However, an underlying fund also may have the ability to invest without limitation in money market instruments or other investments for temporary, defensive purposes. The underlying funds that invest primarily in equity securities are: Pioneer Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund invests in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Research Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as preferred stocks, depositary receipts, rights and warrants. Investment Adviser Pioneer Pioneer Growth Leaders Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in common and preferred stocks and securities convertible into stocks. Securities convertible into stocks include depositary receipts on stocks, 116 convertible debt securities, warrants and rights. The fund offers a broad investment program for the equity portion of an investor's portfolio, with an emphasis on mid and large capitalization issuers traded in the U.S. However, the fund may invest in issuers of any capitalization. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Strategic Growth Fund Investment objective Long term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of U.S. issuers. The fund invests primarily in securities, traded in the U.S., of issuers that the subadviser believes have substantial international activities. In evaluating whether an issuer has substantial international activities, the subadviser considers the degree to which the issuer has non-U.S. reported sales and revenues, operating earnings or tangible assets. The fund may invest up to 20% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Large Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of large capitalization U.S. companies. Large capitalization companies have market capitalizations at the time of acquisition of $3 billion or more. The fund anticipates that the average weighted market capitalization of the companies in the fund's portfolio will be significantly higher that $3 billion. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer AmPac Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of issuers that have substantial sales to, or receive significant income from, countries within the Pacific Rim. These issuers meet one of the following criteria: o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries (including the U.S. and other countries bordering the Pacific Ocean, such as China and Indonesia) o 50% or more of the issuer's earnings or sales are attributed to, or assets are situated in, Pacific Rim countries other than the U.S. 117 The fund also may invest up to 30% of the value of its investments in equity securities of non-U.S. issuers that are traded in U.S. markets. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Value Fund Investment objective Reasonable income and capital growth. Principal investment strategies The fund seeks to invest in a broad list of carefully selected, reasonably priced securities rather than in securities whose prices reflect a premium resulting from their current market popularity. The fund invests the major portion of its assets in equity securities, primarily of U.S. issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer Pioneer Mid Cap Growth Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is, companies with market values within the range of market values of issuers included in the Russell Midcap Growth Index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer Cullen Value Fund Investment objective Capital appreciation. Current income is a secondary objective. Principal investment strategies The fund invests primarily in equity securities. The fund may invest a significant portion of its assets in equity securities of medium- and large-capitalization companies. Consequently, the fund will be subject to the risks of investing in companies with market capitalizations of $1.5 billion or more. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. The fund may invest up to 30% of its total assets in securities of non-U.S. issuers. Up to 5% of the fund's total assets may be invested in securities of emerging market issuers. The fund may invest in securities of Canadian issuers to the same extent as securities of U.S. issuers. 118 Investment Adviser Pioneer Pioneer Mid Cap Value Fund Investment objective Capital appreciation by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of mid-size companies, that is companies with market values within the range of market values of companies included in the Russell Midcap Value Index. The fund focuses on issuers with capitalizations within the $1 billion to $10 billion range, and that range will change depending on market conditions. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. Investment Adviser Pioneer Pioneer Small and Mid Cap Growth Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small and mid-capitalization issuers, that is those with market values, at the time of investment, that do not exceed the market capitalization of the largest company within the S&P Mid Cap 400 Index. The size of the companies in the index may change dramatically as a result of market conditions and the composition of the index. The fund's investments will not be confined to securities issued by companies included in an index. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Investment Adviser Pioneer (adviser); L. Roy Papp & Associates, LLP (subadviser) Pioneer Oak Ridge Small Cap Growth Fund Investment objective Capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small capitalization U.S. companies with market capitalizations of $2 billion or less. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. Small capitalization companies have market capitalizations at the time of acquisition of $2 billion or less. The equity securities in which the fund principally invests are common stocks, preferred stocks, depositary receipts and convertible debt, but the fund may invest in other types of equity securities to a lesser extent, such as warrants and rights. 119 Investment Adviser Pioneer (adviser); Oak Ridge Investments, LLC (subadviser) Pioneer Small Cap Value Fund Investment objective Capital growth by investing in a diversified portfolio of securities consisting primarily of common stocks. Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in equity securities of small companies. Small companies are those with market values, at the time of investment, that do not exceed the greater of the market capitalization of the largest company within the Russell 2000 Index or the 3-year rolling average of the market capitalization of the largest company within the Russell 2000 Index as measured at the end of the preceding month. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The size of the companies in the index changes with market conditions and the composition of the index. Pioneer monitors the fund's portfolio so that, under normal circumstances, the capitalization range of the fund's portfolio is consistent with the inclusion of the fund in the Lipper Small-Cap category. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights, equity interests in real estate investment trusts (REITs) and preferred stocks. Investment Adviser Pioneer Pioneer International Equity Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. The fund focuses on securities of issuers located in countries with developed markets (other than the United States) but may allocate up to 10% of its assets in countries with emerging economies or securities markets. Developed markets outside the United States generally include, but are not limited to, the countries included in the Morgan Stanley Capital International Europe, Australasia, Far East Index. The fund's assets must be allocated to securities of issuers located in at least three non-U.S. countries. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer International Value Fund Investment objective Long-term capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of non-U.S. issuers. These issuers may be located in both developed and emerging markets. Under normal circumstances, the fund's assets will be invested in securities of companies domiciled in at least three different foreign countries. Generally, the fund's investments in any country are limited to 25% or less of its total assets. However, the fund may invest more than 25% of its assets in issuers organized in Japan or the United Kingdom or in securities quoted 120 or denominated in the Japanese yen, the British pound and the euro. Investment of a substantial portion of the fund's assets in such countries or currencies will subject the fund to the risks of adverse securities markets, exchange rates and social, political or economic events which may occur in those countries. The fund may invest without limitation in securities of issuers located in countries with emerging economies or securities markets, but will not invest more than 25% of its total assets in securities of issuers located in any one such country. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred shares. The fund may also purchase and sell forward foreign currency exchange contracts in non-U.S. currencies in connection with its investments. Investment Adviser Pioneer Pioneer Europe Select Fund Investment objective Capital growth. Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of European issuers. The fund's principal focus is on European companies that exhibit strong growth characteristics and are considered to be leaders in their sector or industry. The fund generally focuses on mid- and large-capitalization European issuers. Equity securities include common stocks, convertible debt and other equity instruments, such as depositary receipts, warrants, rights and preferred stocks. The fund may also purchase and sell forward foreign currency exchange contracts in connection with its investments. Investment Adviser Pioneer Pioneer Emerging Markets Fund Investment objective Long-term growth of capital. Principal investment strategies The fund invests primarily in securities of emerging market issuers. Although the fund invests in both equity and debt securities, it normally emphasizes equity securities in its portfolio. Normally, the fund invests at least 80% of its total assets in the securities of emerging market corporate and government issuers (i.e., securities of companies that are domiciled or primarily doing business in emerging countries and securities of these countries' governmental issuers). Investment Adviser Pioneer Pioneer Real Estate Shares Investment objective Long-term growth of capital. Current income is a secondary objective. 121 Principal investment strategies Normally, the fund invests at least 80% of its total assets in equity securities of real estate investment trusts (REITs) and other real estate industry issuers. For purposes of the fund's investment policies, equity securities include common stocks, convertible debt and other equity instruments, such as warrants, rights, interests in REITs and preferred stocks. Investment Adviser Pioneer (adviser); AEW Management and Advisors, L.P. (subadviser) The underlying funds that invest primarily in debt securities are: Pioneer Bond Fund Investment objective To provide current income from an investment grade portfolio with due regard to preservation of capital and prudent investment risk. The fund also seeks a relatively stable level of dividends; however, the level of dividends will be maintained only if consistent with preserving the investment grade quality of the fund's portfolio. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government or its agencies and instrumentalities, o Debt securities, including convertible debt, of corporate and other issuers rated at least investment grade at the time of investment, and comparably rated commercial paper, o Cash and cash equivalents, certificates of deposit, repurchase agreements maturing in one week or less and bankers' acceptances. Normally, the fund invests at least 80% of its total assets in these securities. In addition, the fund may invest up to 20% of its total assets in debt securities rated below investment grade or, if unrated, of equivalent quality as determined by Pioneer. Cash and cash equivalents include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer High Yield Fund Investment objective Maximize total return through a combination of income and capital appreciation. Principal investment strategies Normally, the fund invests at least 80% of its total assets in below investment grade (high yield) debt securities and preferred stocks. These high yield securities may be convertible into the equity securities of the issuer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. Investment Adviser Pioneer 122 Pioneer Short Term Income Fund Investment objective A high level of current income to the extent consistent with a relatively high level of stability of principal. Principal investment strategies The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities o Debt securities, including convertible debt, of corporate and other issuers and commercial paper o Mortgage-backed and asset-backed securities o Short-term money market instruments Normally, at least 80% of the fund's net assets are invested in debt securities that are rated investment grade at the time of purchase or cash and cash equivalents. Cash and cash equivalents may include cash balances, accrued interest and receivables for items such as the proceeds, not yet received, from the sale of the fund's portfolio investments. Investment Adviser Pioneer Pioneer Cash Reserves Fund Investment objective High current income, preservation of capital and liquidity through investments in high-quality short-term securities. Principal investment strategies The fund seeks to maintain a constant net asset value of $1.00 per share by investing in high-quality, U.S. dollar denominated money market securities, including those issued by: o U.S. and foreign banks o U.S. and foreign corporate issuers o The U.S. government and its agencies and instrumentalities o Foreign governments o Multinational organizations such as the World Bank The fund may invest more than 25% of its total assets in U.S. government securities and obligations of U.S. banks. The fund may invest in any money market instrument that is a permissible investment for a money market fund under the rules of the Securities and Exchange Commission, including commercial paper, certificates of deposit, time deposits, bankers' acceptances, mortgage-backed and asset-backed securities, repurchase agreements, municipal obligations and other short-term debt securities. Investment Adviser Pioneer Pioneer Strategic Income Fund Investment objective A high level of current income. 123 Principal investment strategies Normally, the fund invests at least 80% of its net assets (plus the amount of borrowings, if any, for investment purposes) in debt securities. The fund has the flexibility to invest in a broad range of issuers and segments of the debt securities markets. Pioneer Investment Management, Inc., the fund's investment adviser, allocates the fund's investments among the following three segments of the debt markets: o Below investment grade (high yield) securities of U.S. and non-U.S. issuers o Investment grade securities of U.S. issuers o Investment grade securities of non-U.S. issuers Pioneer's allocations among these segments of the debt markets depend upon its outlook for economic, interest rate and political trends. The fund invests primarily in: o Debt securities issued or guaranteed by the U.S. government, its agencies or instrumentalities or non-U.S. governmental entities o Debt securities of U.S. and non-U.S. corporate issuers, including convertible debt o Mortgage-backed and asset-backed securities The fund's investments may have fixed or variable principal payments and all types of interest rate payment and reset terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred, payment in kind and auction rate features. The fund invests in securities with a broad range of maturities. Depending upon Pioneer's allocation among market segments, up to 70% of the fund's total assets may be in debt securities rated below investment grade at the time of purchase or determined to be of equivalent quality by Pioneer. Up to 20% of the fund's total assets may be invested in debt securities rated below CCC by Standard & Poor's Ratings Group or the equivalent by another nationally recognized statistical rating organization or determined to be of equivalent credit quality by Pioneer. Debt securities rated below investment grade are commonly referred to as "junk bonds" and are considered speculative. Below investment grade debt securities involve greater risk of loss, are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher rated debt securities. As with all fixed income securities, the market values of convertible debt securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, when the market price of the common stock underlying a convertible security exceeds the conversion price, the convertible security tends to reflect the market price of the underlying common stock. Depending upon Pioneer's allocation among market segments, up to 85% of the fund's total assets may be in debt securities of non-U.S. corporate and governmental issuers, including debt securities of corporate and governmental issuers in emerging markets. Investment Adviser Pioneer 124 TERMS OF EACH AGREEMENT AND PLAN OF REORGANIZATION The Reorganizations o Each Reorganization is scheduled to occur at 4:00 p.m., Eastern time, on September 23, 2005, unless your AmSouth Fund and the corresponding Pioneer Fund agree in writing to a later date. Your AmSouth Fund will transfer all of its assets to the corresponding Pioneer Fund. The corresponding Pioneer Fund will assume, in the case of reorganizations into Pioneer Funds that have previously commenced investment operations, your AmSouth Fund's liabilities that are included in the calculation of your AmSouth Fund's net asset value on the Closing Date and, in the case of newly organized Pioneer Funds, all of your AmSouth Fund's liabilities. The net asset value of both Funds will be computed as of 4:00 p.m., Eastern time, on the Closing Date. o Each Pioneer Fund will issue to the corresponding AmSouth Fund Class A, B and Y shares with an aggregate net asset value equal to the net assets attributable to the corresponding AmSouth Fund's Class A, B and I shares. These shares will immediately be distributed to your AmSouth Fund's shareholders in proportion to the relative net asset value of their holdings of your AmSouth Fund's shares on the Closing Date. As a result, each AmSouth Fund's shareholders will end up as Class A, B, or Y class shareholders of the corresponding Pioneer Fund. o After the distribution of shares, your AmSouth Fund will be liquidated and dissolved. o Each Reorganization is intended to result in no income, gain or loss being recognized for federal income tax purposes and will not take place unless both Funds involved in the Reorganization receive a satisfactory opinion concerning the tax consequences of the Reorganization from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds. Agreement and Plan of Reorganization The shareholders of each AmSouth Fund are being asked to approve an Agreement and Plan of Reorganization substantially in the form attached as EXHIBIT A-1 or A-2 (each, a "Plan"). The description of the Plan contained herein includes the material provisions of the Plan but this description is qualified in its entirety by the attached copies, as appropriate. Conditions to Closing Each Reorganization. The obligation of each Fund to consummate each Reorganization is subject to the satisfaction of certain conditions, including each Fund's performance of all of its obligations under the Plan, the receipt of certain documents and financial statements from your AmSouth Fund and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Sections 7 and 8 of the Plan). The consummation of each Reorganization is not contingent on consummation of any other Reorganization. The obligations of both Funds are subject to the approval of the Plan by the necessary vote of the outstanding shares of your AmSouth Fund, in accordance with the provisions of AmSouth Funds' declaration of trust and by-laws. The Funds' obligations are also subject to the receipt of a favorable opinion of Wilmer Cutler Pickering Hale and Dorr LLP as to the United States federal income tax consequences of each Reorganization (see Section 8.5 of the Plan). Termination of the Plan. The board of either the AmSouth Funds or the corresponding Pioneer Fund may terminate the Plan (even if the shareholders of your AmSouth Fund have already approved it) at any time before the Closing Date, if that board believes in good faith that proceeding with the Reorganization would no longer be in the best interests of shareholders. TAX STATUS OF EACH REORGANIZATION Each Reorganization will not result in any income, gain or loss being recognized for United States federal income tax purposes and will not take place unless both Funds involved in the Reorganization receive a satisfactory opinion from Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Pioneer Funds, substantially to the effect that each Reorganization will be a "reorganization" within the meaning of Section 368(a) of the Code. As a result, for federal income tax purposes: o No gain or loss will be recognized by your AmSouth Fund upon (1) the transfer of all of its assets to the corresponding Pioneer Fund as described in this Proxy Statement/Prospectus or (2) the distribution by your AmSouth Fund of Pioneer Fund shares to your AmSouth Fund's shareholders; o No gain or loss will be recognized by the corresponding Pioneer Fund upon the receipt of your AmSouth Fund's assets solely in exchange for the issuance of Pioneer Fund shares to your AmSouth Fund and the assumption of your AmSouth Fund's liabilities by the Pioneer Fund; 125 o The basis of the assets of your AmSouth Fund acquired by the corresponding Pioneer Fund will be the same as the basis of those assets in the hands of your AmSouth Fund immediately before the transfer; o The tax holding period of the assets of your AmSouth Fund in the hands of the corresponding Pioneer Fund will include your AmSouth Fund's tax holding period for those assets; o You will not recognize gain or loss upon the exchange of your shares of your AmSouth Fund solely for the Pioneer Fund shares as part of the Reorganization; o The basis of the Pioneer Fund shares received by you in the Reorganization will be the same as the basis of your shares of your AmSouth Fund surrendered in the exchange; and o The tax holding period of the Pioneer Fund shares you receive will include the tax holding period of the shares of your AmSouth Fund surrendered in the exchange, provided that you held the shares of your AmSouth Fund as capital assets on the date of the exchange. In rendering such opinions, counsel shall rely upon, among other things, reasonable assumptions as well as representations of your AmSouth Fund and the Pioneer Fund. No tax ruling has been or will be received from the Internal Revenue Service ("IRS") in connection with the Reorganizations. An opinion of counsel is not binding on the IRS or a court, and no assurance can be given that the IRS would not assert, or a court would not sustain, a contrary position. The foregoing consequences may not apply to certain classes of taxpayers who are subject to special tax circumstances, such as shareholders who are not citizens or residents of the United States, insurance companies, tax-exempt organizations, financial institutions, dealers in securities or foreign currencies, or persons who hold their shares as part of a straddle or conversion transaction. You should consult your tax adviser for the particular tax consequences to you of the Reorganizations, including the applicability of any state, local or foreign tax laws. 126 VOTING RIGHTS AND REQUIRED VOTE Each share of your AmSouth Fund is entitled to one vote and each fractional share shall be entitled to a proportionate fractional vote. A quorum is required to conduct business at the Meeting. With respect to each AmSouth Fund, the presence in person or by proxy of a majority of the outstanding shares of an AmSouth Fund entitled to cast votes at the Meeting will constitute a quorum with respect to that AmSouth Fund. A favorable vote of a "majority of the outstanding voting securities" of the applicable AmSouth Fund is required to approve each Proposal. Under the Investment Company Act, the vote of a majority of the outstanding voting securities means the affirmative vote of the lesser of (i) 67% or more of the shares of the applicable AmSouth Fund represented at the meeting, if at least 50% of all outstanding shares of the AmSouth Fund are represented at the meeting, or (ii) 50% or more of the outstanding shares of the AmSouth Fund entitled to vote at the meeting.
- ------------------------------------------------------------------------------------------------------------------------------ Shares Quorum Voting - ------------------------------------------------------------------------------------------------------------------------------ In General All shares "present" in person or by proxy Shares "present" in person will be voted in are counted towards a quorum. person at the Meeting. Shares present by proxy will be voted in accordance with instructions. - ------------------------------------------------------------------------------------------------------------------------------ Broker Non-Vote (where the Considered "present" at Meeting for Broker non-votes do not count as a vote underlying holder has not purposes of quorum. "for" and effectively result in a vote voted and the broker does "against" Proposals 1(a)-(e). not have discretionary authority to vote the shares) - ------------------------------------------------------------------------------------------------------------------------------ Proxy with No Voting Considered "present" at Meeting for Voted "for" the Proposals. Instruction (other than Broker purposes of quorum. Non-Vote) - ------------------------------------------------------------------------------------------------------------------------------ Vote to Abstain Considered "present" at Meeting for Abstentions do not constitute a vote "for" purposes of quorum. and effectively result in a vote "against" Proposals 1(a)-(e). - ------------------------------------------------------------------------------------------------------------------------------
COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS BUSINESS TRUST Each of the AmSouth Funds is a series of a Massachusetts business trust. The Pioneer Funds are series of Delaware statutory trusts. The following is a summary of the principal differences between Delaware statutory trusts and Massachusetts business trusts. Limitation of Shareholders' and Series' Liability Delaware law provides that the shareholders of a Delaware statutory trust shall not be subject to liability for the debts or obligations of the trust. Under Massachusetts law, shareholders of a Massachusetts business trust may, under certain circumstances, be liable for the debts and obligations of that trust. Although the risk of liability of shareholders of a Massachusetts business trust who do not participate in the management of the trust may be remote, Delaware law affords greater protection against potential shareholder liability. Similarly, Delaware law provides that, to the extent that a Delaware statutory trust issues multiple series of shares, each series shall not be liable for the debts or obligations of any other series, another potential, although remote, risk in the case of a Massachusetts business trust. While the trustees believe that a series of a Massachusetts business trust will only be liable for its own obligations, there is no direct statutory or judicial support for that position. Limitation of Trustee Liability Delaware law provides that, except to the extent otherwise provided in a trust's declaration of trust or by-laws, trustees will not be personally liable to any person (other than the statutory trust or a shareholder thereof) for any act, omission or obligation of the statutory trust or any trustee thereof. Delaware law also provides that a trustee's actions under a Delaware statutory trust's declaration of trust or by-laws will not subject the trustee to liability to the statutory trust or its shareholders if the trustee takes such action in good faith reliance on the provisions of the statutory trust's declaration of trust or bylaws. The declaration of trust of a Massachusetts business trust may limit the liability of a trustee, who is not also an officer of the corporation, for breach of fiduciary duty except for, among other things, any act or omission not in good faith which involves intentional misconduct or a knowing violation of law or any transaction from which such trustee derives an improper direct or indirect financial benefit. The trustees believe that such limitations on liability under Delaware 127 law and under the Pioneer Funds' declarations of trust are consistent with those applicable to directors of a corporation under Delaware law and will be beneficial in attracting and retaining in the future qualified persons to act as trustees. Shareholder Voting Delaware law provides that a Delaware statutory trust's declaration of trust or by-laws may set forth provisions related to voting in any manner. This provision appears to permit trustee and shareholder voting through computer or electronic media. For an investment company with a significant number of institutional shareholders, all with access to computer or electronic networks, the use of such voting methods could significantly reduce the costs of shareholder voting. However, the advantage of such methods may not be realizable unless the SEC modifies its proxy rules. Also, as required by the Investment Company Act, votes on certain matters by trustees would still need to be taken at actual in-person meetings. Board Composition Delaware law explicitly provides that separate boards of trustees may be authorized for each series of a Delaware statutory trust. Whether separate boards of trustees can be authorized for series of a Massachusetts business trust is unclear under Massachusetts law. As always, the establishment of any board of trustees of a registered investment company must comply with applicable securities laws, including the provision of the 1940 Act regarding the election of trustees by shareholders. Establishing separate boards of trustees would, among other things, enable the series of a Delaware statutory trust to be governed by individuals who are more familiar with such series' particular operations. ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS Investment Adviser Pioneer serves as the investment adviser to each Pioneer Fund. Pioneer is an indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., one of the largest banking groups in Italy. Pioneer is part of the global asset management group providing investment management and financial services to mutual funds, institutions and other clients. As of December 31, 2004, assets under management were approximately $175 billion worldwide, including over $42 billion in assets under management by Pioneer. Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109. Pioneer's U.S. mutual fund investment history includes creating one of the first mutual funds in 1928. The Board of Trustees of the Pioneer Funds is responsible for overseeing the performance of each of Pioneer Fund's investment adviser and subadviser, if any, and determining whether to approve and renew the fund's investment advisory agreement and the subadvisory agreements. Pioneer has received an order (the "Exemptive Order") from the SEC that permits Pioneer, subject to the approval of the Pioneer Funds' Board of Trustees, to hire and terminate a subadviser or to materially modify an existing subadvisory agreement for a Pioneer Fund without shareholder approval. Pioneer retains the ultimate responsibility to oversee and recommend the hiring, termination and replacement of any subadviser. To the extent that the SEC adopts a rule that would supersede the Exemptive Order, Pioneer and the Pioneer Funds intend to rely on such rule to permit Pioneer, subject to the approval of the Pioneer Funds' Board of Trustees and any other applicable conditions of the rule, to hire and terminate a subadviser or to materially modify an existing subadvisory agreement for a Pioneer Fund without shareholder approval. Buying, Exchanging and Selling Shares of the Pioneer Funds Net Asset Value. Each Pioneer Fund's net asset value is the value of its portfolio of securities plus any other assets minus its operating expenses and any other liabilities. Each Pioneer Fund calculates a net asset value for each class of shares every day the New York Stock Exchange is open when regular trading closes (normally 4:00 p.m. Eastern time). In connection with its approval of the Reorganizations, the Board of the AmSouth Funds adopted the valuation procedures of the Pioneer Funds. This change did not have a material effect on the valuation methodology employed by the AmSouth Funds. Each Pioneer Fund generally values its portfolio securities using closing market prices or readily available market quotations. When closing market prices or market quotations are not available or are considered by Pioneer to be unreliable, a Pioneer Fund will use a security's fair value. Fair value is the valuation of a security determined on the basis of factors other than market value in accordance with procedures approved by the Pioneer Funds' trustees. Each Pioneer Fund also may use the fair value of a security, including a non-U.S. security, when Pioneer determines that the closing market price on the primary exchange where the security is traded no longer accurately reflects the 128 value of the security due to factors affecting one or more relevant securities markets or the specific issuer. The use of fair value pricing by a Pioneer Fund may cause the net asset value of its shares to differ from the net asset value that would be calculated using closing market prices. International securities markets may be open on days when the U.S. markets are closed. For this reason, the value of any international securities owned by a Pioneer Fund could change on a day you cannot buy or sell shares of the fund. Each Pioneer Fund may use a pricing service or a pricing matrix to value some of its assets. Debt securities with remaining maturities of 60 days or less are valued at amortized cost, which is a method of determining a security's fair value. You buy or sell shares at the share price. When you buy Class A shares, you pay an initial sales charge unless you qualify for a waiver or reduced sales charge. However, the Class A shares of the Pioneer Funds you receive in the Reorganizations will not be subject to any sales charge. When you buy Class B shares, you do not pay an initial sales charge. However, if you sell Class B shares within five years of purchase, you will pay a contingent deferred sales charge. The Class B shares of the Pioneer Funds you receive in the transaction will retain the holding periods and be subject to the same contingent deferred sales charge as your Class B shares of the AmSouth Funds. Class B shares convert to Class A shares eight years after the original date of purchase. Class B shares issued to the former ISG Fund shareholders will convert to Class A shares seven years after the date of purchase. Class Y shares do not impose a sales charge. Opening Your Account. If your shares are held in your investment firm's name, the options and services available to you may be different from those described herein or in the Pioneer Fund's prospectus. Ask your investment professional for more information. If you invest in a Pioneer Fund through investment professionals or other financial intermediaries, including wrap programs and fund supermarkets, additional conditions may apply to your investment in a Pioneer Fund, and the investment professional or intermediary may charge you a transaction-based or other fee for its services. These conditions and fees are in addition to those imposed by the Pioneer Fund and its affiliates. You should ask your investment professional or financial intermediary about its services and any applicable fees. Account Options. Use your account application to select options and privileges for your account. You can change your selections at any time by sending a completed account options form to the transfer agent. You may be required to obtain a signature guarantee to make certain changes to an existing account. Call or write to the Pioneer Funds' transfer agent for account applications, account options forms and other account information: PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. P.O. Box 55014 Boston, Massachusetts 02205-5014 Telephone 1-800-225-6292 Telephone Transaction Privileges. If your account is registered in your name, you can buy, exchange or sell shares of the Pioneer Funds by telephone. If you do not want your account to have telephone transaction privileges, you must indicate that choice on your account application or by writing to the transfer agent. When you request a telephone transaction, the transfer agent will try to confirm that the request is genuine. The transfer agent records the call, requires the caller to provide the personal identification number for the account and sends you a written confirmation. Each Pioneer Fund may implement other confirmation procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. Online Transaction Privileges. If your account is registered in your name, you may be able to buy, exchange or sell fund shares online. Your investment firm may also be able to buy, exchange or sell your Pioneer Fund shares online. To establish online transaction privileges, complete an account options form, write to the transfer agent or complete the online authorization screen on: www.pioneerfunds.com. To use online transactions, you must read and agree to the terms of an online transaction agreement available on the Pioneer website. When you or your investment firm requests an online transaction, the transfer agent electronically records the transaction, requires an authorizing password and sends a written confirmation. The Pioneer Funds may implement other procedures from time to time. Different procedures may apply if you have a non-U.S. account or if your account is registered in the name of an institution, broker-dealer or other third party. You may not be able to use the online transaction privilege for certain types of accounts, including most retirement accounts. Share Price. If you place an order with your investment firm before the New York Stock Exchange closes and your investment firm submits the order to PFD prior to PFD's close of business (usually 5:30 p.m. Eastern time), your share price will be calculated that day. Otherwise, your price per share will be calculated at the close of the New York Stock Exchange after the distributor receives your order. Your investment firm is responsible for submitting your order to the distributor. 129 Buying Pioneer Fund Shares. You may buy shares of each Pioneer Fund from any investment firm that has a sales agreement with PFD. If you do not have an investment firm, please call 1-800-225-6292 for information on how to locate an investment professional in your area. You can buy shares of the Pioneer Funds at the offering price. The distributor may reject any order until it has confirmed the order in writing and received payment. The fund reserves the right to stop offering any class of shares. Minimum Investment Amounts. Your initial investment must be at least $1,000. Additional investments must be at least $100 for Class A shares and $500 for Class B shares. You may qualify for lower initial or subsequent investment minimums if you are opening a retirement plan account, establishing an automatic investment plan or placing your trade through your investment firm. The minimum investment amount does not apply for purposes of the Reorganization. Exchanging Pioneer Fund Shares. You may exchange your shares in a Pioneer Fund for shares of the same class of another Pioneer mutual fund. Your exchange request must be for at least $1,000 unless the fund you are exchanging into has a different minimum. Each Pioneer Fund allows you to exchange your shares at net asset value without charging you either an initial or contingent deferred sales charge at the time of the exchange. Shares you acquire as part of an exchange will continue to be subject to any contingent deferred sales charge that applies to the shares you originally purchased. When you ultimately sell your shares, the date of your original purchase will determine your contingent deferred sales charge. Before you request an exchange, consider each Fund's investment objective and policy as described in each fund's prospectus. Selling Pioneer Fund Shares. Your shares will be sold at net asset value per share next calculated after the Pioneer Fund, or authorized agent, such as a broker-dealer, receives your request in good order. If the shares you are selling are subject to a deferred sales charge, it will be deducted from the sale proceeds. Each Pioneer Fund generally will send your sale proceeds by check, bank wire or electronic funds transfer. Normally you will be paid within seven days. If you are selling shares from a non-retirement account or certain IRAs, you may use any of the methods described below. If you are selling shares from a retirement account other than an IRA, you must make your request in writing. You may have to pay federal income taxes on a sale or an exchange. Good order means that: o You have provided adequate instructions o There are no outstanding claims against your account o There are no transaction limitations on your account o If you have any Pioneer Fund share certificates, you submit them and they are signed by each record owner exactly as the shares are registered o Your request includes a signature guarantee if you: o Are selling over $100,000 or exchanging over $500,000 worth of shares o Changed your account registration or address within the last 30 days o Instruct the transfer agent to mail the check to an address different from the one on your account o Want the check paid to someone other than the account owner(s) o Are transferring the sale proceeds to a Pioneer mutual fund account with a different registration 130 Buying, Exchanging and Selling Pioneer Fund Shares
------------------------------------------------------------------------------------------ Buying Shares Exchanging Shares ------------------------------------------------------------------------------------------ Through Normally, your investment firm will send Normally, your investment firm will send your investment your purchase request to the Pioneer your exchange request to the Pioneer firm Funds' transfer agent. Consult your Fund's transfer agent. Consult your investment professional for more investment professional for more information. Your investment firm may information about exchanging your receive a commission from the distributor shares. for your purchase of fund shares. The distributor or its affiliates may pay additional compensation, out of their own assets, to certain investment firms or their affiliates based on objective criteria established by the distributor. By phone or online You can use the telephone or online After you establish your Pioneer Fund privilege if you have an existing non- account, you can exchange Fund retirement account or certain IRAs. You shares by phone or online if: can purchase additional fund shares by o You are exchanging into an existing phone if: account or using the exchange to o You established your bank account of establish a new account, provided the record at least 30 days ago new account has a registration o Your bank information has not identical to the original account changed for at least 30 days o The fund into which you are o You are not purchasing more than exchanging offers the same class of $25,000 worth of shares per account shares per day o You are not exchanging more than o You can provide the proper account $500,000 worth of shares per account identification information per day o You can provide the proper account When you request a telephone or online identification information purchase, the transfer agent will electronically debit the amount of the purchase from your bank account of record. The transfer agent will purchase Pioneer Fund shares for the amount of the debit at the offering price determined after the transfer agent receives your telephone or online purchase instruction and good funds. It usually takes three business days for the transfer agent to receive notification from your bank that good funds are available in the amount of your investment. In writing, by mail You can purchase Pioneer Fund shares You can exchange fund shares by or by fax for an existing fund account by mailing mailing or faxing a letter of instruction a check to the transfer agent. Make to the transfer agent. You can exchange your check payable to the Pioneer Fund. Pioneer Fund shares directly through the Neither initial nor subsequent Pioneer Fund only if your account is investments should be made by third registered in your name. However, you party check. Your check must be in U.S. may not fax an exchange request for dollars and drawn on a U.S. bank. more than $500,000. Include in your Include in your purchase request the letter: fund's name, the account number and o The name, social security number and the name or names in the account signature of all registered owners registration. o A signature guarantee for each registered owner if the amount of the exchange is more than $500,000 o The name of the fund out of which you are exchanging and the name of the fund into which you are exchanging o The class of shares you are exchanging o The dollar amount or number of shares you are exchanging
131
--------------------------------------------------------------------------------------- Selling Shares How to Contact Pioneer --------------------------------------------------------------------------------------- Normally, your investment firm will send By phone your request to sell shares to the For information or to request a Pioneer Fund's transfer agent. Consult telephone transaction between 8:00 a.m. your investment professional for more and 7:00 p.m. (Eastern time) by information. Each Pioneer Fund has speaking with a shareholder services authorized PFD to act as its agent in the representative call 1-800-225-6292 repurchase of Pioneer Fund shares from To request a transaction using qualified investment firms. Each Pioneer FactFone(SM) call 1-800-225-4321 Fund reserves the right to terminate this Telecommunications Device for the Deaf procedure at any time. (TDD) 1-800-225-1997 You may sell up to $100,000 per By mail account per day by phone or online. Send your written instructions to: You may sell Pioneer Fund shares held Pioneer Investment Management in a retirement plan account by phone Shareholder Services, Inc. only if your account is an eligible IRA P.O. Box 55014 (tax penalties may apply). You may not Boston, Massachusetts 02205-5014 sell your shares by phone or online if you have changed your address (for By fax checks) or your bank information (for Fax your exchange and sale requests to: wires and transfers) in the last 30 days. 1-800-225-4240 You may receive your sale proceeds: Exchange Privilege o By check, provided the check is made You may make up to four exchange payable exactly as your account is redemptions of $25,000 or more per registered account per calendar year. o By bank wire or by electronic funds transfer, provided the sale proceeds are being sent to your bank address of record You can sell some or all of your Pioneer Fund shares by writing directly to the Pioneer Fund only if your account is registered in your name. Include in your request your name, your social security number, the fund's name and any other applicable requirements as described below. The transfer agent will send the sale proceeds to your address of record unless you provide other instructions. Your request must be signed by all registered owners and be in good order. You may not sell more than $100,000 per account per day by fax.
Pioneer Fund Shareholder Account Policies Signature Guarantees and Other Requirements. You are required to obtain a signature guarantee when you are: o Requesting certain types of exchanges or sales of Pioneer Fund shares o Redeeming shares for which you hold a share certificate o Requesting certain types of changes for your existing account You can obtain a signature guarantee from most broker-dealers, banks, credit unions (if authorized under state law) and federal savings and loan associations. You cannot obtain a signature guarantee from a notary public. All Pioneer Funds will accept only medallion signature guarantees. A medallion signature guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association, or other financial institution that is participating in a medallion program recognized by the Securities Transfer Association. Signature guarantees from financial institutions that are not participating in one of these programs are not accepted. Fiduciaries and corporations are required to submit additional documents to sell Pioneer Fund shares. Exchange Limitation. You may only make up to four exchange redemptions of $25,000 or more per account per calendar year out of a Pioneer Fund. Each Fund's exchange limitation is intended to discourage short-term trading in fund shares. Short-term trading can increase the expenses incurred by the Fund and make portfolio management less efficient. In determining whether the exchange redemption limit has been reached, Pioneer may aggregate a series of exchanges (each valued at less than $25,000) and/or fund accounts that appear to be under common ownership or control. Pioneer may view accounts for which one person gives instructions or accounts that act on advice provided by a single source to be under common control. The exchange limitation does not apply to automatic exchange transactions or to exchanges made by participants in employer-sponsored retirement plans qualified under Section 401(a) of the Code. While financial intermediaries that maintain omnibus accounts that invest in the fund are requested to apply the exchange limitation policy to shareholders who hold shares through such accounts, we do not impose the exchange limitation policy at the level of the omnibus account and are not able to monitor compliance by the financial intermediary with this policy. Excessive Trading. Frequent trading into and out of the fund can disrupt portfolio management strategies, harm fund performance by forcing the Fund to hold excess cash or to liquidate certain portfolio securities prematurely and increase expenses for all investors, 132 including long-term investors who do not generate these costs. An investor may use short-term trading as a strategy, for example, if the investor believes that the valuation of the Fund's portfolio securities for purposes of calculating its net asset value does not fully reflect the then current fair market value of those holdings. The Fund discourages, and does not take any intentional action to accommodate, excessive and short-term trading practices, such as market timing. Although there is no generally applied standard in the marketplace as to what level of trading activity is excessive, we may consider trading in the Fund's shares to be excessive for a variety of reasons, such as if: o You sell shares within a short period of time after the shares were purchased; o You make two or more purchases and redemptions within a short period of time; o You enter into a series of transactions that is indicative of a timing pattern or strategy; or o We reasonably believe that you have engaged in such practices in connection with other mutual funds. The Fund's Board of Trustees has adopted policies and procedures with respect to frequent purchases and redemptions of fund shares by fund investors. Pursuant to these policies and procedures, we monitor selected trades on a daily basis in an effort to detect excessive short-term trading. If we determine that an investor or a client of a broker has engaged in excessive short-term trading that we believe may be harmful to the fund, we will ask the investor or broker to cease such activity and we will refuse to process purchase orders (including purchases by exchange) of such investor, broker or accounts that we believe are under their control. In determining whether to take such actions, we seek to act in a manner that is consistent with the best interests of the fund's shareholders. While we use our reasonable efforts to detect excessive trading activity, there can be no assurance that our efforts will be successful or that market timers will not employ tactics designed to evade detection. If we are not successful, your return from an investment in the fund may be adversely affected. Frequently, fund shares are held through omnibus accounts maintained by financial intermediaries such as brokers and retirement plan administrators, where the holdings of multiple shareholders, such as all the clients of a particular broker, are aggregated. Our ability to monitor trading practices by investors purchasing shares through omnibus accounts is limited and dependent upon the cooperation of the financial intermediary in observing the fund's policies. In addition to monitoring trades, the policies and procedures provide that: o The fund imposes limitations on the number of exchanges out of an account holding the fund's Class A, Class B or Class C shares that may occur in any calendar year. o Certain funds managed by Pioneer have adopted redemption fees that are incurred if you redeem shares within a short period after purchase, including exchanges. These redemption fees are described in the applicable prospectuses under "Fees and expenses." The fund may reject a purchase or exchange order before its acceptance or an order prior to issuance of shares. The fund may also restrict additional purchases or exchanges in an account. Each of these steps may be taken, for any reason, without prior notice, including transactions that the fund believes are requested on behalf of market timers. The fund reserves the right to reject any purchase request by any investor or financial institution if the fund believes that any combination of trading activity in the account or related accounts is potentially disruptive to the fund. A prospective investor whose purchase or exchange order is rejected will not achieve the investment results, whether gain or loss, that would have been realized if the order were accepted and an investment made in the fund. The fund and its shareholders do not incur any gain or loss as a result of a rejected order. The fund may impose further restrictions on trading activities by market timers in the future. The fund's prospectus will be amended or supplemented to reflect any material additional restrictions on trading activities intended to prevent excessive trading. Minimum Account Size. Each Pioneer Fund requires that you maintain a minimum account value of $500. If you hold less than the minimum in your account because you have sold or exchanged some of your shares, the Pioneer Fund will notify you of its intent to sell your shares and close your account. You may avoid this by increasing the value of your account to at least the minimum within six months of the notice from the Pioneer Fund. Telephone Access. You may have difficulty contacting the Pioneer Fund by telephone during times of market volatility or disruption in telephone service. If you are unable to reach the Pioneer Fund by telephone, you should communicate with the Pioneer Fund in writing. Share Certificates. Normally, your shares will remain on deposit with the transfer agent and certificates will not be issued. If you are legally required to obtain a certificate, you may request one for your Class A shares only. A fee may be charged for this service. Any share certificates of the AmSouth Funds outstanding at the Closing Date of the Reorganizations will be deemed to be cancelled and will no longer represent shares of the Funds. 133 Other Policies. Each Pioneer Fund may suspend transactions in shares when trading on the New York Stock Exchange is closed or restricted, when an emergency exists that makes it impracticable, as determined by the SEC, for the Fund to sell or value its portfolio securities or with the permission of the SEC. Each Pioneer Fund or PFD may revise, suspend or terminate the account options and services available to shareholders at any time. Each Pioneer Fund reserves the right to redeem in kind by delivering portfolio securities to a redeeming shareholder, provided that the Pioneer Fund must pay redemptions in cash if a shareholder's aggregate redemptions in a 90 day period are less than $250,000 or 1% of the fund's net assets. Dividends and Capital Gains Each Pioneer Fund generally pays any distributions of net short- and long-term capital gains and dividends from any net investment income at least annually. Each Pioneer Fund may also pay dividends and capital gain distributions at other times if necessary for the Fund to avoid U.S. federal income or excise tax. If you invest in a Pioneer Fund close to the time that the Fund makes a distribution, generally you will pay a higher price per share and you will pay taxes on the amount of the distribution whether you reinvest the distribution or receive it as cash. Taxes For U.S. federal income tax purposes, distributions from each Pioneer Fund's net long-term capital gains (if any) are considered long-term capital gains and may be taxable to you at different maximum rates depending upon their source and other factors. Short-term capital gain distributions for each Pioneer Fund are taxable as ordinary income. Dividends from net investment income are taxable either as ordinary income or, if so designated by the Fund and certain other conditions, including holding period requirements, are met by the Fund and the shareholder, as "qualified dividend income" taxable to individual shareholders at the maximum 15% U.S. federal tax rate. Dividends and distributions generally are taxable, whether you take payment in cash or reinvest them to buy additional Pioneer Fund shares. When you sell or exchange Pioneer Fund shares you will generally recognize a capital gain or capital loss in an amount equal to the difference between the net amount of sale proceeds (or, in the case of an exchange, the fair market value of the shares) that you receive and your tax basis for the shares that you sell or exchange. In January of each year, each Pioneer Fund will mail to you information about your dividends, distributions and any shares you sold in the previous calendar year. You must provide your social security number or other taxpayer identification number to the Fund along with the certifications required by the Internal Revenue Service when you open an account. If you do not or if it is otherwise legally required to do so, the Pioneer Fund will withhold 28% "backup withholding" tax from your dividends and distributions, sale proceeds and any other payments to you. You should ask your tax adviser about any federal, state and foreign tax considerations, including possible additional withholding taxes for non-U.S. shareholders. You may also consult the "Tax Status" section of each Pioneer Fund's statement of additional information for a more detailed discussion of U.S. federal income tax considerations, including qualified dividend income considerations that may affect the Pioneer Fund and its shareholders. Pioneer Funds' Rule 12b-1 Plans. As described above, each Pioneer Fund has adopted a Rule 12b-1 plan for its Class A shares and Class B shares (each, a "Plan"). Because the Rule 12b-1 fees payable under each Plan are an ongoing expense, over time they may increase the cost of your investment and your shares may cost more than shares that are not subject to a distribution or service fee or sales charge. Compensation and Services. Each Class A Plan is a reimbursement plan, and distribution expenses of PFD are expected to substantially exceed the distribution fees paid by the Fund in a given year. Pursuant to each Class A Plan the Fund reimburses PFD for its actual expenditures to finance any activity primarily intended to result in the sale of Class A shares or to provide services to holders of Class A shares, provided the categories of expenses for which reimbursement is made are approved by the Board of Trustees. The expenses of the Fund pursuant to the Class A Plan are accrued daily at a rate which may not exceed the annual rate of 0.25% of the Fund's average daily net assets attributable to Class A shares. The Class B Plan provides that the Fund shall pay to PFD, as the Fund's distributor for its Class B shares a distribution fee equal on an annual basis to 0.75% of the Fund's average daily net assets attributable to Class B shares and a service fee equal to 0.25% of the Fund's average daily net assets attributable to Class B shares. The distribution fee compensates PFD for its distribution services with respect to Class B shares. PFD also pays commissions to broker-dealers and the cost of printing prospectuses and reports used for sales 134 purposes and the preparation and printing of sales literature and other distribution-related expenses. The plan authorizes PFD to pay a service fee to broker-dealers at a rate of up to 0.25% of the fund's average daily net assets attributable to Class B shares owned by shareholders for whom that broker-dealer is the holder or dealer of record. This service fee compensates the broker-dealer for providing personal services and/or account maintenance services rendered by the broker-dealer with respect to Class B shares. The Class B Plan is a compensation plan, which provides for a fixed level of fees. Payments under this plan are not tied exclusively to actual distribution and service expenses, and may exceed (or may be less than) the expenses actually incurred. Trustee Approval and Oversight. Each Plan was last approved by the Board of Trustees of each Pioneer Fund, including a majority of the independent trustees, by votes cast in person at meetings called for the purpose of voting on the Plans on December 2, 2004. Pursuant to the Plans, at least quarterly, PFD will provide each Fund with a written report of the amounts expended under the Plans and the purpose for which these expenditures were made. The Trustees review these reports on a quarterly basis to determine their continued appropriateness. Term, Termination and Amendment. Each Plan's adoption, terms, continuance and termination are governed by Rule 12b-1 under the Investment Company Act. The Board of Trustees believes that there is a reasonable likelihood that the Plans will benefit each Fund and its current and future shareholders. The Plans may not be amended to increase materially the annual percentage limitation of average net assets which may be spent for the services described therein without approval of the shareholders of the Fund affected thereby, and material amendments of the Plans must also be approved by the Trustees as provided in Rule 12b-1. 135 FINANCIAL HIGHLIGHTS The following tables show the financial performance of each Pioneer Fund for the past five fiscal years and, if applicable, for any recent semiannual period (or the period during which each Pioneer Fund has been in operation, if less than five years). Certain information reflects financial results for a single Pioneer Fund share. "Total return" shows how much an investment in a Pioneer Fund would have increased or decreased during each period, assuming you had reinvested all dividends and other distributions. In the case of each Pioneer Fund, each fiscal year ended on or after the fiscal year ended June 30, 2002 has been audited by Ernst & Young LLP, each Pioneer Fund's independent registered public accounting firm, as stated in their reports incorporated by reference in this registration statement. For fiscal years prior to the fiscal year ended June 30, 2002, the financial statements of each Pioneer Fund were audited by Arthur Andersen LLP, the Pioneer Funds' previous independent accountants. Arthur Andersen ceased operations in 2002. The information for any semiannual period has not been audited. PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period .................................. $10.00 $10.00 ------ ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ..................................... $ - $ 0.01 Net realized and unrealized gain (loss) on investments ............... 1.36 0.97 ------ ------ Net increase (decrease) from investment operations ................... $ 1.36 $ 0.98 ------ ------ Distributions to shareowners: Net investment income ................................................ $(0.02) $ - Net realized gain .................................................... (0.30) (0.30) ------ ------- Net increase (decrease) in net asset value ........................... $ 1.04 $ 0.68 ------ ------- Net asset value, end of period ....................................... $11.04 $10.68 ====== ======= Total return* ......................................................... 13.54% 9.73% Ratio of net expenses to average net assets**++ ....................... 0.93% 1.83% Ratio of net investment income (loss) to average net assets** ......... (0.02)% 0.18% Portfolio turnover rate** ............................................. 12% 12% Net assets, end of period (in thousands) .............................. $6,604 $1,962
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 6.66% and 9.32% of average net assets, respectively, for Class A and Class B shares. 136 PIONEER IBBOTSON GROWTH ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period ............................ $ 10.00 $10.00 ------- ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ............................... $ 0.03 $ 0.04 Net realized and unrealized gain (loss) on investments ......... 1.09 0.16 ------- ------ Net increase (decrease) from investment operations ............. $ 1.12 $ 0.20 ------- ------ Distributions to shareowners: Net investment income .......................................... $ (0.03) $ - Net realized gain .............................................. (0.25) (0.25) ------- ------ Net increase (decrease) in net asset value ..................... $ 0.84 $(0.05) ------- ------ Net asset value, end of period ................................. $ 10.84 $ 9.95 ======= ====== Total return* ................................................... 11.19% 1.95% Ratio of net expenses to average net assets**++ ................. 0.93% 1.83% Ratio of net investment income to average net assets** .......... 0.62% 0.72% Portfolio turnover rate** ....................................... 13% 13% Net assets, end of period (in thousands) ........................ $11,580 $3,226
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 3.73% and 5.34% of average net assets, respectively, for Class A and Class B shares. 137 PIONEER IBBOTSON MODERATE ALLOCATION FUND
For the period 8/9/04(a) to 1/31/05 ----------------------------------- Class A Class B Net asset value, beginning of period ............................ $ 10.00 $10.00 ------- ------ Increase (decrease) from investment operations: Net investment income (loss) (b) ............................... $ 0.06 $ 0.01 Net realized and unrealized gain (loss) on investments ......... 0.84 0.54 ------- ------ Net increase (decrease) from investment operations ............. $ 0.90 $ 0.55 ------- ------ Distributions to shareowners: Net investment income .......................................... $ (0.04) $ - Net realized gain .............................................. (0.23) (0.23) ------- ------- Net increase (decrease) in net asset value ..................... $ 0.63 $ 0.32 ------- ------- Net asset value, end of period ................................. $ 10.63 $10.32 ======= ======= Total return* ................................................... 9.04% 5.51% Ratio of net expenses to average net assets**++ ................. 0.90% 1.80% Ratio of net investment income to average net assets** .......... 1.15% 0.19% Portfolio turnover rate** ....................................... 20% 20% Net assets, end of period (in thousands) ........................ $13,612 $3,274
- ---------- (a) Commencement of operations. (b) Calculated using average shares outstanding for the period. * Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period, and no sales charges. Total return would be reduced if sales charges were taken into account. ** Annualized. ++ In the absence of expense reimbursement, expenses on an annualized basis would have been 2.84% and 4.35% of average net assets, respectively, for Class A and Class B shares. 138 INFORMATION CONCERNING THE MEETING Solicitation of Proxies In addition to the mailing of these proxy materials, proxies may be solicited by telephone, by fax or in person by the Trustees and officers of your AmSouth Fund or its affiliates, including personnel of your AmSouth Fund's transfer agent, Pioneer Funds' investment adviser, Pioneer, Pioneer Funds' transfer agent, PIMSS, or by broker-dealer firms. ComputerShare Fund Services has been retained to provide proxy solicitation services to the Funds at a cost of approximately $70,000. Pioneer and AmSouth Bancorporation will bear the cost of such solicitation. Revoking Proxies An AmSouth Fund shareholder signing and returning a proxy has the power to revoke it at any time before it is exercised: o by filing a written notice of revocation with your AmSouth Fund's transfer agent, BISYS Fund Services, at P.O. Box 182733, Columbus, Ohio 43218-2733, or o by returning a duly executed proxy with a later date before the time of the Meeting, or o if a shareholder has executed a proxy but is present at the Meeting and wishes to vote in person, by notifying the secretary of your AmSouth Fund (without complying with any formalities) at any time before it is voted. Being present at the Meeting alone does NOT revoke a previously executed and returned proxy. Outstanding Shares Only shareholders of record on July 29, 2005 (the "record date") are entitled to notice of and to vote at the Meeting. As of the record date, the following shares of each AmSouth Fund were outstanding.
Shares Outstanding AmSouth Fund (as of July 29, 2005) - ------------ ---------------------- AmSouth Balanced Fund Class A ........................................ 8,239,735.118 Class B ........................................ 1,947,581.903 Class I ........................................ 4,078,106.501 AmSouth Strategic Portfolios: Aggressive Growth Portfolio Class A ........................................ 2,314,936.570 Class B ........................................ 1,678,844.581 Class I ........................................ 1,508,323.999 AmSouth Strategic Portfolios: Growth Portfolio Class A ........................................ 3,157,976.420 Class B ........................................ 3,190,213.840 Class I ........................................ 802,043.030 AmSouth Strategic Portfolios: Growth and Income Portfolio Class A ........................................ 4,991,158.141 Class B ........................................ 1,944,651.410 Class I ........................................ 3,907,604.281 AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio Class A ........................................ 2,173,088.324 Class B ........................................ 1,411,005.230 Class I ........................................ 1,371,469.350
139 Other Business Your AmSouth Fund's Board of Trustees knows of no business to be presented for consideration at the Meeting other than Proposals 1(a)-(e). If other business is properly brought before the Meeting, proxies will be voted according to the best judgment of the persons named as proxies. Adjournments If, by the time scheduled for the Meeting, a quorum of shareholders of a Fund is not present or if a quorum is present but sufficient votes "for" the proposals have not been received, the persons named as proxies may propose to adjourn the Meeting with respect to one or more of the Funds to another date and time, and the Meeting may be held as adjourned within a reasonable time after the date set for the original Meeting for that Fund without further notice. Any such adjournment will require the affirmative vote of a majority of the votes cast on the question of adjournment in person or by proxy at the session of the Meeting to be adjourned. The persons named as proxies will vote all proxies in favor of the adjournment that voted in favor of the proposal or that abstained. They will vote against such adjournment those proxies required to be voted against the proposal. Broker non-votes will be disregarded in the vote for adjournment. If the adjournment requires setting a new record date or the adjournment is for more than 120 days of the original Meeting (in which case the Board of Trustees of your AmSouth Fund will set a new record date), your AmSouth Fund will give notice of the adjourned meeting to its shareholders. Telephone Voting In addition to soliciting proxies by mail, by fax or in person, your AmSouth Fund may also arrange to have votes recorded by telephone by officers and employees of your AmSouth Fund or by personnel of the adviser or transfer agent or a third party solicitation firm. The telephone voting procedure is designed to verify a shareholder's identity, to allow a shareholder to authorize the voting of shares in accordance with the shareholder's instructions and to confirm that the voting instructions have been properly recorded. If these procedures were subject to a successful legal challenge, these telephone votes would not be counted at the Meeting. Your AmSouth Fund has not obtained an opinion of counsel about telephone voting, but is currently not aware of any challenge. o A shareholder will be called on a recorded line at the telephone number in the Fund's account records and will be asked to provide the shareholder's social security number or other identifying information. o The shareholder will then be given an opportunity to authorize proxies to vote his or her shares at the Meeting in accordance with the shareholder's instructions. o To ensure that the shareholder's instructions have been recorded correctly, the shareholder will also receive a confirmation of the voting instructions by mail. o A toll-free number will be available in case the voting information contained in the confirmation is incorrect. o If the shareholder decides after voting by telephone to attend the Meeting, the shareholder can revoke the proxy at that time and vote the shares at the Meeting. o Touchtone telephone voting information is noted on the enclosed proxy card(s). Internet Voting You will also have the opportunity to submit your voting instructions via the Internet by utilizing a program provided through the tabulator. Voting via the Internet will not affect your right to vote in person if you decide to attend the Meeting. Do not mail the proxy card if you are voting via the Internet. To vote via the Internet, you will need the "control number" that appears on your proxy card. These Internet voting procedures are designed to authenticate shareholder identities, to allow shareholders to give their voting instructions, and to confirm that shareholders' instructions have been recorded properly. If you are voting via the Internet, you should understand that there may be costs associated with electronic access, such as usage charges from Internet access providers and telephone companies, that must be borne by you. o Read the proxy statement and have your proxy card at hand. o Go to the Web site listed on your proxy card. o Enter control number found on your proxy card. o Follow the simple instructions on the Web site. Please call AmSouth Funds at 1-800-451-8382 if you have any problems. 140 o To insure that your instructions have been recorded correctly you will receive a confirmation of your voting instructions immediately after your submission and also by e-mail if chosen. o Internet voting information is noted on the enclosed proxy card(s). Shareholders' Proposals Your AmSouth Fund is not required, and does not intend, to hold meetings of shareholders each year. Instead, meetings will be held only when and if required. Any shareholders desiring to present a proposal for consideration at the next meeting for shareholders must submit the proposal in writing, so that it is received by your AmSouth Fund to Michael C. Daniel, President, AmSouth Funds, c/o AmSouth Bank, 1900 Fifth Avenue North, Birmingham, AL 35203 within a reasonable time before any meeting. If the Reorganization is completed, your AmSouth Fund will not hold another shareholder meeting. Appraisal Rights If the Reorganization of your AmSouth Fund is approved at the Meeting, shareholders of your AmSouth Fund will not have the right to dissent and obtain payment of the fair value of their shares because the exercise of appraisal rights is subject to the forward pricing requirements of Rule 22c-1 under the Investment Company Act, which supersede state law. Shareholders of your AmSouth Funds, however, have the right to redeem their Fund shares until the closing date of the Reorganizations. OWNERSHIP OF SHARES OF THE AMSOUTH FUNDS To the knowledge of your AmSouth Fund, as of May 31, 2005, the following persons owned of record or beneficially 5% or more of the outstanding shares of each of the AmSouth Funds.
- --------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------- AMSOUTH BALANCED FUND -- CLASS A - --------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR AM 1,715,208.626 20.75% BANK FBO AMSOUTH THRIFT PLAN PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST CO AS AGENT 1,471,810.189 17.80% FOR AMSOUTH BANK FBO BCBS ALABAMA PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR AM 516,827.177 6.25% BANK FBO BRASFIELD GORRIE EMPLOYE PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------- AMSOUTH BALANCED FUND -- CLASS I - --------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 1,699,127.878 42.24% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST COMPANY 410,690.141 10.21% AS AGENT FOR AMSOUTH BANK PO BOX 105779 ATLANTA GA 303485779 - ---------------------------------------------------------------------------------
141
- ----------------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 398,294.497 9.90% WARRIOR TRACTOR EQUIPMENT 401 K SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 388,726.276 9.66% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- AMVESCAP NATL TR CO AS AGENT FOR 275,539.796 6.85% AMSOUTH FBO TRACTOR EQUIPMENT PO BOX 105779 ATLANTA GA 30348 - ----------------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO 977,512.782 6.94% 3435 STELZER RD ATTN FUND ACCOUNTING COLUMBUS OH 43219 - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 875,083.106 6.21% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: AGGRESSIVE GROWTH FUND -- CLASS I - ----------------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 466,778.020 29.81% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 229,924.893 14.68% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 144,952.998 9.26% WALKER-J-WALKER INC PROFIT SHARIN SUITE 300 DENVER CO 80202 - ----------------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 92,304.222 5.89% SEABROOK EES PROFIT SHARING RETIREM SUITE 300 DENVER CO 80202 - -----------------------------------------------------------------------------------------------------------------------
142
- --------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 551,605.180 10.00% THE WOMEN S CLINIC AMC P S PLAN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 450,593.183 8.17% ACE BOLT SCREW CO INC PROFIT SHA SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 431,874.127 7.83% HEART CNTR CARDIOVASC SPECIALISTS 4 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 392,323.861 7.11% EAR NOSE THROAT PHYS N MISS 4 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH & INCOME PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 2,021,724.353 52.75% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 493,107.625 12.87% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 324,655.761 8.47% EAR NOSE THROAT CENTER RET SAVIN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- AMVESCAP NATIONAL TRUST COMPANY 320,083.181 10.22% AS AGENT FOR AMSOUTH BANK PO BOX 105779 ATLANTA GA 30348 - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 249,833.742 7.98% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 177,625.115 5.67% NORTH MISSISSIPPI ORAL 401 K PS PL SUITE 300 DENVER CO 80202 - ---------------------------------------------------------------------------------------------------------------
143
- --------------------------------------------------------------------------------------------------------------- Percent of the Class Held by Fund/Class No. of Shares Shareholder - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: GROWTH PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 338,956.524 39.79% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH BANK 180,856.121 21.23% COOK YANCEY KING GALLOWAY PO BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 61,057.862 7.17% SEABROOK EES PROFIT SHARING RETIREM SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 54,070.165 6.35% WALKER-J-WALKER INC PROFIT SHARIN SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS A - --------------------------------------------------------------------------------------------------------------- MCB TRUST SERVICES AS AGENT FOR 258,695.800 10.98% FRONTIER TRUST CO AS TRUSTEE SUITE 300 700 17TH STREET DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 159,234.626 6.76% WEST QUALITY FOOD SERVICE INC 401 SUITE 300 DENVER CO 80202 - --------------------------------------------------------------------------------------------------------------- HARTFORD LIFE INSURANCE COMPANY 122,492.770 5.20% 200 HOPMEADOW STREET SIMSBURY CT 06089 - --------------------------------------------------------------------------------------------------------------- AMSOUTH STRATEGIC PORTFOLIOS: MODERATE GROWTH & INCOME PORTFOLIO -- CLASS I - --------------------------------------------------------------------------------------------------------------- KENNEBURT & COMPANY FBO ASO TRUST 924,772.196 65.62% ATTN MUTUAL FUND OPERATIONS P O BOX 12365 BIRMINGHAM AL 35202 - --------------------------------------------------------------------------------------------------------------- BISYS RETIREMENT SERVICES FBO 125,779.661 8.93% C C CLARK INC 401 K PLAN SUITE 300 DENVER CO 80202 - ---------------------------------------------------------------------------------------------------------------
As of May 31, 2005, the Trustees and officers of your AmSouth Fund, as a group, owned in the aggregate less than 1% of the outstanding shares of your AmSouth Fund. Any shares beneficially owned by AmSouth Bank or other companies controlled by AmSouth Bancorporation (the "AmSouth Companies") and shares over which AmSouth Companies have discretionary voting power will be voted in the manner determined by a special fiduciary independent of the AmSouth Companies. 144 OWNERSHIP OF SHARES OF THE PIONEER FUNDS To the knowledge of your Pioneer Fund, as of May 31, 2005, the following persons owned of record or beneficially 5% or more of the outstanding shares of each of the Pioneer Funds.
- ------------------------------------------------------------------------------------------------------------- Percentage of Class Held by Fund/Class Shareholder Name and Address Shareholder - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Aggressive Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 5.83% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class B MLPF&S 18.33% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 31.43% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Growth Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 5.33% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 30.10% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Pioneer Ibbotson Moderate Allocation Fund - ------------------------------------------------------------------------------------------------------------- Class A MLPF&S 17.48% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - ------------------------------------------------------------------------------------------------------------- Class B MLPF&S 7.51% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - -------------------------------------------------------------------------------------------------------------
145
- ------------------------------------------------------------------------------------------------------------- Percentage of Class Held by Fund/Class Shareholder Name and Address Shareholder - ------------------------------------------------------------------------------------------------------------- Class C MLPF&S 28.89% For the Sole Benefit of its Customers Mutual Fund Administration 4800 Deer Lake Drive East 2nd Floor Jacksonville, FL 32246-6484 - -------------------------------------------------------------------------------------------------------------
As of May 31, 2005, the Trustees and officers of each Pioneer Fund owned less than 1% of the outstanding shares of each Pioneer Fund. EXPERTS AmSouth Funds The financial statements and financial highlights of each AmSouth Fund incorporated by reference in the respective AmSouth Funds' Annual Report for the most recent fiscal year end have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon incorporated by reference into this registration statement. Such financial statements and financial highlights are incorporated herein by reference in reliance on such reports given on the authority of such firm as experts in accounting and auditing. Pioneer Funds The financial statements and financial highlights of each Pioneer Fund incorporated by reference in the respective Pioneer Fund's Annual Report for the most recent fiscal year end have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their reports thereon incorporated by reference into this registration statement. Such financial statements and financial highlights are incorporated herein by reference in reliance on such reports given on the authority of such firm as experts in accounting and auditing. AVAILABLE INFORMATION The AmSouth Funds and the Pioneer Funds are subject to the informational requirements of the Securities Exchange Act of 1934 and the Investment Company Act and file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information filed by the Funds can be inspected and copied (for a duplication fee) at the public reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C. Copies of these materials can also be obtained by mail from the Public Reference Branch, Office of Consumer Affairs and Information Services, SEC, Washington, D.C. 20549, at prescribed rates. In addition, copies of these documents may be viewed on-screen or downloaded from the SEC's Internet site at http://www.sec.gov. 146 Exhibit A-1 -- Form of Agreement and Plan of Reorganization (C/D Reorganizations) AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the day of [ ] 2005, by and between Pioneer [ ] Fund, a Delaware statutory trust (the "Acquiring Trust"), on behalf of its sole series Pioneer [ ] Fund (the "Acquiring Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust (the "AmSouth Trust"), on behalf of its series [ ] Fund (the "Acquired Fund"), with its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. The Acquiring Fund and the Acquired Fund are sometimes referred to collectively herein as the "Funds" and individually as a "Fund." This Agreement is intended to be and is adopted as a plan of a "reorganization" as defined in Section 368(a)(1)[(C)/(D)] of the United States Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations thereunder. The reorganization (the "Reorganization") will consist of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y shares of beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of the liabilities of the Acquired Fund that are both set forth on the Statement of Assets and Liabilities (as defined below) and also included in the calculation of net asset value ("NAV") on the closing date of the Reorganization (the "Closing Date") (collectively, the "Assumed Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly after the Closing Date as provided herein, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation and dissolution of the Acquired Fund, all upon the terms and conditions hereinafter set forth in this Agreement. WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered investment companies classified as management companies of the open-end type. WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial interest. WHEREAS, the Board of Trustees of the AmSouth Trust and the Board of Trustees of the Acquiring Trust have determined that the Reorganization is in the best interests of the Acquired Fund shareholders and the Acquiring Fund shareholders, respectively, and is not dilutive of the interests of those shareholders. NOW, THEREFORE, in consideration of the premises of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the Acquiring Fund free and clear of all liens and encumbrances (other than those arising under the Securities Act of 1933, as amended (the "Securities Act"), liens for taxes not yet due and contractual restrictions on the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, of each class with an aggregate NAV equal to the NAV of the Acquired Fund attributable to the corresponding class of the Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities. Such transactions shall take place at the Closing (as defined in Paragraph 3.1 below). 1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's property, including, without limitation, all portfolio securities and instruments, dividends and interest receivables, cash, goodwill, contractual rights and choses in action of the Acquired Fund or the AmSouth Trust in respect of the Acquired Fund, all other intangible property owned by the Acquired Fund, originals or copies of all books and records of the Acquired Fund, and all other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also be entitled to receive (or, to the extent agreed upon between the AmSouth Trust and the Acquiring Trust, be provided access to) copies of all records that the AmSouth Trust is required to maintain under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules of the Securities and Exchange Commission (the "Commission") thereunder to the extent such records pertain to the Acquired Fund. (b) The Acquired Fund has provided the Acquiring Fund with a list of all of the Acquired Fund's securities and other assets as of the date of execution of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of the current fundamental investment policies and restrictions and fair value procedures applicable to the Acquiring Fund. The Acquired Fund reserves the right to A-1 sell any of such securities or other assets before the Closing Date (except to the extent sales may be limited by representations of the Acquired Fund contained herein and made in connection with the issuance of the tax opinion provided for in Paragraph 8.5 hereof) and agrees not to acquire any portfolio security that is not an eligible investment for, or that would violate an investment policy or restriction of, the Acquiring Fund. 1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations that are or will become due prior to the Closing. 1.4 On or as soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and distribute pro rata to its shareholders of record, determined as of the close of regular trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number of Acquiring Fund Shares of the class corresponding to the class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares held of record by such Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution will be accomplished by the AmSouth Trust instructing the Acquiring Trust to transfer the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund established and maintained by the Acquiring Fund's transfer agent in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with evidence of such liquidation and distribution. All issued and outstanding Acquired Fund Shares will simultaneously be cancelled on the books of the Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.5 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Any certificates representing ownership of Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed to be cancelled and shall no longer evidence ownership of Acquired Fund Shares. 1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund Shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.7 Any reporting responsibility of the AmSouth Trust with respect to the Acquired Fund for taxable periods ending on or before the Closing Date, including, but not limited to, the responsibility for filing of regulatory reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the Commission, any state securities commissions, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the AmSouth Trust. 2. VALUATION 2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund shall, in each case, be determined as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the "Valuation Time"). The NAV of each Acquiring Fund Share shall be computed by Pioneer Investment Management, Inc. (the "Acquiring Fund Adviser") in the manner set forth in the Acquiring Trust's Declaration of Trust (the "Declaration"), or By-Laws, and the Acquiring Fund's then-current prospectus and statement of additional information. The NAV of the Acquired Fund shall be computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws, and the Acquiring Fund's then-current prospectus and statement of additional information. The Acquiring Fund Adviser shall confirm to the Acquiring Fund the NAV of the Acquired Fund. 2.2 The number of Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Assets and the assumption of the Assumed Liabilities shall be determined by the Acquiring Fund Adviser by dividing the NAV of the Acquired Fund, as determined in accordance with Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in accordance with Paragraph 2.1. 2.3 The Acquiring Fund and the Acquired Fund shall cause the Acquiring Fund Adviser and the Acquired Fund Administrator, respectively, to deliver a copy of its valuation report to the other party at Closing. All computations of value shall be made by the Acquiring Fund Adviser and the Acquired Fund Administrator in accordance with its regular practice as pricing agent for the Acquiring Fund and the Acquired Fund, respectively. A-2 3. CLOSING AND CLOSING DATE 3.1 The Closing Date shall be [ ], 2005, or such later date as the parties may agree to in writing. All acts necessary to consummate the Reorganization (the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The Closing shall be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, or at such other place as the parties may agree. 3.2 Portfolio securities that are held other than in book-entry form in the name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than three business days preceding the Closing Date. Such portfolio securities shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the account of the Acquiring Fund on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund shall be delivered by the Acquired Fund Custodian through the Depository Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian transmitting immediately available funds by wire transfer to the Acquiring Fund Custodian the cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount to the account of the Acquiring Fund. 3.3 The Acquiring Fund Custodian shall deliver within one business day after the Closing a certificate of an authorized officer stating that: (a) the Acquired Assets have been delivered in proper form to the Acquiring Fund on the Closing Date, and (b) all necessary transfer taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment has been made in conjunction with the delivery of portfolio securities as part of the Acquired Assets. 3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere is disrupted so that accurate appraisal of the NAV of the Acquiring Fund Shares or the Acquired Fund pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 3.5 The Acquired Fund shall deliver at the Closing a list of the names, addresses, federal taxpayer identification numbers and backup withholding and nonresident alien withholding status and certificates of the Acquired Fund Shareholders and the number and percentage ownership of outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time, certified by the President or a Secretary of the AmSouth Trust and its Treasurer, Secretary or other authorized officer (the "Shareholder List") as being an accurate record of the information (a) provided by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from the AmSouth Trust's records by such officers or one of the AmSouth Trust's service providers. The Acquiring Fund shall issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES 4.1 Except as set forth on a disclosure schedule previously provided by the AmSouth Trust to the Acquiring Trust, the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquired Fund is a series of the AmSouth Trust. The AmSouth Trust is a business trust validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to own all of its properties and assets and, subject to approval by the Acquired Fund's shareholders, to perform its obligations under this Agreement. The Acquired Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the AmSouth Trust and the Acquired Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The AmSouth Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The AmSouth Trust is not in violation of, and the execution and delivery of this Agreement and the performance of its obligations under this Agreement in respect of the Acquired Fund will not result in a violation of, any provision of the AmSouth Trust's A-3 Declaration of Trust or By-Laws or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquired Fund to which the AmSouth Trust is a party or by which the Acquired Fund or any of its assets are bound; (d) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of the Acquired Fund's properties or assets. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquired Fund's business or its ability to consummate the transactions contemplated herein or would be binding upon the Acquiring Fund as the successor to the Acquired Fund; (e) The Acquired Fund has no material contracts or other commitments (other than this Agreement or agreements for the purchase and sale of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) which will not be terminated at or prior to the Closing Date and no such termination will result in liability to the Acquired Fund (or the Acquiring Fund); (f) The statement of assets and liabilities of the Acquired Fund, and the related statements of operations and changes in net assets, as of and for the fiscal year ended July 31, 2005, have been audited by an independent registered public accounting firm retained by the Acquired Fund, and are in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquired Fund as of the date thereof are disclosed therein. The Statement of Assets and Liabilities will be in accordance with GAAP consistently applied and will fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended. Except for the Assumed Liabilities, the Acquired Fund will not have any known or contingent liabilities on the Closing Date. No significant deficiency, material weakness, fraud, significant change or other factor that could significantly affect the internal controls of the Acquired Fund has been disclosed or is required to be disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief executive officer and chief financial officer or other officers of the Acquired Fund to make the certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness, fraud, change, event or other factor exists that will be required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date; (g) Since the most recent fiscal year end, except as specifically disclosed in the Acquired Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the period ended January 31, 2005, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquired Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (g) (but not for any other purpose of this Agreement), a decline in NAV per Acquired Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquired Fund's portfolio or a decline in net assets of the Acquired Fund as a result of redemptions shall not constitute a material adverse change; (h) (A) For each taxable year of its operation since its inception, the Acquired Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company. The Acquired Fund will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquired Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquired Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquired Fund has properly filed on a timely basis all Tax Returns (as defined below) that it was required to file, and all such Tax Returns were complete and accurate in all material respects. The Acquired Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquired Fund was required to file any Tax Return that was not filed; and the Acquired Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquired Fund has timely paid, in the manner prescribed by law, all Taxes (as defined below), which were due and payable or which were claimed to be due; (D) All Tax Returns filed by the Acquired Fund constitute complete and accurate reports of the respective Tax liabilities and all attributes of the Acquired Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns; A-4 (E) The Acquired Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquired Fund has not been notified that any examinations of the Tax Returns of the Acquired Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquired Fund as a result of any audit by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquired Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquired Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquired Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquired Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Statement of Assets and Liabilities, as defined in paragraph 5.7, rather than in any notes thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquired Fund has delivered to the Acquiring Fund or made available to the Acquiring Fund complete and accurate copies of all Tax Returns of the Acquired Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquired Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquired Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquired Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex B; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquired Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquired Fund are accurately reflected on the Acquired Fund's Tax books and records; (N) The Acquired Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law; and (O) For purposes of this Agreement, "Taxes" or "Tax" shall mean all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof; and "Tax Returns" shall mean all reports, returns, declarations, statements or other A-5 information required to be supplied to a governmental or regulatory authority or agency, or to any other person, in connection with Taxes and any associated schedules or work papers produced in connection with such items; (i) All issued and outstanding Acquired Fund Shares are, and at the Closing Date will be, legally issued and outstanding, fully paid and nonassessable by the Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at the time of Closing, be held of record by the persons and in the amounts set forth in the Shareholder List submitted to the Acquiring Fund pursuant to Paragraph 3.5 hereof. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding any security convertible into any Acquired Fund Shares; (j) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Assets, and full right, power and authority to sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the Securities Act; (k) The AmSouth Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the AmSouth Trust's Board of Trustees, and, subject to the approval of the Acquired Fund's shareholders, assuming due authorization, execution and delivery by the Acquiring Fund, this Agreement will constitute a valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (l) The information to be furnished by the Acquired Fund to the Acquiring Fund for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby and any information necessary to compute the total return of the Acquired Fund shall be accurate and complete and shall comply in all material respects with federal securities and other laws and regulations applicable thereto; (m) The information included in the proxy statement (the "Proxy Statement") forming part of the Acquiring Fund's Registration Statement on Form N-14 filed in connection with this Agreement (the "Registration Statement") that has been furnished in writing by the Acquired Fund to the Acquiring Fund for inclusion in the Registration Statement, on the effective date of that Registration Statement and on the Closing Date, will conform in all material respects to the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment Company Act and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (n) Upon the effectiveness of the Registration Statement, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by the AmSouth Trust or the Acquired Fund of the transactions contemplated by this Agreement; (o) All of the issued and outstanding Acquired Fund Shares have been offered for sale and sold in compliance in all material respects with all applicable federal and state securities laws, except as may have been previously disclosed in writing to the Acquiring Fund; (p) The prospectus and statement of additional information of the Acquired Fund and any amendments or supplements thereto, furnished to the Acquiring Fund, did not as of their dates or the dates of their distribution to the public contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which such statements were made, not materially misleading; (q) The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the AmSouth Trust with respect to the Acquired Fund. All advertising and sales material used by the Acquired Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD") and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquired Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, A-6 prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (r) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of the Acquired Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (s) The tax representation certificate to be delivered by AmSouth Trust on behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 4.2 Except as set forth on a disclosure schedule previously provided by the Acquiring Trust to the AmSouth Trust, the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring Trust is a statutory trust duly organized, validly existing and in good standing under the laws of the State of Delaware. The Acquiring Trust has the power to own all of its properties and assets and to perform the obligations under this Agreement. The Acquiring Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the Acquiring Trust and the Acquiring Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Acquiring Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The current prospectus and statement of additional information of the Acquiring Fund and each prospectus and statement of additional information for the Acquiring Fund used during the three years previous to the date of this Agreement, and any amendment or supplement to any of the foregoing, conform or conformed at the time their distribution to the public in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder and do not or did not at the time of their distribution to the public include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not materially misleading; (d) The Acquiring Fund's registration statement on Form N-1A that will be in effect on the Closing Date, and the prospectus and statement of additional information of the Acquiring Fund included therein, will conform in all material respects with the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder, and did not as of the effective date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (e) The Registration Statement, the Proxy Statement and statement of additional information with respect to the Acquiring Fund, and any amendments or supplements thereto in effect on or prior to the Closing Date included in the Registration Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder. Neither the Registration Statement nor the Proxy Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (f) The Acquiring Trust is not in violation of, and the execution and delivery of this Agreement and performance of its obligations under this Agreement will not result in a violation of, any provisions of the Declaration of Trust or by-laws of the Acquiring Trust A-7 or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquiring Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or any of its assets is bound; (g) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or threatened against the Acquiring Fund or any of the Acquiring Fund's properties or assets. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquiring Fund's business or its ability to consummate the transactions contemplated herein; (h) The statement of assets and liabilities of the Acquiring Fund, and the related statements of income and changes in NAV, as of and for the fiscal year ended [____] have been audited by Ernst & Young LLP, independent registered public accounting firm, and are in accordance with GAAP consistently applied and fairly reflect, in all material respects, the financial condition of the Acquiring Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquiring Fund as of the date thereof are disclosed therein; (i) Since the most recent fiscal year end, except as specifically disclosed in the Acquiring Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, [or its semi-annual report for the period ended ____, 2005], there has not been any material adverse change in the Acquiring Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquiring Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (i) (but not for any other purpose of this Agreement), a decline in NAV per Acquiring Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquiring Fund's portfolio or a decline in net assets of the Acquiring Fund as a result of redemptions shall not constitute a material adverse change; (j) (A) For each taxable year of its operation since its inception, the Acquiring Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company and will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquiring Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquiring Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquiring Fund has properly filed on a timely basis all Tax Returns that it was required to file, and all such Tax Returns were complete and accurate in all material respects. The Acquiring Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquiring Fund was required to file any Tax Return that was not filed; and the Acquiring Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquiring Fund has timely paid, in the manner prescribed by law, all Taxes that were due and payable or that were claimed to be due; (D) All Tax Returns filed by the Acquiring Fund constitute complete and accurate reports of the respective liabilities for Taxes and all attributes of the Acquiring Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns; (E) The Acquiring Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquiring Fund has not been notified that any examinations of the Tax Returns of the Acquiring Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquiring Fund as a result of any audit by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquiring Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquiring Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquiring Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquiring Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth in the financial statements referred to in paragraph 4.2(h). All Taxes that the Acquiring Fund is or was required A-8 by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquiring Trust has delivered to AmSouth Trust or made available to AmSouth Trust complete and accurate copies of all Tax Returns of the Acquiring Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquiring Fund. The Acquiring Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquiring Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquiring Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquiring Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex A; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquiring Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquiring Fund are accurately reflected on the Acquiring Fund's Tax books and records; (N) The Acquiring Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law, except as set forth on Schedule 4.2; (k) The authorized capital of the Acquiring Fund consists of an unlimited number of shares of beneficial interest, no par value per share. As of the Closing Date, the Acquiring Fund will be authorized to issue an unlimited number of shares of beneficial interest, no par value per share. The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will have been duly authorized on the Closing Date and, when so issued and delivered, will be legally issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor is there outstanding any security convertible into any Acquiring Fund shares; (l) All issued and outstanding Acquiring Fund Shares are, and on the Closing Date will be, legally issued, fully paid and non-assessable and have been offered and sold in every state and the District of Columbia in compliance in all material respects with all applicable federal and state securities laws; (m) The Acquiring Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquiring Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Acquired Fund, this Agreement will constitute a valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (n) The information to be furnished in writing by the Acquiring Fund or the Acquiring Fund Adviser for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; A-9 (o) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by the Agreement by the Acquiring Fund, except for the registration of the Acquiring Fund Shares under the Securities Act and the Investment Company Act; (p) The Acquiring Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquiring Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the Acquiring Trust with respect to the Acquiring Fund. All advertising and sales material used by the Acquiring Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the NASD and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquiring Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (q) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of the Acquiring Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (r) The tax representation certificate to be delivered by the Acquiring Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 5. COVENANTS OF THE FUNDS 5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary course of business between the date hereof and the Closing Date. It is understood that such ordinary course of business will include the declaration and payment of customary dividends and other distributions and any other dividends and other distributions necessary or advisable (except to the extent dividends or other distributions that are not customary may be limited by representations made in connection with the issuance of the tax opinion described in Paragraph 8.5 hereof), in each case payable either in cash or in additional shares. 5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's shareholders to consider approval of this Agreement and act upon the matters set forth in the Proxy Statement. 5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and Proxy Statement (collectively, "Proxy Materials") to be used in connection with such meeting, and will promptly prepare and file with the Commission the Registration Statement. The AmSouth Trust will provide the Acquiring Fund with information reasonably requested for the preparation of the Registration Statement in compliance with the Securities Act, the Exchange Act, and the Investment Company Act. 5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired by the Acquired Fund for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement. 5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requires concerning the beneficial ownership of the Acquired Fund Shares. 5.6 Subject to the provisions of this Agreement, each Fund will take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement. A-10 5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date a statement of assets and liabilities of the Acquired Fund ("Statement of Assets and Liabilities") as of the Closing Date setting forth the NAV (as computed pursuant to Paragraph 2.1) of the Acquired Fund as of the Valuation Time, which statement shall be prepared in accordance with GAAP consistently applied and certified by the AmSouth Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but in any case within 30 days after the Closing Date, the AmSouth Trust shall furnish to the Acquiring Trust, in such form as is reasonably satisfactory to the Acquiring Trust, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, and of any capital loss carryovers and other items that will be carried over to the Acquiring Fund under the Code, and which statement will be certified by the Treasurer of the AmSouth Trust. 5.8 Neither Fund shall take any action that is inconsistent with the representations set forth in, with respect to the Acquired Fund, the Acquired Fund Tax Representation Certificate and, with respect to the Acquiring Fund, the Acquiring Fund Tax Representation Certificate. 5.9 From and after the date of this Agreement and until the Closing Date, each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its commercially reasonable efforts to cause the Reorganization to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent the Reorganization from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the Code. Unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code, the parties hereto shall treat and report the transactions contemplated hereby as a reorganization within the meaning of Section [368(a)(1)(C)/(D)] of the Code and shall not take any position inconsistent with such treatment. 5.10 From and after the date of this Agreement and through the time of the Closing, each Fund shall use its commercially reasonable efforts to cause it to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent it from qualifying as a regulated investment company under the provisions of Subchapter M of the Code. 5.11 Each Fund shall prepare, or cause to be prepared, all of its Tax Returns for taxable periods that end on or before the Closing Date and shall timely file, or cause to be timely filed, all such Tax Returns. Each Fund shall make any payments of Taxes required to be made by it with respect to any such Tax Returns. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions, unless waived by the Acquired Fund in writing: 6.1 All representations and warranties by the Acquiring Trust on behalf of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring Fund executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust and dated as of the Closing Date, to the effect that the representations and warranties of the Acquiring Trust made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 6 have been met, and as to such other matters as the AmSouth Trust shall reasonably request; 6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquiring Fund; 6.4 With respect to the Acquiring Fund, the Board of Trustees of the Acquiring Trust shall have determined that the Reorganization is in the best interests of the Acquiring Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby; and 6.5 The AmSouth Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the Acquiring Trust and related matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing Date, in a form reasonably satisfactory to the AmSouth Trust. A-11 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions, unless waived by the Acquiring Fund in writing: 7.1 All representations and warranties of the AmSouth Trust on behalf of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 7.2 The AmSouth Trust shall have delivered to the Acquiring Fund the Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.7, together with a list of its portfolio securities showing the federal income tax bases and holding periods of such securities, as of the Closing Date, certified by the AmSouth Trust's Treasurer or Assistant Treasurer; 7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund executed in its name by its President or Vice President and a Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the Acquiring Trust and dated as of the Closing Date, to the effect that the representations and warranties of the AmSouth Trust contained in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 7 have been met, and as to such other matters as the Acquiring Trust shall reasonably request; 7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the AmSouth Trust and the Acquiring Trust, concerning certain tax-related matters with respect to the Acquired Fund; 7.5 The Acquiring Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the AmSouth Trust and related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and 7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth Trust shall have determined that the Reorganization is in the best interests of the Acquired Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 8. FURTHER CONDITIONS PRECEDENT If any of the conditions set forth below does not exist on or before the Closing Date with respect to either party hereto, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the Acquired Fund's shareholders in accordance with the provisions of the AmSouth Trust's Declaration of Trust and By-Laws, and certified copies of the resolutions evidencing such approval by the Acquired Fund's shareholders shall have been delivered by the Acquired Fund to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither party hereto may waive the conditions set forth in this Paragraph 8.1; 8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein; 8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by either party hereto to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party hereto, provided that either party may waive any such conditions for itself; 8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have become effective under the Securities Act and no stop orders suspending the effectiveness of such Registration Statement shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act; 8.5 The parties shall have received an opinion of Wilmer Cutler Pickering Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and subject to customary assumptions and qualifications, substantially to the effect that for federal income tax purposes A-12 the acquisition by the Acquiring Fund of the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring Fund, followed by the distribution by the Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for their Acquired Fund Shares and the termination of the Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code; 8.6 The Acquired Fund shall have distributed to its shareholders, in a distribution or distributions qualifying for the deduction for dividends paid under Section 561 of the Code, all of its investment company taxable income (as defined in Section 852(b)(2) of the Code determined without regard to Section 852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all of the excess of (i) its interest income excludable from gross income under Section 103(a) of the Code over (ii) its deductions disallowed under Sections 265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date, and all of its net capital gain (as such term is used in Sections 852(b)(3)(A) and (C) of the Code), after reduction by any available capital loss carryforward, for its taxable year ending on the Closing Date; and 8.7 The Acquiring Fund shall have made a distribution of at least 80% of its accumulated undistributed realized net capital gains as of seven business days before the Closing Date (the "Determination Date") to its shareholders on or about three business days before the Closing Date; provided that the Acquiring Fund shall not be required to make such distribution if (i) such gains do not exceed 3% of the net assets of the Acquiring Fund on such date, both as determined in accordance with GAAP consistently applied and certified by the Acquiring Fund's Treasurer or Assistant Treasurer, or (ii) the Acquiring Fund shall have been notified by the staff of the Commission in response to a request in accordance with Rule 19b-1(e) under the Investment Company Act that the staff objects to the proposed distribution. If the Acquiring Fund distributes income monthly, the dividend distribution that the Acquiring Fund would make in September 2005 shall have been made to shareholders of record prior to closing. 9. BROKERAGE FEES AND EXPENSES 9.1 Each party hereto represents and warrants to the other party hereto that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI") and the Acquiring Fund Adviser -- and the parties have entered into this Agreement in reliance on such information -- that certain non-parties will pay (with each of AmSouth Bancorporation or AAMI and the Acquiring Fund Adviser being responsible for 50% of such amounts) all proxy statement and solicitation costs of the Funds associated with the Reorganization including, but not limited to, the expenses associated with the preparation, printing and mailing of any and all shareholder notices, communications, proxy statements, and necessary filings with the SEC or any other governmental authority in connection with the transactions contemplated by this Agreement and the fees and expenses of any proxy solicitation firm retained in connection with the Reorganization. Except for the foregoing, the AAMI shall bear the expenses of the Acquired Fund in connection with the transactions contemplated by this Agreement. 10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES 10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party has made any representation, warranty or covenant not set forth herein or referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the entire agreement between the parties. 10.2 The representations and warranties contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder. 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Acquiring Trust and the AmSouth Trust. In addition, either party may at its option terminate this Agreement at or prior to the Closing Date: (a) because of a material breach by the other of any representation, warranty, covenant or agreement contained herein to be performed at or prior to the Closing Date; (b) because of a condition herein expressed to be precedent to the obligations of the terminating party which has not been met and which reasonably appears will not or cannot be met; (c) by resolution of the Acquiring Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquiring Fund's shareholders; (d) by resolution of the AmSouth Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquired Fund's shareholders; or A-13 (e) if the transactions contemplated by this Agreement shall not have occurred on or prior to December 31, 2005 or such other date as the parties may mutually agree upon in writing. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it incidental to the preparation and carrying out of this Agreement. 12. AMENDMENTS This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the AmSouth Trust and the Acquiring Trust; provided, however, that following the meeting of the Acquired Fund's shareholders called by the AmSouth Trust pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the effect of changing the provisions regarding the method for determining the number of Acquiring Fund Shares to be received by the Acquired Fund Shareholders under this Agreement to their detriment without their further approval; provided that nothing contained in this Section 12 shall be construed to prohibit the parties from amending this Agreement to change the Closing Date. 13. NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o AmSouth Asset Management Inc., 1900 Fifth Avenue North, 10th Floor, Birmingham, Alabama 35203, Attention: Andrew Chambless, with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800 Massachusetts Avenue, N.W., Washington, DC, 20036-1221, Attention: Clifford J. Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc., 60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa, Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: David C. Phelan. 14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 14.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 14.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 14.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to conflict of laws principles (other than Delaware Code Title 6 [sec] 2708); provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern. 14.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the prior written consent of the other party hereto. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, or other entity, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 14.5 It is expressly agreed that the obligations of the Acquiring Trust and the AmSouth Trust shall not be binding upon any of their respective trustees, shareholders, nominees, officers, agents or employees personally, but bind only to the property of the Acquiring Fund or the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. The execution and delivery of this Agreement have been authorized by the trustees of the Acquiring Trust and of the AmSouth Trust and this Agreement has been executed by authorized officers of the Acquiring Trust and the AmSouth Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to imposed any liability on any of them personally, but shall bind only the property of the Acquiring Fund and the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. A-14 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first set forth above by its President or Vice President and attested by its Secretary or Assistant Secretary. Attest: AMSOUTH FUNDS on behalf of AMSOUTH [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Name: Title: [Assistant] Secretary Title: [Vice] President Attest: PIONEER [______] FUND on behalf of PIONEER [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Christopher J. Kelley Name: Osbert M. Hood Title: Assistant Secretary Title: Executive Vice President A-15 Exhibit A-2 -- Form of Agreement and Plan of Reorganization (F Reorganizations) AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of the day of [ ], 2005, by and between Pioneer [ ] Fund, a Delaware statutory trust (the "Acquiring Trust"), on behalf of its series Pioneer [ ] Fund (the "Acquiring Fund"), with its principal place of business at 60 State Street, Boston, Massachusetts 02109, and AmSouth Funds, a Massachusetts business trust (the "AmSouth Trust"), on behalf of its series AmSouth [ ] Fund (the "Acquired Fund"), with its principal place of business at 3435 Stelzer Road, Columbus, Ohio 43219. The Acquiring Fund and the Acquired Fund are sometimes referred to collectively herein as the "Funds" and individually as a "Fund." This Agreement is intended to be and is adopted as a plan of a "reorganization" as defined in Section 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations thereunder. The reorganization (the "Reorganization") will consist of (1) the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in exchange solely for (A) the issuance of Class A, Class B and Class Y shares of beneficial interest of the Acquiring Fund (collectively, the "Acquiring Fund Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (B) the assumption by the Acquiring Fund of all liabilities of the Acquired Fund (collectively, the "Assumed Liabilities"), and (2) the distribution by the Acquired Fund, on or promptly after the closing date of the Reorganization (the "Closing Date") as provided herein, of the Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation and dissolution of the Acquired Fund, all upon the terms and conditions hereinafter set forth in this Agreement. WHEREAS, the Acquiring Trust and the AmSouth Trust are each registered investment companies classified as management companies of the open-end type. WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial interest. WHEREAS, the Board of Trustees of the AmSouth Trust has determined that the Reorganization is in the best interests of the Acquired Fund shareholders and is not dilutive of the interests of those shareholders. NOW, THEREFORE, in consideration of the premises of the covenants and agreements hereinafter set forth, the parties hereto covenant and agree as follows: 1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES; LIQUIDATION AND TERMINATION OF THE ACQUIRED FUND. 1.1 Subject to the terms and conditions herein set forth and on the basis of the representations and warranties contained herein, the Acquired Fund will transfer all of its assets as set forth in Paragraph 1.2 (the "Acquired Assets") to the Acquiring Fund free and clear of all liens and encumbrances (other than those arising under the Securities Act of 1933, as amended (the "Securities Act"), liens for taxes not yet due and contractual restrictions on the transfer of the Acquired Assets) and the Acquiring Fund agrees in exchange therefor: (i) to issue to the Acquired Fund the number of Acquiring Fund Shares, including fractional Acquiring Fund Shares, of each class with an aggregate net asset value ("NAV") equal to the NAV of the Acquired Fund attributable to the corresponding class of the Acquired Fund's shares, as determined in the manner set forth in Paragraphs 2.1 and 2.2; and (ii) to assume the Assumed Liabilities. Such transactions shall take place at the Closing (as defined in Paragraph 3.1 below). 1.2 (a) The Acquired Assets shall consist of all of the Acquired Fund's property, including, without limitation, all portfolio securities and instruments, dividends and interest receivables, cash, goodwill, contractual rights and choses in action of the Acquired Fund or the AmSouth Trust in respect of the Acquired Fund, all other intangible property owned by the Acquired Fund, originals or copies of all books and records of the Acquired Fund, and all other assets of the Acquired Fund on the Closing Date. The Acquiring Fund shall also be entitled to receive (or, to the extent agreed upon between the AmSouth Trust and the Acquiring Trust, be provided access to) copies of all records that the AmSouth Trust is required to maintain under the Investment Company Act of 1940, as amended (the "Investment Company Act"), and the rules of the Securities and Exchange Commission (the "Commission") thereunder to the extent such records pertain to the Acquired Fund. (b) The Acquired Fund has provided the Acquiring Fund with a list of all of the Acquired Fund's securities and other assets as of the date of execution of this Agreement, and the Acquiring Fund has provided the Acquired Fund with a copy of the current fundamental investment policies and restrictions and fair value procedures applicable to the Acquiring Fund. The Acquired Fund reserves the right to sell any of such securities or other assets before the Closing Date (except to the extent sales may be limited by representations of the Acquired Fund contained herein and made in connection with the issuance of the tax opinion provided for in Paragraph 8.5 hereof) and A-16 agrees not to acquire any portfolio security that is not an eligible investment for, or that would violate an investment policy or restriction of, the Acquiring Fund. 1.3 The Acquired Fund will endeavor to discharge all of its known liabilities and obligations that are or will become due prior to the Closing. 1.4 On or as soon after the Closing Date as is conveniently practicable (the "Liquidation Date"), the AmSouth Trust shall liquidate the Acquired Fund and distribute pro rata to its shareholders of record, determined as of the close of regular trading on the New York Stock Exchange on the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund Shares received by the Acquired Fund pursuant to Paragraph 1.1 hereof. Each Acquired Fund Shareholder shall receive the number of Acquiring Fund Shares of the class corresponding to the class of shares of beneficial interest in the Acquired Fund (the "Acquired Fund Shares") held by such Acquired Fund Shareholder that have an aggregate NAV equal to the aggregate NAV of the Acquired Fund Shares held of record by such Acquired Fund Shareholder on the Closing Date. Such liquidation and distribution will be accomplished by the AmSouth Trust instructing the Acquiring Trust to transfer the Acquiring Fund Shares then credited to the account of the Acquired Fund on the books of the Acquiring Fund to open accounts on the share records of the Acquiring Fund established and maintained by the Acquiring Fund's transfer agent in the names of the Acquired Fund Shareholders and representing the respective pro rata number of the Acquiring Fund Shares due the Acquired Fund Shareholders. The AmSouth Trust shall promptly provide the Acquiring Trust with evidence of such liquidation and distribution. All issued and outstanding Acquired Fund Shares will simultaneously be cancelled on the books of the Acquired Fund, and the Acquired Fund will be dissolved. The Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares in connection with such exchange. 1.5 Ownership of Acquiring Fund Shares will be shown on the books of the Acquiring Fund's transfer agent. Any certificates representing ownership of Acquired Fund Shares that remain outstanding on the Closing Date shall be deemed to be cancelled and shall no longer evidence ownership of Acquired Fund Shares. 1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name other than the registered holder of the Acquired Fund Shares on the books of the Acquired Fund as of that time shall, as a condition of such issuance and transfer, be paid by the person to whom such Acquiring Fund Shares are to be issued and transferred. 1.7 Any reporting responsibility of the AmSouth Trust with respect to the Acquired Fund for taxable periods ending on or before the Closing Date, including, but not limited to, the responsibility for filing of regulatory reports, Tax Returns (as defined in Paragraph 4.1), or other documents with the Commission, any state securities commissions, and any federal, state or local tax authorities or any other relevant regulatory authority, is and shall remain the responsibility of the AmSouth Trust. 2. VALUATION 2.1 The NAV of the Acquiring Fund Shares and the NAV of the Acquired Fund shall, in each case, be determined as of the close of regular trading on the New York Stock Exchange (generally, 4:00 p.m., Boston time) on the Closing Date (the "Valuation Time"). The NAV of each class of Acquiring Fund Shares shall be equal to the NAV of the corresponding class of the Acquired Fund Shares as of the Valuation Time. The NAV of the Acquired Fund and of each Class A, B and I share thereof shall be computed by ASO Services Company, Inc. (the "Acquired Fund Administrator") in the manner set forth in the Acquiring Trust's Declaration of Trust, or By-laws, and the Acquiring Fund's then-current prospectus and statement of additional information. Pioneer Investment Management, Inc. (the "Acquiring Fund Adviser") shall confirm to the Acquiring Fund the NAV of the Acquired Fund. 2.2 The number of Acquiring Fund Shares to be issued (including fractional shares, if any) in exchange for the Acquired Assets and the assumption of the Assumed Liabilities shall be determined by Acquiring Fund Adviser by dividing the NAV of the Acquired Fund, as determined in accordance with Paragraph 2.1, by the NAV of each Acquiring Fund Share, as determined in accordance with Paragraph 2.1. 2.3 The Acquired Fund shall cause the Acquired Fund Administrator to deliver a copy of its valuation report to the Acquiring Fund at Closing. All computations of value shall be made by the Acquired Fund Administrator in accordance with its regular practice as pricing agent for the Acquired Fund. 3. CLOSING AND CLOSING DATE 3.1 The Closing Date shall be [ ], 2005, or such later date as the parties may agree to in writing. All acts necessary to consummate the Reorganization (the "Closing") shall be deemed to take place simultaneously as of 5:00 p.m. (Eastern time) on the Closing Date unless otherwise provided. The Closing shall be held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts, or at such other place as the parties may agree. A-17 3.2 Portfolio securities that are held other than in book-entry form in the name of AmSouth Bank (the "Acquired Fund Custodian") as record holder for the Acquired Fund shall be presented by the Acquired Fund to Brown Brothers Harriman & Co. (the "Acquiring Fund Custodian") for examination no later than three business days preceding the Closing Date. Such portfolio securities shall be delivered by the Acquired Fund to the Acquiring Fund Custodian for the account of the Acquiring Fund on the Closing Date, duly endorsed in proper form for transfer, in such condition as to constitute good delivery thereof in accordance with the custom of brokers, and shall be accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. Portfolio securities held of record by the Acquired Fund Custodian in book-entry form on behalf of the Acquired Fund shall be delivered by the Acquired Fund Custodian through the Depository Trust Company to the Acquiring Fund Custodian and by the Acquiring Fund Custodian recording the beneficial ownership thereof by the Acquiring Fund on the Acquiring Fund Custodian's records. Any cash shall be delivered by the Acquired Fund Custodian transmitting immediately available funds by wire transfer to the Acquiring Fund Custodian the cash balances maintained by the Acquired Fund Custodian and the Acquiring Fund Custodian crediting such amount to the account of the Acquiring Fund. 3.3 The Acquiring Fund Custodian shall deliver within one business day after the Closing a certificate of an authorized officer stating that: (a) the Acquired Assets have been delivered in proper form to the Acquiring Fund on the Closing Date, and (b) all necessary transfer taxes including all applicable federal and state stock transfer stamps, if any, have been paid, or provision for payment has been made in conjunction with the delivery of portfolio securities as part of the Acquired Assets. 3.4 If on the Closing Date (a) the New York Stock Exchange is closed to trading or trading thereon shall be restricted or (b) trading or the reporting of trading on such exchange or elsewhere is disrupted so that accurate appraisal of the NAV of the Acquired Fund pursuant to Paragraph 2.1 is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored. 3.5 The Acquired Fund shall deliver at the Closing a list of the names, addresses, federal taxpayer identification numbers and backup withholding and nonresident alien withholding status and certificates of the Acquired Fund Shareholders and the number and percentage ownership of outstanding Acquired Fund Shares owned by each Acquired Fund Shareholder as of the Valuation Time, certified by the President or a Secretary of the AmSouth Trust and its Treasurer, Secretary or other authorized officer (the "Shareholder List") as being an accurate record of the information (a) provided by the Acquired Fund Shareholders, (b) provided by the Acquired Fund Custodian, or (c) derived from the AmSouth Trust's records by such officers or one of the AmSouth Trust's service providers. The Acquiring Fund shall issue and deliver to the Acquired Fund a confirmation evidencing the Acquiring Fund Shares to be credited on the Closing Date, or provide evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares have been credited to the Acquired Fund's account on the books of the Acquiring Fund. At the Closing, each party shall deliver to the other such bills of sale, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request. 4. REPRESENTATIONS AND WARRANTIES 4.1 Except as set forth on a disclosure schedule previously provided by the AmSouth Trust to the Acquiring Trust, the AmSouth Trust, on behalf of the Acquired Fund, represents, warrants and covenants to the Acquiring Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquired Fund is a series of the AmSouth Trust. The AmSouth Trust is a business trust validly existing and in good standing under the laws of the Commonwealth of Massachusetts and has the power to own all of its properties and assets and, subject to approval by the Acquired Fund's shareholders, to perform its obligations under this Agreement. The Acquired Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the AmSouth Trust and the Acquired Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The AmSouth Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The AmSouth Trust is not in violation of, and the execution and delivery of this Agreement and the performance of its obligations under this Agreement in respect of the Acquired Fund will not result in a violation of, any provision of the AmSouth Trust's Declaration of Trust or By-Laws or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquired Fund to which the AmSouth Trust is a party or by which the Acquired Fund or any of its assets are bound; (d) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or to its knowledge threatened against the Acquired Fund or any of the Acquired Fund's properties or assets. The Acquired Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the AmSouth Trust nor the Acquired Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely A-18 affects the Acquired Fund's business or its ability to consummate the transactions contemplated herein or would be binding upon the Acquiring Fund as the successor to the Acquired Fund; (e) The Acquired Fund has no material contracts or other commitments (other than this Agreement or agreements for the purchase and sale of securities entered into in the ordinary course of business and consistent with its obligations under this Agreement) which will not be terminated at or prior to the Closing Date and no such termination will result in liability to the Acquired Fund (or the Acquiring Fund); (f) The statement of assets and liabilities of the Acquired Fund, and the related statements of operations and changes in net assets, as of and for the fiscal year ended July 31, 2005, have been audited by an independent registered public accounting firm retained by the Acquired Fund, and are in accordance with generally accepted accounting principles ("GAAP") consistently applied and fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended, and all known liabilities, whether actual or contingent, of the Acquired Fund as of the date thereof are disclosed therein. The Statement of Assets and Liabilities will be in accordance with GAAP consistently applied and will fairly reflect, in all material respects, the financial condition of the Acquired Fund as of such date and the results of its operations for the period then ended. Except for the Assumed Liabilities, the Acquired Fund will not have any known or contingent liabilities on the Closing Date. No significant deficiency, material weakness, fraud, significant change or other factor that could significantly affect the internal controls of the Acquired Fund has been disclosed or is required to be disclosed in the Acquired Fund's reports on Form N-CSR to enable the chief executive officer and chief financial officer or other officers of the Acquired Fund to make the certifications required by the Sarbanes-Oxley Act, and no deficiency, weakness, fraud, change, event or other factor exists that will be required to be disclosed in the Acquiring Fund's Form N-CSR after the Closing Date; (g) Since the most recent fiscal year end, except as specifically disclosed in the Acquired Fund's prospectus, its statement of additional information as in effect on the date of this Agreement, or its semi-annual report for the period ended January 31, 2005, there has not been any material adverse change in the Acquired Fund's financial condition, assets, liabilities, business or prospects, or any incurrence by the Acquired Fund of indebtedness, except for normal contractual obligations incurred in the ordinary course of business or in connection with the settlement of purchases and sales of portfolio securities. For the purposes of this subparagraph (g) (but not for any other purpose of this Agreement), a decline in NAV per Acquired Fund Share arising out of its normal investment operations or a decline in market values of securities in the Acquired Fund's portfolio or a decline in net assets of the Acquired Fund as a result of redemptions shall not constitute a material adverse change; (h) (A) For each taxable year of its operation since its inception, the Acquired Fund has satisfied, and for the current taxable year it will satisfy, the requirements of Subchapter M of the Code for qualification and treatment as a regulated investment company and will qualify as such as of the Closing Date and will satisfy the diversification requirements of Section 851(b)(3) of the Code without regard to the last sentence of Section 851(d) of the Code. The Acquired Fund has not taken any action, caused any action to be taken or caused any action to fail to be taken which action or failure could cause the Acquired Fund to fail to qualify as a regulated investment company under the Code; (B) Within the times and in the manner prescribed by law, the Acquired Fund has properly filed on a timely basis all Tax Returns (as defined below) that it was required to file, and all such Tax Returns were complete and accurate in all material respects. [The Agreement for the AmSouth International Equity Fund will include an exception for Forms 1099-DIV distributed in January 2005.] The Acquired Fund has not been informed by any jurisdiction that the jurisdiction believes that the Acquired Fund was required to file any Tax Return that was not filed; and the Acquired Fund does not know of any basis upon which a jurisdiction could assert such a position; (C) The Acquired Fund has timely paid, in the manner prescribed by law, all Taxes (as defined below), which were due and payable or which were claimed to be due; (D) All Tax Returns filed by the Acquired Fund constitute complete and accurate reports of the respective Tax liabilities and all attributes of the Acquired Fund or, in the case of information returns and payee statements, the amounts required to be reported, and accurately set forth all items required to be included or reflected in such returns [The Agreement for the AmSouth International Equity Fund will include an exception for Forms 1099-DIV distributed in January 2005.]; (E) The Acquired Fund has not waived or extended any applicable statute of limitations relating to the assessment or collection of Taxes; (F) The Acquired Fund has not been notified that any examinations of the Tax Returns of the Acquired Fund are currently in progress or threatened, and no deficiencies have been asserted or assessed against the Acquired Fund as a result of any audit A-19 by the Internal Revenue Service or any state, local or foreign taxing authority, and, to its knowledge, no such deficiency has been proposed or threatened; (G) The Acquired Fund has no actual or potential liability for any Tax obligation of any taxpayer other than itself. The Acquired Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquired Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (H) The unpaid Taxes of the Acquired Fund for tax periods through the Closing Date do not exceed the accruals and reserves for Taxes (excluding accruals and reserves for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the Statement of Assets and Liabilities, as defined in paragraph 5.7, rather than in any notes thereto (the "Tax Reserves"). All Taxes that the Acquired Fund is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been timely paid to the proper governmental agency; (I) The Acquired Fund has delivered to the Acquiring Fund or made available to the Acquiring Fund complete and accurate copies of all Tax Returns of the Acquired Fund, together with all related examination reports and statements of deficiency for all periods not closed under the applicable statutes of limitations and complete and correct copies of all private letter rulings, revenue agent reports, information document requests, notices of proposed deficiencies, deficiency notices, protests, petitions, closing agreements, settlement agreements, pending ruling requests and any similar documents submitted by, received by or agreed to by or on behalf of the Acquired Fund. The Acquired Fund has disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; (J) The Acquired Fund has not undergone, has not agreed to undergo, and is not required to undergo (nor will it be required as a result of the transactions contemplated in this Agreement to undergo) a change in its method of accounting resulting in an adjustment to its taxable income pursuant to Section 481 of the Code. The Acquired Fund will not be required to include any item of income in, or exclude any item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any (i) change in method of accounting for a taxable period ending on or prior to the Closing Date under Section 481(c) of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (ii) "closing agreement" as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) installment sale or open transaction disposition made on or prior to the Closing Date; or (iv) prepaid amount received on or prior to the Closing Date; (K) The Acquired Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex B; (L) There are (and as of immediately following the Closing there will be) no liens on the assets of the Acquired Fund relating to or attributable to Taxes, except for Taxes not yet due and payable; (M) The Tax bases of the assets of the Acquired Fund are accurately reflected on the Acquired Fund's Tax books and records; (N) The Acquired Fund's Tax attributes are not limited under the Code (including but not limited to any capital loss carry forward limitations under Sections 382 or 383 of the Code and the Treasury Regulations thereunder) or comparable provisions of state law; and (O) For purposes of this Agreement, "Taxes" or "Tax" shall mean all taxes, charges, fees, levies or other similar assessments or liabilities, including without limitation income, gross receipts, ad valorem, premium, value-added, excise, real property, personal property, sales, use, transfer, withholding, employment, unemployment, insurance, social security, business license, business organization, environmental, workers compensation, payroll, profits, license, lease, service, service use, severance, stamp, occupation, windfall profits, customs, duties, franchise and other taxes imposed by the United States of America or any state, local or foreign government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest, fines, penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest or dispute thereof; and "Tax Returns" shall mean all reports, returns, declarations, statements or other information required to be supplied to a governmental or regulatory authority or agency, or to any other person, in connection with Taxes and any associated schedules or work papers produced in connection with such items; (i) All issued and outstanding Acquired Fund Shares are, and at the Closing Date will be, legally issued and outstanding, fully paid and nonassessable by the Acquired Fund. All of the issued and outstanding Acquired Fund Shares will, at the time of Closing, be held of record by the persons and in the amounts set forth in the Shareholder List submitted to the Acquiring Fund pursuant to A-20 Paragraph 3.5 hereof. The Acquired Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquired Fund Shares, nor is there outstanding any security convertible into any Acquired Fund Shares; (j) At the Closing Date, the Acquired Fund will have good and marketable title to the Acquired Assets, and full right, power and authority to sell, assign, transfer and deliver the Acquired Assets to the Acquiring Fund, and, upon delivery and payment for the Acquired Assets, the Acquiring Fund will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, except such restrictions as might arise under the Securities Act; (k) The AmSouth Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the AmSouth Trust's Board of Trustees, and, subject to the approval of the Acquired Fund's shareholders, assuming due authorization, execution and delivery by the Acquiring Fund, this Agreement will constitute a valid and binding obligation of the Acquired Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (l) The information to be furnished by the Acquired Fund to the Acquiring Fund for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby and any information necessary to compute the total return of the Acquired Fund shall be accurate and complete and shall comply in all material respects with federal securities and other laws and regulations applicable thereto; (m) The information included in the proxy statement (the "Proxy Statement") forming part of the Acquiring Fund's Registration Statement on Form N-14 filed in connection with this Agreement (the "Registration Statement") that has been furnished in writing by the Acquired Fund to the Acquiring Fund for inclusion in the Registration Statement, on the effective date of that Registration Statement and on the Closing Date, will conform in all material respects to the applicable requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Investment Company Act and the rules and regulations of the Commission thereunder and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (n) Upon the effectiveness of the Registration Statement, no consent, approval, authorization or order of any court or governmental authority is required for the consummation by the AmSouth Trust or the Acquired Fund of the transactions contemplated by this Agreement; (o) All of the issued and outstanding Acquired Fund Shares have been offered for sale and sold in compliance in all material respects with all applicable federal and state securities laws, except as may have been previously disclosed in writing to the Acquiring Fund; (p) The prospectus and statement of additional information of the Acquired Fund, and any amendments or supplements thereto, furnished to the Acquiring Fund, did not as of their dates or the dates of their distribution to the public contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which such statements were made, not materially misleading; (q) The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, the requirements of, and the rules and regulations under, the Investment Company Act, the Securities Act, the Exchange Act, state "Blue Sky" laws and all other applicable federal and state laws or regulations. The Acquired Fund currently complies in all material respects with, and since its organization has complied in all material respects with, all investment objectives, policies, guidelines and restrictions and any compliance procedures established by the AmSouth Trust with respect to the Acquired Fund. All advertising and sales material used by the Acquired Fund complies in all material respects with and has complied in all material respects with the applicable requirements of the Securities Act, the Investment Company Act, the rules and regulations of the Commission, and, to the extent applicable, the Conduct Rules of the National Association of Securities Dealers, Inc. (the "NASD") and any applicable state regulatory authority. All registration statements, prospectuses, reports, proxy materials or other filings required to be made or filed with the Commission, the NASD or any state securities authorities by the Acquired Fund have been duly filed and have been approved or declared effective, if such approval or declaration of effectiveness is required by law. Such registration statements, prospectuses, reports, proxy materials and other filings under the Securities Act, the Exchange Act and the Investment Company Act (i) are or were in compliance in all material respects with the requirements of all applicable statutes and the rules and regulations thereunder and (ii) do not or did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not false or misleading; (r) The Acquired Fund has previously provided to the Acquiring Fund (and at the Closing will provide an update through the Closing Date of such information) data which supports a calculation of the Acquired Fund's total return for all periods since the A-21 organization of the Acquired Fund. Such data has been prepared in accordance in all material respects with the requirements of the Investment Company Act and the regulations thereunder and the rules of the NASD; (s) Neither the Acquired Fund nor, to the knowledge of the Acquired Fund, any "affiliated person" of the Acquired Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquired Fund, has any affiliated person of the Acquired Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (t) The tax representation certificate to be delivered by AmSouth Trust on behalf of the Acquired Fund to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP at the Closing pursuant to Paragraph 7.4 (the "Acquired Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 4.2 Except as set forth on a disclosure schedule previously provided by the Acquiring Trust to the AmSouth Trust, the Acquiring Trust, on behalf of the Acquiring Fund, represents, warrants and covenants to the Acquired Fund, which representations, warranties and covenants will be true and correct on the date hereof and on the Closing Date as though made on and as of the Closing Date, as follows: (a) The Acquiring Fund is a series of the Acquiring Trust. The Acquiring Fund has not commenced operations and will not do so until the Closing. The Acquiring Trust is a statutory trust duly organized, validly existing and in good standing under the laws of the State of Delaware. The Acquiring Trust has the power to own all of its properties and assets and to perform the obligations under this Agreement. The Acquiring Fund is not required to qualify to do business in any jurisdiction in which it is not so qualified or where failure to qualify would subject it to any material liability or disability. Each of the Acquiring Trust and the Acquiring Fund has all necessary federal, state and local authorizations to own all of its properties and assets and to carry on its business as now being conducted; (b) The Acquiring Trust is a registered investment company classified as a management company of the open-end type, and its registration with the Commission as an investment company under the Investment Company Act is in full force and effect; (c) The Acquiring Fund's registration statement on Form N-1A that will be in effect on the Closing Date, and the prospectus and statement of additional information of the Acquiring Fund included therein, will conform in all material respects with the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder, and did not as of the effective date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (d) The Registration Statement, the Proxy Statement and statement of additional information with respect to the Acquiring Fund and any amendments or supplements thereto in effect on or prior to the Closing Date included in the Registration Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform in all material respects to the applicable requirements of the Securities Act and the Investment Company Act and the rules and regulations of the Commission thereunder. Neither the Registration Statement nor the Proxy Statement (other than written information furnished by the Acquired Fund for inclusion therein, as covered by the Acquired Fund's warranty in Paragraph 4.1(m) hereof) includes or will include any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (e) The Acquiring Trust is not in violation of, and the execution and delivery of this Agreement and performance of its obligations under this Agreement will not result in a violation of, any provisions of the Declaration of Trust or by-laws of the Acquiring Trust or any material agreement, indenture, instrument, contract, lease or other undertaking with respect to the Acquiring Fund to which the Acquiring Trust is a party or by which the Acquiring Fund or any of its assets is bound; (f) No litigation or administrative proceeding or investigation of or before any court or governmental body is currently pending or threatened against the Acquiring Fund or any of the Acquiring Fund's properties or assets. The Acquiring Fund knows of no facts which might form the basis for the institution of such proceedings. Neither the Acquiring Trust nor the Acquiring Fund is a party to or subject to the provisions of any order, decree or judgment of any court or governmental body which materially adversely affects the Acquiring Fund's business or its ability to consummate the transactions contemplated herein; A-22 (g) The Acquiring Fund has no actual or potential liability for any Tax obligation of any taxpayer. The Acquiring Fund is not and has never been a member of a group of corporations with which it has filed (or been required to file) consolidated, combined or unitary Tax Returns. The Acquiring Fund is not a party to any Tax allocation, sharing, or indemnification agreement; (h) The Acquiring Fund has not taken or agreed to take any action, and is not aware of any agreement, plan or other circumstance, that is inconsistent with the representations set forth in Annex A; (i) The authorized capital of the Acquiring Fund consists of an unlimited number of shares of beneficial interest, no par value per share. As of the Closing Date, the Acquiring Fund will be authorized to issue an unlimited number of shares of beneficial interest, no par value per share. The Acquiring Fund Shares to be issued and delivered to the Acquired Fund for the account of the Acquired Fund Shareholders pursuant to the terms of this Agreement will have been duly authorized on the Closing Date and, when so issued and delivered, will be legally issued and outstanding, fully paid and non-assessable. The Acquiring Fund does not have outstanding any options, warrants or other rights to subscribe for or purchase any Acquiring Fund shares, nor is there outstanding any security convertible into any Acquiring Fund shares, nor will the Acquiring Fund have any issued or outstanding shares on or before the Closing Date other than those issued to the Acquiring Fund Adviser or one of its affiliates, which shares shall be redeemed, for an amount equal to the price paid therefor, at or before the Closing; (j) The Acquiring Trust has the trust power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of the Acquiring Trust's Board of Trustees, and, assuming due authorization, execution and delivery by the Acquired Fund, this Agreement will constitute a valid and binding obligation of the Acquiring Fund, enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights and to general equity principles; (k) The information to be furnished in writing by the Acquiring Fund or the Acquiring Fund Adviser for use in applications for orders, registration statements, proxy materials and other documents which may be necessary in connection with the transactions contemplated hereby shall be accurate and complete in all material respects and shall comply in all material respects with federal securities and other laws and regulations applicable thereto or the requirements of any form for which its use is intended, and shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the information provided not misleading; (l) No consent, approval, authorization or order of or filing with any court or governmental authority is required for the execution of this Agreement or the consummation of the transactions contemplated by the Agreement by the Acquiring Fund, except for the registration of the Acquiring Fund Shares under the Securities Act and the Investment Company Act; (m) Neither the Acquiring Fund nor, to the knowledge of the Acquiring Fund, any "affiliated person" of the Acquiring Fund has been convicted of any felony or misdemeanor, described in Section 9(a)(1) of the Investment Company Act, nor, to the knowledge of the Acquiring Fund, has any affiliated person of the Acquiring Fund been the subject, or presently is the subject, of any proceeding or investigation with respect to any disqualification that would be a basis for denial, suspension or revocation of registration as an investment adviser under Section 203(e) of the Investment Advisers Act or Rule 206(4)-4(b) thereunder or of a broker-dealer under Section 15 of the Exchange Act, or for disqualification as an investment adviser, employee, officer or director of an investment company under Section 9 of the Investment Company Act; and (n) The tax representation certificate to be delivered by the Acquiring Trust on behalf of the Acquiring Fund to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP at Closing pursuant to Section 6.3 (the "Acquiring Fund Tax Representation Certificate") will not on the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading. 5. COVENANTS OF THE FUNDS 5.1 The Acquired Fund will operate the Acquired Fund's business in the ordinary course of business between the date hereof and the Closing Date. It is understood that such ordinary course of business will include the declaration and payment of customary dividends and other distributions and any other dividends and other distributions necessary or advisable (except to the extent dividends or other distributions that are not customary may be limited by representations made in connection with the issuance of the tax opinion described in Paragraph 8.5 hereof), in each case payable either in cash or in additional shares. 5.2 The AmSouth Trust will call a special meeting of the Acquired Fund's shareholders to consider approval of this Agreement and act upon the matters set forth in the Proxy Statement. A-23 5.3 The Acquiring Fund will prepare the notice of meeting, form of proxy and Proxy Statement (collectively, "Proxy Materials") to be used in connection with such meeting, and will promptly prepare and file with the Commission the Registration Statement. The AmSouth Trust will provide the Acquiring Fund with information reasonably requested for the preparation of the Registration Statement in compliance with the Securities Act, the Exchange Act, and the Investment Company Act. 5.4 The Acquired Fund covenants that the Acquiring Fund Shares to be issued hereunder are not being acquired by the Acquired Fund for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement. 5.5 The Acquired Fund will assist the Acquiring Fund in obtaining such information as the Acquiring Fund reasonably requires concerning the beneficial ownership of the Acquired Fund Shares. 5.6 Subject to the provisions of this Agreement, each Fund will take, or cause to be taken, all actions, and do or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by this Agreement. 5.7 The Acquired Fund shall furnish to the Acquiring Fund on the Closing Date a statement of assets and liabilities of the Acquired Fund ("Statement of Assets and Liabilities") as of the Closing Date setting forth the NAV of the Acquired Fund as of the Valuation Time, which statement shall be prepared in accordance with GAAP consistently applied and certified by the AmSouth Trust's Treasurer or Assistant Treasurer. As promptly as practicable, but in any case within 30 days after the Closing Date, the AmSouth Trust shall furnish to the Acquiring Trust, in such form as is reasonably satisfactory to the Acquiring Trust, a statement of the earnings and profits of the Acquired Fund for federal income tax purposes, and of any capital loss carryovers and other items that will be carried over to the Acquiring Fund under the Code, and which statement will be certified by the Treasurer of the AmSouth Trust. 5.8 Neither Fund shall take any action that is inconsistent with the representations set forth in, with respect to the Acquired Fund, the Acquired Fund Tax Representation Certificate and, with respect to the Acquiring Fund, the Acquiring Fund Tax Representation Certificate. 5.9 From and after the date of this Agreement and until the Closing Date, each of the Funds and the AmSouth Trust and the Acquiring Trust shall use its commercially reasonable efforts to cause the Reorganization to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent the Reorganization from qualifying, as a reorganization under the provisions of Section 368(a) of the Code. The parties hereby adopt this Agreement as a "plan of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the income tax regulations promulgated under the Code. Unless otherwise required pursuant to a "determination" within the meaning of Section 1313(a) of the Code, the parties hereto shall treat and report the transactions contemplated hereby as a reorganization within the meaning of Section 368(a)(1)(F) of the Code and shall not take any position inconsistent with such treatment. 5.10 From and after the date of this Agreement and through the time of the Closing, each Fund shall use its commercially reasonable efforts to cause it to qualify, and will not knowingly take any action, cause any action to be taken, fail to take any action or cause any action to fail to be taken, which action or failure to act could prevent it from qualifying, as a regulated investment company under the provisions of Subchapter M of the Code. 5.11 The Acquired Fund shall prepare, or cause to be prepared, all Tax Returns of the Acquired Fund for taxable periods that end on or before the Closing Date and shall timely file, or cause to be timely filed, all such Tax Returns. The Acquired Fund shall make any payments of Taxes required to be made by such Fund with respect to any such Tax Returns. 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND The obligations of the Acquired Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquiring Fund of all the obligations to be performed by it hereunder on or before the Closing Date, and, in addition thereto, the following further conditions, unless waived by the Acquired Fund in writing: 6.1 All representations and warranties by the Acquiring Trust on behalf of the Acquiring Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 6.2 The Acquiring Trust shall have delivered to the AmSouth Trust on the Closing Date a certificate of the Acquiring Trust on behalf of the Acquiring Fund executed in its name by its President or Vice President and its Treasurer or Assistant Treasurer, in form and substance satisfactory to the AmSouth Trust and dated as of the Closing Date, to the effect that the representations and warranties of the Acquiring Trust made in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected A-24 by the transactions contemplated by this Agreement, that each of the conditions to Closing in this Article 6 have been met, and as to such other matters as the AmSouth Trust shall reasonably request; 6.3 The Acquiring Trust on behalf of the Acquiring Fund shall have delivered to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Fund Tax Representation Certificate, satisfactory to the AmSouth Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquiring Fund; 6.4 With respect to the Acquiring Fund, the Board of Trustees of the Acquiring Trust shall have determined that the Reorganization is in the best interests of the Acquiring Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby; and 6.5 The AmSouth Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the Acquiring Trust and related matters of Wilmer Cutler Pickering Hale and Dorr LLP, dated as of the Closing Date, in a form reasonably satisfactory to the AmSouth Trust. 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND The obligations of the Acquiring Fund to complete the transactions provided for herein shall be, at its election, subject to the performance by the Acquired Fund of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following further conditions, unless waived by the Acquiring Fund in writing: 7.1 All representations and warranties of the AmSouth Trust on behalf of the Acquired Fund contained in this Agreement shall be true and correct in all material respects as of the date hereof (in each case, as such representations and warranties would read as if all qualifications as to materiality were deleted therefrom) and, except as they may be affected by the transactions contemplated by this Agreement, as of the Closing Date with the same force and effect as if made on and as of the Closing Date; 7.2 The AmSouth Trust shall have delivered to the Acquiring Fund the Statement of Assets and Liabilities of the Acquired Fund pursuant to Paragraph 5.7, together with a list of its portfolio securities showing the federal income tax bases and holding periods of such securities, as of the Closing Date, certified by the AmSouth Trust's Treasurer or Assistant Treasurer; 7.3 The AmSouth Trust shall have delivered to the Acquiring Trust on the Closing Date a certificate of the AmSouth Trust on behalf of the Acquired Fund executed in its name by its President or Vice President and a Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory to the Acquiring Trust and dated as of the Closing Date, to the effect that the representations and warranties of the AmSouth Trust contained in this Agreement are true and correct in all material respects at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, that each of the conditions to closing in this Article 7 have been met, and as to such other matters as the Acquiring Trust shall reasonably request; 7.4 The AmSouth Trust on behalf of the Acquired Fund shall have delivered to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Fund Tax Representation Certificate, satisfactory to the Acquiring Trust and Wilmer Cutler Pickering Hale and Dorr LLP, in a form mutually acceptable to the Acquiring Trust and the AmSouth Trust, concerning certain tax-related matters with respect to the Acquired Fund; 7.5 The Acquiring Trust shall have received at the Closing a favorable opinion as to the due authorization of this Agreement by the AmSouth Trust and related matters of Kirkpatrick & Lockhart Nicholson Graham LLP, dated as of the Closing Date, in a form reasonably satisfactory to the Acquiring Trust; and 7.6 With respect to the Acquired Fund, the Board of Trustees of the AmSouth Trust shall have determined that the Reorganization is in the best interests of the Acquired Fund and, based upon such determination, shall have approved this Agreement and the transactions contemplated hereby. 8. FURTHER CONDITIONS PRECEDENT If any of the conditions set forth below does not exist on or before the Closing Date with respect to either party hereto, the other party to this Agreement shall, at its option, not be required to consummate the transactions contemplated by this Agreement: 8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the Acquired Fund's shareholders in accordance with the provisions of the AmSouth Trust's Declaration of Trust and By-Laws, and certified copies of the resolutions evidencing such approval by the Acquired Fund's shareholders shall have been delivered by the Acquired Fund to the Acquiring Fund. Notwithstanding anything herein to the contrary, neither party hereto may waive the conditions set forth in this Paragraph 8.1; A-25 8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein; 8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities) deemed necessary by either party hereto to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain any such consent, order or permit would not involve a risk of a material adverse effect on the assets or properties of either party hereto, provided that either party may waive any such conditions for itself; 8.4 The Acquiring Trust's Registration Statement on Form N-14 shall have become effective under the Securities Act and no stop orders suspending the effectiveness of such Registration Statement shall have been issued and, to the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall have been instituted or be pending, threatened or contemplated under the Securities Act; and 8.5 The parties shall have received an opinion of Wilmer Cutler Pickering Hale and Dorr LLP, satisfactory to the AmSouth Trust and the Acquiring Trust and subject to customary assumptions and qualifications, substantially to the effect that for federal income tax purposes the acquisition by the Acquiring Fund of the Acquired Assets solely in exchange for the issuance of Acquiring Fund Shares to the Acquired Fund and the assumption of the Assumed Liabilities by the Acquiring Fund, followed by the distribution by the Acquired Fund, in liquidation of the Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in exchange for their Acquired Fund Shares and the termination of the Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code 9. BROKERAGE FEES AND EXPENSES 9.1 Each party hereto represents and warrants to the other party hereto that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 9.2 The parties have been informed by AmSouth Asset Management Inc. ("AAMI") and the Acquiring Fund Adviser -- and the parties have entered into this Agreement in reliance on such information -- that certain non-parties will pay (with each of AmSouth Bancorporation or AAMI and the Acquiring Fund Adviser being responsible for 50% of such amounts) all proxy statement and solicitation costs of the Funds associated with the Reorganization including, but not limited to, the expenses associated with the preparation, printing and mailing of any and all shareholder notices, communications, proxy statements, and necessary filings with the SEC or any other governmental authority in connection with the transactions contemplated by this Agreement, and the fees and expenses of any proxy solicitation firm retained in connection with the Reorganization. Except for the foregoing, AAMI shall bear the expenses of the Acquired Fund in connection with the transactions contemplated by this Agreement. 10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES 10.1 The Acquiring Trust and the AmSouth Trust each agrees that neither party has made any representation, warranty or covenant not set forth herein or referred to in Paragraphs 4.1 or 4.2 hereof and that this Agreement constitutes the entire agreement between the parties. 10.2 The representations and warranties contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall not survive the consummation of the transactions contemplated hereunder. 11. TERMINATION 11.1 This Agreement may be terminated by the mutual agreement of the Acquiring Trust and the AmSouth Trust. In addition, either party may at its option terminate this Agreement at or prior to the Closing Date: (a) because of a material breach by the other of any representation, warranty, covenant or agreement contained herein to be performed at or prior to the Closing Date; (b) because of a condition herein expressed to be precedent to the obligations of the terminating party which has not been met and which reasonably appears will not or cannot be met; (c) by resolution of the Acquiring Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquiring Fund's shareholders; (d) by resolution of the AmSouth Trust's Board of Trustees if circumstances should develop that, in the good faith opinion of such Board, make proceeding with the Agreement not in the best interests of the Acquired Fund's shareholders; or A-26 (e) if the transactions contemplated by this Agreement shall not have occurred on or prior to December 31, 2005 or such other date as the parties may mutually agree upon in writing. 11.2 In the event of any such termination, there shall be no liability for damages on the part of the Acquiring Fund, the Acquiring Trust, the AmSouth Trust or the Acquired Fund, or the trustees or officers of the AmSouth Trust, or the Acquiring Trust, but, subject to Paragraph 9.2, each party shall bear the expenses incurred by it incidental to the preparation and carrying out of this Agreement. 12. AMENDMENTS This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the authorized officers of the AmSouth Trust and the Acquiring Trust; provided, however, that following the meeting of the Acquired Fund's shareholders called by the AmSouth Trust pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the effect of changing the provisions regarding the method for determining the number of Acquiring Fund Shares to be received by the Acquired Fund Shareholders under this Agreement to their detriment without their further approval; provided that nothing contained in this Section 12 shall be construed to prohibit the parties from amending this Agreement to change the Closing Date. 13. NOTICES Any notice, report, statement or demand required or permitted by any provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy or certified mail addressed to the Acquired Fund, c/o AmSouth Asset Management Inc., 1900 Fifth Avenue North, 10th Floor, Birmingham, Alabama 35203, Attention: Andrew Chambless, with copies to Kirkpatrick & Lockhart Nicholson Graham LLP, 1800 Massachusetts Avenue, N.W., Washington, DC 20036-1221, Attention: Clifford J. Alexander, and to the Acquiring Fund, c/o Pioneer Investment Management, Inc., 60 State Street, Boston, Massachusetts 02109, Attention: Dorothy E. Bourassa, Esq., with copies to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: David C. Phelan. 14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT 14.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 14.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. 14.3 This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to conflict of laws principles (other than Delaware Code Title 6 [sec] 2708); provided that, in the case of any conflict between those laws and the federal securities laws, the latter shall govern. 14.4 This Agreement shall bind and inure to the benefit of the parties hereto and their respective successors and assigns, but no assignment or transfer hereof or of any rights or obligations hereunder shall be made by either party without the prior written consent of the other party hereto. Nothing herein expressed or implied is intended or shall be construed to confer upon or give any person, firm or corporation, or other entity, other than the parties hereto and their respective successors and assigns, any rights or remedies under or by reason of this Agreement. 14.5 It is expressly agreed that the obligations of the Acquiring Trust and the AmSouth Trust shall not be binding upon any of their respective trustees, shareholders, nominees, officers, agents or employees personally, but bind only to the property of the Acquiring Fund or the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. The execution and delivery of this Agreement have been authorized by the trustees of the Acquiring Trust and of the AmSouth Trust and this Agreement has been executed by authorized officers of the Acquiring Trust and the AmSouth Trust, acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to imposed any liability on any of them personally, but shall bind only the property of the Acquiring Fund and the Acquired Fund, as the case may be, as provided in the trust instruments of the Acquiring Trust and the Declaration of Trust of the AmSouth Trust, respectively. A-27 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed as of the date first set forth above by its President or Vice President and attested by its Secretary or Assistant Secretary. Attest: AMSOUTH FUNDS on behalf of AMSOUTH [______] FUND By: By: ----------------------------------- ----------------------------------- Name: Name: Title: [Assistant] Secretary Title: [Vice] President Attest: PIONEER [_______] FUND on behalf of PIONEER [_______] FUND By: By: ----------------------------------- ----------------------------------- Name: Christopher J. Kelley Name: Osbert M. Hood Title: Assistant Secretary Title: Executive Vice President A-28 Exhibit B -- Additional Information Pertaining to Pioneer PORTFOLIO TRANSACTION POLICIES All orders for the purchase or sale of portfolio securities are placed on behalf of each fund by Pioneer pursuant to authority contained in the fund's management contract. Pioneer seeks to obtain the best execution on portfolio trades. The price of securities and any commission rate paid are always factors, but frequently not the only factors, in judging best execution. In selecting brokers or dealers, Pioneer considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability and financial condition of the dealer; the dealer's execution services rendered on a continuing basis; and the reasonableness of any dealer spreads. Transactions in non-U.S. equity securities are executed by broker-dealers in non-U.S. countries in which commission rates may not be negotiable (as such rates are in the U.S.). Pioneer may select broker-dealers that provide brokerage and/or research services to a fund and/or other investment companies or other accounts managed by Pioneer. In addition, consistent with Section 28(e) of the Securities Exchange Act of 1934 as amended, if Pioneer determines in good faith that the amount of commissions charged by a broker-dealer is reasonable in relation to the value of the brokerage and research services provided by such broker, the fund may pay commissions to such broker-dealer in an amount greater than the amount another firm may charge. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; providing stock quotation services, credit rating service information and comparative fund statistics; furnishing analyses, electronic information services, manuals and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts and particular investment decisions; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). Pioneer maintains a listing of broker-dealers who provide such services on a regular basis. However, because many transactions on behalf of a fund and other investment companies or accounts managed by Pioneer are placed with broker-dealers (including broker-dealers on the listing) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such dealers solely because such services were provided. Pioneer believes that no exact dollar value can be calculated for such services. The research received from broker-dealers may be useful to Pioneer in rendering investment management services to any of the funds as well as other investment companies or other accounts managed by Pioneer, although not all such research may be useful to any of the funds. Conversely, such information provided by brokers or dealers who have executed transaction orders on behalf of such other accounts may be useful to Pioneer in carrying out its obligations to any of the funds. The receipt of such research has not reduced Pioneer's normal independent research activities; however, it enables Pioneer to avoid the additional expenses which might otherwise be incurred if it were to attempt to develop comparable information through its own staff. None of the funds used any brokers affiliated with Pioneer during its most recently completed fiscal year in connection with its portfolio transactions. SIMILAR FUNDS Pioneer serves as the investment adviser to each fund in the Pioneer Family of Funds. The following table identifies other funds in the Pioneer Family of Funds that have similar investment objectives to the Funds described in this Proxy Statement/Prospectus and provides other information regarding the similar funds.
- ------------------------------------------------------------------------------------------------------------------ Net assets of Fund Management fee rate (as a percentage of average Fund (as of March 31, 2005) daily net assets) - ------------------------------------------------------------------------------------------------------------------ Pioneer Balanced Fund $138,289,597 0.65% of the Fund's average net assets up to $1 billion, 0.60% of the next $4 billion; and 0.55% of the excess over $5 billion. - ------------------------------------------------------------------------------------------------------------------ Pioneer Balanced VCT Portfolio $ 45,294,667 0.65% - ------------------------------------------------------------------------------------------------------------------
B-1 Exhibit C -- Portfolio Manager's Discussion of Performance PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 11.07 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0218 $ -- $ 0.2979
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10702 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 13.54% 7.02%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-1 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.68 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.2979
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Aggressive Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10573 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - --------------------------------------------------- Life-of-Class (8/9/04) 9.73% 5.73%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-2 Pioneer Ibbotson Allocation Series Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-3 PIONEER IBBOTSON GROWTH ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.84 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0342 $ -- $ 0.249
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10480 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 11.19% 4.80%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-4 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 9.95 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.249
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Growth Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 9797 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - ------------------------------------------------------ Life-of-Class (8/9/04) 1.95% -2.03%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-5 Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-6 PIONEER IBBOTSON MODERATE ALLOCATION FUND Performance Update 1/31/05 Class A Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.63 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $ 0.0433 $ -- $ 0.2339
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund at public offering price, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10277 11186
Average Annual Total Returns (As of January 31, 2005) Period Net Asset Value Public Offering Price (POP) - ------------------------------------------------------------------ Life-of-Class (8/9/04) 9.04% 2.77%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. POP returns reflect deduction of maximum 5.75% sales charge. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-7 Performance Update 1/31/05 Class B Shares Share Prices and Distributions
1/31/05 8/9/04 Net Asset Value per Share $ 10.32 $ 10.00
Distributions per Share Dividends Short-Term Long-Term (8/9/04 -- 1/31/05) Capital Gains Capital Gains $-- $ -- $ 0.2339
Investment Returns The mountain chart shows the change in value of a $10,000 investment made in Pioneer Ibbotson Moderate Allocation Fund, compared to that of the Standard & Poor's 500 Stock Index. [THE MOUNTAIN CHART IS A REPRESENTATION OF THE PRINTED MATERIAL] 8/04 10000 10000 1/05 10151 11186
Average Annual Total Returns (As of January 31, 2005) Period If Held If Redeemed - ------------------------------------------ Life-of-Class (8/9/04) 5.51% 1.51%
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end performance results. Current performance may be lower or higher than the performance data quoted. The performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate, and shares, when redeemed, may be worth more or less than their original cost. "If redeemed" returns reflect the deduction of applicable contingent deferred sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC is applied to withdrawals was shortened to 5 years. The maximum CDSC for class B shares continues to be 4%. For more complete information, please see the prospectus for details. Note: Shares purchased prior to December 1, 2004 remain subject to the CDSC in effect at the time you purchased those shares. For performance information for shares purchased prior to December 1, 2004, please visit www.pioneerfunds.com/bshares. All results are historical and assume the reinvestment of dividends and capital gains. Other share classes are available for which performance and expenses will differ. Performance results reflect any applicable expense waivers in effect during the periods shown. Without such waivers Fund performance would be lower. Waivers may not be in effect for all funds. Certain fee waivers are contractual through a specified period. Otherwise, fee waivers can be rescinded at any time. See the prospectus and financial statements for more information. The performance table and graph do not reflect the deduction of fees and taxes that a shareowner would pay on Fund distributions or the redemption of Fund shares. The Standard & Poor's 500 Stock Index (the S&P 500) is a commonly used measure of the broad U.S. stock market. Index returns are calculated monthly, assume reinvestment of dividends and, unlike Fund returns, do not reflect any fees, expenses or sales charges. You cannot invest directly in the Index. C-8 Portfolio Management Discussion 1/31/05 In the following interview, portfolio manager Peng Chen, Chief Investment Officer for Ibbotson Associates, discusses the market environment and investment strategies that applied to the three portfolios in the Pioneer Ibbotson Allocation Series for the period of almost six months since they began operations on August 9, 2004. Q: Could you characterize the economic backdrop against which the three portfolios began investment operations? A: The period of nearly six months between the August 9, 2004 launch of the funds and the end of January 2005 was an uncertain environment for investors. While the U.S. economy has continued the growth trend that started in the second half of 2003, the rate of growth has showed signs of decelerating. At the same time, inflation continues to be a concern, spurred on by the continued strength in the economy and, to a lesser extent, by oil prices that have been at all-time highs. On the interest rate front, the Federal Reserve began to raise short-term rates earlier in 2004 and appears to be maintaining a tightening policy to keep economic growth in check. Q: How did the financial markets respond in this climate? A: Early in the period, equity market levels wavered while basically staying within a range. As the November 2 date for the U.S. presidential election drew closer, however, investors became increasingly focused on the accompanying uncertainties, and stocks fell. In contrast, bond prices generally showed strength during this time. The trends appeared to reverse themselves in the aftermath of the election. The stock market responded positively to the increased clarity, while bond market performance was dampened by expectations of a continued lack of progress on reducing federal budget deficits. Q: What were the strategic considerations that you applied to the three portfolios in allocating assets? A: As the three portfolios in the series were launched and initial investor dollars were received, assets were invested in keeping with the respective broad asset allocation and specific mutual fund targets established prior to the launch of the series. Toward the, middle of the period, in late October, we implemented two strategic changes across all three portfolios. First, within the U.S. stock portion of the portfolios, we implemented a moderate emphasis on value stocks and a corresponding underweighting of more growth-oriented investments. We did this because we believe the U.S. economy has entered into a decelerating growth cycle that should favor value equities with relatively stable earnings prospects. We also believe that the potential for higher inflation and interest rates favors the value investment style over growth. Our equity valuation and momentum models further support this assessment, indicating an overweighting of value and an underweighting of growth equities. That said, value stocks have now outperformed growth over a period of more than four years. If the economy starts to show signs of more rapid growth, an overweighting of more growth-oriented investments will be warranted. With respect to the other equity asset classes, the portfolios' targeted exposure across large-, mid-, and small-cap equities remained unchanged. We have also maintained neutral target weightings in the non-U.S. equity market alternatives, both developed and emerging. The other shift has been within the bond portion of the portfolios, where we implemented an underweighting of the long-term bond vehicle, with the difference allocated to the shorter-term fixed income alternative. We believe that, given the prospect of higher interest rates across all maturities, but especially on the long end of the yield curve, shorter duration fixed-income investments are more attractive. Elsewhere within fixed-income, we have maintained neutral positions in the high yield bond offering, as well as in the non-U.S. fixed-income option. Going forward, we will closely monitor economic indicators and interest rate movements to evaluate whether we need to make any adjustments to the views underlying these allocations. Given the significant level of uncertainty that continues to impact the financial markets, we believe that maintaining appropriate diversification across asset classes will be especially important in the months ahead. Any information in this report regarding market or economic trends or the factors influencing the Fund's historical or future performance are statements of the opinion of Fund management as of the date of this report. These statements should not be relied upon for any other purposes. Past performance is no guarantee of future results, and there is no guarantee that market forecasts discussed will be realized. C-9 - -------------------------------------------------------------------------------- AmSouth Balanced Fund - -------------------------------------------------------------------------------- Brian B. Sullivan, CFA Director, Value Equity Strategies John P. Boston, CFA Chief Fixed Income Officer AmSouth Bank AmSouth Asset Investment Management, Inc. Brian Sullivan has been the portfolio manager for the AmSouth Value and AmSouth Balanced Fund since June 2004. Mr. Sullivan has more than 18 years of investment management experience and holds an MBA in finance and a bachelor's degree in economics. John Boston manages the AmSouth High Quality Bond Fund and co-manages the AmSouth Government Income Fund, AmSouth Limited Term Bond Fund and the AmSouth Balanced Fund. Mr. Boston joined the Asset Management Division in 1987. Mr. Boston earned his B.S. in Finance and Political Science from the University of North Alabama. He is a member and past president of the Alabama Society of Financial Analysts and holds the Chartered Financial Analyst designation. PORTFOLIO MANAGERS' PERSPECTIVE "The AmSouth Balanced Fund is a diversified fund that offers investors a simple and easy way to balance their investments between stocks and bonds. Within the equity component, our diversified equity strategy invests in a broad array of high quality stocks to provide long term growth. The fixed income component contains a mix of investment grade bonds to generate income. We assess market opportunities between the two asset classes and allocate assets in the Fund to potentially achieve high risk-adjusted returns." INVESTMENT CONCERNS Equity securities (stocks) are more volatile and carry more risk than other forms of investments, including investments in high-grade fixed income securities. The net asset value per share of this Fund will fluctuate as the value of the securities in the portfolio changes. Bonds offer a relatively stable level of income, although bond prices will fluctuate providing the potential for principal gain or loss. Intermediate-term, higher-quality bonds generally offer less risk than longer-term bonds and a lower rate of return. - -------------------------------------------------------------------------------- [Q&A GRAPHIC] Q. How did the Fund perform during the six-month period ended January 31, 2005? A. The Fund delivered a total return of 6.26% (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower). The Fund's benchmarks, the S&P 500 Stock Index(1) and the Lehman Brothers Government/Credit Bond Index(1), returned 8.15% and 4.02%, respectively. The Fund's total return does not reflect the deduction of a sales charge on Class A Shares. If reflected, the sales charge would reduce the performance quoted. The Fund held an average of approximately 60% of its assets in stocks and roughly 40% of its assets in bonds. Stocks significantly outperformed bonds during the period, so the Fund's emphasis on stocks helped boost returns. With the maximum sales charge of 5.50% and recurring fees, the Fund's six month, 1 Year, 5 Year and 10 Year average annual total returns for the periods ended January 31, 2005, were 0.44%, -1.15%, 5.15% and 8.72%, respectively, for Class A Shares. The returns quoted assume the reinvestment of dividends and capital gains distributions. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and does not reflect the deduction of taxes that a shareholder would pay on distributions and redemptions. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. For performance data current to the most recent month end please visit www.amsouthfunds.com. + The Fund's portfolio is current to January 31, 2005 and subject to change. (1)See Glossary of Terms for additional information. Q. What factors affected the Fund's performance? A. Stocks posted solid returns during the period, particularly during the fourth calendar quarter of 2004. That trend boosted the returns of the Fund's equity allocation. Yields on long-term bonds declined, while yields on short-term bonds rose. The Fund's fixed-income portion generated modest gains in that environment.+ We maintained a higher-than-neutral stock allocation throughout the period. The Fund held 60% of its assets in stocks, compared to its neutral position of 50%. The emphasis on equities boosted the Fund's returns relative to its neutral weightings, as stocks significantly outperformed bonds.+ Stock selection helped the Fund's equity allocation outperform the S&P 500. Selection in the health care sector was especially beneficial: The Fund's health care stake out-gained the health care stocks in the S&P 500 by approximately eight percentage points, largely because we avoided or under-weighted several stocks that suffered very poor returns. The Fund's superior performance in the health care sector made a significant impact on relative performance, because health care stocks comprise a sizable portion of the index and this Fund. Stock selection in the technology sector weighed on the equity allocation's returns against the stock benchmark, largely due to weak returns among certain hardware and networking stocks in the Fund's portfolio.+ The Fund's bond allocation lagged its benchmark for the period. We maintained a short average duration relative to the fixed-income index, to protect against rising interest rates. That strategy left the Fund underexposed to long-term bonds, which saw their yields decline and their prices rise. We increased the Fund's average duration late in the period.+ The bond allocation's returns relative to the fixed-income benchmark benefited from an emphasis on corporate bonds, which outperformed government credit. The Fund's high-quality focus prevented it from benefiting from even stronger performance among lower-quality issues, however.+ C-10 - -------------------------------------------------------------------------------- AmSouth Strategic Portfolios - -------------------------------------------------------------------------------- Aggressive Growth Growth Growth and Income Moderate Growth and Income The AmSouth Strategic Portfolios are managed by a team of AmSouth investment managers, including both equity and fixed income specialists. The team has more than 40 years of combined investment management experience. INVESTMENT CONCERNS The Funds invest in underlying funds, so the investment performance is directly related to the performance of those underlying funds. Before investing in the Fund, investors should assess the risks associated with and types of investments made by each of the underlying funds in which the Funds invests. PORTFOLIO MANAGERS' PERSPECTIVE The Portfolios seek to provide investors with the potential to achieve a variety of long- and short-term goals, commensurate with investors' specific time horizons and tolerance for risk. Each of our four Strategic Portfolios invests in a combination of underlying mutual funds from the AmSouth fund family. Based on each Portfolio's asset-allocation target, the managers periodically rebalance stock, bond and money market holdings--based on analysis of economic and market trends. - -------------------------------------------------------------------------------- [Q&A GRAPHIC] Q. How did the Funds perform during the period? A. During the six-month period ended January 31, 2005, the Funds' total returns, benchmark returns and other comparative returns were as follows: AmSouth Aggressive Growth Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 9.87% S&P 500 Stock Index(1): 8.15% Lipper Multi-Cap Core Funds Average(1): 9.47% AmSouth Growth Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 7.91% S&P 500 Stock Index(1): 8.15% Lipper Multi-Cap Growth Funds Average(1): 10.47% AmSouth Growth and Income Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 6.73% S&P 500 Stock Index(1): 8.15% Merrill Lynch Government/Corporate Master Index(1): 3.98% Lipper Large Cap Value Funds Average(1): 8.99% AmSouth Moderate Growth and Income Portfolio (Class A Shares at NAV. Had the effects of the front-end sales charge been included, the return would have been lower): 6.03% S&P 500 Stock Index(1): 8.15% Merrill Lynch Government/Corporate Master Index(1): 3.98% Lipper Flexible Portfolio Funds Average(1): 7.54% With the maximum sales charge of 5.50% and recurring fees, the six-month, 1 Year, 5 Year and Since Inceptions average annual total returns for the Class A Shares for the periods ended January 31, 2005 were 3.87%, 1.11%, -0.53% and 1.60%, respectively, for the Aggressive Growth Portfolio; 2.00%, 0.06%, 0.73% and 1.61%, respectively, for the Growth Portfolio; 0.88%, -0.81%, 2.21% and 2.44%, respectively, for the Growth and Income Portfolio; and 0.22%, -1.28%, 2.95% and 2.83%, respectively, for the Moderate Growth and Income Portfolio. The returns quoted assume reinvestment of dividends and capital gains distributions. (1) See Glossary of Terms for additional information. Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains and does not reflect the deduction of taxes that a shareholder would pay on distributions and redemptions. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. For performance data current to the most recent month end please visit www.amsouthfunds.com. Q. What factors affected the Portfolios' performance? A. The stock market staged a strong rally during the fourth quarter of 2004, helping the Strategic Portfolios generate gains for the six-month period. The Portfolios' returns benefited from their broad diversification in the stock market, including funds that invest in various styles and market-cap sizes as well as international shares. Above-neutral allocations to stocks throughout the period boosted the Portfolios' returns. The Aggressive Growth Portfolio held 99% of its assets in stock during the period, compared to its neutral allocation of 85%. The Growth, Growth and Income and Moderate Growth and Income Portfolios all held equity allocations ten percentage points higher than their neutral positions.+ The diversification of the Portfolios' equity holdings helped those equity stakes outperform the broad market, as measured by the Standard & Poor's 500 Index. In particular, the Portfolios benefited from their allocations to small and medium-sized stocks, value shares and international equities, all of which generated strong gains during the six-month period. The bond funds in which the Portfolios invested lagged their benchmarks, weighing down relative returns. + The Fund's portfolio is current to January 31, 2005 and subject to change. C-11 S88568 17973-00-0805 PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each a series of Pioneer Ibbotson Asset Allocation Series) STATEMENT OF ADDITIONAL INFORMATION [ ], 2005 This Statement of Additional Information is not a Prospectus. It should be read in conjunction with the related combined Proxy Statement and Prospectus (also dated [ ], 2005), which covers Class A, B and Y shares of Pioneer Ibbotson Aggressive Allocation Fund to be issued in exchange for shares of AmSouth Strategic Portfolios: Aggressive Growth Portfolio; Class A, B and Y shares of Pioneer Ibbotson Growth Allocation Fund to be issued in exchange for shares of AmSouth Strategic Portfolios: Growth Portfolio; and Class A, B and Y shares of Pioneer Ibbotson Moderate Allocation to be issued in exchange for shares of AmSouth Strategic Portfolios: Growth & Income Portfolio and AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio, each a series of AmSouth Funds. Please retain this Statement of Additional Information for further reference. The Prospectus is available to you free of charge (please call 1-800-225-6292). INTRODUCTION...................................................................2 EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE...............................2 ADDITIONAL INFORMATION ABOUT PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND, PIONEER IBBOTSON GROWTH ALLOCATION FUND AND PIONEER IBBOTSON MODERATE ALLOCATION FUND................................................................3 FUND HISTORY..........................................................3 DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS......................3 MANAGEMENT OF THE FUND................................................3 CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................3 INVESTMENT ADVISORY AND OTHER SERVICES................................3 PORTFOLIO MANAGERS....................................................3 BROKERAGE ALLOCATION AND OTHER PRACTICES..............................3 CAPITAL STOCK AND OTHER SECURITIES....................................3 PURCHASE, REDEMPTION AND PRICING OF SHARES............................4 TAXATION OF THE FUND..................................................4 UNDERWRITERS..........................................................4 CALCULATION OF PERFORMANCE DATA.......................................4 FINANCIAL STATEMENTS..................................................4
-1- INTRODUCTION This Statement of Additional Information is intended to supplement the information provided in a combined Proxy Statement and Prospectus dated [ ], 2005 (the "Proxy Statement and Prospectus") relating to the proposed reorganization of: AmSouth Strategic Portfolios: Aggressive Growth Portfolio into Pioneer Ibbotson Aggressive Allocation Fund; AmSouth Strategic Portfolios: Growth Portfolio into Pioneer Ibbotson Growth Allocation Fund; and AmSouth Strategic Portfolios: Growth & Income Portfolio and AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio into Pioneer Ibbotson Moderate Allocation Fund, and in connection with the solicitation by the management of AmSouth Funds of proxies to be voted at the Meeting of Shareholders of each of AmSouth Strategic Portfolios: Aggressive Growth Portfolio, AmSouth Strategic Portfolios: Growth Portfolio; AmSouth Strategic Portfolios: Growth & Income Portfolio, and AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio to be held on September 22, 2005. EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE The following documents are incorporated herein by reference, unless otherwise indicated. Shareholders will receive a copy of each document that is incorporated by reference upon any request to receive a copy of this Statement of Additional Information. 1. Pioneer Ibbotson Asset Allocation Series' statement of additional information for Class A, B and C shares, dated August 6, 2004 (the "SAI") (File No. 333- 114788), as filed with the Securities and Exchange Commission on August 6, 2004 (Accession No. 0001016964-04-000333), is incorporated herein by reference. 2. Pioneer Ibbotson Asset Allocation Series' Semi-Annual Report for the period ended January 31, 2005 (File No. 811-21569), as filed with the Securities and Exchange Commission on April 8, 2005 (Accession No. 0001003715-05-000133), is incorporated herein by reference. 3. AmSouth Fund's statement of additional information, dated December 1, 2004 (File No. 33-21660), as filed with the Securities and Exchange Commission on December 8, 2004 (Accession No. 0000898432-04-001009), is incorporated herein by reference. 4. AmSouth Strategic Portfolios: Aggressive Growth Portfolio's Annual Report for the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the Securities and Exchange Commission on October 12, 2004 (Accession No. 0001145443-04-001533), is incorporated by reference. 5. AmSouth Strategic Portfolios: Aggressive Growth Portfolio's Semi-Annual Report for the period ended January 31, 2005 (File No. 811-05551), as filed with the Securities and Exchange Commission on April 11, 2005 (Accession No. 0001206774-05-000567), is incorporated herein by reference. 6. AmSouth Strategic Portfolios: Growth Portfolio's Annual Report for the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the Securities and Exchange Commission on October 12, 2004 (Accession No. 0001145443-04-001533), is incorporated by reference. 7. AmSouth Strategic Portfolios: Growth Portfolio's Semi- Annual Report for the period ended January 31, 2005 (File No. 811-05551), as filed with the Securities and Exchange Commission on April 11, 2005 (Accession No. 0001206774-05-000567), is incorporated herein by reference. 8. AmSouth Strategic Portfolios: Growth & Income Portfolio's Annual Report for the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the Securities and Exchange Commission on October 12, 2004 (Accession No. 0001145443-04-001533), is incorporated by reference. 9. AmSouth Strategic Portfolios: Growth & Income Portfolio's Semi- Annual Report for the period ended January 31, 2005 (File No. 811-05551), as filed with the Securities and Exchange Commission on April 11, 2005 (Accession No. 0001206774-05-000567), is incorporated herein by reference. -2- 10. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's Annual Report for the fiscal year ended July 31, 2004 (File No. 811-05551), as filed with the Securities and Exchange Commission on October 12, 2004 (Accession No. 0001145443-04-001533), is incorporated by reference. 11. AmSouth Strategic Portfolios: Moderate Growth & Income Portfolio's Semi- Annual Report for the period ended January 31, 2005 (File No. 811-05551), as filed with the Securities and Exchange Commission on April 11, 2005 (Accession No. 0001206774-05-000567), is incorporated herein by reference. ADDITIONAL INFORMATION ABOUT PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PIONEER IBBOTSON GROWTH ALLOCATION FUND PIONEER IBBOTSON MODERATE ALLOCATION FUND (each a series of Pioneer Ibbotson Asset Allocation Series) FUND HISTORY For additional information about Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund generally and the history of each, see "Fund History" for each fund in the SAI. DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS For additional information about each of Pioneer Ibbotson Aggressive Allocation Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer Ibbotson Moderate Allocation Fund's investment objectives, policies, risks and restrictions, see "Investment Policies, Risks and Restrictions" for each fund in the SAI. MANAGEMENT OF THE FUND For additional information about Pioneer Ibbotson Asset Allocation Series' Board of Trustees and officers, see "Trustees and Officers" in the SAI. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES For additional information, see "Annual Fee, Expense and Other Information - - Share ownership." INVESTMENT ADVISORY AND OTHER SERVICES For additional information, see "Investment Adviser," "Shareholder Servicing/Transfer Agent," "Custodian" and "Independent Auditors" in the SAI. Neither Pioneer Investment Management, Inc. ("Pioneer") nor AmSouth Asset Management Inc. ("AAMI") is entitled to be reimbursed for any amounts that AmSouth Bank or its affiliates waived or reimbursed series under the expense limitation arrangement between AAMI and the AmSouth Funds. Neither Pioneer nor the AmSouth Funds will pay AAMI or any subadviser to any series of AmSouth Funds a termination fee in connection with the reorganizations of the series of the AmSouth Funds into corresponding series of Pioneer funds. Pioneer has agreed to compensate AAMI in connection with the reorganizations as is discussed in the Proxy Statement/Prospectus. PORTFOLIO MANAGERS For addition information, see "Portfolio Management" in the SAI. BROKERAGE ALLOCATION AND OTHER PRACTICES For additional information about Pioneer Ibbotson Aggressive Allocation Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer Ibbotson Moderate Allocation Fund's brokerage allocation practices, see "Portfolio Transactions" in the SAI. CAPITAL STOCK AND OTHER SECURITIES For additional information about the voting rights and other characteristics of shares of beneficial interest of each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Description of Shares" in the SAI. -3- PURCHASE, REDEMPTION AND PRICING OF SHARES For additional information about purchase, redemption and pricing of shares of each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Sales Charges," "Redeeming Shares," "Telephone and Online Transactions" and "Pricing of Shares" in the SAI. TAXATION OF THE FUND For additional information about tax matters related to an investment in each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Tax Status" in the SAI. UNDERWRITERS For additional information about of each of Pioneer Ibbotson Aggressive Allocation Fund's, Pioneer Ibbotson Growth Allocation Fund's and Pioneer Ibbotson Moderate Allocation Fund's principal underwriter and distribution plans, see "Principal Underwriter and Distribution Plans" and "Sales Charges" in the SAI. CALCULATION OF PERFORMANCE DATA For additional information about the investment performance of each of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund and Pioneer Ibbotson Moderate Allocation Fund, see "Investment Results" in the SAI. FINANCIAL STATEMENTS For additional information, see "Financial Statements" in the SAI. -4- PIONEER IBBOTSON AGGRESSIVE ALLOCATION FUND PRO FORMA Schedule of Investments January 31, 2005 (Unaudited) (amounts in thousands, except shares)
Pioneer AmSouth Ibbotson Strategic Aggressive Portfolios: % of Allocation Aggressive Growth Pro Forma Pro Forma Fund Portfolio Share Combined Combined Shares Shares Reallocation Shares Net Assets ------ ------ ------------ ------ ---------- INVESTMENT COMPANIES 100.3% 758,989 (758,989) 0 AmSouth Capital Growth Fund, I Shares 889,656 (889,656) 0 AmSouth Enhanced Market Fund, I Shares 397,609 (397,609) 0 AmSouth International Equity Fund, I Shares 270,628 (270,628) 0 AmSouth Large Cap Fund, I Shares 45 (45) 0 AmSouth Limited Term Bond Fund, I Shares 376,949 (376,949) 0 AmSouth Mid Cap Fund, I Shares 493,905 (493,905) 0 AmSouth Prime Money Market Fund, I Shares 344,086 (344,086) 0 AmSouth Select Equity Fund, I Shares 561,617 (561,617) 0 AmSouth Small Cap Fund, I Shares * 477,783 (477,783) 0 AmSouth Value Fund, I Shares 112,586 496,792 609,378 Pioneer Bond Fund Class Y 35,440 156,381 191,821 Pioneer Emerging Markets Fund Class Y 40,016 176,573 216,589 Pioneer Fund Class Y 113,089 499,012 612,101 Pioneer International Equity Fund Class Y 61,095 269,585 330,680 Pioneer Mid-Cap Value Fund Class Y 41,455 182,923 224,378 Pioneer Real Estate Shares Fund Class Y 91,054 401,781 492,835 Pioneer Research Fund Class Y 18,854 83,194 102,048 Pioneer Small Cap Value Fund Class Y 28,627 126,318 154,945 Pioneer Oak Ridge Large Cap Growth Fund Class Y 100,942 445,412 546,354 Pioneer Value Fund Class Y TOTAL INVESTMENT COMPANIES 100.3% TOTAL INVESTMENT IN SECURITIES OTHER ASSETS AND LIABILITIES -0.3% TOTAL NET ASSETS 100.0% Total Investments at Cost
AmSouth Pioneer Strategic Ibbotson Portfolios: Aggressive Aggressive Allocation Growth Pro Forma Fund Portfolio Combined Market Market Asset Market Value Value Reallocation (a) Value ----- ----- ---------------- ----- INVESTMENT COMPANIES AmSouth Capital Growth Fund, I Shares $ 7,446 $ -7,446 $ 0 AmSouth Enhanced Market Fund, I Shares 10,196 -10,196 0 AmSouth International Equity Fund, I Shares 5,463 -5,463 0 AmSouth Large Cap Fund, I Shares 4,860 -4,860 0 AmSouth Limited Term Bond Fund, I Shares 0 0 0 AmSouth Mid Cap Fund, I Shares 5,209 -5,209 0 AmSouth Prime Money Market Fund, I Shares 494 -494 0 AmSouth Select Equity Fund, I Shares 5,000 -5,000 0 AmSouth Small Cap Fund, I Shares * 5,223 -5,223 0 AmSouth Value Fund, I Shares 7,855 -7,855 0 Pioneer Bond Fund Class Y $ 1,052 4,640 5,692 Pioneer Emerging Markets Fund Class Y 706 3,114 3,819 Pioneer Fund Class Y 1,644 7,255 8,900 Pioneer International Equity Fund Class Y 2,339 10,320 12,658 Pioneer Mid-Cap Value Fund Class Y 1,533 6,767 8,300 Pioneer Real Estate Shares Fund Class Y 928 4,094 5,022 Pioneer Research Fund Class Y 822 3,628 4,450 Pioneer Small Cap Value Fund Class Y 591 2,607 3,198 Pioneer Oak Ridge Large Cap Growth Fund Class Y 352 1,554 1,906 Pioneer Value Fund Class Y 1,760 7,768 9,528 --------- --------- ---------- --------- $ 11,727 $ 51,746 $ 0 $ 63,473 --------- --------- ---------- --------- TOTAL INVESTMENT COMPANIES $ 11,727 $ 51,746 $ 63,473 ----------------------- --------- TOTAL INVESTMENT IN SECURITIES $ 11,727 $ 51,746 $ 63,473 ----------------------- --------- OTHER ASSETS AND LIABILITIES $ (48) $ (142) $ (190) ----------------------- --------- TOTAL NET ASSETS $ 11,679 $ 51,604 $ 63,283 ======================= ========= Total Investments at Cost $ 11,638 $ 43,211 $ 54,849 ======================= =========
* Non-income producing security. (a) All shares in AmSouth funds will be sold and re-allocated in accordance with the Ibbotson Aggressive Allocation Model. Pioneer Ibbotson Aggressive Allocation Fund Pro Forma Statement of Assets and Liabilities January 31, 2005 (unaudited) (Amounts in Thousands, except for per share data)
AmSouth Pioneer Strategic Ibbotson Portfolios: Aggressive Aggressive Allocation Growth Pro Forma Pro Forma Fund Portfolio Adjustments Combined ---- --------- ----------- -------- ASSETS: Investment in securities of affiliated issuers, at value (cost $11,638 and $43,211, respectively) $ 11,727 $ 51,746 $ 63,473 -------- -------- -------- Total Investments in Securities at value $ 11,727 $ 51,746 $ 63,473 Cash 246 -- 246 Receivables - Capital stock sold 253 20 273 Interest and Dividends 1 1 Reimbursement from Advisor 3 3 Other -- 11 11 -------- -------- -------- Total assets $ 12,229 $ 51,778 $ $ 64,007 -------- -------- -------- LIABILITIES: Payables - Investment securities purchased $ 477 $ -- $ $ 477 Capital stock redeemed -- 141 141 Due to affiliates 22 21 43 Accrued expenses 51 12 63 -------- -------- -------- Total liabilities $ 550 $ 174 $ $ 724 -------- -------- -------- NET ASSETS: Paid-in capital $ 11,599 $ 50,981 $ $ 62,580 Accumulated net investment income (loss) (8) 57 49 Accumulated net realized loss on investments (1) (7,969) (7,970) Net unrealized gain on investments 89 8,535 8,624 -------- -------- -------- Total net assets $ 11,679 $ 51,604 $ $ 63,283 ======== ======== ======== OUTSTANDING SHARES: (Unlimited number of shares authorized) Class A 598 2,378 (332) 2,644 ======== ======== ======== Class B 184 1,452 (213) 1,423 ======== ======== ======== Class C 288 288 ======== ======== ======== Class I 1,662 (1,662) -- ======== ======== ======== Class Y 1,445 1,445 ======== ======== ======== NET ASSET VALUE PER SHARE: Class A $ 11.04 9.50 $ 11.04 ======== ======== ======== Class B $ 10.68 9.11 $ 10.68 ======== ======== ======== Class C $ 10.82 $ 10.82 ======== ======== ======== Class I $ 9.60 $ -- ======== ======== ======== Class Y $ $ 11.04 ======== ======== ======== MAXIMUM OFFERING PRICE: Class A $ 11.71 10.05 $ 11.71 ======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolios: Aggressive Growth Portfolio are exchanged for Class A, Class B and newly created Class Y shares of Pioneer Ibbotson Aggressive Allocation Fund, to be established upon consummation of the merger. Initial per share values of Class Y shares are presumed to equal that of Class A shares. Pioneer Ibbotson Aggressive Allocation Fund Pro Forma Statement of Operations For the Period Ended January 31, 2005 (unaudited) (Amounts in Thousands)
AmSouth Pioneer Strategic Ibbotson Portfolios: Aggressive Aggressive Allocation Growth Pro Forma Pro Forma Fund* Portfolio Adjustments Combined ----- --------- ----------- -------- INVESTMENT INCOME: Dividends $ 50 $ 334 $ 384 Interest 3 -- 3 Income from securities loaned, net -- -- -- -------- -------- -------- Total investment income $ 53 $ 334 $ 387 EXPENSES: Management fees $ 5 $ 92 $ (22)(a) $ 75 Transfer agent fees 82 (82)(a) -- Investor Class -- -- -- Class A 14 -- 39(a) 53 Class B 13 -- 44(a) 57 Class C 13 -- 13 Class Y -- -- 40(a) 40 Shareholder Servicing fees -- Class A -- 48 (48)(a) -- Class B -- 26 (26)(a) -- Class I 25 (25)(a) -- Distribution fees Class A 5 -- 49(a) 54 Class B 8 76 28(a) 112 Class C 11 -- 11 Class Y -- -- 25(a) 25 Administrative expenses -- 103 (92)(a) 11 Custodian fees 46 12 7(a) 65 Registration fees 93 12 105 Professional fees 62 -- 62 Printing 20 -- 20 Fees and expenses of nonaffiliated trustees 9 -- 9 Insurance expense 1 1 Miscellaneous 1 20 21 -------- -------- -------- -------- Total expenses $ 300 $ 496 $ (63) $ 733 Less management fees waived by Advisor (247) (167) 155(b) (259) Less fees paid indirectly -- -- -- -- -------- -------- -------- -------- Net expenses $ 53 $ 329 $ 92 $ 474 -------- -------- -------- -------- Net investment Income $ (0) $ 5 $ (92) $ (87) -------- -------- -------- -------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain (loss) on investments $ 193 $ 2,085 $ 2,278 Change in net unrealized gain on investments 89 1,183 1,272 -------- -------- -------- Net gain on investments $ 282 $ 3,268 $ 3,550 -------- -------- -------- Net increase in net assets resulting from operations $ 282 $ 3,273 $ 3,463 ======== ======== ========
* Pioneer Ibbotson Aggressive Allocation Fund's semi-annual income and expense information has been annualized to represent a full year of income and expense. (a) Reflects change in fee structure to conform to Pioneer Ibbotson Aggressive Allocation Fund's management, transfer agent, custody and distribution plan agreements. (b) Reflects reduction in expenses due to elimination of duplicate services. Pioneer Ibbotson Aggressive Allocation Fund PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS 01/31/05 (Unaudited) 1. Description of the Fund The Pioneer Ibbotson Aggressive Allocation Fund (the Fund), a fund of the Pioneer Ibbotson Asset Allocation Series (the Trust), was organized as a Delaware statutory trust on April 22, 2004 (amended July 1, 2004) and was registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. The Trust consists of three separate non-diversified funds, each issuing three classes of shares (collectively, the Funds, individually, the Fund) as follows: Pioneer Ibbotson Moderate Allocation Fund Pioneer Ibbotson Growth Allocation Fund Pioneer Ibbotson Aggressive Allocation Fund The investment objective of the Fund is to seek long-term capital growth. Each Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing in other funds ("underlying funds") rather than direct investment in securities. The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Funds entails more direct and indirect expenses than direct investment in the underlying funds. All initial fund shares outstanding at July 12, 2004, were owned by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund for all organizational costs of the Funds. 2. Basis of Combination The accompanying pro forma combining financial statements, and related notes, are presented to show the effect of the proposed acquisition (the "acquisition") of AmSouth Strategic Portfolios: Aggressive Growth Portfolio (Aggressive Growth Portfolio) by the Fund as if such acquisition had taken place as of February 1, 2004. Under the terms of an Agreement and Plan of Reorganization (the "Reorganization") between these two Funds, the combination of the Fund and AmSouth Strategic Portfolios: Aggressive Growth Portfolio will be treated as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies. The acquisition will be accomplished by an acquisition of the net assets of AmSouth Strategic Portfolios: Aggressive Growth Portfolio in exchange for shares of the Fund at their net asset values. The accompanying schedules of investments, statements of assets and liabilities and the related statements of operations of the Fund and AmSouth Strategic Portfolios: Aggressive Growth Portfolio have been combined as of and for the fiscal year ended January 31, 2005. The Fund's investment income and expenses have been annualized based upon the semi-annual shareholder reports dated January 31, 2005 to reflect a full year of data. Following the acquisition, the Fund will be the accounting survivor. All related acquisition costs will be borne by the Advisors. These pro forma financial statements and related notes should be read in conjunction with the financial statements of the Fund and AmSouth Strategic Portfolios: Aggressive Growth Portfolio included in their respective semi-annual reports to shareowners dated January 31, 2005. Adjustments have been made to expenses for Pioneer affiliate contractual rates and duplicate services that would not have been incurred if the merger took place on February 1, 2004. 3. Security Valuation Security transactions are recorded as of the trade date. The net asset value is computed once daily, on each day the New York Stock Exchange is open, as of the close of regular trading on the Exchange. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value of each fund. Holdings for which market quotation are not readily available are valued at their fair values as determined by, or under the direction of, the Board of Trustees. At January 31, 2005 there were no holdings fair valued. Dividend income is recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost. 4. Capital Shares The pro forma net asset value per share assumes the issuance of shares of the Fund that would have been issued at January 31, 2005, in connection with the proposed acquisition. The number of shares assumed to be issued is equal to the net asset value of shares of AmSouth Strategic Portfolios: Aggressive Growth Portfolio, as of January 31, 2005, divided by the net asset value per share of the Fund's shares as of January 31, 2005. The pro forma number of shares outstanding, by class, for the combined Fund consists of the following at January 31, 2005 in thousands:
- ------------------------------------------------------------------------------------------------------------- Additional Shares Assumed Issued to Shares of Aggressive Growth The Fund Portfolio Shareholders Total Outstanding Shares Class of Shares Pre-Combination In Reorganization Post-Combination - ------------------------------------------------------------------------------------------------------------- Class A 598 2,046 2,644 - ------------------------------------------------------------------------------------------------------------- Class B 184 1,239 1,423 - ------------------------------------------------------------------------------------------------------------- Class C 288 288 - ------------------------------------------------------------------------------------------------------------- Class Y 1,445 1,445 - -------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes Each Fund has elected to be taxed as a "regulated investment company" under the Internal Revenue Code. After the acquisition, it will continue to be the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. The identified cost of investments for these funds is substantially the same for both financial and federal income tax purposes. The cost of investments will remain unchanged for the combined Fund. PIONEER IBBOTSON GROWTH ALLOCATION FUND PRO FORMA Schedule of Investments January 31, 2005 (Unaudited) (amounts in thousands, except shares)
AmSouth Ibbotson Strategic Growth Portfolios: % of Allocation Growth Pro Forma Pro Forma Fund Portfolio Share Combined Combined Shares Shares Reallocation Shares Net Assets ------ ------ ------------ ------ ---------- INVESTMENT COMPANIES 99.7% 659,253 -659,253 0 AmSouth Capital Growth Fund, I Shares 806,835 -806,835 0 AmSouth Enhanced Market Fund, I Shares 231,375 -231,375 0 AmSouth Government Income Fund, I Shares 693,115 -693,115 0 AmSouth High Quality Bond Fund, I Shares 370,721 -370,721 0 AmSouth International Equity Fund, I Shares 240,660 -240,660 0 AmSouth Large Cap Fund, I Shares 434,079 -434,079 0 AmSouth Limited Term Bond Fund, I Shares 334,313 -334,313 0 AmSouth Mid Cap Fund, I Shares 564,642 -564,642 0 AmSouth Prime Money Market Fund, I Shares 316,944 -316,944 0 AmSouth Select Equity Fund, I Shares 497,237 -497,237 0 AmSouth Small Cap Fund, I Shares * 438,320 -438,320 0 AmSouth Value Fund, I Shares 244,346 720,816 965,162 Pioneer Bond Fund Class Y 52,438 154,691 207,129 Pioneer Emerging Markets Fund Class Y 73,587 217,080 290,667 Pioneer Fund Class Y 72,812 214,794 287,606 Pioneer High Yield Fund Class Y 150,598 444,261 594,859 Pioneer International Equity Fund Class Y 91,786 270,767 362,553 Pioneer Mid Cap Value Fund Class Y 55,206 162,857 218,063 Pioneer Real Estate Shares Fund Class Y 127,025 374,721 501,746 Pioneer Research Fund Class Y 20,085 59,250 79,335 Pioneer Small Cap Value Fund Class Y 50,829 149,945 200,774 Pioneer Oak Ridge Large Cap Growth Fund Class Y 209,081 616,785 825,866 Pioneer Short Term Income Fund Class Y 143,380 422,968 566,348 Pioneer Value Fund Class Y TOTAL INVESTMENT COMPANIES 99.7% TOTAL INVESTMENT IN SECURITIES OTHER ASSETS AND LIABILITIES 0.3% TOTAL NET ASSETS 100.0% Total Investments at Cost
Pioneer AmSouth Ibbotson Strategic Growth Portfolios: Allocation Growth Pro Forma Fund Portfolio Combined Market Market Asset Market Value Value Reallocation (a) Value ----- ----- ---------------- ----- INVESTMENT COMPANIES AmSouth Capital Growth Fund, I Shares $ 6,467 $ -6,467 $ 0 AmSouth Enhanced Market Fund, I Shares 9,247 -9,247 0 AmSouth Government Income Fund, I Shares 2,272 -2,272 0 AmSouth High Quality Bond Fund, I Shares 7,728 -7,728 0 AmSouth International Equity Fund, I Shares 5,094 -5,094 0 AmSouth Large Cap Fund, I Shares 4,322 -4,322 0 AmSouth Limited Term Bond Fund, I Shares 4,497 -4,497 0 AmSouth Mid Cap Fund, I Shares 4,758 -4,758 0 AmSouth Prime Money Market Fund, I Shares 565 -565 0 AmSouth Select Equity Fund, I Shares 4,605 -4,605 0 AmSouth Small Cap Fund, I Shares * 4,624 -4,624 0 AmSouth Value Fund, I Shares 7,206 -7,206 0 Pioneer Bond Fund Class Y $ 2,282 6,732 9,015 Pioneer Emerging Markets Fund Class Y 1,044 3,080 4,124 Pioneer Fund Class Y 3,024 8,920 11,943 Pioneer High Yield Fund Class Y 831 2,451 3,282 Pioneer International Equity Fund Class Y 3,114 9,187 12,302 Pioneer Mid Cap Value Fund Class Y 2,304 6,796 9,100 Pioneer Real Estate Shares Fund Class Y 1,236 3,645 4,880 Pioneer Research Fund Class Y 1,147 3,384 4,531 Pioneer Small Cap Value Fund Class Y 629 1,857 2,486 Pioneer Oak Ridge Large Cap Growth Fund Class Y 625 1,844 2,470 Pioneer Short Term Income Fund Class Y 2,072 6,112 8,184 Pioneer Value Fund Class Y 2,501 7,377 9,877 --------- --------- --------- ---------- $ 20,809 $ 61,385 $ 0 $ 82,194 --------- --------- --------- ---------- TOTAL INVESTMENT COMPANIES $ 20,809 $ 61,385 82,194 ----------------------- ---------- TOTAL INVESTMENT IN SECURITIES $ 20,809 $ 61,385 $ 82,194 ----------------------- ---------- OTHER ASSETS AND LIABILITIES $ 103 $ 177 $ 280 ----------------------- ---------- TOTAL NET ASSETS $ 20,912 $ 61,562 $ 82,474 ======================= ========== Total Investments at Cost $ 20,669 $ 55,193 $ 75,862 ======================= ==========
* Non-income producing security. (a) All shares of AmSouth funds will be sold and re-allocated in accordance with the Ibbotson Growth Allocation Model. Pioneer Ibbotson Growth Allocation Fund Pro Forma Statement of Assets and Liabilities January 31, 2005 (Unaudited) (Amounts in thousands, except per share data)
Pioneer AmSouth Ibbotson Strategic Growth Portfolios: Allocation Growth Pro Forma Pro Forma Fund Portfolio Adjustments Combined ---- --------- ----------- -------- ASSETS: Investment in securities of affiliated issuers, at value $ 20,809 $ 61,385 $ 82,194 (cost $20,669 and $55,193, respectively) Cash 671 671 Receivables - Investment securities sold 1 1 Capital stock sold 595 270 865 Interest and Dividends 1 1 Reimbursement from adviser 7 7 Other 9 9 -------- -------- -------- Total assets $ 22,083 $ 61,665 $ 83,748 -------- -------- -------- LIABILITIES: Payables - Securities purchased $ 963 $ $ 963 Capital stock redeemed 137 63 200 Due to affiliates 26 31 57 Accrued expenses and other liabilities 45 9 54 -------- -------- -------- Total liabilities $ 1,171 $ 103 $ 1,274 -------- -------- -------- NET ASSETS: Paid-in capital $ 20,780 $ 59,131 $ 79,911 Accumulated net investment income (loss) (4) 4 (0) Accumulated net realized loss on investments (3) (3,765) (3,768) Net unrealized gain on investments 139 6,192 6,331 -------- -------- -------- Total net assets $ 20,912 $ 61,562 $ 82,474 ======== ======== ======== OUTSTANDING SHARES: (No par value, unlimited number of shares authorized) Class A 1,068 2,936 (328)(a) 3,676 ======== ======== ======== Class B 324 2,624 (116)(a) 2,832 ======== ======== ======== Class C 581 -- (a) 581 ======== ======== ======== Class I -- 863 (863)(a) -- ======== ======== ======== Class Y -- 770(a) 770 ======== ======== ======== NET ASSET VALUE PER SHARE: Class A $ 10.84 $ 9.63 $ 10.84 ======== ======== ======== Class B $ 9.95 $ 9.51 $ 9.95 ======== ======== ======== Class C $ 10.51 $ $ 10.51 ======== ======== ======== Class I $ $ 9.67 $ -- ======== ======== ======== Class Y $ $ $ 10.84 ======== ======== ======== MAXIMUM OFFERING PRICE: Class A $ 11.50 $ 10.19 $ 11.50 ======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolio: Growth Portfolio are exchanged for Class A, Class B and a newly created Class Y shares respectively, of Pioneer Ibbotson Growth Allocation Fund. The Initial per share value Class Y shares are presumed to equal that of Pioneer Ibbotson Growth Allocation Fund's Class A shares. See accompanying notes to pro forma financial statements. Pioneer Ibbotson Growth Allocation Fund Pro Forma Statement of Operations For the Year Ended January 31, 2005 (unaudited) (amounts in thousands)
Pioneer AmSouth Ibbotson Strategic Growth Portfolios: Allocation Growth Pro Forma Pro Forma Fund* Portfolio Adjustments Combined ----- --------- ----------- -------- INVESTMENT INCOME: Dividends $ 133 $ 780 $ 913 Interest 6 6 -------- -------- -------- Total investment income $ 139 $ 780 $ 919 -------- -------- -------- EXPENSES: Management fees $ 9 $ 103 $ (24)(a) $ 88 Transfer agent fees and expenses 55 (55)(a) -- Class A 12 47(a) 59 Class B 13 77(a) 90 Class C 16 16 Class Y 25(a) 25 Distribution fees -- Class A 10 59(a) 69 Class B 13 132 51(a) 196 Class C 20 20 Shareholder servicing fee -- Class A 58 (58)(a) -- Class B 44 (44)(a) -- Class I 15 (15)(a) -- Class Y 16(a) 16 Custodian fees 46 14 7(a) 67 Administrative expenses 115 (103)(a) 12 Registration fees 93 12 105 Professional fees 58 58 Printing expense 20 20 Fees and expenses of nonaffiliated trustees 5 5 Insurance Expense 1 1 Miscellaneous 1 23 24 -------- -------- -------- -------- Total expenses $ 318 $ 571 $ (17) $ 872 Less fees waived by Advisor (221) (188) 172(b) (237) -------- -------- -------- -------- Net expenses $ 97 $ 383 $ 155 $ 635 -------- -------- -------- -------- Net investment income $ 41 $ 397 $ (155) $ 283 -------- -------- -------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investments $ 312 $ 1,098 $ 1,410 Change in net unrealized gain on investments 139 1,636 1,775 -------- -------- Net gain on investments $ 451 $ 2,734 $ 3,185 -------- -------- -------- -------- Net decrease in net assets resulting from operations $ 492 $ 3,131 $ (155) $ 3,468 ======== ======== ======== ========
* Pioneer Ibbotson Growth Allocation Fund's semi-annual income and expense information has been annualized to represent a full year of income and expense. (a) Reflects change in fee structure to conform to Pioneer Ibbotson Growth Fund's management, transfer agent, custody and distribution plan agreements. (b) Expense limitation conformed to Pioneer Ibbotson Growth Allocation Fund's management contract. See accompanying notes to pro forma financial statements. Pioneer Ibbotson Growth Allocation Fund PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS 01/31/05 (Unaudited) 1. Description of the Fund The Pioneer Ibbotson Growth Allocation Fund (the Fund), a fund of the Pioneer Ibbotson Asset Allocation Series (the Trust), was organized as a Delaware statutory trust on April 22, 2004 (amended July 1, 2004) and was registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. The Trust consists of three separate non-diversified funds, each issuing three classes of shares (collectively, the Funds, individually, the Fund) as follows: Pioneer Ibbotson Moderate Allocation Fund Pioneer Ibbotson Growth Allocation Fund Pioneer Ibbotson Aggressive Allocation Fund The investment objective of the Fund is to seek a balance between long-term capital growth and current income. Each Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing in other funds ("underlying funds") rather than direct investment in securities. The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Funds entails more direct and indirect expenses than direct investment in the underlying funds. All initial fund shares outstanding at July 12, 2004, were owned by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund for all organizational costs of the Funds. 2. Basis of Combination The accompanying pro forma combining financial statements, and related notes, are presented to show the effect of the proposed acquisition (the "acquisition") of AmSouth Strategic Portfolios: Growth Portfolio (Growth Portfolio) by the Fund as if such acquisition had taken place as of February 1, 2004. Under the terms of an Agreement and Plan of Reorganization (the "Reorganization") between these two Funds, the combination of the Fund and AmSouth Strategic Portfolios: Growth Portfolio will be treated as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies. The acquisition will be accomplished by an acquisition of the net assets of AmSouth Strategic Portfolios: Growth Portfolio in exchange for shares of the Fund at their net asset values. The accompanying schedules of investments, statements of assets and liabilities and the related statements of operations of the Fund and AmSouth Strategic Portfolios: Growth Portfolio have been combined as of the fiscal year ended January 31, 2005. The Fund's investment income and expenses have been annualized based upon the semi-annual shareholder reports dated January 31, 2005 to reflect a full year of data. Following the acquisition, the Fund will be the accounting survivor. All related acquisition costs will be borne by the Advisors. These pro forma financial statements and related notes should be read in conjunction with the financial statements of the Fund and AmSouth Strategic Portfolios: Growth Portfolio included in their respective semi-annual reports to shareowners dated January 31, 2005. Adjustments have been made to expenses for Pioneer affiliate contractual rates and duplicate services that would not have been incurred if the merger took place on February 1, 2004. 3. Security Valuation Security transactions are recorded as of the trade date. The net asset value is computed once daily, on each day the New York Stock Exchange is open, as of the close of regular trading on the Exchange. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value of each fund. Holdings for which market quotation are not readily available are valued at their fair values as determined by, or under the direction of, the Board of Trustees. At January 31, 2005 there were no holdings fair valued. Dividend income is recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost. 4. Capital Shares The pro forma net asset value per share assumes the issuance of shares of the Fund that would have been issued at January 31, 2005, in connection with the proposed acquisition. The number of shares assumed to be issued is equal to the net asset value of shares of AmSouth Strategic Portfolios: Growth Portfolio, as of January 31, 2005, divided by the net asset value per share of the Fund's shares as of January 31, 2005. The pro forma number of shares outstanding, by class, for the combined Fund consists of the following at January 31, 2005 in thousands:
- ------------------------------------------------------------------------------------------------------------- Additional Shares Shares of Assumed Issued to Growth The Fund Portfolio Shareholders Total Outstanding Shares Class of Shares Pre-Combination In Reorganization Post-Combination - ------------------------------------------------------------------------------------------------------------- Class A 1,068 2,608 3,676 - ------------------------------------------------------------------------------------------------------------- Class B 324 2,508 2,832 - ------------------------------------------------------------------------------------------------------------- Class C 581 581 - ------------------------------------------------------------------------------------------------------------- Class Y 770 770 - -------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes Each Fund has elected to be taxed as a "regulated investment company" under the Internal Revenue Code. After the acquisition, it will continue to be the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. The identified cost of investments for these funds is substantially the same for both financial and federal income tax purposes. The cost of investments will remain unchanged for the combined Fund. PIONEER IBBOTSON MODERATE ALLOCATION FUND PRO FORMA Schedule of Investments January 31, 2005 (Unaudited) (amount in thousand, except shares)
AmSouth Pioneer Strategic Portfolios: Ibbotson ----------------------- Moderate Growth & Moderate % of Allocation Income Growth & Income Pro Forma Pro Forma Fund Portfolio Portfolio Share Combined Combined Shares Shares Shares Reallocation Shares Net Assets ------ ------ ------------ ------------ ------ ---------- INVESTMENT COMPANIES 99.3% 981,417 396,701 (1,378,118) 0 AmSouth Capital Growth Fund, I Shares 1,218,074 414,203 (1,632,277) 0 AmSouth Enhanced Market Fund, I Shares 975,060 524,380 (1,499,440) 0 AmSouth Government Income Fund, I Shares 1,818,420 1,016,407 (2,834,827) 0 AmSouth High Quality Bond Fund, I Shares 531,002 209,182 (740,184) 0 AmSouth International Equity Fund, I Shares 363,628 143,677 (507,305) 0 AmSouth Large Cap Fund, I Shares 1,302,508 750,428 (2,052,936) 0 AmSouth Limited Term Bond Fund, I Shares 520,041 199,775 (719,816) 0 AmSouth Mid Cap Fund, I Shares 1,046,639 487,620 (1,534,259) 0 AmSouth Prime Money Market Fund, I Shares 479,837 181,400 (661,237) 0 AmSouth Select Equity Fund, I Shares 739,228 276,831 (1,016,059) 0 AmSouth Small Cap Fund, I Shares * 663,573 233,186 (896,759) 0 AmSouth Value Fund, I Shares 319,848 2,523,436 2,843,284 Pioneer Bond Fund Class Y 27,969 220,661 248,630 Pioneer Emerging Markets Fund Class Y 64,861 511,720 576,581 Pioneer Fund Class Y 116,404 918,368 1,034,772 Pioneer High Yield Fund Class Y 117,613 927,906 1,045,519 Pioneer International Equity Fund Class Y 79,993 631,103 711,096 Pioneer Mid Cap Value Fund Class Y 39,411 310,932 350,343 Pioneer Real Estate Shares Fund Class Y 123,009 970,478 1,093,487 Pioneer Research Fund Class Y 14,263 112,528 126,791 Pioneer Small Cap Value Fund Class Y 54,133 427,081 481,214 Pioneer Oak Ridge Large Cap Growth Fund Class Y 334,195 2,636,626 2,970,821 Pioneer Short Term Income Fund Class Y 139,993 1,104,473 1,244,466 Pioneer Value Fund Class Y TOTAL INVESTMENT COMPANIES 99.3% TOTAL INVESTMENT IN SECURITIES OTHER ASSETS AND LIABILITIES 0.7% TOTAL NET ASSETS 100.0% Total Investments at Cost
AmSouth Strategic Portfolios: Pioneer ----------------------------- Ibbotson Moderate Moderate Growth & Growth & Allocation Income Income Pro Forma Fund Portfolio Portfolio Combined Market Market Market Asset Market Value Value Value Reallocation (a) Value ----- ----- ----- ---------------- ----- INVESTMENT COMPANIES AmSouth Capital Growth Fund, I Shares $ 9,628 $ 3,892 $ (13,520) $ 0 AmSouth Enhanced Market Fund, I Shares 13,959 4,747 (18,706) 0 AmSouth Government Income Fund, I Shares 9,575 5,149 (14,724) 0 AmSouth High Quality Bond Fund, I Shares 20,275 11,332 (31,607) 0 AmSouth International Equity Fund, I Shares 7,296 2,874 (10,170) 0 AmSouth Large Cap Fund, I Shares 6,531 2,580 (9,111) 0 AmSouth Limited Term Bond Fund, I Shares 13,494 7,774 (21,268) 0 AmSouth Mid Cap Fund, I Shares 7,187 2,761 (9,948) 0 AmSouth Prime Money Market Fund, I Shares 1,047 488 (1,535) 0 AmSouth Select Equity Fund, I Shares 6,972 2,636 (9,608) 0 AmSouth Small Cap Fund, I Shares * 6,875 2,575 (9,450) 0 AmSouth Value Fund, I Shares 10,909 3,834 (14,743) 0 Pioneer Bond Fund Class Y $ 2,987 23,569 26,556 Pioneer Emerging Markets Fund Class Y 557 4,393 4,950 Pioneer Fund Class Y 2,665 21,027 23,692 Pioneer High Yield Fund Class Y 1,328 10,479 11,807 Pioneer International Equity Fund Class Y 2,432 19,189 21,621 Pioneer Mid Cap Value Fund Class Y 2,008 15,841 17,848 Pioneer Real Estate Shares Fund Class Y 882 6,959 7,841 Pioneer Research Fund Class Y 1,111 8,763 9,874 Pioneer Small Cap Value Fund Class Y 447 3,527 3,974 Pioneer Oak Ridge Large Cap Growth Fund Class Y 666 5,253 5,919 Pioneer Short Term Income Fund Class Y 3,312 26,129 29,441 Pioneer Value Fund Class Y 2,441 19,262 21,703 --------- -------- --------- ---------- --------- $ 20,837 $113,748 $ 50,642 $ 0 $ 185,227 --------- -------- --------- ---------- --------- TOTAL INVESTMENT COMPANIES $ 20,837 $113,748 $ 50,642 185,227 ---------------------------------------- ------- TOTAL INVESTMENT IN SECURITIES $ 20,837 $113,748 $ 50,642 185,227 ---------------------------------------- ------- OTHER ASSETS AND LIABILITIES $ 1,376 $ (63) $ 19 1,332 ---------------------------------------- ------- TOTAL NET ASSETS $ 22,213 $113,685 $ 50,661 186,559 ======================================== ======= Total Investments at Cost $ 20,644 $102,605 $ 47,477 170,726 ======================================== =======
* Non-income producing security. (a) All shares in AmSouth funds will be sold and re-allocated in accordance with the Ibbotson Moderate Allcoation Model. Pioneer Ibbotson Moderate Allocation Fund Pro Forma Statement of Assets and Liabilities January 31, 2005 (Unaudited) (amounts in thousands, except per share data)
AmSouth Strategic Portfolios: ----------------------------- Pioneer Ibbotson Moderate Moderate Growth and Growth and Allocation Income Income Pro Forma Pro Forma Fund Portfolio Portfolio Adjustments Combined ---- --------- --------- ----------- -------- ASSETS: Investment in securities of affliliated issuers, at value at value (cost $20,644 and $102,605, and $47,477, respectively) $ 20,837 $113,748 $ 50,642 $185,227 Cash 1,310 1,310 Receivables - Investment securities sold 3 3 Capital stock sold 506 33 51 590 Interest and dividends 1 1 2 Reimbursement from advisor 2 2 Other 5 2 7 -------- -------- -------- -------- Total assets $ 22,658 $113,787 $ 50,696 $187,141 -------- -------- -------- -------- LIABILITIES: Payables - Securities purchased $ 371 $ $ $ 371 Capital stock redeemed 1 61 1 63 Due to affiliates 26 39 21 86 Accrued expenses and other liabilities 47 2 13 62 -------- -------- -------- -------- Total liabilities $ 444 $ 102 $ 35 $ 581 -------- -------- -------- -------- NET ASSETS: Paid-in capital $ 22,020 $111,286 $ 48,437 $181,743 Accumulated net investment income 4 88 45 137 Accumulated net realized loss on investments (4) (8,832) (986) (9,822) Net unrealized gain on investments 193 11,143 3,165 14,501 -------- -------- -------- -------- Total net assets $ 22,213 $113,685 $ 50,661 $186,559 ======== ======== ======== ======== OUTSTANDING SHARES: (No par value, unlimited number of shares authorized) Class A 1,280 5,488 2,236 (451)(a) 8,553 ======== ======== ======== ======== Class B 317 1,704 1,276 (106)(a) 3,191 ======== ======== ======== ======== Class C 521 521 ======== ======== ======== ======== Class I 4,135 1,479 (5,614)(a) -- ======== ======== ======== ======== Class Y 5,307 (a) 5,307 ======== ======== ======== ======== NET ASSET VALUE PER SHARE: Class A $ 10.63 $ 10.03 $ 9.96 $ 10.63 ======== ======== ======== ======== Class B $ 10.32 $ 9.99 $ 9.90 $ 10.32 ======== ======== ======== ======== Class C $ 10.23 $ $ $ 10.23 ======== ======== ======== ======== Class I $ $ 10.07 $ 9.99 $ -- ======== ======== ======== ======== Class Y $ $ $ $ 10.63 ======== ======== ======== ======== MAXIMUM OFFERING PRICE: Class A $ 11.28 $ 10.61 $ 10.54 $ 11.28 ======== ======== ======== ========
(a) Class A, Class B and Class I shares of AmSouth Strategic Portfolios: Growth & Income Portfolio and Moderate Growth & Income Portfolio are exchanged for Class A, Class B and newly created Class Y shares of Pioneer Ibbotson Moderate Allocation Fund, to be established upon consummation of the mergers. Initial per share values of Class Y shares are presummed to equal that of Class A shares. See accompanying notes to pro forma financial statements. Ibbotson Moderate Allocation Fund Pro Forma Statement of Operations For the Period Ended January 31, 2005 (Unaudited) (amounts in thousands)
AmSouth Strategic Portfolios: ----------------------------- Pioneer Ibbotson Moderate Moderate Growth and Growth and Allocation Income Income Pro Forma Pro Forma Fund* Portfolio Portfolio Pro Forma Combined ----- --------- --------- ----------- -------- INVESTMENT INCOME: Dividends $ 220 $ 2,130 $ 1,068 $ $ 3,418 Interest 12 12 -------- -------- -------- -------- Total investment income $ 232 $ 2,130 $ 1,068 $ $ 3,430 -------- -------- -------- -------- EXPENSES: Management fees $ 13 $ 216 $ 91 $ (75)(a) $ 245 Transfer agent fees and expenses 80 71 (151)(a) -- Class A 12 129(a) 141 Class B 14 100(a) 114 Class C 12 12 Class Y 158(a) 158 Distribution fees -- Class A 16 162(a) 178 Class B 14 98 76 65(a) 253 Class C 23 23 Class Y 99(a) 99 Shareholder Servicing Fees -- Class A 114 54 (168)(a) -- Class B 33 16 (49)(a) -- Class I 73 27 (100)(a) -- Custodian fees 46 28 11 (8)(a) 77 Administrative expenses 239 102 (8)(a) 333 Registration fees 93 3 13 109 Professional fees 63 63 Printing expense 20 20 Fees and expenses of nonaffiliated trustees 5 5 Insurance Expense 1 1 Miscellaneous 1 39 26 66 -------- -------- -------- -------- -------- Total expenses $ 333 $ 923 $ 487 $ 154 $ 1,897 Less fees waived by Advisor (209) (256) (168) 424(b) (209) -------- -------- -------- -------- -------- Net expenses $ 124 $ 667 $ 319 $ 578 $ 1,688 -------- -------- -------- -------- -------- Net investment income $ 108 $ 1,463 $ 749 $ (578) $ 1,742 -------- -------- -------- -------- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on investments $ 396 $ 2,992 $ 1,263 $ 4,651 Change in net unrealized gain on investments 193 676 53 922 -------- -------- -------- -------- Net gain on investments $ 589 $ 3,668 $ 1,316 $ 5,573 -------- -------- -------- -------- -------- Net increase in net assets resulting from operations $ 697 $ 5,131 $ 2,065 $ (578) $ 7,315 ======== ======== ======== ======== ========
* Pioneer Ibbotson Moderate Allocation Fund's semi-annual income and expense information has been annualized to represent a full year of income and expense. (a) Reflects change in fee structure to conform to Pioneer Ibbotson Mderate Allocation Fund's management, transfer agent, custody and distribution plan agreements. (b) Expense limitation conformed to Pioneer Ibbotson Moderate Allocation Fund's management contract. See accompanying notes to pro forma financial statements. Pioneer Ibbotson Moderate Allocation Fund PRO FORMA NOTES TO COMBINING FINANCIAL STATEMENTS 01/31/05 (Unaudited) 1. Description of the Fund The Pioneer Ibbotson Moderate Allocation Fund (the Fund), a fund of the Pioneer Ibbotson Asset Allocation Series (the Trust), was organized as a Delaware statutory trust on April 22, 2004 (amended July 1, 2004) and was registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (the 1940 Act) as an open-end management investment company. The Trust consists of three separate non-diversified funds, each issuing three classes of shares as follows: Pioneer Ibbotson Moderate Allocation Fund Pioneer Ibbotson Growth Allocation Fund Pioneer Ibbotson Aggressive Allocation Fund The investment objective of the Fund is to seek a balance between long-term capital growth and current income. Each Fund is a "fund of funds," which means that it seeks to achieve its investment objective by investing in other funds ("underlying funds") rather than direct investment in securities. The Funds indirectly pay a portion of the expenses incurred by the underlying funds. Consequently, an investment in the Funds entails more direct and indirect expenses than direct investment in the underlying funds. All initial fund shares outstanding at July 12, 2004, were owned by Pioneer Funds Distributor, Inc. (PFD), the principal underwriter for the Fund and a wholly owned indirect subsidiary of UniCredito Italiano S.p.A. (UniCredito Italiano). In addition, Pioneer Investment Management, Inc. reimbursed each Fund for all organizational costs of the Funds. 2. Basis of Combination The accompanying pro forma combining financial statements, and related notes, are presented to show the effect of the proposed acquisition (the "acquisition") of AmSouth Strategic Portfolios: Growth and Income Portfolio (Growth Portfolio) and AmSouth Strategic Portfolios: Moderate Growth and Income Portfolio (Moderate Portfolio) by the Fund as if such acquisition had taken place as of February 1, 2004. Under the terms of an Agreement and Plan of Reorganization (the "Reorganization") among these three Funds, the combination of the Fund and Growth Portfolio and Moderate Portfolio will be treated as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies. The acquisition will be accomplished by an acquisition of the net assets of Growth Portfolio and Moderate Portfolio in exchange for shares of the Fund at their net asset values. The accompanying schedules of investments, statements of assets and liabilities and the related statements of operations of the Fund and Growth Portfolio and Moderate Portfolio have been combined as of and for their fiscal year ended January 31, 2005. The Fund's investment income and expenses have been annualized based upon the semi-annual shareholder reports dated January 31, 2005 to reflect a full year of data. Following the acquisition, the Fund will be the accounting survivor. All related acquisition costs will be borne by the Advisors. These pro forma financial statements and related notes should be read in conjunction with the financial statements of the Fund and Growth Portfolio and Moderate Portfolio included in their respective semi-annual reports to shareowners dated January 31, 2005. Adjustments have been made to expenses for Pioneer affiliate contractual rates and duplicate services that would not have been incurred if the merger took place on February 1, 2004. 3. Security Valuation Security transactions are recorded as of the trade date. The net asset value is computed once daily, on each day the New York Stock Exchange is open, as of the close of regular trading on the Exchange. In computing the net asset value, holdings of mutual fund shares are valued at the net asset value of each fund. Holdings for which market quotation are not readily available are valued at their fair values as determined by, or under the direction of, the Board of Trustees. At January 31, 2005 there were no holdings fair valued. Dividend income is recorded on the ex-dividend date. Temporary cash investments are valued at amortized cost. 4. Capital Shares The pro forma net asset value per share assumes the issuance of shares of the Fund that would have been issued at January 31, 2005, in connection with the proposed acquisition. The number of shares assumed to be issued is equal to the net asset value of shares of Growth Portfolio or Moderate Portfolio, as of January 31, 2005, divided by the net asset value per share of the Fund's respective shares as of January 31, 2005. The pro forma number of shares outstanding, by class, for the combined Fund consists of the following at January 31, 2005:
- --------------------------------------------------------------------------------------------------------------------- Additional Shares Additional Shares Assumed Issued to Assumed Issued to Shares of Growth Portfolio Moderate Portfolio Total Outstanding The Fund Shareholders Shareholders Shares Class of Shares Pre-Combination In Reorganization In Reorganization Post-Combination - --------------------------------------------------------------------------------------------------------------------- Class A 1,280 5,178 2,095 8,553 - --------------------------------------------------------------------------------------------------------------------- Class B 317 1,650 1,224 3,191 - --------------------------------------------------------------------------------------------------------------------- Class C 521 521 - --------------------------------------------------------------------------------------------------------------------- Class Y 3,917 1,390 5,307 - ---------------------------------------------------------------------------------------------------------------------
5. Federal Income Taxes Each Fund has elected to be taxed as a "regulated investment company" under the Internal Revenue Code. After the acquisition, it will continue to be the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income and net realized capital gains, if any, to its shareowners. Therefore, no federal income tax provision is required. The identified cost of investments for these funds is substantially the same for both financial and federal income tax purposes. The cost of investments will remain unchanged for the combined Fund. PART C OTHER INFORMATION PIONEER IBBOTSON ASSET ALLOCATION SERIES (On behalf of its series, Pioneer Ibbotson Aggressive Allocation Series, Pioneer Ibbotson Growth Allocation Series and Pioneer Ibbotson Moderate Allocation Series) ITEM 15. INDEMNIFICATION No change from the information set forth in Item 25 of the most recently filed Registration Statement of Pioneer Ibbotson Asset Allocation Series (the "Registrant") on Form N-1A under the Securities Act of 1933 and the Investment Company Act of 1940 (File Nos. 333-114788 and 811-21569) as filed with the Securities and Exchange Commission on July 15, 2005 (Accession No. 0001288255-05-000003), which information is incorporated herein by reference. ITEM 16. EXHIBITS (1)(a) Agreement and Declaration of Trust (1) (1)(b) Amended and Restated Declaration of Trust (2) (1)(c) Amendment to Amended and Restated Agreement and Declaration of Trust (5) (2) By-Laws (2) (3) Not applicable (4) Form of Agreement and Plan of Reorganization (8) (5) Reference is made to Exhibits (1) and (2) hereof (6)(a) Management Contract (2) (6)(b) Sub-Advisory Agreement between Pioneer Investment (5) Management, Inc. and Ibbotson Associates Advisors, LLC ("Ibbotson") (6)(c) Amendment to Sub-Advisory Agreement between Pioneer (7) Investment Management, Inc. and Ibbotson (6)(d) Amended and Restated Expense Limitation Agreement (6)
(7)(a) Underwriting Agreement with Pioneer Funds Distributor, Inc. (2) (7)(b) Dealer Sales Agreement (2) (8) Not applicable (9) Custodian Agreement with Brown Brothers Harriman & Co. (2) ("BBH") (10)(a) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2) Moderate Allocation Fund (10)(b) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2) Growth Allocation Fund (10)(c) Multiple Class Plan Pursuant to Rule 18f-3 for Pioneer Ibbotson (2) Aggressive Allocation Fund (10)(d) Class A Shares Distribution Plan for Pioneer Ibbotson Moderate (2) Allocation Fund (10)(e) Class A Shares Distribution Plan for Pioneer Ibbotson Growth (2) Allocation Fund (10)(f) Class A Shares Distribution Plan for Pioneer Ibbotson (2) Aggressive Allocation Fund (10)(g) Class B Shares Distribution Plan for Pioneer Ibbotson Moderate (2) Allocation Fund (10)(h) Class B Shares Distribution Plan for Pioneer Ibbotson Growth (2) Allocation Fund (10)(i) Class B Shares Distribution Plan for Pioneer Ibbotson (2) Aggressive Allocation Fund (10)(j) Class C Shares Distribution Plan for Pioneer Ibbotson Moderate (2) Allocation Fund (10)(k) Class C Shares Distribution Plan for Pioneer Ibbotson Growth (2) Allocation Fund (10)(l) Class C Shares Distribution Plan for Pioneer Ibbotson (2) Aggressive Allocation Fund (11) Opinion of Counsel (legality of securities being offered) (6)
(12) Form of opinion as to tax matters and consent (*) (13)(a) Investment Company Service Agreement between the Registrant (2) and Pioneer Investment Shareholder Services, Inc. (13)(b) Administration Agreement between the Registrant and Pioneer (3) Investment Management, Inc. (formerly, Pioneering Services Corporation) (13)(c) Administrative and Fund Accounting Agency Agreement between the Registrant (7) and BBH (13)(d) Asset Allocation Administrative Agreement between the Registrant and BBH (7) (13)(e) Form of Services Agreement for Class Y Shares (*) (14) Consent(s) of Independent Registered Public Accounting Firm (*) (15) Not applicable (16) Powers of Attorney (7) (17)(a) Code of Ethics - Pioneer (5) (17)(b) Code of Ethics - Ibbotson (5) (17)(b) Form of Proxy Card (6)
(1) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Initial Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on April 23, 2004 (Accession no. 0001288255-04-000006). (2) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Pre-effective Amendment No. 2 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on August 6, 2004 (Accession no. 0001016964-04-000333). (3) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Post-effective Amendment No. 1 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on August 9, 2004 (Accession no. 0001016964-04-000353). (4) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Post-effective Amendment No. 2 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on February 28, 2005 (Accession no. 0001016964-05-000055). (5) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Post-effective Amendment No. 3 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on May 6, 2005 (Accession no. 0001016964-05-000218). (6) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Registration Statement on Form N-14 (File No. 333-126370), as filed with the Securities and Exchange Commission on July 5, 2005 (Accession no. 0001145443-05-001510). (7) Previously filed. Incorporated herein by reference from the exhibits filed with the Registrant's Post-effective Amendment No. 4 to the Registration Statement on Form N-1A (File Nos. 333-114788 and 811-21569), as filed with the Securities and Exchange Commission on July 15, 2005 (Accession no. 0001288255-05-000003). (8) Filed herewith as Exhibit A to the Proxy Statement and Prospectus included as Part A of this Registration Statement. (*) Filed herewith. ITEM 17. UNDERTAKINGS. (1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is part of this Registration Statement by any person or party which is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned Registrant agrees that it shall file a final executed version of the legal and consent opinion as to tax matters as an exhibit to the subsequent post-effective amendment to its registration statement on Form N-14 filed with the SEC upon the consummation of the reorganization contemplated by this Registration Statement on Form N-14. (4) Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement on Form N-14 has been signed on behalf of the Registrant, in the City of Boston and the Commonwealth of Massachusetts, on the 18th day of August, 2005. Pioneer Ibbotson Asset Allocation Series By: /s/ Osbert M. Hood ----------------------------------------- Osbert M. Hood Executive Vice President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date /s/ John F. Cogan, Jr. Chairman of the Board, Trustee, August 18, 2005 - --------------------------- and President John F. Cogan, Jr. /s/ Vincent Nave Chief Financial Officer, August 18, 2005 - --------------------------- Principal Accounting Vincent Nave Officer, and Treasurer * - --------------------------- Mary K. Bush Trustee * - --------------------------- David R. Bock Trustee * - --------------------------- Margaret B.W. Graham Trustee /s/ Osbert M. Hood August 18, 2005 - --------------------------- Osbert M. Hood Trustee * - --------------------------- Marguerite A. Piret Trustee * - --------------------------- Steven K. West Trustee * - --------------------------- John Winthrop Trustee * By: /s/ Osbert M. Hood August 18, 2005 -------------------------------------- Osbert M. Hood, Attorney-in-Fact
EXHIBIT INDEX The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description (12) Form of Opinion as to Tax Matters and Consent (13)(e) Form of Services Agreement for Class Y Shares (14) Consent(s) of Independent Registered Public Accounting Firm
EX-99.12 4 d17586_ex12.txt DRAFT OF AUGUST 10, 2005, SUBJECT TO CHANGE __________, 2005 [Pioneer Fund/Trust] 60 State Street Boston, Massachusetts 02109 AmSouth Funds 3435 Stelzer Road Columbus, Ohio 43219 Ladies and Gentlemen: This opinion is being delivered to you in connection with the Agreement and Plan of Reorganization (the "Agreement") made as of ______, 2005 by and between [Pioneer Fund/Trust], a [Delaware statutory/Massachusetts business] trust, on behalf of its [sole] series, [Pioneer Fund] ("Acquiring Fund"), and AmSouth Funds, a Massachusetts business trust, on behalf of its series, [AmSouth Fund] ("Acquired Fund"). Pursuant to the Agreement, Acquiring Fund will acquire all of the assets of Acquired Fund in exchange solely for (i) the assumption by Acquiring Fund of all of the Assumed Liabilities of Acquired Fund, as defined in the Agreement (the "Acquired Fund Liabilities"), and (ii) the issuance of Class A shares, Class B shares, and Class Y shares of beneficial interest of Acquiring Fund (the "Acquiring Fund Shares") to Acquired Fund, followed by the distribution by Acquired Fund, in liquidation of Acquired Fund, of the Acquiring Fund Shares to the shareholders of Acquired Fund and the termination of Acquired Fund (the foregoing together constituting the "Transaction"). All section references, unless otherwise indicated, are to the United States Internal Revenue Code of 1986, as amended (the "Code"). In rendering this opinion, we have examined and relied upon (i) the prospectus for Acquiring Fund dated ___________; (ii) the statement of additional information for Acquiring Fund dated _____________; (iii) the prospectus for Acquired Fund dated __________; (iv) the statement of additional information for Acquired Fund dated ___________; (v) the Notice of Special Meeting of Shareholders Scheduled for __________ and the accompanying proxy statement and prospectus on Form N-14; (vi) the Agreement; (vii) the tax representation certificates delivered pursuant to the Agreement and relevant to this opinion (the "Representation Certificates"); and (viii) such other documents as we deemed necessary or relevant to our analysis. In our examination of documents, we have assumed, with your permission, the authenticity of original documents, the accuracy of copies, the genuineness of signatures, the legal capacity of signatories, and the proper execution of documents. We have further assumed, with your permission, that (i) all parties to the Agreement and to any other documents examined by us have acted, and will act, in accordance with the terms of such Agreement and documents and that the [Pioneer Fund/Trust] AmSouth Funds __________, 2005 Page 2 Transaction will be consummated pursuant to the terms and conditions set forth in the Agreement without the waiver or modification of any such terms and conditions; (ii) all representations contained in the Agreement, as well as those representations contained in the Representation Certificates are, on the date hereof, and will be, at the consummation of the Transaction and thereafter as relevant, true and complete; (iii) any representation made in any of the documents referred to herein "to the knowledge and belief" (or similar qualification) of any person or party is, and at the consummation of the Transaction will be, correct without such qualification; and (iv) as to all matters for which a person or entity has represented that such person is not a party to, does not have, or is not aware of any plan, intention, understanding, or agreement, there is no such plan, intention, understanding, or agreement. We have not attempted to verify independently any of the above assumptions or representations, but in the course of our representation, nothing has come to our attention that would cause us to question the accuracy thereof. The conclusions expressed herein represent our judgment as to the proper treatment of the Transaction for United States federal income tax purposes based upon the relevant provisions of the Code, the Treasury Regulations promulgated thereunder, and interpretations of the foregoing as expressed in court decisions and administrative determinations, all as in effect on the date of this opinion. We cannot give any assurance that such laws will not be amended or otherwise changed after the consummation of the Transaction or that any such changes will not affect the conclusions expressed herein. We undertake no obligation to update or supplement this opinion to reflect any changes in law that may occur. Our opinion represents our best judgment of how a court would decide if presented with the issues addressed herein and is not binding upon the Internal Revenue Service (the "IRS") or any court. Thus, no assurance can be given that a position taken in reliance on our opinion will not be challenged by the IRS or rejected by a court. This opinion is limited to the specific United States federal income tax consequences of the Transaction set forth below. It does not address any other federal, state, local, or foreign income, estate, gift, transfer, sales, use, or other tax consequences that may result from the Transaction or any other transaction, including any transaction undertaken in connection with the Transaction. On the basis of and subject to the foregoing and in reliance upon the representations, facts and assumptions described above, we are of the opinion that the acquisition by Acquiring Fund of the assets of Acquired Fund solely in exchange for the issuance of Acquiring Fund Shares to Acquired Fund and the assumption of the Acquired Fund Liabilities by Acquiring Fund, followed by the distribution by Acquired Fund, in liquidation of Acquired Fund, of Acquiring Fund Shares to Acquired Fund shareholders in exchange for their Acquired Fund Shares and the termination of Acquired Fund, will constitute a "reorganization" within the meaning of Section 368(a) of the Code. As indicated above, our opinion is based solely on the documents that we have examined, including without limitation the Representation Certificates and the assumptions described herein. If any of the facts or representations contained in such documents is, or later becomes, [Pioneer Fund/Trust] AmSouth Funds __________, 2005 Page 3 inaccurate in any material respect, or if any of the assumptions we have made is, or later becomes, unfounded in any material respect, our opinion may be adversely affected and may not be relied upon. This opinion is being delivered to you solely in connection with the closing condition set forth in Section 8.5 of the Agreement. This opinion is intended solely for the benefit of you and the shareholders of the Acquired Fund and it may not be relied upon for any other purpose or by any other person or entity, and may not be made available to any other person or entity, without our prior written consent. Very truly yours, WILMER CUTLER PICKERING HALE AND DORR LLP By: __________________________ EX-99.13(E) 5 d17586_13e.txt FORM OF SERVICES AGREEMENT CLASS Y SHARES This Agreement is made as of _________________, 2005, between Pioneer Investment Management, Inc. ("Pioneer), a Massachusetts corporation and [ ] ("Service Company"). Pioneer is a member if the UniCredito Italiano banking group, register of banking groups. WHEREAS Pioneer is the investment adviser to the Pioneer Funds, open-end management investment companies or series thereof (each portfolio is referred to as a "Fund" or collectively as the "Funds"); WHEREAS Pioneer wishes to have Service Company perform certain recordkeeping, shareholder communication, and other administrative services for its customers ("Customers") with respect to Class Y shares of the Funds listed on Exhibit A hereto, which Exhibit may be amended from time to time by Pioneer; and WHEREAS Service Company is willing to perform such services on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the foregoing and the mutual promises set forth below, the parties agree as follows: 1. Services and Accounts. During the term of this Agreement, Service Company shall perform the services set forth on Exhibit B hereto, as such exhibit may be amended from time to time by mutual consent of the parties (the "Services"). In connection with these Services, Service Company will maintain one or more omnibus accounts per Fund (the "Accounts"). In connection with these Accounts, Service Company represents and warrants that it has the authority to act on behalf of and to provide the Services to the Customers. 2. Fees. In recognition of Service Company's provision of Services outlined in this Agreement, Pioneer agrees to pay Service Company, on a calendar quarter basis for so long as this Agreement remains in effect, a fee equal to [ ]% of the average daily net assets held by Customers in the Accounts of Class Y shares of each Fund that are held during such quarter. Service Provider will calculate the amount of the fee payable on a quarterly basis and shall deliver a statement showing the calculation of the fee payable to Service Provider for the quarter and such other supporting data as may be reasonably requested by Pioneer within 30 days of each quarter end. The foregoing fee may be paid by Pioneer, or its affiliate, to Service Company out of its own resources. Any payments made pursuant to this Agreement shall be subject to the following terms and conditions: a. Service Company shall provide to Pioneer each calendar quarter such information as shall reasonably be requested by Pioneer with respect to the fee paid to the Service Company pursuant to this Agreement. 1 b. Service Company will permit representatives of Pioneer reasonable access to its personnel and records to enable them to monitor the quality of services being provided by Service Company pursuant to this Agreement. 3. Recordkeeping. Recordkeeping and other Services as set forth in Exhibit B shall be the responsibility of Service Company and shall not be the responsibility of Pioneer. Pioneer will recognize each Account as a single shareholder and will not maintain separate accounts for Customers. 4. Transaction Charges. Service Company shall not, during the term of this Agreement, assess against or collect from its customers any transaction fee upon the purchase or redemption of any Fund's shares that are considered in calculating the Fee. 5. Compliance with Laws. Service Company shall comply with any applicable laws, rules and regulations relating to the Services provided by Service Company pursuant to this agreement. Service Company represents and warrants to Pioneer that it has obtained, and will maintain in effect during the term of the agreement, all registrations under applicable laws, rules and regulations that are necessary to enable it to perform its obligations under this agreement. 6. Indemnification. A. Service Company shall indemnify and hold harmless Pioneer, the Funds and their directors, officers, employees, and agents ("Indemnified Parties") from and against any and all losses, claims, liabilities and expenses (including reasonable attorneys' fees) ("Losses") incurred by any of them arising out of (i) Service Company's dissemination of information regarding any Fund that is alleged to contain an untrue statement of material fact or any omission of a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and that was not published or provided to Service Company by or on behalf of the Funds, Pioneer or their affiliated persons ("Affiliates"), as defined under the Investment Company Act of 1940, as amended (the "1940 Act"), or accurately derived from information published or provided by or on behalf of Pioneer, the Funds or any Affiliate, (ii) any breach by Service Company of any representation, warranty or agreement contained in this Agreement, or (iii) any willful misconduct or negligence by Service Company in the performance of, or failure to perform, its obligations under this Agreement, except to the extent such Losses are caused by Pioneer's breach of this Agreement or Pioneer's willful misconduct or negligence in the performance, or failure to perform, its obligations under this Agreement. This Section 7(a) shall survive termination of this Agreement. B. In any event, neither party shall be liable for any special, consequential or incidental damages. 2 7. Role and Relationship of Service Company. The parties acknowledge and agree that the Services under this Agreement are record keeping, shareholder communication and related services only. This Agreement does not grant Service Company any right to purchase shares from any Fund (although it does not preclude Service Company from purchasing any such shares), nor does it constitute Service Company an agent of Pioneer or any Fund for purposes of selling shares of any Fund to the public. To the extent Service Company is involved in the purchase of shares of any Fund by Service Company's customers, such involvement will be as agent of such customer only. 8. Price Adjustments. A. In accordance with each Fund's error correction policy, in the event adjustments are required to correct any error in the computation of the net asset value and public offering price of Fund shares, Pioneer shall notify Service Company as soon as possible after discovering the need for such adjustments. B. In accordance with each Fund's error correction policy, in connection with a redemption of Fund shares, if Service Company received an amount on behalf of an Account, in excess of the amount to which it otherwise would have been entitled (giving effect to any price adjustment), Service Company, when requested by Pioneer, will make a good faith attempt to collect such excess amount from the applicable Customers. Absent Service Company's failure to make such a good faith attempt, however, Service Company will in not be liable to Pioneer for any such amounts if, prior to notice from Pioneer of a price adjustment, such amounts were distributed to Customers. C. In accordance with each Fund's error correction policy, if an Account received an amount less than that to which it would otherwise have been entitled prior to a price adjustment, Pioneer shall make adjustments to accurately reflect the number of shares held in the Account. 9. Information to be Provided by Service Company. Service Company will, upon request: (i) furnish Pioneer with monthly written statements of the number of shares of each Fund purchased on behalf of Service Company customers resident in one or more states or other jurisdictions indicated by Pioneer; and, (ii) on a quarterly basis, a certification of the number of Customer accounts for each Fund. 10. Notices. All notices required by this Agreement shall be in writing and delivered personally or sent by first class mail. Such notices will be deemed to have been received as of the earlier of actual physical receipt or three (3) days after deposit, first class postage prepaid, in the U. S. Mail. All such notices shall be made as follows: Service Company - ---------------------------------------------- - ---------------------------------------------- 3 - ---------------------------------------------- Attention: ------------------------------------ if to Pioneer, to: Pioneer Investment Management Shareholder Services, Inc. 60 State Street Boston, MA 02109 Attn: General Counsel 11. Nonexclusivity. Each party hereto acknowledges that the other may enter into agreements similar to this Agreement with other parties for the performance of services similar to those to be provided under this Agreement, unless otherwise agreed to in writing by the parties. 12. Assignability. This Agreement is not assignable by any party without the other party's prior written consent and any attempted assignment in contravention hereof shall be null and void. 13. Exhibits and Schedules; Entire Agreement. All Exhibits and Schedules to this Agreement, as they may be amended from time to time, are by this reference incorporated into and made a part of this Agreement. This Agreement (including the Exhibits and Schedules hereto) constitutes the entire agreement between the parties as to the subject matter hereof and supersedes any and all agreements, representations and warranties, written or oral, regarding such subject matter made prior to the time at which this Agreement has been executed and delivered by Service Company and Pioneer and/or any of its Affiliates. 14. Anti-Money Laundering Program. Service Provider hereby acknowledges that: (i) they have adopted an anti-money laundering program that complies with the requirements of applicable anti-money laundering laws, including the USA Patriot Act, the Bank Secrecy Act and applicable regulations thereunder; (ii) they regularly search their databases for shareholder/customer names and countries appearing on U.S. governmental agencies' lists of prohibited persons (e.g., lists maintained by the Office of Foreign Assets Control); and (iii) they monitor their compliance with such program. Service Provider agrees to notify Pioneer of any: (i) identified instances of non-compliance that involve an account related to the Funds or Pioneer (a "Pioneer Related Account"), either through a shareholder or transaction(s); and (ii) other anti-money laundering issues that may arise with respect to a Pioneer Related Account. Service Provider agrees to notify Pioneer with such periodic certifications of compliance as Pioneer may reasonably request. 4 15. Short-Term Trading. Service Provider agrees to use reasonable efforts to assist Pioneer by discouraging short-term trading in the Funds, consistent with the policies of Pioneer and each Fund as described in the Fund's prospectus. Service Provider further agrees to notify Pioneer in the event that Service Provider becomes aware of any short-term trading that is inconsistent with such policies with respect to any intermediary or account, including any aggregate activity by accounts under common control. Pioneer reserves the right to restrict the ability of account holders engaging in short-term trading to effect transactions in the Funds, in accordance with the prospectus. Service Provider agrees that upon notice from Pioneer that any short-term activity is disruptive to the fund(s), to terminate such account holder and/or intermediary from subsequent Fund purchases or exchanges. 16. Amendment. This Agreement and the Exhibits and Schedules hereto may be amended only by a writing executed by each party hereto that is to be bound by such amendment. 17. Governing Law. This Agreement will be governed by and interpreted under the laws of The Commonwealth of Massachusetts as applied to contracts entered into and to be performed entirely within the Commonwealth. 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together shall constitute one and the same instrument. 19. Effectiveness of Agreements; Termination. A. The initial term of this Agreement shall commence on the date of the parties signatures and shall continue for a period of three (3) years (the "Initial Term"). Upon expiration of the Initial Term, this Agreement will continue with automatic renewals for additional one (1) year terms, unless written notice of non-renewal is delivered by either party to the other party not less than thirty (30) days prior to the expiration date. Notwithstanding the foregoing, this Agreement may be terminated immediately by either party, without regard for the proper terms of notice and dates, if one of the parties commits a material breach of its obligations under this Agreement. B. After the date of termination as to a Fund, Pioneer will not be obligated to pay the Fee with respect to any shares of the Fund that are first held in Service Company customer accounts after the date of such termination. However, notwithstanding any such termination, Pioneer will remain obligated to pay Service Company the Fee as to each share of the Fund that was considered in the calculation of the Fee as of the date of termination (a "Pre-Termination Share") for so long as such Pre-Termination Share is held in any Service Company account and Service Company continues to perform substantially all of the Services as to such Pre-Termination Share, and this Agreement will otherwise remain in full force and effect as to any such Pre-Termination Share. 5 IN WITNESS WHEREOF, the parties have executed this Agreement by a duly authorized representative of the parties hereto. ------------------------------------ [Service Company] By: --------------------------------- Name: ------------------------------- Title: ------------------------------ Pioneer Investment Management, Inc. By: --------------------------------- Name: ------------------------------- Title: ------------------------------ 6 EXHIBIT A Class Y shares of beneficial interest in: [List of Funds] 7 EXHIBIT B SERVICES 1. Record Maintenance Service Company shall maintain the following records for each customer who beneficially owns Fund shares through a Service Company account: A. number of shares; B. date, price and amount of purchases and redemptions (including dividend reinvestments) and dates and amounts of dividends paid for at least the current year to date; C. name and address of the customer, including zip codes and social security numbers or taxpayer identification numbers; D. records of distributions and dividend payments; E. any transfers of shares; and F. overall control records. 2. Shareholder Communications Service Company shall: A. Provide to a shareholder mailing agent for the purpose of mailing certain Fund-related materials the names and addresses of all Service Company customers who hold shares of such Fund in their Service Company accounts. The shareholder mailing agent shall be a person or entity with whom the Fund has arranged for the distribution of certain Fund-related materials. The Fund-related materials shall consist of updated prospectuses and any supplements and amendments thereto, annual and other periodic reports, proxy or information statements and other appropriate shareholder communications. In the alternative, Service Company may distribute the Fund-related materials to its customers; B. Mail current Fund prospectuses and statements of additional information and annual and other periodic reports upon customer request and, as applicable, with confirmation statements; C. Mail statements to customers on a monthly basis (or, as to accounts in which there has been no activity in a particular month, no less frequently than quarterly) showing, among other things, the number of shares of each Fund owned by such customer and the net asset value of such Fund as of a recent date; D. Produce and mail to customers confirmation statements reflecting purchases and redemptions of shares of each Fund in Service Company accounts; 8 E. Respond to customer inquiries regarding, among other things, share prices, account balances, dividend amounts and dividend payment dates; F. Distribute all proxy material furnished by Pioneer to each Customer and vote the shares as directed by such Customers. Where specific proxy voting rights have not been granted to Service Company by a Customer, Service Company will not in any way recommend action in connection with or oppose or interfere with the solicitation such proxies. 3. Transactional Services Service Company shall communicate, as to shares of each Fund, purchase, redemption and exchange orders reflecting the orders it receives from its customers. Service Company shall also communicate, as to shares of each Fund, mergers, splits and other reorganization activities. 4. Tax Information Returns and Reports Service Company shall prepare and file with the appropriate governmental agencies, such information, returns and reports as are required to be so filed for reporting (i) dividends and other distributions made, (ii) amounts withheld on dividends and other distributions and payments under applicable federal and state laws, rules and regulations, and (iii) gross proceeds of sales transactions as required. 5. Fund Communications Service Company shall, on a daily basis and for each Fund, report the number of shares on which the Fee is to be paid pursuant to this Agreement and the number of shares on which no such Fee is to be paid. Service Company shall also provide each Fund with monthly summaries of reports. Such summaries shall be expressed in both shares and dollar amounts. 9 EX-99.14 6 d17586_ex14.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the references to our firm under the captions "Financial Highlights" and "Experts - Pioneer Funds", in the Combined Proxy Statement of AmSouth Funds and Prospectus for Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund, and Pioneer Ibbotson Moderate Allocation Fund (each a series of Pioneer Ibbotson Asset Allocation Series) ("Combined Proxy Statements and Prospectus"), and to the incorporation by reference of our report dated August 4, 2004, on the statements of assets and liabilities of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund, and Pioneer Ibbotson Moderate Allocation Fund as of July 12, 2004, in the Combined Proxy Statements and Prospectus included in this Registration Statement on Form N-14 of the Pioneer Oak Ridge Large Cap Growth Fund. We further consent to the reference to us under the heading "Representations and Warranties" (paragraph 4.2(g)) in the Agreement and Plan of Reorganization included as Exhibit A to the Combined Proxy Statements and Prospectus. We also consent to the reference to our firm under the captions "Independent Registered Public Accounting Firm" and "Financial Statements" in the Pioneer Ibbotson Asset Allocation Series Class A, Class B and Class C shares Statement of Additional Information, and to the incorporation by reference of our report, dated August 4, 2004, on the statements of assets and liabilities of Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund, and Pioneer Ibbotson Moderate Allocation Fund as of July 12, 2004, in Pre-Effective Amendment No. 2 to the Registration Statement (Form N-1A, 1933 Nos. 333-114788), as filed with the Securities and Exchange Commission on August 6, 2004 (Accession No. 0001016964-04-000333), which is incorporated by reference into the Combined Proxy Statements and Prospectus included in this Registration Statement on Form N-14 of the Pioneer Ibbotson Aggressive Allocation Fund, Pioneer Ibbotson Growth Allocation Fund, and Pioneer Ibbotson Moderate Allocation Fund. /s/ ERNST & YOUNG LLP Boston, Massachusetts August 17, 2005 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the caption "Experts - AmSouth Funds", in the Combined Proxy Statements of AmSouth Funds and Prospectus for Pioneer Ibbotson Asset Allocation Series ("Combined Proxy Statements and Prospectus"), and to the incorporation by reference of our report dated September 29, 2004, with respect to the financial statements and financial highlights of the AmSouth Aggressive Growth Portfolio, AmSouth Growth Portfolio, AmSouth Growth & Income Portfolio, and AmSouth Moderate Growth & Income Portfolio, included in the AmSouth Funds Annual Report for the year ended July 31, 2004, in the Combined Proxy Statements and Prospectus included in this Registration Statement on Form N-14 of the Pioneer Ibbotson Asset Allocation Series. We also consent to the references to our firm under the captions "Independent Registered Public Accounting Firm" and "Financial Statements" in the AmSouth Funds Statement of Additional Information, and to the incorporation by reference of our report, dated September 29, 2004, on the financial statements and financial highlights of AmSouth Aggressive Growth Portfolio, AmSouth Growth Portfolio, AmSouth Growth & Income Portfolio, and AmSouth Moderate Growth & Income Portfolio, included in the AmSouth Funds Annual Report for the year ended July 31, 2004, in Post-Effective Amendment No. 43 to the Registration Statement (Form N-1A, 1933 Nos. 33-21660) of the AmSouth Funds, as filed with the Securities and Exchange Commission on December 1, 2004 (Accession No. 0000898432-04-000999), which is incorporated by reference into the Combined Proxy Statements and Prospectus included in this Registration Statement on Form N-14 of the Pioneer Ibbotson Asset Allocation Series. /s/ ERNST & YOUNG LLP Columbus, Ohio August 15, 2005 -----END PRIVACY-ENHANCED MESSAGE-----