0000869356-17-000002.txt : 20170228
0000869356-17-000002.hdr.sgml : 20170228
20170228112844
ACCESSION NUMBER: 0000869356-17-000002
CONFORMED SUBMISSION TYPE: 485BPOS
PUBLIC DOCUMENT COUNT: 7
FILED AS OF DATE: 20170228
DATE AS OF CHANGE: 20170228
EFFECTIVENESS DATE: 20170301
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PIONEER EQUITY INCOME FUND
CENTRAL INDEX KEY: 0000869356
IRS NUMBER: 000000000
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: 485BPOS
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-46453
FILM NUMBER: 17645449
BUSINESS ADDRESS:
STREET 1: 60 STATE STREET
CITY: BOSTON
STATE: MA
ZIP: 02109
BUSINESS PHONE: 6174224947
MAIL ADDRESS:
STREET 1: 60 STATE STREET 13TH FLOOR
CITY: BOSTON
STATE: MA
ZIP: 02109-1820
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: PIONEER EQUITY INCOME FUND
CENTRAL INDEX KEY: 0000869356
IRS NUMBER: 000000000
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1031
FILING VALUES:
FORM TYPE: 485BPOS
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-08657
FILM NUMBER: 17645450
BUSINESS ADDRESS:
STREET 1: 60 STATE STREET
CITY: BOSTON
STATE: MA
ZIP: 02109
BUSINESS PHONE: 6174224947
MAIL ADDRESS:
STREET 1: 60 STATE STREET 13TH FLOOR
CITY: BOSTON
STATE: MA
ZIP: 02109-1820
0000869356
S000003948
Pioneer Equity Income Fund
C000185372
Pioneer Equity Income Fund: Class T
0000869356
S000003948
Pioneer Equity Income Fund
C000011065
Pioneer Equity Income Fund: Class A
PEQIX
C000011067
Pioneer Equity Income Fund: Class C
PCEQX
C000011068
Pioneer Equity Income Fund: Class Y
PYEQX
C000011069
Pioneer Equity Income Fund: Class R
PQIRX
C000123818
Pioneer Equity Income Fund: Class K
PEQKX
485BPOS
1
ei022817485b.txt
POST-EFFECTIVE AMENDMENT NO. 35
File Nos. 333-46453
811-08657
As filed with the Securities and Exchange Commission on February 28, 2017
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. 35 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 36 [X]
(Check appropriate box or boxes)
PIONEER EQUITY INCOME FUND
(Exact Name of Registrant as Specified in Charter)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (617) 742-7825
Terrence J. Cullen, Pioneer Investment Management, Inc.
60 State Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
[ ] immediately upon filing pursuant to paragraph (b)
[X] on March 1, 2017 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on [date] pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on [date] pursuant to paragraph (a)(2)of Rule 485.
If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
PIONEER
--------------------------------------------------------------------------------
EQUITY INCOME FUND
Class A Shares (PEQIX)
Class C Shares (PCEQX)
Class K Shares (PEQKX)
Class R Shares (PQIRX)
Class T Shares (EITPX)
Class Y Shares (PYEQX)
Prospectus, March 1, 2017
CONTENTS
--------------------------------------------------------------------------------
Fund summary................................... 1
More on the fund's investment objectives
and strategies................................. 13
More on the risks of investing in the fund..... 18
Management..................................... 29
Pricing of shares.............................. 31
Choosing a class of shares..................... 33
Distribution and service arrangements.......... 36
Sales charges.................................. 39
Buying, exchanging and selling shares.......... 47
Account options................................ 58
Shareholder services and policies.............. 62
Dividends, capital gains and taxes............. 69
Financial highlights........................... 72
Intermediary defined sales charge waiver
policies....................................... 78
Neither the Securities and Exchange Commission nor any state securities agency
has approved or disapproved the fund's shares or determined whether this
prospectus is
[GRAPHIC APPEARS HERE]
accurate or complete. Any representation to the contrary is a crime.
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
-------------------------------------------------------------------------------
Contact your investment professional to discuss how the fund may fit
into your portfolio.
-------------------------------------------------------------------------------
Fund summary
INVESTMENT OBJECTIVES
Current income and long-term growth of capital from a portfolio consisting
primarily of income producing equity securities of U.S. corporations.
FEES AND EXPENSES OF THE FUND
This table describes the fees and expenses that you may pay if you buy and hold
shares of the fund.
You may qualify for sales charge discounts if you or your family invest, or
agree to invest in the future, at least $50,000 in Class A shares of the
Pioneer funds. More information about these and other discounts is available
from your investment professional and in the "Sales charges" section of the
prospectus beginning on page 39, the "Intermediary defined sales charge waiver
policies" section of the prospectus beginning on page 78, and the "Sales
charges" section of the statement of additional information beginning on page
52.
SHAREOWNER FEES
(fees paid directly from your
investment) CLASS A CLASS C CLASS K CLASS R CLASS T CLASS Y
-------------------------------------- --------- --------- --------- --------- --------- --------
Maximum sales charge (load) when
you buy shares (as a percentage of
offering price) 5.75% None None None 2.50% None
-------------------------------------- ------ --------- --------- --------- ---- --------
Maximum deferred sales charge (load)
(as a percentage of offering price or
the amount you receive when you sell
shares, whichever is less) None/1/ 1% None None None None
-------------------------------------- ------ --------- --------- --------- ---- --------
ANNUAL FUND OPERATING
EXPENSES
(expenses that you pay each
year as a percentage of the
value of your investment) CLASS A CLASS C CLASS K CLASS R CLASS T CLASS Y
--------------------------------------- --------- --------- --------- --------- --------- --------
Management Fees 0.60% 0.60% 0.60% 0.60% 0.60% 0.60%
--------------------------------------- ---- ---- ---- ---- ---- ----
Distribution and Service (12b-1) Fees 0.25% 1.00% 0.00% 0.50% 0.25% 0.00%
--------------------------------------- ---- ---- ---- ---- ---- ----
Other Expenses/2/ 0.19% 0.17% 0.07% 0.30% 0.19% 0.17%
--------------------------------------- ---- ---- ---- ---- ---- ----
Total Annual Fund Operating Expenses 1.04% 1.77% 0.67% 1.40% 1.04% 0.77%
--------------------------------------- ---- ---- ---- ---- ---- ----
1 Class A purchases of $500,000 or more that are not subject to an initial
sales charge may be subject to a contingent deferred sales charge of 1%.
See "Sales charges."
2 Other Expenses for Class T shares are based on estimated amounts for the
current fiscal year.
1
Fund summary
EXAMPLE
This example is intended to help you compare the cost of investing in the fund
with the cost of investing in other mutual funds. The example assumes that you
invest $10,000 in the fund for the time periods shown and then, except as
indicated, redeem all of your shares at the end of those periods. It also
assumes that (a) your investment has a 5% return each year and (b) the fund's
total annual operating expenses remain the same. Although your actual costs may
be higher or lower, based on these assumptions your costs would be:
IF YOU REDEEM YOUR SHARES IF YOU DO NOT REDEEM YOUR SHARES
-------------------------------------- --------------------------------------
NUMBER OF YEARS YOU OWN YOUR SHARES
------------------------------------------------------------------------------
1 3 5 10 1 3 5 10
------- ------- --------- --------- ------- ------- --------- ---------
Class A $675 $887 $1,116 $1,773 $675 $887 $1,116 $1,773
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class C 280 557 959 2,084 180 557 959 2,084
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class K 68 214 373 835 68 214 373 835
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class R 143 443 766 1,680 143 443 766 1,680
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class T 353 573 810 1,489 353 573 810 1,489
--------- ---- ---- ------ ------ ---- ---- ------ ------
Class Y 79 246 428 954 79 246 428 954
--------- ---- ---- ------ ------ ---- ---- ------ ------
PORTFOLIO TURNOVER
The fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate
may indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the example, affect the fund's
performance. During the most recent fiscal year, the fund's portfolio turnover
rate was 35% of the average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
Normally, the fund invests at least 80% of its total assets in income producing
equity securities of U.S. issuers. The income producing equity securities in
which the fund may invest include common stocks, preferred stocks,
exchange-traded funds (ETFs) that invest primarily in equity securities and
equity interests in real estate investment trusts (REITs). The remainder of the
fund may be invested in debt securities, most of which are expected to be
convertible into common stocks. The fund may invest in initial public offerings
of equity securities.
2
The fund may invest up to 20% of its total assets in securities of non-U.S.
issuers, including depositary receipts. The fund will not invest more than 5%
of its total assets in the securities of emerging markets issuers.
The fund may invest up to 20% of its net assets in REITs.
The fund also may invest in investment grade and below investment grade debt
securities (known as "junk bonds"). The fund may invest up to 10% of its net
assets in junk bonds, including below investment grade convertible debt
securities.
The fund may, but is not required to, use derivatives, such as stock index
futures and options. The fund may use derivatives for a variety of purposes,
including; in an attempt to hedge against adverse changes in the market price
of securities, interest rates or currency exchange rates; as a substitute for
purchasing or selling securities; to attempt to increase the fund's return as a
non-hedging strategy that may be considered speculative; to manage portfolio
characteristics; and as a cash flow management technique. The fund may choose
not to make use of derivatives for a variety of reasons, and any use may be
limited by applicable law and regulations. The fund may also hold cash or other
short-term investments.
The fund's investment adviser uses a value approach to select the fund's
investments to buy and sell. The adviser seeks securities that are selling at
substantial discounts to their underlying values and then holds these
securities until the market values reflect their intrinsic values. The adviser
evaluates a security's potential value, including the attractiveness of its
market valuation, based on the company's assets and prospects for earnings
growth. The adviser also considers a security's potential to provide a
reasonable amount of income. In making these assessments, the adviser employs
fundamental research and an evaluation of the issuer based on its financial
statements and operations, employing a bottom-up analytic style, which focuses
on specific securities rather than on industries. The adviser generally sells a
portfolio security when it believes that the security's market value reflects
its underlying value.
PRINCIPAL RISKS OF INVESTING IN THE FUND
You could lose money on your investment in the fund. As with any mutual fund,
there is no guarantee that the fund will achieve its objectives.
3
Fund summary
MARKET RISK. The market prices of securities held by the fund may go up or
down, sometimes rapidly or unpredictably, due to general market conditions,
such as real or perceived adverse economic, political, or regulatory
conditions, inflation, changes in interest or currency rates, lack of liquidity
in the bond markets or adverse investor sentiment. In the past several years,
financial markets, such as those in the United States, Europe, Asia and
elsewhere, have experienced increased volatility, depressed valuations,
decreased liquidity and heightened uncertainty. These conditions may continue,
recur, worsen or spread. Events that have contributed to these market
conditions include, but are not limited to, major cybersecurity events;
measures to address U.S. federal and state budget deficits; downgrading of U.S.
long-term sovereign debt; declines in oil and commodity prices; dramatic
changes in currency exchange rates; and public sentiment. The U.S. government
and the Federal Reserve, as well as certain foreign governments and their
central banks, have taken steps to support financial markets, including by
keeping interest rates at historically low levels. This and other government
intervention may not work as intended, particularly if the efforts are
perceived by investors as being unlikely to achieve the desired results. The
Federal Reserve has reduced its market support activities and recently has
begun raising interest rates. Certain foreign governments and central banks are
implementing or discussing so-called negative interest rates (e.g., charging
depositors who keep their cash at a bank) to spur economic growth. Further
Federal Reserve or other U.S. or non-U.S. governmental or central bank actions,
including interest rate increases or contrary actions by different governments,
could negatively affect financial markets generally, increase market volatility
and reduce the value and liquidity of securities in which the fund invests.
Policy and legislative changes in the U.S. and in other countries are affecting
many aspects of financial regulation, and may in some instances contribute to
decreased liquidity and increased volatility in the financial markets. The
impact of these changes on the markets, and the practical implications for
market participants, may not be fully known for some time. Economies and
financial markets throughout the world are increasingly interconnected.
Economic, financial or political events, trading and tariff arrangements,
terrorism, natural disasters and other circumstances in one country or region
could have profound impacts on global economies or markets. As a result,
whether or not the fund invests in securities of issuers located in or with
significant exposure to the countries directly affected, the value and
liquidity of the fund's investments may be negatively affected. The fund may
experience a substantial or complete loss on any individual security or
derivative position.
4
VALUE STYLE RISK. The prices of securities the adviser believes are undervalued
may not appreciate as expected or may go down. Value stocks may fall out of
favor with investors and underperform the overall equity market.
INCOME PRODUCING SECURITIES RISK. Income producing securities may fall out of
favor with investors and underperform the overall equity market.
LARGE CAPITALIZATION COMPANIES RISK. Large capitalization companies may fall
out of favor with investors and underperform the overall equity market.
PORTFOLIO SELECTION RISK. The adviser's judgment about a particular security or
issuer, or about the economy or a particular sector, region or market segment,
or about an investment strategy, may prove to be incorrect.
RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S.
issuers that have significant exposure to foreign markets, may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced for issuers in emerging markets or to the extent that the fund
invests significantly in one region or country. These risks may include
different financial reporting practices and regulatory standards, less liquid
trading markets, extreme price volatility, currency risks, changes in economic,
political, regulatory and social conditions, terrorism, sustained economic
downturns, financial instability, tax burdens, and investment and repatriation
restrictions. Lack of information and less market regulation also may affect
the value of these securities. Withholding and other non-U.S. taxes may
decrease the fund's return. Non-U.S. issuers may be located in parts of the
world that have historically been prone to natural disasters. Investing in
depositary receipts is subject to many of the same risks as investing directly
in non-U.S. issuers. Depositary receipts may involve higher expenses and may
trade at a discount (or premium) to the underlying security. A number of
countries in the European Union (EU) have experienced, and may continue to
experience, severe economic and financial difficulties. In addition, voters in
the United Kingdom have approved withdrawal from the EU. Other countries may
seek to withdraw from the EU and/or abandon the euro, the common currency of
the EU.
RISKS OF INVESTMENTS IN REAL ESTATE RELATED SECURITIES. Investments in real
estate securities are affected by economic conditions, interest rates,
governmental actions and other factors. In addition, investing in REITs
involves unique risks. They are significantly affected by the market for real
estate and are dependent upon management skills and cash flow. REITs may have
lower trading volumes and may be subject to more abrupt or
5
Fund summary
erratic price movements than the overall securities markets. Mortgage REITs are
particularly subject to interest rate and credit risks. In addition to its own
expenses, the fund will indirectly bear its proportionate share of any
management and other expenses paid by REITs in which it invests. Many real
estate companies, including REITs, utilize leverage.
RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public
offerings (IPOs) generally have limited operating histories, and prospects for
future profitability are uncertain. The market for IPO issuers has been
volatile, and share prices of newly public companies have fluctuated
significantly over short periods of time. The purchase of IPO shares may
involve high transaction costs.
RISKS OF INVESTMENT IN OTHER FUNDS. Investing in other investment companies,
including exchange-traded funds (ETFs), subjects the fund to the risks of
investing in the underlying securities or assets held by those funds. When
investing in another fund, the fund will bear a pro rata portion of the
underlying fund's expenses, in addition to its own expenses.
RISKS OF CONVERTIBLE SECURITIES. The market values of convertible securities
tend to decline as interest rates increase and, conversely, to increase as
interest rates decline. A downturn in equity markets may cause the price of
convertible securities to decrease relative to other fixed income securities.
PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of
return. Preferred stocks are subject to issuer-specific and market risks
applicable generally to equity securities. In addition, a company's preferred
stocks generally pay dividends only after the company makes required payments
to holders of its bonds and other debt. Thus, the value of preferred stocks
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. The market
value of preferred stocks generally decreases when interest rates rise.
Preferred stocks of smaller companies may be more vulnerable to adverse
developments than preferred stocks of larger companies.
DEBT SECURITIES RISK. Factors that could contribute to a decline in the market
value of debt securities in the fund include rising interest rates, if the
issuer or other obligor of a security held by the fund fails to pay principal
and/or interest, otherwise defaults or has its credit rating downgraded or is
perceived to be less creditworthy or the credit quality or value of any
underlying assets declines. Junk bonds have a higher risk of default or are
already in default and are considered speculative.
6
HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment
grade, called "junk bonds," are speculative, have a higher risk of default or
are already in default, tend to be less liquid and are more difficult to value
than higher grade securities. Junk bonds tend to be volatile and more
susceptible to adverse events and negative sentiments. These risks are more
pronounced for securities that are already in default.
MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time,
investments in a market segment, the fund will be subject to a greater degree
to the risks particular to 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 real estate investment trusts (REITs), may be
sensitive to changes in interest rates and general economic activity and are
generally subject to extensive government regulation.
Industries in the consumer staples segment, such as food and drug retailing,
beverages, food and tobacco products, household products and personal products,
are subject to government regulation affecting ingredients and production
methods. These industries also may be affected by competition, changes in
consumer tastes and other factors affecting supply and demand, and litigation.
DERIVATIVES RISK. Using stock index futures and options and other derivatives
can increase fund losses and reduce opportunities for gains when market prices,
interest rates or the derivative instruments themselves behave in a way not
anticipated by the fund. Using derivatives may increase the volatility of the
fund's net asset value and may not provide the result intended. Derivatives may
have a leveraging effect on the fund. Some derivatives have the potential for
unlimited loss, regardless of the size of the fund's initial investment.
Changes in a derivative's value may not correlate well with the referenced
asset or metric. The fund also may have to sell assets at inopportune times to
satisfy its obligations. Derivatives may be difficult to sell, unwind or value,
and the counterparty may default on its obligations to the fund. Use of
derivatives may have different tax consequences for the fund than an investment
in the underlying security, and such differences may affect the amount, timing
and character of income distributed to shareholders. The U.S. government and
foreign governments are in the process of adopting and implementing regulations
governing derivatives markets, including mandatory clearing of certain
derivatives, margin and reporting requirements. The ultimate impact of the
regulations remains
7
Fund summary
unclear. Additional regulation of derivatives may make them more costly, may
limit their availability, may disrupt markets or may otherwise adversely affect
their value or performance. In addition, the SEC has proposed a new rule that
would change the regulation of the use of derivatives by registered investment
companies, such as the fund. If the proposed rule takes effect, it could limit
the ability of the fund to invest in derivatives.
LEVERAGING RISK. The value of your investment may be more volatile and other
risks tend to be compounded if the fund borrows or uses derivatives or other
investments, such as ETFs, that have embedded leverage. Leverage generally
magnifies the effect of any increase or decrease in the value of the fund's
underlying assets and creates a risk of loss of value on a larger pool of
assets than the fund would otherwise have, potentially resulting in the loss of
all assets. Engaging in such transactions may cause the fund to liquidate
positions when it may not be advantageous to do so to satisfy its obligations
or meet segregation requirements.
LIQUIDITY RISK. Some securities and derivatives held by the fund may be
impossible or difficult to purchase, sell or unwind, particularly during times
of market turmoil. Illiquid securities and derivatives also may be difficult to
value. If the fund is forced to sell an illiquid asset or unwind a derivatives
position to meet redemption requests or other cash needs, the fund may be
forced to sell at a loss.
REDEMPTION RISK. The fund may experience heavy redemptions that could cause the
fund to liquidate its assets at inopportune times or at a loss or depressed
value, which could cause the value of your investment to decline.
VALUATION RISK. The sales price the fund could receive for any particular
portfolio investment may differ from the fund's last valuation of the
investment, particularly for illiquid securities and securities that trade in
thin or volatile markets or that are valued using a fair value methodology.
Investors who purchase or redeem fund shares on days when the fund is holding
fair-valued securities may receive fewer or more shares or lower or higher
redemption proceeds than they would have received if the fund had not
fair-valued the securities or had used a different valuation methodology. The
fund's ability to value its investments may also be impacted by technological
issues and/or errors by pricing services or other third party service
providers.
8
EXPENSE RISK. Your actual costs of investing in the fund may be higher than the
expenses shown in "Annual fund operating expenses" for a variety of reasons.
For example, expense ratios may be higher than those shown if overall net
assets decrease. Net assets are more likely to decrease and fund expense ratios
are more likely to increase when markets are volatile.
Please note that there are many other factors that could adversely affect your
investment and that could prevent the fund from achieving its goals.
An investment in the fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.
THE FUND'S PAST PERFORMANCE
The bar chart and table indicate the risks and volatility of an investment in
the fund by showing how the fund has performed in the past. The bar chart shows
changes in the performance of the fund's Class A shares from calendar year to
calendar year. The table shows the average annual total returns for each class
of the fund over time and compares these returns to the returns of the Russell
1000 Value Index, a broad-based measure of market performance that has
characteristics relevant to the fund's investment strategies. You can obtain
updated performance information by visiting
https://us.pioneerinvestments.com/performance or by calling 1-800-225-6292.
The fund's past performance (before and after taxes) does not necessarily
indicate how it will perform in the future.
The bar chart does not reflect any sales charge you may pay when you buy fund
shares. If this amount was reflected, returns would be less than those shown.
9
Fund summary
ANNUAL RETURN CLASS A SHARES (%)
(Year ended December 31)
[GRAPHIC APPEARS HERE]
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16
0.07 -30.02 11.08 19.16 6.40 9.79 28.90 12.82 0.27 19.14
For the period covered by the bar chart:
THE HIGHEST CALENDAR QUARTERLY RETURN WAS 13.18% (07/01/2009 TO 09/30/2009).
THE LOWEST CALENDAR QUARTERLY RETURN WAS -21.20% (10/01/2008 TO 12/31/2008).
No performance information is presented for Class T shares in the table because
Class T shares do not have annual returns for at least one calendar year. The
returns for Class T shares would differ from those of other classes of shares
because they have different expenses.
10
AVERAGE ANNUAL TOTAL RETURN (%)
(for periods ended December 31, 2016)
SINCE INCEPTION
1 YEAR 5 YEARS 10 YEARS INCEPTION DATE
-------- ----------- ---------- ----------- ----------
Class A 7/25/90
-------------------------------------- ----- ----- ---- ----- -------
Return before taxes 12.30 12.45 5.89 9.55
-------------------------------------- ------ -------- ---- -------- -------
Return after taxes on distributions 8.67 10.22 4.50 8.06
-------------------------------------- ------ -------- ---- -------- -------
Return after taxes on distributions
and sale of shares 9.08 9.64 4.49 7.75
-------------------------------------- ------ -------- ---- -------- -------
Class C+ 18.30 12.96 5.73 7.65 1/31/96
-------------------------------------- ------ -------- ---- -------- -------
Class K 19.57 N/A N/A 14.82 12/20/12
-------------------------------------- ------ -------- ---- -------- --------
Class R 18.73 13.41 6.23 9.68 4/1/03
-------------------------------------- ------ -------- ---- -------- --------
Class Y 19.47 14.13 6.92 7.09 7/2/98
-------------------------------------- ------ -------- ---- -------- --------
Russell 1000 Value Index (reflects no
deduction for fees, expenses or
taxes) 17.34 14.80 5.72 10.13 7/31/90
-------------------------------------- ------ -------- ---- -------- --------
+ The performance of Class C shares does not reflect the 1% front-end sales
charge in effect prior to February 1, 2004. If you paid a 1% sales
charge, your returns would be lower than those shown above.
After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual after-tax returns depend on the investor's tax situation
and may differ from those shown. The after-tax returns shown are not relevant
to investors who hold fund shares through tax-deferred arrangements such as
401(k) plans or individual retirement accounts.
After-tax returns are shown only for Class A shares. After-tax returns for
Class C, Class K, Class R, Class T and Class Y shares will vary.
MANAGEMENT
INVESTMENT ADVISER Pioneer Investment Management, Inc.
PORTFOLIO MANAGEMENT John A. Carey, Executive Vice President of
Pioneer (portfolio manager of the fund since
1990), and Walter Hunnewell, Jr., Vice
President of Pioneer (portfolio manager of the
fund since 2001)
11
Fund summary
PURCHASE AND SALE OF FUND SHARES
You may purchase, exchange or sell (redeem) shares each day the New York Stock
Exchange is open through your financial intermediary or, for accounts held
directly with the fund, by contacting the fund in writing or by telephone:
Pioneer Funds, P.O. Box 55014, Boston, MA 02205-5014, tel. 1-800-225-6292.
Your initial investment for Class A, Class C or Class T shares must be at least
$1,000. Additional investments must be at least $100 for Class A and Class T
shares and $500 for Class C shares. The initial investment for Class K shares
and Class Y shares must be at least $5 million. This amount may be invested in
one or more of the Pioneer mutual funds that currently offer Class K shares or
Class Y shares, as applicable. There is no minimum additional investment amount
for Class K or Class Y shares. There is no minimum investment amount for Class
R shares.
TAX INFORMATION
The fund intends to make distributions that may be taxed as ordinary income,
qualified dividend income, or capital gains.
PAYMENTS TO BROKER-DEALERS AND OTHER FINANCIAL INTERMEDIARIES
If you purchase the fund through a broker-dealer or other financial
intermediary (such as a bank), the fund and its related companies may pay the
intermediary for the sale of fund shares and related services. These payments
create a conflict of interest by influencing the broker-dealer or other
intermediary and your salesperson or investment professional to recommend the
fund over another investment. Ask your salesperson or investment professional
or visit your financial intermediary's website for more information.
12
More on the fund's investment objectives
and strategies
INVESTMENT OBJECTIVES
Current income and long-term growth of capital from a portfolio consisting
primarily of income producing equity securities of U.S. corporations.
The fund's investment objectives may be changed without shareholder approval.
The fund will provide at least 30 days' notice prior to implementing any change
to its investment objectives.
PRINCIPAL INVESTMENT STRATEGIES
Normally, the fund invests at least 80% of its total assets in income producing
equity securities of U.S. issuers. The income producing equity securities in
which the fund may invest include common stocks, preferred stocks,
exchange-traded funds (ETFs) that invest primarily in equity securities and
equity interests in real estate investment trusts (REITs). The remainder of the
fund may be invested in debt securities, most of which are expected to be
convertible into common stocks. The fund may invest in initial public offerings
of equity securities. The fund may consider ETFs as income producing equity
securities for purposes of satisfying the fund's 80% policy if the ETF invests
at least 80% of its net assets in income producing equity securities of U.S.
issuers.
The fund will provide notice to shareholders at least 60 days prior to any
change to its policy to invest at least 80% of its assets in income producing
equity securities of U.S. issuers.
The fund may invest up to 20% of its total assets in securities of non-U.S.
issuers, including depositary receipts. The fund will not invest more than 5%
of its total assets in the securities of emerging markets issuers. The fund
does not count securities of Canadian issuers against the limit on investment
in securities of non-U.S. issuers.
The fund may invest up to 20% of its net assets in REITs.
The fund may invest in securities of issuers in any industry or market segment,
and in securities of any market capitalization. The fund may invest in debt
securities. The fund may invest up to 10% of its net assets in below investment
grade debt securities (known as "junk bonds"), including below investment grade
convertible debt securities. The fund may invest in debt securities rated "C"
or better, or comparable unrated securities. The fund invests in debt
securities when the adviser believes they are consistent with the fund's
investment objectives of current income and long-term capital
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More on the fund's investment objectives
and strategies
growth, to diversify the fund's portfolio or for greater liquidity. The fund
may invest in Brady bonds, which are restructured debt of governmental issuers
of emerging market countries.
Pioneer Investment Management, Inc. (Pioneer), the fund's investment adviser,
uses a value approach to select the fund's investments. Using this investment
style, Pioneer seeks securities selling at substantial discounts to their
underlying values and then holds these securities until the market values
reflect their intrinsic values. Pioneer evaluates a security's potential value,
including the attractiveness of its market valuation, based on the company's
assets and prospects for earnings growth. Pioneer also considers a security's
potential to provide a reasonable amount of income. In making these
assessments, Pioneer employs fundamental research and an evaluation of the
issuer based on its financial statements and operations, employing a bottom-up
analytic style, which focuses on specific securities rather than on industries.
Pioneer relies on the knowledge, experience and judgment of its staff and the
staff of its affiliates who have access to a wide variety of research. Pioneer
focuses on the quality and price of individual issuers and securities, not on
economic sector or market-timing strategies. Factors Pioneer looks for in
selecting investments include:
o Favorable expected returns relative to perceived risk
o Management with demonstrated ability and commitment to the company
o Low market valuations relative to earnings forecast, book value, cash flow
and sales
o Good prospects for dividend growth
Pioneer generally sells a portfolio security when it believes that the
security's market value reflects its underlying value.
The fund's investment strategies and policies may be changed from time to time
without shareholder approval, unless specifically stated otherwise in this
prospectus or in the statement of additional information.
NON-U.S. INVESTMENTS
The fund may invest in securities of non-U.S. issuers, including securities of
emerging markets issuers. Non-U.S. issuers are issuers that are organized and
have their principal offices outside of the United States. Non-U.S. securities
may be issued by non-U.S. governments, banks or corporations, or private
issuers, and certain supranational organizations, such as the World Bank and
the European Union. The fund considers emerging market issuers to include
issuers organized under the laws of an emerging market country, issuers with a
principal office in an emerging market country,
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issuers that derive at least 50% of their gross revenues or profits from goods
or services produced in emerging markets or sales made in emerging markets, and
emerging market governmental issuers.
INVESTMENTS IN REITS
REITs are companies that invest primarily in income producing real estate or
real estate related loans or interests. Some REITs invest directly in real
estate and derive their income from the collection of rents and capital gains
on the sale of properties. Other REITs invest primarily in mortgages, including
"sub-prime" mortgages, secured by real estate and derive their income from
collection of interest.
DEBT SECURITIES
The fund may invest in debt securities. Generally the fund may acquire debt
securities that are investment grade, but the fund may invest in below
investment grade debt securities (known as "junk bonds") including below
investment grade convertible debt securities. A debt security is investment
grade if it is rated in one of the top four categories by a nationally
recognized statistical rating organization or determined to be of equivalent
credit quality by the adviser.
BELOW INVESTMENT GRADE SECURITIES ("JUNK BONDS")
The fund may invest in debt securities rated below investment grade or, if
unrated, of equivalent quality as determined by Pioneer. A debt security is
below investment grade if it is rated BB or lower by Standard & Poor's
Financial Services LLC or the equivalent rating 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 quality debt securities. Below
investment grade securities also may be more difficult to value.
DERIVATIVES
The fund may, but is not required to, use futures and options on securities,
indices and currencies, forward foreign currency exchange contracts, swaps and
other derivatives. A derivative is a security or instrument whose value is
determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund may
use derivatives for a variety of purposes, including:
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More on the fund's investment objectives
and strategies
o In an attempt to hedge against adverse changes in the market prices of
securities, interest rates or currency exchange rates
o As a substitute for purchasing or selling securities
o To attempt to increase the fund's return as a non-hedging strategy that may
be considered speculative
o To manage portfolio characteristics (for example, the fund's currency
exposure and exposure to various market segments)
o As a cash flow management technique
The fund may choose not to make use of derivatives for a variety of reasons,
and any use may be limited by applicable law and regulations.
CASH MANAGEMENT AND TEMPORARY INVESTMENTS
Normally, the fund invests substantially all of its assets to meet its
investment objectives. The fund may invest the remainder of its assets in
securities with remaining maturities of less than one year or 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. The fund may adopt a defensive strategy when the adviser believes
securities in which the fund normally invests have special or unusual risks or
are less attractive due to adverse market, economic, political or other
conditions. During such periods, it may be more difficult for the fund to
achieve its investment objective.
ADDITIONAL INVESTMENT STRATEGIES
In addition to the principal investment strategies discussed above, the fund
may also use other techniques, including the following non-principal investment
strategies.
REVERSE REPURCHASE AGREEMENTS AND BORROWING
The fund may enter into reverse repurchase agreements pursuant to which the
fund transfers securities to a counterparty in return for cash, and the fund
agrees to repurchase the securities at a later date and for a higher price.
Reverse repurchase agreements are treated as borrowings by the fund, are a form
of leverage and may make the value of an investment in the fund more volatile
and increase the risks of investing in the fund. The fund also may borrow money
from banks or other lenders for temporary purposes. The fund may borrow up to
33 1/3% of its total assets. Entering
16
into reverse repurchase agreements and other borrowing transactions may cause
the fund to liquidate positions when it may not be advantageous to do so in
order to satisfy its obligations or meet segregation requirements.
SHORT-TERM TRADING
The fund usually does not trade for short-term profits. The fund will sell an
investment, however, even if it has only been held for a short time, if it no
longer meets the fund's investment criteria. If the fund does a lot of trading,
it may incur additional operating expenses, which would reduce performance, and
could cause shareowners to incur a higher level of taxable income or capital
gains.
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More on the risks of investing in the fund
PRINCIPAL INVESTMENT RISKS
You could lose money on your investment in the fund. As with any mutual fund,
there is no guarantee that the fund will achieve its objectives.
MARKET RISK. The market prices of securities held by the fund may go up or
down, sometimes rapidly or unpredictably, due to general market conditions,
such as real or perceived adverse economic, political, or regulatory
conditions, inflation, changes in interest or currency rates, lack of liquidity
in the bond markets or adverse investor sentiment. Changes in market conditions
may not have the same impact on all types of securities. The market prices of
securities may also fall due to specific conditions that affect a particular
sector of the securities market or a particular issuer. The stock market may
perform poorly relative to other investments (this risk may be greater in the
short term). In the past several years, financial markets, such as those in the
United States, Europe, Asia and elsewhere, have experienced increased
volatility, depressed valuations, decreased liquidity and heightened
uncertainty. These conditions may continue, recur, worsen or spread. Events
that have contributed to these market conditions include, but are not limited
to, major cybersecurity events; measures to address U.S. federal and state
budget deficits; downgrading of U.S. long-term sovereign debt; declines in oil
and commodity prices; dramatic changes in currency exchange rates; and public
sentiment. The U.S. government and the Federal Reserve, as well as certain
foreign governments and their central banks, have taken steps to support
financial markets, including by keeping interest rates at historically low
levels. This and other government intervention may not work as intended,
particularly if the efforts are perceived by investors as being unlikely to
achieve the desired results. The Federal Reserve has reduced its market support
activities and recently has begun raising interest rates. Certain foreign
governments and central banks are implementing or discussing so-called negative
interest rates (e.g., charging depositors who keep their cash at a bank) to
spur economic growth. Further Federal Reserve or other U.S. or non-U.S.
governmental or central bank actions, including interest rate increases or
contrary actions by different governments, could negatively affect financial
markets generally, increase market volatility and reduce the value and
liquidity of securities in which the fund invests. Policy and legislative
changes in the U.S. and in other countries are affecting many aspects of
financial regulation, and may in some instances contribute to decreased
liquidity and increased volatility in the financial markets. The impact of
these changes on the markets, and the practical implications for market
participants, may not be fully known for some time. Economies and financial
18
markets throughout the world are increasingly interconnected. Economic,
financial or political events, trading and tariff arrangements, terrorism,
natural disasters and other circumstances in one country or region could have
profound impacts on global economies or markets. As a result, whether or not
the fund invests in securities of issuers located in or with significant
exposure to the countries directly affected, the value and liquidity of the
fund's investments may be negatively affected. The fund may experience a
substantial or complete loss on any individual security or derivative position.
VALUE STYLE RISK. The prices of securities the adviser believes are undervalued
may not appreciate as expected or may go down. Value stocks may fall out of
favor with investors and underperform the overall equity market.
INCOME PRODUCING SECURITIES RISK. Income producing securities may fall out of
favor with investors and underperform the overall equity market.
LARGE CAPITALIZATION COMPANIES RISK. Large capitalization companies may fall
out of favor with investors and underperform the overall equity market.
PORTFOLIO SELECTION RISK. The adviser's judgment about a particular security or
issuer, or about the economy or a particular sector, region or market segment,
or about an investment strategy, may prove to be incorrect.
RISKS OF NON-U.S. INVESTMENTS. Investing in non-U.S. issuers, or in U.S.
issuers that have significant exposure to foreign markets, may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced for issuers in emerging markets or to the extent that the fund
invests significantly in one region or country. 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, the adviser may not be able to sell the fund's 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, or its ability to convert non-U.S. currencies to U.S.
dollars
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, regulatory and social developments may adversely affect
the securities markets
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More on the risks of investing in the fund
o It may be difficult for the fund to pursue claims or enforce judgments
against a foreign bank, depository or issuer of a security, or any of their
agents, in the courts of a foreign country
o Withholding and other non-U.S. taxes may decrease the fund's return. The
value of the fund's foreign investments also may be affected by U.S. tax
considerations and restrictions in receiving investment proceeds from a
foreign country
o Some markets in which the fund may invest are located in parts of the world
that have historically been prone to natural disasters that could result in
a significant adverse impact on the economies of those countries and
investments made in those countries
o It is often more expensive for the fund to buy, sell and hold securities in
certain foreign markets than in the United States
o A governmental entity may delay, or refuse or be unable to pay, interest or
principal on its sovereign debt due to cash flow problems, insufficient
foreign currency reserves, political considerations, the relative size of
the governmental entity's debt position in relation to the economy or the
failure to put in place economic reforms
o Investing in depositary receipts is subject to many of the same risks as
investing directly in non-U.S. issuers. Depositary receipts may involve
higher expenses and may trade at a discount (or premium) to the underlying
security. In addition, depositary receipts may not pass through voting and
other shareholder rights, and may be less liquid than the underlying
securities listed on an exchange
o A number of countries in the European Union (EU) have experienced, and may
continue to experience, severe economic and financial difficulties.
Additional EU member countries may also fall subject to such difficulties. A
number of countries in Europe have suffered terror attacks, and additional
attacks may occur in the future. In addition, voters in the United Kingdom
have approved withdrawal from the EU. Other countries may seek to withdraw
from the EU and/or abandon the euro, the common currency of the EU. These
events could negatively affect the value and liquidity of the fund's
investments, particularly in euro-denominated securities and derivative
contracts, securities of issuers located in the EU or with significant
exposure to EU issuers or countries
RISKS OF INVESTMENTS IN REAL ESTATE RELATED SECURITIES. The fund has risks
associated with the real estate industry. Although the fund does not invest
directly in real estate, it may invest in REITs and other equity securities of
real estate industry issuers. These risks may include:
20
o The U.S. or a local real estate market declines due to adverse economic
conditions, foreclosures, 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 the fund's portfolio is, or is perceived by the market to be,
poorly managed
o If the fund's real estate related investments are concentrated in one
geographic area or property type, the fund will be particularly subject to
the risks associated with that area or property type
REITs can generally be classified as equity REITs, mortgage REITs or hybrid
REITs. Equity REITs invest primarily in real property and derive income mainly
from the collection of rents. They may also realize gains or losses from the
sale of properties. Equity REITs will be affected by conditions in the real
estate rental market and by changes in the value of the properties they own.
Mortgage REITs invest primarily in mortgages and similar real estate interests
and derive income primarily from interest payments. Mortgage REITs will be
affected by changes in creditworthiness of borrowers and changes in interest
rates. Mortgage REITs are subject to the risks of default of the mortgages or
mortgage-related securities in which they invest, and REITs that invest in
so-called "sub-prime" mortgages are particularly subject to this risk. Hybrid
REITs invest both in real property and in mortgages.
Investing in REITs involves certain unique risks. REITs are dependent on
management skills, are not diversified and are subject to the risks of
financing projects. REITs are typically invested in a limited number of
projects or in a particular market segment or geographic region, and therefore
are more susceptible to adverse developments affecting a single project, market
segment or geographic region than more broadly diversified investments. REITs
are subject to heavy cash flow dependency, defaults by mortgagors or other
borrowers and tenants, self-liquidation and the possibility of failing to
qualify for certain tax and regulatory exemptions. REITs may have limited
financial resources and may experience sharper swings in market values and
trade less frequently and in a more limited volume than securities of larger
issuers. In addition to its own expenses, the fund will indirectly bear
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More on the risks of investing in the fund
its proportionate share of any management and other expenses paid by REITs in
which it invests. Such expenses are not shown in "Annual fund operating
expenses" above.
Many real estate companies, including REITs, utilize leverage (and some may be
highly leveraged), which increases investment risk and could adversely affect a
real estate company's operations and market value. Mortgage REITs tend to be
more leveraged than equity REITs. In addition, many mortgage REITs manage their
interest rate and credit risks through the use of derivatives and other hedging
techniques. In addition, capital to pay or refinance a REIT's debt may not be
available or reasonably priced. Financial covenants related to real estate
company leveraging may affect the company's ability to operate effectively.
RISKS OF INITIAL PUBLIC OFFERINGS. Companies involved in initial public
offerings (IPOs) generally have limited operating histories, and prospects for
future profitability are uncertain. Information about the companies may be
available for very limited periods. The market for IPO issuers has been
volatile, and share prices of newly public companies have fluctuated
significantly over short periods of time. Further, stocks of newly-public
companies may decline shortly after the IPO. There is no assurance that the
fund will have access to IPOs. The purchase of IPO shares may involve high
transaction costs. Because of the price volatility of IPO shares, the fund may
choose to hold IPO shares for a very short period of time. This may increase
the turnover of the portfolio and may lead to increased expenses to the fund,
such as commissions and transaction costs. The market for IPO shares can be
speculative and/or inactive for extended periods of time. There may be only a
limited number of shares available for trading. The limited number of shares
available for trading in some IPOs may also make it more difficult for the fund
to buy or sell significant amounts of shares without an unfavorable impact on
prevailing prices.
RISKS OF INVESTMENT IN OTHER FUNDS. Investing in other investment companies,
including exchange-traded funds (ETFs), subjects the fund to the risks of
investing in the underlying securities or assets held by those funds. When
investing in another fund, the fund will bear a pro rata portion of the
underlying fund's expenses, in addition to its own expenses. ETFs are bought
and sold based on market prices and can trade at a premium or a discount to the
ETF's net asset value.
22
RISKS OF CONVERTIBLE SECURITIES. Convertible securities generally offer lower
interest or dividend yields than non-convertible securities of similar quality.
As with all fixed income securities, the market values of convertible
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 approaches or exceeds the
conversion price, the convertible security tends to reflect the market price of
the underlying common stock. As the market price of the underlying common stock
declines, the convertible security tends to trade increasingly on a yield basis
and thus may not decline in price to the same extent as the underlying common
stock. Convertible securities rank senior to common stocks in an issuer's
capital structure and consequently entail less risk than the issuer's common
stock. The value of a synthetic convertible security will respond differently
to market fluctuations than a traditional convertible security because a
synthetic convertible security is composed of two or more separate securities
or instruments, each with its own market value. If the value of the underlying
common stock or the level of the index involved in the convertible component
falls below the exercise price of the warrant or option, the warrant or option
may lose all value.
PREFERRED STOCKS RISK. Preferred stocks may pay fixed or adjustable rates of
return. Preferred stocks are subject to issuer-specific and market risks
applicable generally to equity securities. In addition, a company's preferred
stocks generally pay dividends only after the company makes required payments
to holders of its bonds and other debt. Thus, the value of preferred stocks
will usually react more strongly than bonds and other debt to actual or
perceived changes in the company's financial condition or prospects. The market
value of preferred stocks generally decreases when interest rates rise.
Preferred stocks of smaller companies may be more vulnerable to adverse
developments than preferred stocks of larger companies.
DEBT SECURITIES RISK. Factors that could contribute to a decline in the market
value of debt securities in the fund include rising interest rates, if the
issuer or other obligor of a security held by the fund fails to pay principal
and/or interest, otherwise defaults or has its credit rating downgraded or is
perceived to be less creditworthy or the credit quality or value of any
underlying assets declines. Junk bonds 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;
they may also be more difficult to value. Junk bonds have a higher risk of
default or are already in default and are considered speculative.
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More on the risks of investing in the fund
HIGH YIELD OR "JUNK" BOND RISK. Debt securities that are below investment
grade, called "junk bonds," are speculative, have a higher risk of default or
are already in default, tend to be less liquid and are more difficult to value
than higher grade securities and may involve major risk of exposure to adverse
conditions and negative sentiments. These securities have a higher risk of
issuer default because, among other reasons, issuers of junk bonds often have
more debt in relation to total capitalization than issuers of investment grade
securities. Junk bonds tend to be volatile and more susceptible to adverse
events and negative sentiments. These risks are more pronounced for securities
that are already in default. Changes in economic conditions or developments
regarding the individual issuer are more likely to cause price volatility and
weaken the capacity of such securities to make principal and interest payments
than is the case for higher grade debt securities. The value of lower-quality
debt securities often fluctuates in response to company, political, or economic
developments and can decline significantly over short as well as long periods
of time or during periods of general or regional economic difficulty. Junk
bonds may also be less liquid than higher-rated securities, which means that
the fund may have difficulty selling them at times, and it may have to apply a
greater degree of judgment in establishing a price for purposes of valuing fund
shares. Junk bonds generally are issued by less creditworthy issuers. In the
event of an issuer's bankruptcy, claims of other creditors may have priority
over the claims of junk bond holders, leaving few or no assets available to
repay junk bond holders. The fund may incur expenses to the extent necessary to
seek recovery upon default or to negotiate new terms with a defaulting issuer.
Junk bonds frequently have redemption features that permit an issuer to
repurchase the security from the fund before it matures. If the issuer redeems
junk bonds, the fund may have to invest the proceeds in bonds with lower yields
and may lose income.
MARKET SEGMENT RISK. To the extent the fund emphasizes, from time to time,
investments in a market segment, the fund will be subject to a greater degree
to the risks particular to 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 real
estate investment trusts (REITs), may be sensitive to changes in interest rates
and general economic activity and are generally subject to extensive government
regulation.
24
For example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and real estate investment trusts (REITs), may be
sensitive to changes in interest rates and general economic activity and are
generally subject to extensive government regulation.
Industries in the consumer staples segment, such as food and drug retailing,
beverages, food and tobacco products, household products and personal products,
are subject to government regulation affecting ingredients and production
methods. These industries also may be affected by competition, changes in
consumer tastes and other factors affecting supply and demand, and litigation.
DERIVATIVES RISK. Using stock index futures and options and other derivatives
exposes the fund to special risks and costs and may result in losses to the
fund, even when used for hedging purposes. Using derivatives can increase
losses and reduce opportunities for gain when market prices, interest rates or
currencies, or the derivative instruments themselves, behave in a way not
anticipated by the fund, especially in abnormal market conditions. Using
derivatives can have a leveraging effect (which may increase investment losses)
and increase the fund's volatility, which is the degree to which the fund's
share price may fluctuate within a short time period. Certain derivatives have
the potential for unlimited loss, regardless of the size of the fund's initial
investment. If changes in a derivative's value do not correspond to changes in
the value of the fund's other investments or do not correlate well with the
underlying assets, rate or index, the fund may not fully benefit from, or could
lose money on, or could experience unusually high expenses as a result of, the
derivative position. The other parties to certain derivative transactions
present the same types of credit risk as issuers of fixed income securities.
Derivatives also tend to involve greater liquidity risk and they may be
difficult to value. The fund may be unable to terminate or sell its derivative
positions. In fact, many over-the-counter derivatives will not have liquidity
beyond the counterparty to the instrument. Use of derivatives or similar
instruments may have different tax consequences for the fund than an investment
in the underlying security, and those differences may affect the amount, timing
and character of income distributed to shareholders. The fund's use of
derivatives may also increase the amount of taxes payable by shareholders.
Risks associated with the use of derivatives are magnified to the extent that
an increased portion of the fund's assets are committed to derivatives in
general or are invested in just one or a few types of derivatives.
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More on the risks of investing in the fund
The U.S. government and foreign governments are in the process of adopting and
implementing regulations governing derivative markets, including mandatory
clearing of certain derivatives, margin and reporting requirements. The
ultimate impact of the regulations remains unclear. Additional regulation of
derivatives may make derivatives more costly, may limit their availability or
utility or otherwise adversely affect their performance, or may disrupt
markets. The fund may be exposed to additional risks as a result of the
additional regulations. The extent and impact of the regulations are not yet
fully known and may not be for some time. In addition, the SEC has proposed a
new rule that would change the regulation of the use of derivatives by
registered investment companies, such as the fund. If the proposed rule takes
effect, it could limit the ability of the fund to invest in derivatives.
The fund will be required to maintain its positions with a clearing
organization through one or more clearing brokers. The clearing organization
will require the fund to post margin and the broker may require the fund to
post additional margin to secure the fund's obligations. The amount of margin
required may change from time to time. In addition, cleared transactions may be
more expensive to maintain than over-the-counter transactions and may require
the fund to deposit larger amounts of margin. The fund may not be able to
recover margin amounts if the broker has financial difficulties. Also, the
broker may require the fund to terminate a derivatives position under certain
circumstances. This may cause the fund to lose money. The fund's ability to use
certain derivative instruments currently is limited by Commodity Futures
Trading Commission rules.
LEVERAGING RISK. The value of your investment may be more volatile and other
risks tend to be compounded if the fund borrows or uses derivatives or other
investments, such as ETFs, that have embedded leverage. Leverage generally
magnifies the effect of any increase or decrease in the value of the fund's
underlying assets and creates a risk of loss of value on a larger pool of
assets than the fund would otherwise have, potentially resulting in the loss of
all assets. Engaging in such transactions may cause the fund to liquidate
positions when it may not be advantageous to do so to satisfy its obligations
or meet segregation requirements.
VALUATION RISK. Many factors may influence the price at which the fund could
sell any particular portfolio investment. The sales price may well differ -
higher or lower - from the fund's last valuation of the investment, and such
differences could be significant, particularly for illiquid securities and
securities that trade in thin markets and/or markets that experience
26
extreme volatility. The fund may value investments using fair value
methodologies. Investors who purchase or redeem fund shares on days when the
fund is holding fair-valued securities may receive fewer or more shares, or
lower or higher redemption proceeds, than they would have received if the fund
had not fair-valued the securities or had used a different valuation
methodology. The value of foreign securities, certain fixed income securities
and currencies, as applicable, may be materially affected by events after the
close of the market on which they are valued, but before the fund determines
its net asset value. The fund's ability to value its investments may also be
impacted by technological issues and/or errors by pricing services or other
third party service providers.
LIQUIDITY RISK. Liquidity risk is the risk that particular investments, or
investments generally, may be impossible or difficult to purchase or sell.
Although most of the fund's securities and other investments must be liquid at
the time of investment, securities and other investments may become illiquid
after purchase by the fund, particularly during periods of market turmoil.
Liquidity and value of investments can deteriorate rapidly. When the fund holds
illiquid investments, its portfolio may be harder to value, especially in
changing markets. If the fund is forced to sell or unwind these investments to
meet redemptions or for other cash needs, the fund may suffer a loss. The fund
may experience heavy redemptions that could cause the fund to liquidate its
assets at inopportune times or at a loss or depressed value, which could cause
the value of your investment to decline. In addition, when there is illiquidity
in the market for certain securities and other investments, the fund, due to
limitations on investments in illiquid securities, may be unable to achieve its
desired level of exposure to a certain sector.
REDEMPTION RISK. The fund may experience periods of heavy redemptions that
could cause the fund to liquidate its assets at inopportune times or at a loss
or depressed value, particularly during periods of declining or illiquid
markets. Redemption risk is greater to the extent that the fund has investors
with large shareholdings, short investment horizons, or unpredictable cash flow
needs. In addition, redemption risk is heightened during periods of overall
market turmoil. The redemption by one or more large shareholders of their
holdings in the fund could hurt performance and/or cause the remaining
shareholders in the fund to lose money. If one decision maker has control of
fund shares owned by separate fund shareholders, including clients or
affiliates of the fund's adviser, redemptions by these shareholders
27
More on the risks of investing in the fund
may further increase the fund's redemption risk. If the fund is forced to
liquidate its assets under unfavorable conditions or at inopportune times, the
value of your investment could decline.
CASH MANAGEMENT RISK. The value of the investments held by the fund for cash
management or temporary defensive purposes may be affected by market risks,
changing interest rates and by changes in credit ratings of the investments. To
the extent that the fund has any uninvested cash, the fund would be subject to
credit risk with respect to the depository institution holding the cash. If the
fund holds cash uninvested, the fund will not earn income on the cash and the
fund's yield will go down. During such periods, it may be more difficult for
the fund to achieve its investment objectives.
EXPENSE RISK. Your actual costs of investing in the fund may be higher than the
expenses shown in "Annual fund operating expenses" for a variety of reasons.
For example, expense ratios may be higher than those shown if overall net
assets decrease. Net assets are more likely to decrease and fund expense ratios
are more likely to increase when markets are volatile.
To learn more about the fund's investments and risks, you should obtain and
read the statement of additional information. Please note that there are many
other factors that could adversely affect your investment and that could
prevent the fund from achieving its goals.
DISCLOSURE OF PORTFOLIO HOLDINGS
The fund's policies and procedures with respect to disclosure of the fund's
securities are described in the statement of additional information.
28
Management
INVESTMENT ADVISER
Pioneer, the fund's investment adviser, selects the fund's investments and
oversees the fund's operations.
Pioneer is an indirect, wholly owned subsidiary of UniCredit 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,
institutional and other clients. As of December 31, 2016, assets under
management were approximately $241 billion worldwide, including over $68
billion in assets under management by Pioneer (and its U.S. affiliates).
Pioneer's main office is at 60 State Street, Boston, Massachusetts 02109.
The firm's U.S. mutual fund investment history includes creating in 1928 one of
the first mutual funds.
Pioneer has received an order from the Securities and Exchange Commission that
permits Pioneer, subject to the approval of the fund's Board of Trustees, to
hire and terminate a subadviser that is not affiliated with Pioneer (an
"unaffiliated subadviser") or to materially modify an existing subadvisory
contract with an unaffiliated subadviser for the fund without shareholder
approval. Pioneer retains the ultimate responsibility to oversee and recommend
the hiring, termination and replacement of any unaffiliated subadviser.
PORTFOLIO MANAGEMENT
Day-to-day management of the fund's portfolio is the responsibility of John A.
Carey, portfolio manager of the fund since 1990, and Walter Hunnewell, Jr.,
portfolio manager of the fund since 2001. Mr. Carey and Mr. Hunnewell are
supported by the domestic equity team. Members of this team manage other
Pioneer funds investing primarily in U.S. equity securities. The portfolio
managers and the team also may draw upon the research and investment management
expertise of the global research teams, which provide fundamental and
quantitative research on companies and include members from one or more of
Pioneer's affiliates. Mr. Carey, an Executive Vice President of Pioneer, joined
Pioneer as an analyst in 1979. Mr. Hunnewell, a Vice President of Pioneer,
joined Pioneer as a portfolio manager in 2001 and has been an investment
professional since 1985.
29
Management
The fund's statement of additional information provides additional information
about the portfolio managers' compensation, other accounts managed by the
portfolio managers, and the portfolio managers' ownership of shares of the
fund.
MANAGEMENT FEE
The fund pays Pioneer a fee for managing the fund and to cover the cost of
providing certain services to the fund. Pioneer's annual fee is equal to 0.60%
of the fund's average daily net assets up to $10 billion and 0.575% of the
fund's average daily net assets over $10 billion. The fee is accrued daily and
paid monthly.
For the fiscal year ended October 31, 2016, the fund paid management fees
(excluding waivers and/or assumption of expenses) equivalent to 0.60% of the
fund's average daily net assets.
A discussion regarding the basis for the Board of Trustees' approval of the
management contract is available in the fund's annual report to shareholders
for the period ended October 31, 2016.
DISTRIBUTOR
Pioneer Funds Distributor, Inc. is the fund's distributor. The fund compensates
the distributor for its services. The distributor is an affiliate of Pioneer.
30
Pricing of shares
NET ASSET VALUE
The fund's net asset value is the value of its securities plus any other assets
minus its accrued operating expenses and other liabilities. The fund calculates
a net asset value for each class of shares every day the New York Stock
Exchange is open as of the scheduled close of regular trading (normally 4:00
p.m. Eastern time). If the New York Stock Exchange closes at another time, the
fund will calculate a net asset value for each class of shares as of the
scheduled closing time. On days when the New York Stock Exchange is closed for
trading, including certain holidays listed in the statement of additional
information, a net asset value is not calculated. The fund's most recent net
asset value is available on the fund's website, us.pioneerinvestments.com.
The fund generally values its equity securities and certain derivative
instruments that are traded on an exchange using the last sale price on the
principal exchange on which they are traded. Equity securities that are not
traded on the date of valuation, or securities for which no last sale prices
are available, are valued at the mean between the last bid and asked prices or,
if both last bid and asked prices are not available, at the last quoted bid
price. Last sale, bid and asked prices are provided by independent third party
pricing services. In the case of equity securities not traded on an exchange,
prices are typically determined by independent third party pricing services
using a variety of techniques and methods. The fund may use a fair value model
developed by an independent pricing service to value non-U.S. equity
securities.
The fund generally values debt securities and certain derivative instruments by
using the prices supplied by independent third party pricing services. A
pricing service may use market prices or quotations from one or more brokers or
other sources, or may use a pricing matrix or other fair value methods or
techniques to provide an estimated value of the security or instrument. A
pricing matrix is a means of valuing a debt security on the basis of current
market prices for other debt securities, historical trading patterns in the
market for fixed income securities and/or other factors. Non-U.S. debt
securities that are listed on an exchange will be valued at the bid price
obtained from an independent third party pricing service.
31
Pricing of shares
To the extent that the fund invests in shares of other mutual funds that are
not traded on an exchange, such shares of other mutual funds are valued at
their net asset values as provided by those funds. The prospectuses for those
funds explain the circumstances under which those funds will use fair value
pricing methods and the effects of using fair value pricing methods.
The valuations of securities traded in non-U.S. markets and certain fixed
income securities will generally be determined as of the earlier closing time
of the markets on which they primarily trade. When the fund holds securities or
other assets that are denominated in a foreign currency, the fund will normally
use the currency exchange rates as of 3:00 p.m. (Eastern time). Non-U.S.
markets are open for trading on weekends and other days when the fund does not
price its shares. Therefore, the value of the fund's shares may change on days
when you will not be able to purchase or redeem fund shares.
When independent third party pricing services are unable to supply prices for
an investment, or when prices or market quotations are considered by Pioneer to
be unreliable, the value of that security may be determined using quotations
from one or more broker-dealers. When such prices or quotations are not
available, or when they are considered by Pioneer to be unreliable, the fund
uses fair value methods to value its securities pursuant to procedures adopted
by the Board of Trustees. The fund also may use fair value methods if it is
determined that a significant event has occurred between the time at which a
price is determined and the time at which the fund's net asset value is
calculated. Because the fund may invest in securities rated below investment
grade - some of which may be thinly traded and for which prices may not be
readily available or may be unreliable - the fund may use fair value methods
more frequently than funds that primarily invest in securities that are more
widely traded. Valuing securities using fair value methods may cause the net
asset value of the fund's shares to differ from the net asset value that would
be calculated only using market prices.
The prices used by the fund to value its securities may differ from the amounts
that would be realized if these securities were sold and these differences may
be significant, particularly for securities that trade in relatively thin
markets and/or markets that experience extreme volatility.
32
Choosing a class of shares
The fund offers six classes of shares through this prospectus. Each class has
different eligibility requirements, sales charges and expenses, allowing you to
choose the class that best meets your needs.
Factors you should consider include:
o The eligibility requirements that apply to purchases of a particular share
class
o The expenses paid by each class
o The initial sales charges and contingent deferred sales charges (CDSCs), if
any, applicable to each class
o Whether you qualify for any reduction or waiver of sales charges
o How long you expect to own the shares
o Any services you may receive from a financial intermediary
Your investment professional can help you determine which class meets your
goals. Your investment professional or financial intermediary may receive
different compensation depending upon which class you choose.
For information on the fund's expenses, please see "Fund Summary."
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Specific intermediaries may have different policies and
procedures regarding the availability of front-end sales charge waivers or
contingent deferred (back-end) sales charge (CDSC) waivers, which are discussed
under "Intermediary defined sales charge waiver policies". In all instances, it
is the purchaser's responsibility to notify the fund or the purchaser's
financial intermediary at the time of purchase of any relationship or other
facts qualifying the purchaser for sales charge waivers or discounts. For
waivers and discounts not available through a particular intermediary,
shareholders will have to purchase fund shares directly from the fund or
through another intermediary to receive these waivers or discounts. Please see
the "Intermediary defined sales charge waiver policies" section to determine
any sales charge discounts and waivers that may be available to you through
your financial intermediary.
CLASS A SHARES
o You pay a sales charge of up to 5.75% of the offering price, which is reduced
or waived for large purchases and certain types of investors. At the time of
your purchase, your investment firm may receive a commission from the
distributor of up to 5%, declining as the size of your investment increases.
33
Choosing a class of shares
o There is no contingent deferred sales charge, except in certain circumstances
when no initial sales charge is charged.
o Distribution and service fees of 0.25% of average daily net assets.
CLASS C SHARES
o A 1% contingent deferred sales charge is assessed if you sell your shares
within one year of purchase. Your investment firm may receive a commission
from the distributor at the time of your purchase of up to 1%.
o Distribution and service fees of 1.00% of average daily net assets.
o Does not convert to another share class.
o Maximum purchase amount (per transaction) of $499,999.
CLASS K SHARES
o No initial or contingent deferred sales charge.
o Initial investments by discretionary accounts and direct investors are
subject to a $5 million investment minimum, which may be waived in some
circumstances.
o There is no investment minimum for other eligible investors.
CLASS R SHARES
o No initial or contingent deferred sales charge.
o Distribution fees of 0.50% of average daily net assets. Separate service plan
provides for payment to financial intermediaries of up to 0.25% of average
daily net assets.
o Generally, available only through certain tax-deferred retirement plans and
related accounts.
CLASS T SHARES
o You pay a sales charge of 2.50% of the offering price, which is reduced for
large purchases. At the time of your purchase, your investment firm will
receive a commission from the distributor of up to 2.50%, declining as the
size of your investment increases.
o There is no contingent deferred sales charge.
o Distribution and service fees of 0.25% of average daily net assets.
o There is no exchange privilege for Class T shares.
CLASS Y SHARES
o No initial or contingent deferred sales charge.
34
o Initial investments are subject to a $5 million investment minimum, which may
be waived in some circumstances.
SHARE CLASS ELIGIBILITY
CLASS K SHARES
Class K shares are available to certain discretionary accounts at Pioneer or
its affiliates, certain direct investors, other Pioneer funds, and certain
tax-deferred retirement plans (including 401(k) plans, employer-sponsored
403(b) plans, 457 plans, profit sharing and money purchase pension plans,
defined benefit plans and non-qualified deferred compensation plans) held in
plan level or omnibus accounts.
Direct investors may be individuals, institutions, trusts, foundations and
other institutional investors.
CLASS R SHARES
Class R shares are available to certain tax-deferred retirement plans
(including 401(k) plans, employer-sponsored 403(b) plans, 457 plans, profit
sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts. Class R shares also are available to IRAs that are rollovers from
eligible retirement plans that offered one or more Class R share Pioneer funds
as investment options. Class R shares are not available to non-retirement
accounts, traditional or Roth IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, individual 403(b)s and most individual retirement
accounts or retirement plans that are not subject to the Employee Retirement
Income Security Act of 1974 (ERISA).
CLASS T SHARES
Class T shares are available only through financial intermediaries.
35
Distribution and service arrangements
DISTRIBUTION PLAN
The fund has adopted a distribution plan for Class A, Class C, Class R and
Class T shares in accordance with Rule 12b-1 under the Investment Company Act
of 1940. Under the plan, the fund pays distribution and service fees to the
distributor. Because these fees are an ongoing expense of the fund, over time
they increase the cost of your investment and your shares may cost more than
shares that are subject to other types of sales charges.
CLASS R SHARES SERVICE PLAN
The fund has adopted a separate service plan for Class R shares. Under the
service plan, the fund may pay securities dealers, plan administrators or other
financial intermediaries who agree to provide certain services to plans or plan
participants holding shares of the fund a service fee of up to 0.25% of average
daily net assets attributable to Class R shares held by such plan participants.
The services provided under the service plan include acting as a shareholder of
record, processing purchase and redemption orders, maintaining participant
account records and answering participant questions regarding the fund.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
Your financial intermediary may receive compensation from the fund, Pioneer or
its affiliates for the sale of fund shares and related services. Compensation
may include sales commissions and distribution and service (Rule 12b-1) fees,
as well as compensation for administrative services and transaction processing.
Pioneer or its affiliates may make additional payments to your financial
intermediary. These payments may provide your financial intermediary with an
incentive to favor the Pioneer funds over other mutual funds or assist the
distributor in its efforts to promote the sale of the fund's shares. Financial
intermediaries include broker-dealers, banks (including bank trust
departments), registered investment advisers, financial planners, retirement
plan administrators and other types of intermediaries.
Pioneer or its affiliates make these additional payments (sometimes referred to
as "revenue sharing") to financial intermediaries out of its own assets, which
may include profits derived from services provided to the fund, or from the
retention of a portion of sales charges or distribution and service
36
fees. Pioneer may base these payments on a variety of criteria, including the
amount of sales or assets of the Pioneer funds attributable to the financial
intermediary or as a per transaction fee.
Not all financial intermediaries receive additional compensation and the amount
of compensation paid varies for each financial intermediary. In certain cases,
these payments may be significant. Pioneer determines which firms to support
and the extent of the payments it is willing to make, generally choosing firms
that have a strong capability to effectively distribute shares of the Pioneer
funds and that are willing to cooperate with Pioneer's promotional efforts.
Pioneer also may compensate financial intermediaries (in addition to amounts
that may be paid by the fund) for providing certain administrative services and
transaction processing services.
Pioneer may benefit from revenue sharing if the intermediary features the
Pioneer funds in its sales system (such as by placing certain Pioneer funds on
its preferred fund list or giving access on a preferential basis to members of
the financial intermediary's sales force or management). In addition, the
financial intermediary may agree to participate in the distributor's marketing
efforts (such as by helping to facilitate or provide financial assistance for
conferences, seminars or other programs at which Pioneer personnel may make
presentations on the Pioneer funds to the intermediary's sales force). To the
extent intermediaries sell more shares of the Pioneer funds or retain shares of
the Pioneer funds in their clients' accounts, Pioneer receives greater
management and other fees due to the increase in the Pioneer funds' assets. The
intermediary may earn a profit on these payments if the amount of the payment
to the intermediary exceeds the intermediary's costs.
The compensation that Pioneer pays to financial intermediaries is discussed in
more detail in the fund's statement of additional information. Your
intermediary may charge you additional fees or commissions other than those
disclosed in this prospectus. Intermediaries may categorize and disclose these
arrangements differently than in the discussion above and in the statement of
additional information. You can ask your financial intermediary about any
payments it receives from Pioneer or the Pioneer funds, as well as about fees
and/or commissions it charges.
Pioneer and its affiliates may have other relationships with your financial
intermediary relating to the provision of services to the Pioneer funds, such
as providing omnibus account services or effecting portfolio transactions for
the Pioneer funds. If your intermediary provides these services, Pioneer
37
Distribution and service arrangements
or the Pioneer funds may compensate the intermediary for these services. In
addition, your intermediary may have other relationships with Pioneer or its
affiliates that are not related to the Pioneer funds.
38
Sales charges
INITIAL SALES CHARGES (CLASS A SHARES ONLY)
You pay the offering price (the net asset value per share plus any initial
sales charge) when you buy Class A shares unless you qualify to purchase shares
at net asset value. You pay a lower sales charge as the size of your investment
increases. You do not pay a sales charge when you reinvest dividends or capital
gain distributions paid by the fund.
SALES CHARGES FOR CLASS A SHARES
SALES CHARGE AS % OF
----------------------
OFFERING NET AMOUNT
AMOUNT OF PURCHASE PRICE INVESTED
--------------------------------- ---------- -----------
Less than $50,000 5.75 6.10
--------------------------------- ---- ----
$50,000 but less than $100,000 4.50 4.71
--------------------------------- ---- ----
$100,000 but less than $250,000 3.50 3.63
--------------------------------- ---- ----
$250,000 but less than $500,000 2.50 2.56
--------------------------------- ---- ----
$500,000 or more -0- -0-
--------------------------------- ---- ----
The dollar amount of the sales charge is the difference between the offering
price of the shares purchased (based on the applicable sales charge in the
table) and the net asset value of those shares. Since the offering price is
calculated to two decimal places using standard rounding methodology, the
dollar amount of the sales charge as a percentage of the offering price and of
the net amount invested for any particular purchase of fund shares may be
higher or lower due to rounding.
INITIAL SALES CHARGES (CLASS T SHARES ONLY)
You pay the offering price (the net asset value per share plus the initial
sales charge) when you buy Class T shares. You pay a lower sales charge as the
size of your investment increases. You do not pay a sales charge when you
reinvest dividends or capital gain distributions paid by the fund.
SALES CHARGES FOR CLASS T SHARES
SALES CHARGE AS % OF
----------------------
OFFERING NET AMOUNT
AMOUNT OF PURCHASE PRICE INVESTED
----------------------------------- ---------- -----------
Less than $250,000 2.50 2.56
----------------------------------- ---- ----
$250,000 but less than $500,000 2.00 2.04
----------------------------------- ---- ----
$500,000 but less than $1,000,000 1.50 1.52
----------------------------------- ---- ----
$1,000,000 or more 1.00 1.01
----------------------------------- ---- ----
39
Sales charges
The dollar amount of the sales charge is the difference between the offering
price of the shares purchased (based on the applicable sales charge in the
table) and the net asset value of those shares. Since the offering price is
calculated to two decimal places using standard rounding methodology, the
dollar amount of the sales charge as a percentage of the offering price and of
the net amount invested for any particular purchase of fund shares may be
higher or lower due to rounding.
REDUCED SALES CHARGES - CLASS A SHARES
You may qualify for a reduced Class A sales charge if you own or are purchasing
shares of Pioneer mutual funds. The investment levels required to obtain a
reduced sales charge are commonly referred to as "breakpoints." Pioneer offers
two principal means of taking advantage of breakpoints in sales charges for
aggregate purchases of Class A shares of the Pioneer funds over time if:
o The amount of shares you own of the Pioneer funds plus the amount you are
investing now is at least $50,000 (Rights of accumulation)
o You plan to invest at least $50,000 over the next 13 months (Letter of
intent)
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
RIGHTS OF ACCUMULATION - CLASS A SHARES ONLY
If you qualify for rights of accumulation, your sales charge will be based on
the combined value (at the current offering price) of all your Pioneer mutual
fund shares, the shares of your spouse and the shares of any children under the
age of 21. Rights of accumulation are not applicable to Class T shares.
LETTER OF INTENT - CLASS A SHARES ONLY
You can use a letter of intent to qualify for reduced sales charges in
two situations:
o If you plan to invest at least $50,000 (excluding any reinvestment of
dividends and capital gain distributions) in the fund's Class A shares
during the next 13 months
40
o If you include in your letter of intent the value (at the current offering
price) of all of your Class A shares of the fund and Class A or Class C
shares of all other Pioneer mutual fund shares held of record in the amount
used to determine the applicable sales charge for the fund shares you plan
to buy
Completing a letter of intent does not obligate you to purchase additional
shares, but if you do not buy enough shares to qualify for the projected level
of sales charges by the end of the 13-month period (or when you sell your
shares, if earlier), the distributor will recalculate your sales charge. Any
share class for which no sales charge is paid cannot be included under the
letter of intent. For more information regarding letters of intent, please
contact your investment professional or obtain and read the statement of
additional information.
Letters of intent are not applicable to Class T shares.
QUALIFYING FOR A REDUCED CLASS A SALES CHARGE
In calculating your total account value in order to determine whether you have
met sales charge breakpoints, you can include your Pioneer mutual fund shares,
those of your spouse and the shares of any children under the age of 21.
Pioneer will use each fund's current offering price to calculate your total
account value. Certain trustees and fiduciaries may also qualify for a reduced
sales charge.
To receive a reduced sales charge, you or your investment professional must, at
the time of purchase, notify the distributor of your eligibility. In order to
verify your eligibility for a discount, you may need to provide your investment
professional or the fund with information or records, such as account numbers
or statements, regarding shares of the fund or other Pioneer mutual funds held
in all accounts by you, your spouse or children under the age of 21 with that
investment professional or with any other financial intermediary. Eligible
accounts may include joint accounts, retirement plan accounts, such as IRA and
401(k) accounts, and custodial accounts, such as ESA, UGMA and UTMA accounts.
It is your responsibility to confirm that your investment professional has
notified the distributor of your eligibility for a reduced sales charge at the
time of sale. If you or your investment professional do not notify the
distributor of your eligibility, you will risk losing the benefits of a reduced
sales charge.
41
Sales charges
For this purpose, Pioneer mutual funds include any fund for which the
distributor is principal underwriter and, at the distributor's discretion, may
include funds organized outside the U.S. and managed by Pioneer or an
affiliate.
You can locate information regarding the reduction or waiver of sales charges
free of charge on Pioneer's website at us.pioneerinvestments.com. The website
includes hyperlinks that facilitate access to this information.
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
CLASS A PURCHASES AT NET ASSET VALUE
You may purchase Class A shares at net asset value (without a sales charge) as
follows. If you believe you qualify for any of the Class A sales charge waivers
discussed below, contact your investment professional or the distributor. You
are required to provide written confirmation of your eligibility. You may not
resell these shares except to or on behalf of the fund.
CLASS A PURCHASES AT NET ASSET VALUE ARE AVAILABLE TO:
o Current or former trustees and officers of the fund;
o Partners and employees of legal counsel to the fund (at the time of initial
share purchase);
o Directors, officers, employees or sales representatives of Pioneer and its
affiliates (at the time of initial share purchase);
o Directors, officers, employees or sales representatives of any subadviser or
a predecessor adviser (or their affiliates) to any investment company for
which Pioneer serves as investment adviser (at the time of initial share
purchase);
o Officers, partners, employees or registered representatives of broker-dealers
(at the time of initial share purchase) which have entered into sales
agreements with the distributor;
o Employees of Regions Financial Corporation and its affiliates (at the time of
initial share purchase);
o Members of the immediate families of any of the persons above;
o Any trust, custodian, pension, profit sharing or other benefit plan of the
foregoing persons;
o Insurance company separate accounts;
42
o Certain wrap accounts for the benefit of clients of investment professionals
or other financial intermediaries adhering to standards established by the
distributor;
o Other funds and accounts for which Pioneer or any of its affiliates serves as
investment adviser or manager;
o Investors in connection with certain reorganization, liquidation or
acquisition transactions involving other investment companies or personal
holding companies;
o Certain unit investment trusts;
o Group employer-sponsored retirement plans with at least $500,000 in total
plan assets. Waivers for group employer-sponsored retirement plans do not
apply to traditional IRAs, Roth IRAs, SEPs, SARSEPs, SIMPLE IRAs, KEOGHs,
individual 401(k) or individual 403(b) plans, or to brokerage relationships
in which sales charges are customarily imposed;
o Group employer-sponsored retirement plans with accounts established with
Pioneer on or before March 31, 2004 with 100 or more eligible employees or
at least $500,000 in total plan assets;
o Participants in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial intermediary
and (ii) all participants in the plan who purchase shares of a Pioneer
mutual fund do so through a single broker, dealer or other financial
intermediary designated by your employer;
o Investors purchasing shares pursuant to the reinstatement privilege
applicable to Class A shares; and
o Shareholders of record (i.e., shareholders whose shares are not held in the
name of a broker or an omnibus account) on the date of the reorganization of
a predecessor Safeco fund into a corresponding Pioneer fund, shareholders
who owned shares in the name of an omnibus account provider on that date
that agrees with the fund to distinguish beneficial holders in the same
manner, and retirement plans with assets invested in the predecessor Safeco
fund on that date.
In addition, Class A shares may be purchased at net asset value through certain
mutual fund programs sponsored by qualified intermediaries, such as
broker-dealers and investment advisers. In each case, the intermediary has
entered into an agreement with Pioneer to include the Pioneer funds in their
program without the imposition of a sales charge. The intermediary provides
investors participating in the program with additional services, including
advisory, asset allocation, recordkeeping or other services. You
43
Sales charges
should ask your investment firm if it offers and you are eligible to
participate in such a mutual fund program and whether participation in the
program is consistent with your investment goals. The intermediaries sponsoring
or participating in these mutual fund programs also may offer their clients
other classes of shares of the funds and investors may receive different levels
of services or pay different fees depending upon the class of shares included
in the program. Investors should consider carefully any separate transaction
and other fees charged by these programs in connection with investing in each
available share class before selecting a share class. Such mutual fund programs
include certain self-directed brokerage services accounts held through
qualified intermediaries that may or may not charge participating investors
transaction fees.
CONTINGENT DEFERRED SALES CHARGES (CDSCS)
CLASS A SHARES
Purchases of Class A shares of $500,000 or more may be subject to a contingent
deferred sales charge upon redemption. A contingent deferred sales charge is
payable to the distributor in the event of a share redemption within 12 months
following the share purchase at the rate of 1% of the lesser of the value of
the shares redeemed (exclusive of reinvested dividend and capital gain
distributions) or the total cost of such shares. However, the contingent
deferred sales charge is waived for redemptions of Class A shares purchased by
an employer-sponsored retirement plan that has at least $500,000 in total plan
assets (or that has 1,000 or more eligible employees for plans with accounts
established with Pioneer on or before March 31, 2004).
CLASS C SHARES
You buy Class C shares at net asset value per share without paying an initial
sales charge. However, if you sell your Class C shares within one year of
purchase, upon redemption you will pay the distributor a contingent deferred
sales charge of 1% of the current market value or the original cost of the
shares you are selling, whichever is less.
PAYING THE CONTINGENT DEFERRED SALES CHARGE (CDSC)
Several rules apply for calculating CDSCs so that you pay the lowest possible
CDSC.
o The CDSC is calculated on the current market value or the original cost of
the shares you are selling, whichever is less
o You do not pay a CDSC on reinvested dividends or distributions
44
o If you sell only some of your shares, the transfer agent will first sell your
shares that are not subject to any CDSC and then the shares that you have
owned the longest
o You may qualify for a waiver of the CDSC normally charged. See "Waiver or
reduction of contingent deferred sales charges"
WAIVER OR REDUCTION OF CONTINGENT DEFERRED SALES CHARGES
It is your responsibility to confirm that your investment professional has
notified the distributor of your eligibility for a reduced sales charge at the
time of sale. If you or your investment professional do not notify the
distributor of your eligibility, you will risk losing the benefits of a reduced
sales charge.
The distributor may waive or reduce the CDSC for Class A shares that are
subject to a CDSC or for Class C shares if:
o The distribution results from the death of all registered account owners or a
participant in an employer-sponsored plan. For UGMAs, UTMAs and trust
accounts, the waiver applies only upon the death of all beneficial owners;
o You become disabled (within the meaning of Section 72 of the Internal Revenue
Code) after the purchase of the shares being sold. For UGMAs, UTMAs and
trust accounts, the waiver only applies upon the disability of all
beneficial owners;
o The distribution is made in connection with limited automatic redemptions as
described in "Systematic withdrawal plans" (limited in any year to 10% of
the value of the account in the fund at the time the withdrawal plan is
established);
o The distribution is from any type of IRA, 403(b) or employer-sponsored plan
described under Section 401(a) or 457 of the Internal Revenue Code and, in
connection with the distribution, one of the following applies:
- It is part of a series of substantially equal periodic payments made over
the life expectancy of the participant or the joint life expectancy of the
participant and his or her beneficiary (limited in any year to 10% of the
value of the participant's account at the time the distribution amount is
established);
- It is a required minimum distribution due to the attainment of age 70 1/2,
in which case the distribution amount may exceed 10% (based solely on
total plan assets held in Pioneer mutual funds);
- It is rolled over to or reinvested in another Pioneer mutual fund in the
same class of shares, which will be subject to the CDSC of the shares
originally held; or
45
Sales charges
- It is in the form of a loan to a participant in a plan that permits loans
(each repayment applied to the purchase of shares will be subject to a
CDSC as though a new purchase);
o The distribution is to a participant in an employer-sponsored retirement plan
described under Section 401(a) of the Internal Revenue Code or to a
participant in an employer-sponsored 403(b) plan or employer-sponsored 457
plan if (i) your employer has made special arrangements for your plan to
operate as a group through a single broker, dealer or financial intermediary
and (ii) all participants in the plan who purchase shares of a Pioneer
mutual fund do so through a single broker, dealer or other financial
intermediary designated by your employer and is or is in connection with:
- A return of excess employee deferrals or contributions;
- A qualifying hardship distribution as described in the Internal Revenue
Code;
- Due to retirement or termination of employment;
- From a qualified defined contribution plan and represents a participant's
directed transfer, provided that this privilege has been preauthorized
through a prior agreement with the distributor regarding participant
directed transfers;
o The distribution is made pursuant to the fund's right to liquidate or
involuntarily redeem shares in a shareholder's account;
o The distribution is made to pay an account's advisory or custodial fees; or
o The distributor does not pay the selling broker a commission normally paid at
the time of the sale.
Please see the fund's statement of additional information for more information
regarding reduced sales charges and breakpoints.
The availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the "Intermediary defined sales charge waiver
policies" section for more information.
46
Buying, exchanging and selling shares
OPENING YOUR ACCOUNT
You may open an account by completing an account application and sending it to
the fund by mail or by fax. Please call the fund to obtain an account
application. Certain types of accounts, such as retirement accounts, have
separate applications.
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 fund. You may be required to obtain a signature guarantee
to make certain changes to an existing account.
Call or write to the fund for account applications, account options forms and
other account information:
PIONEER FUNDS
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Please note that there may be a delay in receipt by the fund's transfer agent
of applications submitted by regular mail to a post office address.
Each fund is generally available for purchase in the United States, Puerto
Rico, Guam, American Samoa and the U.S. Virgin Islands. Except to the extent
otherwise permitted by the funds' distributor, the funds will only accept
accounts from U.S. citizens with a U.S. address (including an APO or FPO
address) or resident aliens with a U.S. address (including an APO or FPO
address) and a U.S. taxpayer identification number.
IDENTITY VERIFICATION
To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person who opens an account. When
you open an account, you will need to supply your name, address, date of birth,
and other information that will allow the fund to identify you.
The fund may close your account if we cannot adequately verify your identity.
The redemption price will be the net asset value on the date of redemption.
INVESTING THROUGH FINANCIAL INTERMEDIARIES AND RETIREMENT PLANS
If you invest in the fund through your financial intermediary or through a
retirement plan, the options and services available to you may be different
from those discussed in this prospectus. Shareholders investing through
47
Buying, exchanging and selling shares
financial intermediaries, programs sponsored by financial intermediaries and
retirement plans may only purchase funds and classes of shares that are
available. When you invest through an account that is not in your name, you
generally may buy and sell shares and complete other transactions only through
the account. Ask your investment professional or financial intermediary for
more information.
Additional conditions may apply to your investment in the fund, and the
investment professional or intermediary may charge you a transaction-based,
administrative or other fee for its services. These conditions and fees are in
addition to those imposed by the fund and its affiliates. You should ask your
investment professional or financial intermediary about its services and any
applicable fees.
SHARE PRICES FOR TRANSACTIONS
If you place an order to purchase, exchange or sell shares that is received in
good order by the fund's transfer agent or an authorized agent by the close of
regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern
time), the share price for your transaction will be based on the net asset
value determined as of the scheduled close of regular trading on the New York
Stock Exchange on that day (plus or minus any applicable sales charges). If
your order is received by the fund's transfer agent or an authorized agent
after the scheduled close of regular trading on the New York Stock Exchange, or
your order is not in good order, the share price will be based on the net asset
value next determined after your order is received in good order by the fund or
authorized agent. The authorized agent is responsible for transmitting your
order to the fund in a timely manner.
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 Your request includes a signature guarantee if you:
- Are selling over $100,000 or exchanging over $500,000 worth of shares
- Changed your account registration or address within the last 30 days
- Instruct the transfer agent to mail the check to an address different from
the one on your account
- Want the check paid to someone other than the account's record owner(s)
- Are transferring the sale proceeds to a Pioneer mutual fund account with a
different registration
48
TRANSACTION LIMITATIONS
Your transactions are subject to certain limitations, including the limitation
on the purchase of the fund's shares within 30 calendar days of a redemption.
See "Excessive trading."
BUYING
You may buy fund shares from any financial intermediary that has a sales
agreement or other arrangement with the distributor.
You can buy shares at net asset value per share plus any applicable sales
charge. The distributor may reject any order until it has confirmed the order
in writing and received payment. Normally, your financial intermediary will
send your purchase request to the fund's transfer agent. CONSULT YOUR
INVESTMENT PROFESSIONAL FOR MORE INFORMATION. Your investment firm receives a
commission from the distributor, and may receive additional compensation from
Pioneer, for your purchase of fund shares.
MINIMUM INVESTMENT AMOUNTS
CLASS A, CLASS C AND CLASS T SHARES
Your initial investment must be at least $1,000. Additional investments must be
at least $100 for Class A and Class T shares and $500 for Class C shares.
You may qualify for lower initial or subsequent investment minimums if you are
opening a retirement plan account, establishing an automatic investment plan or
placing your trade through your investment firm. The fund may waive the initial
or subsequent investment minimums. Minimum investment amounts may be waived
for, among other things, share purchases made through certain mutual fund
programs (e.g., asset based fee program accounts) sponsored by qualified
intermediaries, such as broker-dealers and investment advisers, that have
entered into an agreement with Pioneer.
CLASS K SHARES
Initial investments by discretionary accounts and direct investors in Class K
shares must be at least $5 million. There is no investment minimum for other
eligible investors. This amount may be invested in one or more of the Pioneer
mutual funds that currently offer Class K shares. There is no minimum
additional investment amount. The fund may waive the initial investment amount,
if applicable.
49
Buying, exchanging and selling shares
WAIVERS OF THE MINIMUM INVESTMENT AMOUNT FOR CLASS K
The fund will accept an initial investment of less than $5 million if:
(a) The investment is made by a retirement plan that is an eligible
investor in Class K shares; or
(b) The investment is made by another Pioneer fund.
The fund reserves the right to waive the initial investment minimum in other
circumstances.
CLASS R SHARES
There is no minimum investment amount for Class R shares, although investments
are subject to the fund's policies regarding small accounts.
CLASS Y SHARES
Your initial investment in Class Y shares must be at least $5 million. This
amount may be invested in one or more of the Pioneer mutual funds that
currently offer Class Y shares. There is no minimum additional investment
amount. The fund may waive the initial investment amount.
WAIVERS OF THE MINIMUM INVESTMENT AMOUNT FOR CLASS Y
The fund will accept an initial investment of less than $5 million if:
(a) The investment is made by a trust company or bank trust department
which is initially investing at least $1 million in any of the
Pioneer mutual funds and, at the time of the purchase, such assets
are held in a fiduciary, advisory, custodial or similar capacity
over which the trust company or bank trust department has full or
shared investment discretion; or
(b) The investment is at least $1 million in any of the Pioneer mutual
funds and the purchaser is an insurance company separate account; or
(c) The account is not represented by a broker-dealer and the investment
is made by (1) an ERISA-qualified retirement plan that meets the
requirements of Section 401 of the Internal Revenue Code, (2) an
employer-sponsored retirement plan that meets the requirements of
Sections 403 or 457 of the Internal Revenue Code, (3) a private
foundation that meets the requirements of Section 501(c)(3) of the
Internal Revenue Code or (4) an endowment or other organization that
meets the requirements of Section 509(a)(1) of the Internal Revenue
Code; or
50
(d) The investment is made by an employer-sponsored retirement plan
established for the benefit of (1) employees of Pioneer or its
affiliates, or (2) employees or the affiliates of broker-dealers who
have a Class Y shares sales agreement with the distributor; or
(e) The investment is made through certain mutual fund programs
sponsored by qualified intermediaries, such as broker-dealers and
investment advisers. In each case, the intermediary has entered into
an agreement with Pioneer to include Class Y shares of the Pioneer
mutual funds in their program. The intermediary provides investors
participating in the program with additional services, including
advisory, asset allocation, recordkeeping or other services. You
should ask your investment firm if it offers and you are eligible to
participate in such a mutual fund program and whether participation
in the program is consistent with your investment goals. The
intermediaries sponsoring or participating in these mutual fund
programs may also offer their clients other classes of shares of the
funds and investors may receive different levels of services or pay
different fees depending upon the class of shares included in the
program. Investors should consider carefully any separate
transaction and other fees charged by these programs in connection
with investing in each available share class before selecting a
share class; or
(f) The investment is made by another Pioneer fund.
The fund reserves the right to waive the initial investment minimum in other
circumstances.
MAXIMUM PURCHASE AMOUNTS
Purchases of fund shares are limited to $499,999 for Class C shares. This limit
is applied on a per transaction basis. Class A, Class K, Class R, Class T and
Class Y shares are not subject to a maximum purchase amount.
RETIREMENT PLAN ACCOUNTS
You can purchase fund shares through tax-deferred retirement plans for
individuals, businesses and tax-exempt organizations.
Your initial investment for most types of retirement plan accounts must be at
least $250. Additional investments for most types of retirement plans must be
at least $100.
51
Buying, exchanging and selling shares
You may not use the account application accompanying this prospectus to
establish a Pioneer retirement plan. You can obtain retirement plan
applications from your investment firm or by calling the Retirement Plans
Department at 1-800-622-0176.
HOW TO BUY SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your purchase request to the fund's
distributor and/or transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR
MORE INFORMATION. Your investment firm receives a commission from the
distributor, and may receive additional compensation from Pioneer, for your
purchase of fund shares.
BY PHONE OR ONLINE
YOU CAN USE THE TELEPHONE OR ONLINE PURCHASE PRIVILEGE IF you have an existing
non-retirement account. Certain IRAs can use the telephone purchase privilege.
If your account is eligible, you can purchase additional fund shares by phone
or online if:
o You established your bank account of record at least 30 days ago
o Your bank information has not changed for at least 30 days
o You are not purchasing more than $100,000 worth of shares per account per day
o You can provide the proper account identification information
When you request a telephone or online purchase, the fund's transfer agent will
electronically debit the amount of the purchase from your bank account of
record. The fund's transfer agent will purchase fund shares for the amount of
the debit at the offering price determined after the fund's transfer agent
receives your telephone or online purchase instruction and good funds. It
usually takes three business days for the fund's 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 fund shares for an existing fund account by MAILING A CHECK TO
THE FUND. Make your check payable to the fund. Neither initial nor subsequent
investments should be made by third party check, travelers check, or credit
card check. Your check must be in U.S. dollars and drawn on a U.S. bank.
Include in your purchase request the fund's name, the
52
account number and the name or names in the account registration. Please note
that there may be a delay in receipt by the fund's transfer agent of purchase
orders submitted by regular mail to a post office address.
BY WIRE (CLASS K OR CLASS Y SHARES ONLY)
If you have an existing (Class K or Class Y shares only) account, you may wire
funds to purchase shares. Note, however, that:
o State Street Bank must receive your wire no later than 11:00 a.m. Eastern
time on the business day after the fund receives your request to purchase
shares
o If State Street Bank does not receive your wire by 11:00 a.m. Eastern time on
the next business day, your transaction will be canceled at your expense and
risk
o Wire transfers normally take two or more hours to complete and a fee may be
charged by the sending bank
o Wire transfers may be restricted on holidays and at certain other times
INSTRUCT YOUR BANK TO WIRE FUNDS TO:
Receiving Bank: State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02101
ABA Routing No. 011000028
For further credit to: Shareholder Name
Existing Pioneer Account No.
Equity Income Fund
The fund's transfer agent must receive your account application before you send
your initial check or federal funds wire. In addition, you must provide a bank
wire address of record when you establish your account.
EXCHANGING
You may, under certain circumstances, exchange your shares for shares of the
same class of another Pioneer mutual fund. The exchange privilege does not
apply to Class T shares.
Your exchange request must be for at least $1,000. The fund allows you to
exchange your shares at net asset value without charging you either an initial
or contingent deferred sales charge at the time of the exchange. Shares you
acquire as part of an exchange will continue to be subject to
53
Buying, exchanging and selling shares
any contingent deferred sales charge that applies to the shares you originally
purchased. When you ultimately sell your shares, the date of your original
purchase will determine your contingent deferred sales charge.
Before you request an exchange, consider each fund's investment objective and
policies as described in the fund's prospectus. You generally will have to pay
income taxes on an exchange.
SAME-FUND EXCHANGE PRIVILEGE
Certain shareholders may be eligible to exchange their shares for shares of
another class. If eligible, no sales charges or other charges will apply to any
such exchange. Generally, shareholders will not recognize a gain or loss for
federal income tax purposes upon such an exchange. Investors should contact
their financial intermediary to learn more about the details of this privilege.
HOW TO EXCHANGE SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your exchange request to the fund's
transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE INFORMATION ABOUT
EXCHANGING YOUR SHARES. The exchange privilege does not apply to Class T
shares.
BY PHONE OR ONLINE
After you establish an eligible fund account, YOU CAN EXCHANGE FUND SHARES BY
PHONE OR ONLINE IF:
o You are exchanging into an existing account or using the exchange to
establish a new account, provided the new account has a registration
identical to the original account
o The fund into which you are exchanging offers the same class of shares
o You are not exchanging more than $500,000 worth of shares per account per day
o You can provide the proper account identification information
IN WRITING, BY MAIL OR BY FAX
You can exchange fund shares by MAILING OR FAXING A LETTER OF INSTRUCTION TO
THE FUND. You can exchange fund shares directly through the fund only if your
account is registered in your name. However, you may not fax an exchange
request for more than $500,000. Include in your letter:
o The name and signature of all registered owners
54
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
Please note that there may be a delay in receipt by the fund's transfer agent
of exchange requests submitted by regular mail to a post office address.
SELLING
Your shares will be sold at the share price (net asset value less any
applicable sales charge) next calculated after the fund or its authorized
agent, such as a broker-dealer, receives your request in good order. If a
signature guarantee is required, you must submit your request in writing.
If the shares you are selling are subject to a deferred sales charge, it will
be deducted from the sale proceeds. The fund generally will send your sale
proceeds by check, bank wire or electronic funds transfer. Normally you will be
paid within seven days. If you recently sent a check to purchase the shares
being sold, the fund may delay payment of the sale proceeds until your check
has cleared. This may take up to 10 calendar days from the purchase date.
If you are selling shares from a non-retirement account or certain IRAs, you
may use any of the methods described below. If you are selling shares from a
retirement account other than an IRA, you must make your request in writing.
You generally will have to pay income taxes on a sale.
If you must use a written request to exchange or sell your shares and your
account is registered in the name of a corporation or other fiduciary you must
include the name of an authorized person and a certified copy of a current
corporate resolution, certificate of incumbency or similar legal document
showing that the named individual is authorized to act on behalf of the record
owner.
55
Buying, exchanging and selling shares
HOW TO SELL SHARES
THROUGH YOUR INVESTMENT FIRM
Normally, your investment firm will send your request to sell shares to the
fund's transfer agent. CONSULT YOUR INVESTMENT PROFESSIONAL FOR MORE
INFORMATION. The fund has authorized the distributor to act as its agent in the
repurchase of fund shares from qualified investment firms. The fund reserves
the right to terminate this procedure at any time.
BY PHONE OR ONLINE
IF YOU HAVE AN ELIGIBLE NON-RETIREMENT ACCOUNT, YOU MAY SELL UP TO $100,000 PER
ACCOUNT PER DAY BY PHONE OR ONLINE. You may sell fund shares held in a
retirement plan account by phone only if your account is an eligible IRA (tax
penalties may apply). You may not sell your shares by phone or online if you
have changed your address (for checks) or your bank information (for wires and
transfers) in the last 30 days.
You may receive your sale proceeds:
o By check, provided the check is made payable exactly as your account is
registered
o By bank wire or by electronic funds transfer, provided the sale proceeds are
being sent to your bank address of record
For Class Y shares, shareholders may sell up to $5 million per account per day
if the proceeds are directed to your bank account of record ($100,000 per
account per day if the proceeds are not directed to your bank account of
record).
IN WRITING, BY MAIL OR BY FAX
You can sell some or all of your fund shares by WRITING DIRECTLY TO THE FUND
only if your account is registered in your name. Include in your request your
name, the fund's name, your fund account number, the class of shares to be
sold, the dollar amount or number of shares to be sold and any other applicable
requirements as described below. The fund's transfer agent will send the sale
proceeds to your address of record unless you provide other instructions. Your
request must be signed by all registered owners and be in good order.
The fund's transfer agent will not process your request until it is received in
good order.
You may sell up to $100,000 per account per day by fax.
56
Please note that there may be a delay in receipt by the fund's transfer agent
of redemption requests submitted by regular mail to a post office address.
HOW TO CONTACT US
BY PHONE
For information or to request a telephone transaction between 8:00 a.m. and
7:00 p.m. (Eastern time) by speaking with a shareholder services
representative call
1-800-225-6292
To request a transaction using FactFone/SM/ call
1-800-225-4321
BY MAIL
Send your written instructions to:
PIONEER FUNDS
P.O. Box 55014
Boston, Massachusetts 02205-5014
PIONEER WEBSITE
us.pioneerinvestments.com
BY FAX
Fax your exchange and sale requests to:
1-800-225-4240
57
Account options
See the account application form for more details on each of the following
services or call the fund for details and availability.
TELEPHONE TRANSACTION PRIVILEGES
If your account is registered in your name, you can buy, exchange or sell fund
shares by telephone. If you do not want your account to have telephone
transaction privileges, you must indicate that choice on your account
application or by writing to the fund.
When you request a telephone transaction the fund's transfer agent will try to
confirm that the request is genuine. The transfer agent records the call,
requires the caller to provide validating information for the account and sends
you a written confirmation. The fund may implement other confirmation
procedures from time to time. Different procedures may apply if you have a
non-U.S. account or if your account is registered in the name of an
institution, broker-dealer or other third party. If the fund's confirmation
procedures are followed, neither the fund nor its agents will bear any
liability for these transactions.
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 fund shares online.
To establish online transaction privileges:
o For new accounts, complete the online section of the account application
o For existing accounts, complete an account options form, write to the
fund or complete the online authorization screen at
us.pioneerinvestments.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 fund's transfer agent
electronically records the transaction, requires an authorizing password and
sends a written confirmation. The fund 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.
58
AUTOMATIC INVESTMENT PLANS
You can make regular periodic investments in the fund by setting up monthly
bank drafts, government allotments, payroll deductions, a Pioneer Investomatic
Plan and other similar automatic investment plans. Automatic investments may be
made only through U.S. banks. You may use an automatic investment plan to
establish a Class A share account with a small initial investment. If you have
a Class C or Class R share account and your balance is at least $1,000, you may
establish an automatic investment plan.
PIONEER INVESTOMATIC PLAN
If you establish a Pioneer Investomatic Plan, the fund's transfer agent will
make a periodic investment in fund shares by means of a preauthorized
electronic funds transfer from your bank account. Your plan investments are
voluntary. You may discontinue your plan at any time or change the plan's
dollar amount, frequency or investment date by calling or writing to the fund's
transfer agent. You should allow up to 30 days for the fund's transfer agent to
establish your plan.
AUTOMATIC EXCHANGES
You can automatically exchange your fund shares for shares of the same class of
another Pioneer mutual fund. The automatic exchange will begin on the day you
select when you complete the appropriate section of your account application or
an account options form. In order to establish automatic exchange:
o You must select exchanges on a monthly or quarterly basis
o Both the originating and receiving accounts must have identical registrations
o The originating account must have a minimum balance of $5,000
You may have to pay income taxes on an exchange.
The exchange privilege does not apply to Class T shares.
DISTRIBUTION OPTIONS
The fund offers three distribution options. Any fund shares you buy by
reinvesting distributions will be priced at the applicable net asset value per
share.
(1) Unless you indicate another option on your account application, any
dividends and capital gain distributions paid to you by the fund will
automatically be invested in additional fund shares.
59
Account options
(2) You may elect to have the amount of any dividends paid to you in cash and
any capital gain distributions reinvested in additional shares.
(3) You may elect to have the full amount of any dividends and/or capital
gain distributions paid to you in cash.
Options (2) and (3) are not available to retirement plan accounts or accounts
with a current value of less than $500.
If you are under 59 1/2, taxes and tax penalties may apply.
If your distribution check is returned to the fund's transfer agent or you do
not cash the check for six months or more, the fund's transfer agent may
reinvest the amount of the check in your account and automatically change the
distribution option on your account to option (1) until you request a different
option in writing. If the amount of a distribution check would be less than
$25, the fund may reinvest the amount in additional shares of the fund instead
of sending a check. Additional shares of the fund will be purchased at the
then-current net asset value.
DIRECTED DIVIDENDS
You can invest the dividends paid by one of your Pioneer mutual fund accounts
in a second Pioneer mutual fund account. The value of your second account must
be at least $1,000. You may direct the investment of any amount of dividends.
There are no fees or charges for directed dividends. If you have a retirement
plan account, you may only direct dividends to accounts with identical
registrations. Directed dividends do not apply to Class T shares.
SYSTEMATIC WITHDRAWAL PLANS
When you establish a systematic withdrawal plan for your account, the transfer
agent will sell the number of fund shares you specify on a periodic basis and
the proceeds will be paid to you or to any person you select. You must obtain a
signature guarantee to direct payments to another person after you have
established your systematic withdrawal plan. Payments can be made either by
check or by electronic transfer to a U.S. bank account you designate.
To establish a systematic withdrawal plan:
o Your account must have a total value of at least $10,000 when you establish
your plan
60
o You may not request a periodic withdrawal of more than 10% of the value of
any Class C or Class R share account (valued at the time the plan is
implemented)
These requirements do not apply to scheduled (Internal Revenue Code Section
72(t) election) or mandatory (required minimum distribution) withdrawals from
IRAs and certain retirement plans.
Systematic sales of fund shares may be taxable transactions for you. While you
are making systematic withdrawals from your account, you may pay unnecessary
initial sales charges on additional purchases of Class A shares or contingent
deferred sales charges.
DIRECT DEPOSIT
If you elect to take dividends or dividends and capital gain distributions in
cash, or if you establish a systematic withdrawal plan, you may choose to have
those cash payments deposited directly into your savings, checking or NOW bank
account.
VOLUNTARY TAX WITHHOLDING
You may have the fund's transfer agent withhold 28% of the dividends and
capital gain distributions paid from your fund account (before any
reinvestment) and forward the amount withheld to the Internal Revenue Service
as a credit against your federal income taxes. Voluntary tax withholding is not
available for retirement plan accounts or for accounts subject to backup
withholding.
61
Shareholder services and policies
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, 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 indicate 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 or other intermediary has
engaged in excessive short-term trading that we believe may be harmful to the
fund, we will ask the investor, broker or other intermediary to cease such
activity and we will refuse to process purchase orders (including purchases by
exchange) of such investor, broker, other intermediary 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,
62
where the holdings of multiple shareholders, such as all the clients of a
particular broker or other intermediary, are aggregated. Our ability to monitor
trading practices by investors purchasing shares through omnibus accounts may
be limited and dependent upon the cooperation of the broker or other
intermediary in taking steps to limit this type of activity.
The fund may reject a purchase or exchange order before its acceptance or the
issuance of shares. The fund may also restrict additional purchases or
exchanges in an account. Each of these steps may be taken for any transaction,
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 or exchange 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 had been accepted and an investment made in the fund. A
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.
To limit the negative effects of excessive trading on the fund, the fund has
adopted the following restriction on investor transactions. If an investor
redeems $5,000 or more (including redemptions that are a part of an exchange
transaction) from the fund, that investor shall be prevented (or "blocked")
from purchasing shares of the fund (including purchases that are a part of an
exchange transaction) for 30 calendar days after the redemption. This policy
does not apply to systematic purchase or withdrawal plan transactions,
transactions made through employer-sponsored retirement plans described under
Section 401(a), 403(b) or 457 of the Internal Revenue Code or employee benefit
plans, scheduled (Internal Revenue Code Section 72(t) election) or mandatory
(required minimum distribution) withdrawals from IRAs, rebalancing transactions
made through certain asset allocation or "wrap" programs, transactions by
insurance company separate accounts or transactions by other funds that invest
in the fund. This policy does not apply to purchase or redemption transactions
of less than $5,000 or to Pioneer U.S. Government Money Market Fund or Pioneer
Multi-Asset Ultrashort Income Fund.
63
Shareholder services and policies
We rely on financial intermediaries that maintain omnibus accounts to apply to
their customers either the fund's policy described above or their own policies
or restrictions designed to limit excessive trading of fund shares. However, we
do not impose this policy at the omnibus account level.
Purchases pursuant to the reinstatement privilege (for Class A shares) are
subject to this policy.
PURCHASES IN KIND
You may use securities you own to purchase shares of the fund provided that
Pioneer, in its sole discretion, determines that the securities are consistent
with the fund's objectives and policies and their acquisition is in the best
interests of the fund. If the fund accepts your securities, they will be valued
for purposes of determining the number of fund shares to be issued to you in
the same way the fund will value the securities for purposes of determining its
net asset value. For federal income tax purposes, you may be taxed in the same
manner as if you sold the securities that you use to purchase fund shares for
cash in an amount equal to the value of the fund shares that you purchase. Your
broker may also impose a fee in connection with processing your purchase of
fund shares with securities.
REINSTATEMENT PRIVILEGE (CLASS A SHARES)
If you recently sold all or part of your Class A shares, you may be able to
reinvest all or part of your sale proceeds without a sales charge in Class A
shares of any Pioneer mutual fund. To qualify for reinstatement:
o You must send a written request to the fund no more than 90 days after
selling your shares and
o The registration of the account in which you reinvest your sale proceeds must
be identical to the registration of the account from which you sold your
shares.
Purchases pursuant to the reinstatement privilege are subject to limitations on
investor transactions, including the limitation on the purchase of the fund's
shares within 30 calendar days of redemption. See "Excessive trading."
When you elect reinstatement, you are subject to the provisions outlined in the
selected fund's prospectus, including the fund's minimum investment
requirement. Your sale proceeds will be reinvested in shares of the fund at the
Class A net asset value per share determined after the fund receives your
written request for reinstatement. You may realize a gain or loss for
64
federal income tax purposes as a result of your sale of fund shares, and
special tax rules may apply if you elect reinstatement. Consult your tax
adviser for more information.
PIONEER WEBSITE
US.PIONEERINVESTMENTS.COM
The website includes a full selection of information on mutual fund investing.
You can also use the website to get:
o Your current account information
o Prices, returns and yields of all publicly available Pioneer mutual funds
o Prospectuses, statements of additional information and shareowner reports for
all the Pioneer mutual funds
o A copy of Pioneer's privacy notice
If you or your investment firm authorized your account for the online
transaction privilege, you may buy, exchange and sell shares online.
FACTFONE/SM/ 1-800-225-4321
You can use FactFone/SM/ to:
o Obtain current information on your Pioneer mutual fund accounts
o Inquire about the prices of all publicly available Pioneer mutual funds
o Make computer-assisted telephone purchases, exchanges and redemptions for
your fund accounts
o Request account statements
If you plan to use FactFone/SM/ to make telephone purchases and redemptions,
first you must activate your personal identification number and establish your
bank account of record. If your account is registered in the name of a
broker-dealer or other third party, you may not be able to use FactFone/SM/.
If your account is registered in the name of a broker-dealer or other third
party, you may not be able to use FactFone/SM/ to obtain account information.
HOUSEHOLD DELIVERY OF FUND DOCUMENTS
With your consent, Pioneer may send a single proxy statement, prospectus and
shareowner report to your residence for you and any other member of your
household who has an account with the fund. If you wish to revoke your consent
to this practice, you may do so by notifying Pioneer, by phone or in writing
(see "How to contact us"). Pioneer will begin mailing separate proxy
statements, prospectuses and shareowner reports to you within 30 days after
receiving your notice.
65
Shareholder services and policies
CONFIRMATION STATEMENTS
The fund's transfer agent maintains an account for each investment firm or
individual shareowner and records all account transactions. You will be sent
confirmation statements showing the details of your transactions as they occur,
except automatic investment plan transactions, which are confirmed quarterly.
If you have more than one Pioneer mutual fund account registered in your name,
the Pioneer combined account statement will be mailed to you each quarter.
TAX INFORMATION
Early each year, the fund will mail you information about the tax status of the
dividends and distributions paid to you by the fund.
TAX INFORMATION FOR IRA ROLLOVERS
In January (or by the applicable Internal Revenue Service deadline) following
the year in which you take a reportable distribution, the fund's transfer agent
will mail you a tax form reflecting the total amount(s) of distribution(s)
received by the end of January.
PRIVACY
The fund has a policy designed to protect the privacy of your personal
information. A copy of Pioneer's privacy notice was given to you at the time
you opened your account. The fund will send you a copy of the privacy notice
each year. You may also obtain the privacy notice by calling the fund or
through Pioneer's website.
SIGNATURE GUARANTEES AND OTHER REQUIREMENTS
You are required to obtain a signature guarantee when:
o Requesting certain types of exchanges or sales of fund shares
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.
The Pioneer funds generally 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
66
institutions that are not participating in one of these programs are not
accepted as medallion signature guarantees. The fund may accept other forms of
guarantee from financial intermediaries in limited circumstances.
Fiduciaries and corporations are required to submit additional documents to
sell fund shares.
MINIMUM ACCOUNT SIZE
The fund requires that you maintain a minimum account value of $500. If you
hold less than $500 in your account, the fund reserves the right to notify you
that it intends to sell your shares and close your account. You will be given
60 days from the date of the notice to make additional investments to avoid
having your shares sold. This policy does not apply to certain qualified
retirement plan accounts.
TELEPHONE AND WEBSITE ACCESS
You may have difficulty contacting the fund by telephone or accessing
us.pioneerinvestments.com during times of market volatility or disruption in
telephone or Internet service. On New York Stock Exchange holidays or on days
when the exchange closes early, Pioneer will adjust the hours for the telephone
center and for online transaction processing accordingly. If you are unable to
access us.pioneerinvestments.com or reach the fund by telephone, you should
communicate with the fund in writing.
SHARE CERTIFICATES
The fund does not offer share certificates. Shares are electronically recorded.
OTHER POLICIES
The fund and the distributor reserve the right to:
o reject any purchase or exchange order for any reason, without prior notice
o charge a fee for exchanges or to modify, limit or suspend the exchange
privilege at any time without notice. The fund will provide 60 days' notice
of material amendments to or termination of the exchange privilege
o revise, suspend, limit or terminate the account options or services available
to shareowners at any time, except as required by the rules of the
Securities and Exchange Commission
The fund reserves the right to:
o suspend or postpone transactions in shares on any day when trading on the New
York Stock Exchange is closed or restricted, or when the Securities
67
Shareholder services and policies
and Exchange Commission determines an emergency or other circumstances exist
that make it impracticable for the fund to sell or value its portfolio
securities, or otherwise as permitted by the rules of or by the order of the
Securities and Exchange Commission
o redeem in kind, generally by delivering to you a proportionate share of the
portfolio securities owned by the fund rather than cash. Securities you
receive this way may increase or decrease in value while you hold them and
you may incur brokerage and transaction charges and tax liability when you
convert the securities to cash. The fund may redeem in kind at a
shareholder's request or if, for example, the fund reasonably believes that
a cash redemption would negatively affect the fund's operation or
performance
o charge transfer, shareholder servicing or similar agent fees, such as an
account maintenance fee for small balance accounts, directly to accounts
upon at least 30 days' notice. The fund may do this by deducting the fee
from your distribution of dividends and/or by redeeming fund shares to the
extent necessary to cover the fee
o close your account after a period of inactivity, as determined by state law,
and transfer your shares to the appropriate state
68
Dividends, capital gains and taxes
DIVIDENDS AND CAPITAL GAINS
The fund generally pays any distributions of net short- and long-term capital
gains in November.
The fund generally pays dividends from any net investment income quarterly
during March, June, September and December.
The 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 the fund shortly before a dividend or other distribution, generally
you will pay a higher price per share and, unless you are exempt from tax, you
will pay taxes on the amount of the distribution whether you reinvest the
distribution in additional shares or receive it as cash.
TAXES
You will normally have to pay federal income taxes, and any state or local
taxes, on the dividends and other distributions you receive from the fund,
whether you take the distributions in cash or reinvest them in additional
shares. For U.S. federal income tax purposes, distributions from the fund's net
capital gains (if any) are considered long-term capital gains and are generally
taxable to noncorporate shareholders at rates of up to 20%. Distributions from
the fund's net short-term capital gains are generally taxable as ordinary
income. Other dividends are taxable either as ordinary income or, in general,
if paid from the fund's "qualified dividend income" and if certain conditions,
including holding period requirements, are met by the fund and the shareholder,
as qualified dividend income taxable to noncorporate shareholders at U.S.
federal income tax rates of up to 20%.
"Qualified dividend income" generally is income derived from dividends paid by
U.S. corporations or certain foreign corporations that are either incorporated
in a U.S. possession or eligible for tax benefits under certain U.S. income tax
treaties. In addition, dividends that the fund receives in respect of stock of
certain foreign corporations may be qualified dividend income if that stock is
readily tradable on an established U.S. securities market.
A portion of dividends received from the fund (but none of the fund's capital
gain distributions) may qualify for the dividends-received deduction for
corporations.
The fund will report to shareholders annually the U.S. federal income tax
status of all fund distributions.
69
Dividends, capital gains and taxes
If the fund declares a dividend in October, November or December, payable to
shareholders of record in such a month, and pays it in January of the following
year, you will be taxed on the dividend as if you received it in the year in
which it was declared.
Sales and exchanges generally will be taxable transactions to shareowners. When
you sell or exchange 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.
A 3.8% Medicare contribution tax generally applies to all or a portion of the
net investment income of a shareholder who is an individual and not a
nonresident alien for federal income tax purposes and who has adjusted gross
income (subject to certain adjustments) that exceeds a threshold amount. This
3.8% tax also applies to all or a portion of the undistributed net investment
income of certain shareholders that are estates and trusts. For these purposes,
dividends, interest and certain capital gains are generally taken into account
in computing a shareholder's net investment income.
You must provide your social security number or other taxpayer identification
number to the fund along with the certifications required by the Internal
Revenue Service when you open an account. If you do not or if it is otherwise
legally required to do so, the fund will apply "backup withholding" tax on your
dividends and other distributions, sale proceeds and any other payments to you
that are subject to backup withholding. The backup withholding rate is 28%.
Shareholders that are exempt from U.S. federal income tax, such as retirement
plans that are qualified under Section 401 of the Internal Revenue Code,
generally are not subject to U.S. federal income tax on fund dividends or other
distributions or on sales or exchanges of fund shares. However, in the case of
fund shares held through a nonqualified deferred compensation plan, fund
dividends and other distributions received by the plan and sales and exchanges
of fund shares by the plan generally will be taxable to the employer sponsoring
such plan in accordance with U.S. federal income tax laws that are generally
applicable to shareholders receiving such dividends and other distributions
from regulated investment companies such as the fund, or effecting such sales
or exchanges.
70
Plan participants whose retirement plan invests in the fund generally are not
subject to federal income tax on fund dividends or other distributions received
by the plan or on sales or exchanges of fund shares by the plan. However,
distributions to plan participants from a retirement plan generally are taxable
to plan participants as ordinary income.
You should ask your tax adviser about any federal, state, local and foreign tax
considerations relating to an investment in the fund. You may also consult the
fund's statement of additional information for a more detailed discussion of
the U.S. federal income tax considerations that may affect the fund and its
shareowners.
71
Financial highlights
The financial highlights table helps you understand the fund's financial
performance for the past five years.
Certain information reflects financial results for a single fund share. The
total returns in the table represent the rate that you would have earned or
lost on an investment in Class A, Class C, Class K, Class R and Class Y shares
of the fund (assuming reinvestment of all dividends and distributions).
No financial information is presented for Class T shares because no Class T
shares were outstanding during the periods shown.
The information below for the fiscal years ended October 31, 2014 through
October 31, 2016 has been audited by Deloitte & Touche LLP, independent
registered public accounting firm, whose report is included in the fund's
annual report along with the fund's financial statements. The information below
for each of the periods ended on or prior to October 31, 2013 was audited by
another independent registered public accounting firm. The fund's annual report
is incorporated by reference in the statement of additional information and is
available upon request.
72
PIONEER EQUITY INCOME FUND
CLASS A SHARES
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/16 10/31/15 10/31/14 10/31/13 10/31/12
-------------- -------------- ------------ ------------ -----------
Net asset value, beginning of
period $ 34.41 $ 36.47 $ 34.35 $ 27.96 $ 26.19
------- ------- -------- -------- --------
Increase (decrease) from
investment operations:
Net investment income (loss) $ 0.68(a) $ 0.68(a) $ 0.96 $ 0.75 $ 1.05
Net realized and unrealized gain
(loss) on investments 1.89 1.16 3.11 6.53 1.56
------- ------- -------- -------- --------
Net increase (decrease) from
investment operations $ 2.57 $ 1.84 $ 4.07 $ 7.28 $ 2.61
Distribution to shareowners:
Net investment income $ (0.64) $ (0.75) $ (0.80) $ (0.89) $ (0.84)
Net realized gain (2.58) (3.15) (1.15) - -
------- ------- -------- -------- --------
Total distributions $ (3.22) $ (3.90) $ (1.95) $ (0.89) $ (0.84)
------- ------- -------- -------- --------
Net increase (decrease) in net
asset value $ (0.65) $ (2.06) $ 2.12 $ 6.39 $ 1.77
------- ------- -------- -------- --------
Net asset value, end of period $ 33.76 $ 34.41 $ 36.47 $ 34.35 $ 27.96
------- ------- -------- -------- --------
Total return* 8.11% 5.30% 12.33% 26.52% 10.09%
Ratio of net expenses to average
net assets 1.04% 1.06% 1.09% 1.10% 1.14%
Ratio of net investment income
(loss) to average net assets 2.10% 1.99% 2.56% 2.39% 3.86%
Portfolio turnover rate 35% 40% 29% 26% 49%
Net assets, end of period (in
thousands) $757,158 $732,397 $769,869 $826,039 $679,254
* 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.
(a) The per-share data presented above is based on the average shares
outstanding for the period presented.
73
Financial highlights
PIONEER EQUITY INCOME FUND
CLASS C SHARES
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/16 10/31/15 10/31/14 10/31/13 10/31/12
-------------- -------------- ------------ ------------ -----------
Net asset value, beginning of
period $ 33.91 $ 36.03 $ 33.94 $ 27.64 $ 25.91
------- ------- -------- -------- -------
Increase (decrease) from
investment operations:
Net investment income (loss) $ 0.43(a) $ 0.42(a) $ 0.62 $ 0.47 $ 0.84
Net realized and unrealized gain
(loss) on investments 1.87 1.13 3.17 6.50 1.54
------- ------- -------- -------- -------
Net increase (decrease) from
investment operations $ 2.30 $ 1.55 $ 3.79 $ 6.97 $ 2.38
Distribution to shareowners:
Net investment income $ (0.39) $ (0.52) $ (0.55) $ (0.67) $ (0.65)
Net realized gain (2.58) (3.15) (1.15) - -
------- ------- -------- -------- -------
Total distributions $ (2.97) $ (3.67) $ (1.70) $ (0.67) $ (0.65)
------- ------- -------- -------- -------
Net increase (decrease) in net
asset value $ (0.67) $ (2.12) $ 2.09 $ 6.30 $ 1.73
------- ------- -------- -------- -------
Net asset value, end of period $ 33.24 $ 33.91 $ 36.03 $ 33.94 $ 27.64
------- ------- -------- -------- -------
Total return* 7.34%(b) 4.49% 11.57% 25.61% 9.26%
Ratio of net expenses to average
net assets 1.77% 1.80% 1.80% 1.84% 1.86%
Ratio of net investment income
(loss) to average net assets 1.34% 1.24% 1.83% 1.62% 3.13%
Portfolio turnover rate 35% 40% 29% 26% 49%
Net assets, end of period (in
thousands) $140,199 $116,090 $115,762 $104,890 $77,219
* 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.
(a) The per-share data presented above is based on the average shares
outstanding for the period presented.
(b) If the Fund had not recognized gains in the settlement of class
action lawsuits during the year ended October 31, 2016, the total
return would have been 7.30%.
74
PIONEER EQUITY INCOME FUND
CLASS K SHARES
YEAR YEAR YEAR
ENDED ENDED ENDED 12/20/12
10/31/16 10/31/15 10/31/14 TO 10/31/13
-------------- -------------- ---------- ----------------
Net asset value, beginning of period $ 34.44 $ 36.52 $ 34.38 $ 28.30
------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment income (loss) $ 0.80(b) $ 0.80(b) $ 0.96 $ 0.03
Net realized and unrealized gain (loss) on
investments 1.89 1.17 3.27 6.63
------- ------- ------- --------
Net increase (decrease) from investment
operations $ 2.69 $ 1.97 $ 4.23 $ 6.66
Distribution to shareowners:
Net investment income $ (0.74) $ (0.90) $ (0.94) $ (0.58)
Net realized gain (2.58) (3.15) (1.15) -
------- ------- ------- --------
Total distributions $ (3.32) $ (4.05) $ (2.09) $ (0.58)
------- ------- ------- --------
Net increase (decrease) in net asset value $ (0.63) $ (2.08) $ 2.14 $ 6.08
------- ------- ------- --------
Net asset value, end of period $ 33.81 $ 34.44 $ 36.52 $ 34.38
------- ------- ------- --------
Total return* 8.50% 5.67% 12.82% 23.72%(a)
Ratio of net expenses to average net assets 0.67% 0.67% 0.69% 0.66%**
Ratio of net investment income (loss) to average
net assets 2.42% 2.32% 2.24% 1.84%**
Portfolio turnover rate 35% 40% 29% 26%
Net assets, end of period (in thousands) $48,194 $20,908 $10,849 $ 117
* 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.
(a) Not annualized.
(b) The per-share data presented above is based on the average shares
outstanding for the period presented.
75
Financial highlights
PIONEER EQUITY INCOME FUND
CLASS R SHARES
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/16 10/31/15 10/31/14 10/31/13 10/31/12
-------------- -------------- ---------- ---------- -----------
Net asset value, beginning of period $ 34.83 $ 36.88 $ 34.71 $ 28.24 $ 26.45
------- ------- ------- ------- -------
Increase (decrease) from investment
operations:
Net investment income (loss) $ 0.57(a) $ 0.57(a) $ 0.88 $ 0.72 $ 1.03
Net realized and unrealized gain (loss)
on investments 1.92 1.16 3.11 6.54 1.52
------- ------- ------- ------- -------
Net increase (decrease) from
investment operations $ 2.49 $ 1.73 $ 3.99 $ 7.26 $ 2.55
Distribution to shareowners:
Net investment income $ (0.50) $ (0.63) $ (0.67) $ (0.79) $ (0.76)
Net realized gain (2.58) (3.15) (1.15) - -
------- ------- ------- ------- -------
Total distributions $ (3.08) $ (3.78) $ (1.82) $ (0.79) $ (0.76)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value $ (0.59) $ (2.05) $ 2.17 $ 6.47 $ 1.79
------- ------- ------- ------- -------
Net asset value, end of period $ 34.24 $ 34.83 $ 36.88 $ 34.71 $ 28.24
------- ------- ------- ------- -------
Total return* 7.73% 4.90% 11.95% 26.13% 9.76%
Ratio of net expenses to average net
assets 1.40% 1.41% 1.43% 1.41% 1.41%
Ratio of net investment income (loss) to
average net assets 1.73% 1.64% 2.22% 2.09% 3.62%
Portfolio turnover rate 35% 40% 29% 26% 49%
Net assets, end of period (in thousands) $85,307 $75,876 $79,042 $85,986 $79,557
* 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.
(a) The per-share data presented above is based on the average shares
outstanding for the period presented.
76
PIONEER EQUITY INCOME FUND
CLASS Y SHARES
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/16 10/31/15 10/31/14 10/31/13 10/31/12
-------------- -------------- ------------ ------------ -----------
Net asset value, beginning of
period $ 34.71 $ 36.77 $ 34.62 $ 28.17 $ 26.38
------- ------- -------- -------- --------
Increase (decrease) from
investment operations:
Net investment income (loss) $ 0.77(a) $ 0.78(a) $ 0.98 $ 0.78 $ 1.05
Net realized and unrealized gain
(loss) on investments 1.92 1.16 3.23 6.67 1.67
------- ------- -------- -------- --------
Net increase (decrease) from
investment operations $ 2.69 $ 1.94 $ 4.21 $ 7.45 $ 2.72
Distribution to shareowners:
Net investment income $ (0.72) $ (0.85) $ (0.91) $ (1.00) $ (0.93)
Net realized gain (2.58) (3.15) (1.15) - -
------- ------- -------- -------- --------
Total distributions $ (3.30) $ (4.00) $ (2.06) $ (1.00) $ (0.93)
------- ------- -------- -------- --------
Net increase (decrease) in net
asset value $ (0.61) $ (2.06) $ 2.15 $ 6.45 $ 1.79
------- ------- -------- -------- --------
Net asset value, end of period $ 34.10 $ 34.71 $ 36.77 $ 34.62 $ 28.17
------- ------- -------- -------- --------
Total return* 8.40% 5.56% 12.67% 26.98% 10.47%
Ratio of net expenses to average
net assets 0.77% 0.78% 0.79% 0.76% 0.77%
Ratio of net investment income
(loss) to average net assets 2.34% 2.26% 2.85% 2.68% 4.20%
Portfolio turnover rate 35% 40% 29% 26% 49%
Net assets, end of period (in
thousands) $684,969 $527,305 $510,416 $448,509 $322,567
* 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.
(a) The per-share data presented above is based on the average shares
outstanding for the period presented.
77
Intermediary defined sales charge waiver policies
MERRILL LYNCH
Effective April 10, 2017, shareholders purchasing fund shares through a Merrill
Lynch platform or account will be eligible only for the following sales charge
waivers (front-end sales charge waivers and CDSC waivers) and discounts, which
may differ from those disclosed elsewhere in this prospectus or the fund's
statement of additional information.
FRONT-END SALES CHARGE WAIVERS FOR CLASS A SHARES AVAILABLE AT MERRILL LYNCH
o Employer-sponsored retirement, deferred compensation and employee benefit
plans (including health savings accounts) and trusts used to fund those
plans, provided that the plan is a group plan (more than one participant),
the shares are not held in a commission-based brokerage account and shares
are held in the name of the plan through an omnibus account
o Shares purchased by or through a 529 Plan
o Shares purchased through a Merrill Lynch affiliated investment advisory
program
o Shares purchased by third party investment advisors on behalf of their
advisory clients through Merrill Lynch's platform
o Shares of funds purchased through the Merrill Edge Self-Directed platform (if
applicable)
o Shares purchased through reinvestment of capital gains distributions and
dividend reinvestment when purchasing shares of the same fund (but not any
other fund within the fund family)
o Shares exchanged from Class C (i.e. level-load) shares of the same fund in
the month of or following the 10-year anniversary of the purchase date
o Employees and registered representatives of Merrill Lynch or its affiliates
and their family members
o Trustees of the fund, and employees of the fund's investment adviser or any
of its affiliates, as described in this prospectus
o Shares purchased from the proceeds of redemptions within the Pioneer fund
family, provided (1) the repurchase occurs within 90 days following the
redemption, (2) the redemption and purchase occur in the same account, and
(3) redeemed shares were subject to a front-end or deferred sales load
(known as Rights of Reinstatement)
CDSC WAIVERS ON CLASS A AND C SHARES AVAILABLE AT MERRILL LYNCH
o Death or disability of the shareholder
o Shares sold as part of a systematic withdrawal plan as described in the
fund's prospectus
78
o Return of excess contributions from an IRA Account
o Shares sold as part of a required minimum distribution for IRA and retirement
accounts due to the shareholder reaching age 70 1/2
o Shares sold to pay Merrill Lynch fees but only if the transaction is
initiated by Merrill Lynch
o Shares acquired through a right of reinstatement
o Shares held in retirement brokerage accounts, that are exchanged for a lower
cost share class due to transfer to certain fee based accounts or platforms
(applicable to Class A and C shares only)
FRONT-END SALES CHARGE DISCOUNTS FOR CLASS A SHARES AVAILABLE AT MERRILL LYNCH:
BREAKPOINTS, RIGHTS OF ACCUMULATION AND LETTERS OF INTENT
o Breakpoints as described in this prospectus.
o Rights of Accumulation (ROA), which entitle shareholders to breakpoint
discounts, will be automatically calculated based on the aggregated holding
of Pioneer fund family assets held by accounts within the purchaser's
household at Merrill Lynch. Eligible Pioneer fund family assets not held at
Merrill Lynch may be included in the ROA calculation only if the shareholder
notifies his or her financial advisor about such assets
o Letters of Intent (LOI) which allow for breakpoint discounts based on
anticipated purchases within the Pioneer fund family, through Merrill Lynch,
over a 13-month period of time (if applicable)
79
Notes
Notes
Notes
Pioneer
Equity Income Fund
YOU CAN OBTAIN MORE FREE INFORMATION about the fund from your investment firm
or by writing to Pioneer Funds, 60 State Street, Boston, Massachusetts 02109.
You may also call 1-800-225-6292 for more information about the fund, to
request copies of the fund's statement of additional information and shareowner
reports, and to make other inquiries.
VISIT OUR WEBSITE
us.pioneerinvestments.com
The fund makes available the statement of additional information and shareowner
reports, free of charge, on the fund's website at us.pioneerinvestments.com.
You also may find other information and updates about Pioneer and the fund,
including fund performance information and the fund's most recent net asset
value, on the fund's website.
SHAREOWNER REPORTS
Annual and semiannual reports to shareowners, and quarterly reports filed with
the Securities and Exchange Commission, provide additional information about
the fund's investments. The annual report discusses market conditions and
investment strategies that significantly affected the fund's performance during
its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION
The statement of additional information provides more detailed information
about the fund.
The statement of additional information, dated March 1, 2017, as may be amended
from time to time, and filed with the Securities and Exchange Commission, is
incorporated by reference into this prospectus.
You can also review and copy the fund's shareowner reports, prospectus and
statement of additional information at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. Call 1-202-551-8090 for information.
The Commission charges a fee for copies. You can get the same information free
from the Commission's EDGAR database on the Internet (http://www.sec.gov). You
may also e-mail requests for these documents to publicinfo@sec.gov or make a
request in writing to the Commission's Public Reference Section, Washington,
D.C. 20549-1520.
(Investment Company Act file no. 811-08657)
[GRAPHIC APPEARS HERE]
PIONEER FUNDS DISTRIBUTOR, INC.
60 STATE STREET 18772-15-0317
BOSTON, MA 02109 (Copyright)2017 Pioneer Funds Distributor, Inc.
US.PIONEERINVESTMENTS.COM Member SIPC
[GRAPHIC APPEARS HERE]
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
This is not part of the prospectus.
18772-15-0317
(Copyright)2017 Pioneer Funds Distributor, Inc.
Underwriter of Pioneer mutual funds
Member SIPC
PIONEER EQUITY INCOME FUND
--------------------------------------------------------------------------------
60 State Street
Boston, Massachusetts 02109
CLASS A SHARES (PEQIX)
CLASS C SHARES (PCEQX)
CLASS K SHARES (PEQKX)
CLASS R SHARES (PQIRX)
CLASS T SHARES (EITPX)
CLASS Y SHARES (PYEQX)
Statement of Additional Information
March 1, 2017
This statement of additional information is not a prospectus. It should be read
in conjunction with the fund's Class A, Class C, Class K, Class R, Class T and
Class Y share prospectus dated March 1, 2017, as supplemented or revised from
time to time. A copy of the prospectus can be obtained free of charge by
calling the fund at 1-800-225-6292 or by written request to the fund at 60
State Street, Boston, Massachusetts 02109. You can also obtain a copy of the
prospectus from our website at: us.pioneerinvestments.com. The fund's financial
statements for the fiscal year ended October 31, 2016, including the
independent registered public accounting firm's report thereon, are
incorporated into this statement of additional information by reference.
CONTENTS
--------------------------------------------------------------------------------
PAGE
1. Fund history............................................... 1
2. Investment policies, risks and restrictions................ 1
3. Trustees and officers...................................... 30
4. Investment adviser......................................... 39
5. Principal underwriter and distribution plan................ 42
6. Shareholder servicing/transfer agent....................... 44
7. Custodian and sub-administrator............................ 44
8. Independent registered public accounting firm.............. 44
9. Portfolio management....................................... 45
10. Portfolio transactions..................................... 48
11. Description of shares...................................... 49
12. Sales charges.............................................. 52
13. Redeeming shares........................................... 58
14. Telephone and online transactions.......................... 59
15. Pricing of shares.......................................... 60
16. Tax status................................................. 61
17. Financial statements....................................... 69
18. Annual fee, expense and other information.................. 69
19. Appendix A - Description of short-term debt, corporate bond
and preferred stock ratings//.............................. 74
20. Appendix B - Proxy voting policies and procedures.......... 78
[GRAPHIC APPEARS HERE]
1. FUND HISTORY
The fund is a diversified open-end management investment company. The fund is a
series of Pioneer Equity Income Fund, a Delaware statutory trust (the "Trust").
The fund was originally organized as a series of Pioneer Growth Trust, a
Massachusetts business trust on April 7, 1990. The Fund was reorganized as a
series of the Trust on January 8, 1998. Prior to February 22, 2002, the fund's
name was Pioneer Equity-Income Fund." Pioneer Investment Management Inc.
("Pioneer") is the fund's investment adviser.
2. INVESTMENT POLICIES, RISKS AND RESTRICTIONS
The prospectus presents the investment objective and the principal investment
strategies and risks of the fund. This section supplements the disclosure in
the fund's prospectus and provides additional information on the fund's
investment policies or restrictions. Restrictions or policies stated as a
maximum percentage of the fund's assets are only applied immediately after a
portfolio investment to which the policy or restriction is applicable (other
than the limitations on borrowing and illiquid securities). Accordingly, any
later increase or decrease in a percentage resulting from a change in values,
net assets or other circumstances will not be considered in determining whether
the investment complies with the fund's restrictions and policies.
EQUITY SECURITIES AND RELATED INVESTMENTS
INVESTMENTS IN EQUITY SECURITIES
Equity securities, such as common stock, generally represent an ownership
interest in a company. While equity securities have historically generated
higher average returns than fixed income securities, equity securities have
also experienced significantly more volatility in those returns. An adverse
event, such as an unfavorable earnings report, may depress the value of a
particular equity security held by the fund. Also, the prices of equity
securities, particularly common stocks, are sensitive to general movements in
the stock market. A drop in the stock market may depress the price of equity
securities held by the fund.
WARRANTS AND STOCK PURCHASE RIGHTS
The fund may invest in warrants, which are securities permitting, but not
obligating, their holder to subscribe for other securities. Warrants do not
carry with them the right to dividends or voting rights with respect to the
securities that they entitle their holders to purchase, and they do not
represent any rights in the assets of the issuer.
The fund may also invest in stock purchase rights. Stock purchase rights are
instruments, frequently distributed to an issuer's shareholders as a dividend,
that entitle the holder to purchase a specific number of shares of common stock
on a specific date or during a specific period of time. The exercise price on
the rights is normally at a discount from market value of the common stock at
the time of distribution. The rights do not carry with them the right to
dividends or to vote and may or may not be transferable. Stock purchase rights
are frequently used outside of the United States as a means of raising
additional capital from an issuer's current shareholders.
As a result, an investment in warrants or stock purchase rights may be
considered more speculative than certain other types of investments. In
addition, the value of a warrant or a stock purchase right does not necessarily
change with the value of the underlying securities, and warrants and stock
purchase rights expire worthless if they are not exercised on or prior to their
expiration date.
PREFERRED SHARES
The fund may invest in preferred shares. Preferred shares are equity
securities, but they have many characteristics of fixed income securities, such
as a fixed dividend payment rate and/or a liquidity preference over the
issuer's common shares. However, because preferred shares are equity
securities, they may be more susceptible to risks traditionally associated with
equity investments than the fund's fixed income securities.
1
Preferred stocks may differ in many of their provisions. Among the features
that differentiate preferred stocks from one another are the dividend rights,
which may be cumulative or noncumulative and participating or
non-participating, redemption provisions, and voting rights. Such features will
establish the income return and may affect the prospects for capital
appreciation or risks of capital loss.
The market prices of preferred stocks are subject to changes in interest rates
and are more sensitive to changes in an issuer's creditworthiness than are the
prices of debt securities. Shareholders of preferred stock may suffer a loss of
value if dividends are not paid. Under ordinary circumstances, preferred stock
does not carry voting rights.
INVESTMENTS IN INITIAL PUBLIC OFFERINGS
Companies involved in initial public offering (IPOs) generally have limited
operating histories, and prospects for future profitability are uncertain. The
market for IPO issuers has been volatile, and share prices of newly public
companies have fluctuated significantly over short periods of time. Further,
stocks of newly-public companies may decline shortly after the IPO. There is no
assurance that the fund will have access to IPOs. The purchase of IPO shares
may involve high transaction costs. Because of the price volatility of IPO
shares, the fund may choose to hold IPO shares for a very short period of time.
This may increase the turnover of the portfolio and may lead to increased
expenses to the fund, such as commissions and transaction costs. The market for
IPO shares can be speculative and/or inactive for extended periods of time.
There may be only a limited number of shares available for trading. The limited
number of shares available for trading in some IPOs may also make it more
difficult for the fund to buy or sell significant amounts of shares without an
unfavorable impact on prevailing prices.
NON-U.S. INVESTMENTS
EQUITY SECURITIES OF NON-U.S. ISSUERS
The fund may invest in equity securities of non-U.S. issuers, including
American Depositary Receipts ("ADRs"), European Depositary Receipts ("EDRs"),
Global Depositary Receipts ("GDRs") and other similar instruments.
DEBT OBLIGATIONS OF NON-U.S. GOVERNMENTS
The fund may invest in all types of debt obligations of non-U.S. governments.
An investment in debt obligations of non-U.S. governments and their political
subdivisions (sovereign debt) involves special risks that are not present in
corporate debt obligations. The non-U.S. issuer of the sovereign debt or the
non-U.S. governmental authorities that control the repayment of the debt may be
unable or unwilling to repay principal or interest when due, and the fund may
have limited recourse in the event of a default. As a sovereign entity, the
issuing government may be immune from lawsuits in the event of its failure or
refusal to pay the obligations when due. During periods of economic uncertainty
(such as the financial crisis that began in 2008), the values of sovereign debt
and of securities of issuers that purchase sovereign debt may be more volatile
than prices of debt obligations of U.S. issuers. In the past, certain non-U.S.
countries have encountered difficulties in servicing their debt obligations,
withheld payments of principal and interest, declared moratoria on the payment
of principal and interest on their sovereign debt, or restructured their debt
to effectively eliminate portions of it, and similar occurrences may happen in
the future. There is no bankruptcy proceeding by which sovereign debt on which
governmental entities have defaulted may be collected in whole or in part.
A sovereign debtor's willingness or ability to repay principal and pay interest
in a timely manner may be affected by, among other factors, its cash flow
situation, the extent of its foreign currency reserves, the availability of
sufficient foreign exchange, the relative size of the debt service burden, the
sovereign debtor's policy toward its principal international lenders and local
political constraints. Sovereign debtors may also be dependent on disbursements
or assistance from non-U.S. governments, multinational agencies and other
entities to reduce principal and interest arrearages on their debt. Assistance
may be dependent on a country's implementation of austerity measures and
reforms, which measures may limit or be perceived to limit economic growth and
recovery. The failure of a sovereign debtor to implement economic reforms,
2
achieve specified levels of economic performance or repay principal or interest
when due may result in the cancellation of third-party commitments to lend
funds to the sovereign debtor, which may further impair such debtor's ability
or willingness to service its debts.
EURODOLLAR INSTRUMENTS AND SAMURAI AND YANKEE BONDS. The fund may invest in
Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are
bonds of corporate and government issuers that pay interest and principal in
U.S. dollars but are issued in markets outside the United States, primarily in
Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-Japanese
issuers. Yankee bonds are U.S. dollar denominated bonds typically issued in the
U.S. by non-U.S. governments and their agencies and non-U.S. banks and
corporations. The fund may also invest in Eurodollar Certificates of Deposit
("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit
("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued
by non-U.S. branches of domestic banks; ETDs are U.S. dollar-denominated
deposits in a non-U.S. branch of a U.S. bank or in a non-U.S. bank; and Yankee
CDs are U.S. dollar-denominated certificates of deposit issued by a U.S. branch
of a non-U.S. bank and held in the U.S. These investments involve risks that
are different from investments in securities issued by U.S. issuers, including
potential unfavorable political and economic developments, non-U.S. withholding
or other taxes, seizure of non-U.S. deposits, currency controls, interest
limitations or other governmental restrictions which might affect payment of
principal or interest.
RISKS OF NON-U.S. INVESTMENTS. Investing in securities of non-U.S. issuers
involves considerations and risks not typically associated with investing in
the securities of issuers in the U.S. These risks are heightened with respect
to investments in countries with emerging markets and economies. The risks of
investing in securities of non-U.S. issuers generally, or in issuers with
significant exposure to non-U.S. markets, may be related, among other things,
to (i) differences in size, liquidity and volatility of, and the degree and
manner of regulation of, the securities markets of certain non-U.S. markets
compared to the securities markets in the U.S.; (ii) economic, political and
social factors; and (iii) foreign exchange matters, such as restrictions on the
repatriation of capital, fluctuations in exchange rates between the U.S. dollar
and the currencies in which the portfolio securities are quoted or denominated,
exchange control regulations and costs associated with currency exchange. The
political and economic structures in certain countries, particularly emerging
markets, may undergo significant evolution and rapid development, and such
countries may lack the social, political and economic stability characteristic
of more developed countries.
NON-U.S. SECURITIES MARKETS AND REGULATIONS. There may be less publicly
available information about non-U.S. markets and issuers than is available with
respect to U.S. securities and issuers. Non-U.S. companies generally are not
subject to accounting, auditing and financial reporting standards, practices
and requirements comparable to those applicable to U.S. companies. The trading
markets for most non-U.S. securities are generally less liquid and subject to
greater price volatility than the markets for comparable securities in the U.S.
The markets for securities in certain emerging markets are in the earliest
stages of their development. Even the markets for relatively widely traded
securities in certain non-U.S. markets, including emerging market countries,
may not be able to absorb, without price disruptions, a significant increase in
trading volume or trades of a size customarily undertaken by institutional
investors in the U.S. Additionally, market making and arbitrage activities are
generally less extensive in such markets, which may contribute to increased
volatility and reduced liquidity. The less liquid a market, the more difficult
it may be for the fund to accurately price its portfolio securities or to
dispose of such securities at the times determined by Pioneer to be
appropriate. The risks associated with reduced liquidity may be particularly
acute in situations in which the fund's operations require cash, such as in
order to meet redemptions and to pay its expenses.
ECONOMIC, POLITICAL AND SOCIAL FACTORS. Certain countries, including emerging
markets, may be subject to a greater degree of economic, political and social
instability than in the U.S. and Western European countries. Such instability
may result from, among other things: (i) authoritarian governments or military
involvement in political and economic decision making; (ii) popular unrest
associated with demands for improved economic, political and social conditions;
(iii) internal insurgencies; (iv) hostile relations with neighboring countries;
and (v) ethnic, religious and racial conflict. Such economic, political and
social
3
instability could significantly disrupt the financial markets in such countries
and the ability of the issuers in such countries to repay their obligations. In
addition, it may be difficult for the fund to pursue claims against a foreign
issuer in the courts of a foreign country. Investing in emerging market
countries also involves the risk of expropriation, nationalization,
confiscation of assets and property or the imposition of restrictions on
foreign investments and on repatriation of capital invested. In the event of
such expropriation, nationalization or other confiscation in any emerging
country, the fund could lose its entire investment in that country.
Investments that have exposure to Russian or Ukrainian issuers or markets may
be significantly affected by recent events in those regions and economic
sanctions against Russia and other responses to these events by the United
States and other nations.
Certain emerging market countries restrict or control foreign investment in
their securities markets to varying degrees. These restrictions may limit the
fund's investment in those markets and may increase the expenses of the fund.
In addition, the repatriation of both investment income and capital from
certain markets is subject to restrictions such as the need for certain
governmental consents. Even where there is no outright restriction on
repatriation of capital, the mechanics of repatriation may affect certain
aspects of the fund's operation.
Economies in individual countries may differ favorably or unfavorably from the
U.S. economy in such respects as growth of gross domestic product, rates of
inflation, currency valuation, capital reinvestment, resource self-sufficiency
and balance of payments positions. Many countries have experienced substantial,
and in some cases extremely high, rates of inflation for many years. Inflation
and rapid fluctuations in inflation rates have had, and may continue to have,
very negative effects on the economies and securities markets of certain
emerging countries.
Unanticipated political or social developments may affect the values of the
fund's investments and the availability to the fund of additional investments
in such countries. In the past, the economies, securities and currency markets
of many emerging markets have experienced significant disruption and declines.
There can be no assurance that these economic and market disruptions might not
occur again.
Economies in emerging market countries generally are dependent heavily upon
international trade and, accordingly, have been and may continue to be affected
adversely by trade barriers, exchange controls, managed adjustments in relative
currency values and other protectionist measures imposed or negotiated by the
countries with which they trade. These economies also have been, and may
continue to be, affected adversely and significantly by economic conditions in
the countries with which they trade.
A number of countries in Europe have experienced severe economic and financial
difficulties. Many non-governmental issuers, and even certain governments, have
defaulted on, or been forced to restructure, their debts; many other issuers
have faced difficulties obtaining credit or refinancing existing obligations;
financial institutions have in many cases required government or central bank
support, have needed to raise capital, and/or have been impaired in their
ability to extend credit; and financial markets in Europe and elsewhere have
experienced extreme volatility and declines in asset values and liquidity.
These difficulties may continue, worsen or spread within and beyond Europe.
Responses to the financial problems by European governments, central banks and
others, including austerity measures and reforms, may not work, may result in
social unrest and may limit future growth and economic recovery or have other
unintended consequences. Further defaults or restructurings by governments and
others of their debt could have additional adverse effects on economies,
financial markets and asset valuations around the world. In addition, voters in
the United Kingdom have approved withdrawal from the European Union. Other
countries may seek to withdraw from the European Union and/or abandon the euro,
the common currency of the European Union. A number of countries in Europe have
suffered terror attacks, and additional attacks may occur in the future. The
Ukraine has experienced ongoing military conflict; this conflict may expand and
military conflicts could potentially occur elsewhere in Europe. Europe has also
been struggling with mass migration from the Middle East and Africa. The
ultimate effects of these events and other socio-political or geopolitical
issues are not known but could profoundly affect global economies and markets.
Whether or not the fund invests in securities of
4
issuers located in Europe or with significant exposure to European issuers or
countries, these events could negatively affect the value and liquidity of the
fund's investments due to the interconnected nature of the global economy and
capital markets.
CURRENCY RISKS. The value of the securities quoted or denominated in foreign
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The fund 's investment
performance may be negatively affected by a devaluation of a currency in which
the fund's investments are quoted or denominated. Further, the fund's
investment performance may be significantly affected, either positively or
negatively, by currency exchange rates because the U.S. dollar value of
securities quoted or denominated in another currency will increase or decrease
in response to changes in the value of such currency in relation to the U.S.
dollar.
CUSTODIAN SERVICES AND RELATED INVESTMENT COSTS. Custodial services and other
costs relating to investment in international securities markets generally are
more expensive than in the U.S. Such markets have settlement and clearance
procedures that differ from those in the U.S. In certain markets there have
been times when settlements have been unable to keep pace with the volume of
securities transactions, making it difficult to conduct such transactions. The
inability of the fund to make intended securities purchases due to settlement
problems could cause the fund to miss attractive investment opportunities.
Inability to dispose of a portfolio security caused by settlement problems
could result either in losses to the fund due to a subsequent decline in value
of the portfolio security or could result in possible liability to the fund. In
addition, security settlement and clearance procedures in some emerging
countries may not fully protect the fund against loss or theft of its assets.
WITHHOLDING AND OTHER TAXES. The fund may be subject to taxes, including
withholding taxes, on income (possibly including, in some cases, capital gains)
that are or may be imposed by certain countries with respect to the fund's
investments in such countries. These taxes may reduce the return achieved by
the fund. Treaties between the U.S. and such countries may not be available to
reduce the otherwise applicable tax rates.
INVESTMENTS IN DEPOSITARY RECEIPTS
The fund may hold securities of non-U.S. issuers in the form of ADRs, EDRs,
GDRs and other similar instruments. Generally, ADRs in registered form are
designed for use in U.S. securities markets, and EDRs and GDRs and other
similar global instruments in bearer form are designed for use in non-U.S.
securities markets.
ADRs are denominated in U.S. dollars and represent an interest in the right to
receive securities of non-U.S. issuers deposited in a U.S. bank or
correspondent bank. ADRs do not eliminate all the risk inherent in investing in
the securities of non-U.S. issuers. However, by investing in ADRs rather than
directly in equity securities of non-U.S. issuers, the fund will avoid currency
risks during the settlement period for either purchases or sales. EDRs and GDRs
are not necessarily denominated in the same currency as the underlying
securities which they represent.
For purposes of the fund's investment policies, investments in ADRs, EDRs, GDRs
and similar instruments will be deemed to be investments in the underlying
equity securities of non-U.S. issuers. The fund may acquire depositary receipts
from banks that do not have a contractual relationship with the issuer of the
security underlying the depositary receipt to issue and secure such depositary
receipt. To the extent the fund invests in such unsponsored depositary receipts
there may be an increased possibility that the fund may not become aware of
events affecting the underlying security and thus the value of the related
depositary receipt. In addition, certain benefits (i.e., rights offerings)
which may be associated with the security underlying the depositary receipt may
not inure to the benefit of the holder of such depositary receipt.
5
FOREIGN CURRENCY TRANSACTIONS
The fund may engage in foreign currency transactions. These transactions may be
conducted at the prevailing spot rate for purchasing or selling currency in the
foreign exchange market. The fund also may enter into forward foreign currency
exchange contracts, which are contractual agreements to purchase or sell a
specified currency at a specified future date and price set at the time of the
contract.
The fund may enter into forward foreign currency exchange contracts involving
currencies of the different countries in which the fund invests as a hedge
against possible variations in the foreign exchange rates between these
currencies and the U.S. dollar. Transaction hedging is the purchase or sale of
forward foreign currency contracts with respect to specific receivables or
payables of the fund, accrued in connection with the purchase and sale of its
portfolio securities quoted in foreign currencies. Portfolio hedging is the use
of forward foreign currency contracts to offset portfolio security positions
denominated or quoted in such foreign currencies. There is no guarantee that
the fund will be engaged in hedging activities when adverse exchange rate
movements occur or that its hedging activities will be successful. The fund
will not attempt to hedge all of its foreign portfolio positions and will enter
into such transactions only to the extent, if any, deemed appropriate by
Pioneer.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also limit the opportunity
for gain if the value of the hedged currency should rise. Moreover, it may not
be possible for the fund to hedge against a devaluation that is so generally
anticipated that the fund is not able to contract to sell the currency at a
price above the devaluation level it anticipates.
The fund may also engage in cross-hedging by using forward contracts in one
currency to hedge against fluctuations in the value of securities denominated
in a different currency, if Pioneer determines that there is a pattern of
correlation between the two currencies. Cross-hedging may also include entering
into a forward transaction involving two foreign currencies, using one foreign
currency as a proxy for the U.S. dollar to hedge against variations in the
other foreign currency.
The fund may use forward currency exchange contracts to reduce or gain exposure
to a currency. To the extent the fund gains exposure to a currency through
these instruments, the resulting exposure may exceed the value of securities
denominated in that currency held by the fund. For example, where the fund's
security selection has resulted in an overweight or underweight exposure to a
particular currency relative to the fund's benchmark, the fund may seek to
adjust currency exposure using forward currency exchange contracts.
The cost to the fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the size of the contract, the length of
the contract period, differences in interest rates between the two currencies
and the market conditions then prevailing. Since transactions in foreign
currency and forward contracts are usually conducted on a principal basis, no
fees or commissions are involved. The fund may close out a forward position in
a currency by selling the forward contract or by entering into an offsetting
forward contract.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible because the future value of
such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the
contract is entered into and the date it matures. Using forward contracts to
protect the value of the portfolio securities against a decline in the value of
a currency does not eliminate fluctuations in the underlying prices of the
securities. It simply establishes a rate of exchange which the fund can achieve
at some future point in time. The precise projection of currency market
movements is not possible, and short-term hedging provides a means of fixing
the U.S. dollar value of only a portion of the fund's foreign assets.
While the fund may benefit from foreign currency transactions, unanticipated
changes in currency prices may result in a poorer overall performance for the
fund than if it had not engaged in any such transactions. Moreover, there may
be imperfect correlation between the portfolio holdings of securities quoted or
denominated
6
in a particular currency and forward contracts entered into by the fund. Such
imperfect correlation may cause the fund to sustain losses which will prevent
the fund from achieving a complete hedge or expose the fund to risk of foreign
exchange loss.
Over-the-counter markets for trading foreign forward currency contracts offer
less protection against defaults than is available when trading in currency
instruments on an exchange. Since a forward foreign currency exchange contract
is not guaranteed by an exchange or clearinghouse, a default on the contract
would deprive the fund of unrealized profits or force the fund to cover its
commitments for purchase or resale, if any, at the current market price.
If the fund enters into a forward contract to purchase foreign currency, the
custodian or Pioneer will segregate liquid assets. See "Asset Segregation."
OPTIONS ON FOREIGN CURRENCIES
The fund may purchase options on foreign currencies for hedging purposes in a
manner similar to that of transactions in forward contracts. For example, a
decline in the dollar value of a foreign currency in which portfolio securities
are quoted or denominated will reduce the dollar value of such securities, even
if their value in the foreign currency remains constant. In an attempt to
protect against such decreases in the value of portfolio securities, the fund
may purchase put options on the foreign currency. If the value of the currency
declines, the fund will have the right to sell such currency for a fixed amount
of dollars which exceeds the market value of such currency. This would result
in a gain that may offset, in whole or in part, the negative effect of currency
depreciation on the value of the fund's securities quoted or denominated in
that currency.
Conversely, if a rise in the dollar value of a currency is projected for those
securities to be acquired, thereby increasing the cost of such securities, the
fund may purchase call options on such currency. If the value of such currency
increases, the purchase of such call options would enable the fund to purchase
currency for a fixed amount of dollars which is less than the market value of
such currency. Such a purchase would result in a gain that may offset, at least
partially, the effect of any currency-related increase in the price of
securities the fund intends to acquire. As in the case of other types of
options transactions, however, the benefit the fund derives from purchasing
foreign currency options will be reduced by the amount of the premium and
related transaction costs. In addition, if currency exchange rates do not move
in the direction or to the extent anticipated, the fund could sustain losses on
transactions in foreign currency options which would deprive it of a portion or
all of the benefits of advantageous changes in such rates.
The fund may also write options on foreign currencies for hedging purposes. For
example, if the fund anticipated a decline in the dollar value of securities
quoted or denominated in a foreign currency because of declining exchange
rates, it could, instead of purchasing a put option, write a covered call
option on the relevant currency. If the expected decline occurs, the option
will most likely not be exercised, and the decrease in value of portfolio
securities will be partially offset by the amount of the premium received by
the fund.
Similarly, the fund could write a put option on the relevant currency, instead
of purchasing a call option, to hedge against an anticipated increase in the
dollar cost of securities to be acquired. If exchange rates move in the manner
projected, the put option will expire unexercised and allow the fund to offset
such increased cost up to the amount of the premium. However, as in the case of
other types of options transactions, the writing of a foreign currency option
will constitute only a partial hedge up to the amount of the premium, and only
if rates move in the expected direction. If unanticipated exchange rate
fluctuations occur, the option may be exercised and the fund would be required
to purchase or sell the underlying currency at a loss, which may not be fully
offset by the amount of the premium. As a result of writing options on foreign
currencies, the fund also may be required to forgo all or a portion of the
benefits which might otherwise have been obtained from favorable movements in
currency exchange rates.
7
A call option written on foreign currency by the fund is "covered" if the fund
owns the underlying foreign currency subject to the call, or if it has an
absolute and immediate right to acquire that foreign currency without
additional cash consideration. A call option is also covered if the fund holds
a call on the same foreign currency for the same principal amount as the call
written where the exercise price of the call held is (a) equal to or less than
the exercise price of the call written or (b) greater than the exercise price
of the call written if the amount of the difference is maintained by the fund
in cash or liquid securities. See "Asset Segregation."
The fund may close out its position in a currency option by either selling the
option it has purchased or entering into an offsetting option. An
exchange-traded options position may be closed out only on an options exchange
which provides a secondary market for an option of the same series. Although
the fund will generally purchase or write only those options for which there
appears to be an active secondary market, there is no assurance that a liquid
secondary market on an exchange will exist for any particular option, or at any
particular time. For some options no secondary market on an exchange may exist.
In such event, it might not be possible to effect closing transactions in
particular options, with the result that the fund would have to exercise its
options in order to realize any profit and would incur transaction costs upon
the sale of underlying currencies pursuant to the exercise of put options. If
the fund as a covered call option writer is unable to effect a closing purchase
transaction in a secondary market, it will not be able to sell the underlying
currency (or security quoted or denominated in that currency) until the option
expires or it delivers the underlying currency upon exercise.
The fund may also use options on currencies to cross-hedge, which involves
writing or purchasing options on one currency to hedge against changes in
exchange rates of a different currency with a pattern of correlation.
Cross-hedging may also include using a foreign currency as a proxy for the U.S.
dollar, if Pioneer determines that there is a pattern of correlation between
that currency and the U.S. dollar.
The fund may purchase and write over-the-counter options. Trading in
over-the-counter options is subject to the risk that the other party will be
unable or unwilling to close out options purchased or written by the fund.
INVESTMENTS IN EMERGING MARKETS. The fund may invest in securities of issuers
in countries with emerging economies or securities markets. Emerging economies
or securities markets will generally include, but not be limited to, countries
included in the Morgan Stanley Capital International (MSCI) Emerging & Frontier
Markets Index. The fund will generally focus on emerging markets that do not
impose unusual trading requirements which tend to restrict the flow of
investments. In addition, the fund may invest in unquoted securities of
emerging market issuers.
NATURAL DISASTERS
Certain areas of the world, including areas within the United States,
historically have been prone to natural disasters, such as hurricanes,
earthquakes, typhoons, flooding, tidal waves, tsunamis, erupting volcanoes,
wildfires or droughts. Such disasters, and the resulting damage, could have a
significant adverse impact on the economies of those areas and on the ability
of issuers in which the fund invests to conduct their businesses, and thus on
the investments made by the fund in such geographic areas and/or issuers.
Adverse weather conditions could have a significant adverse impact on issuers
in the agricultural sector and on insurance companies that insure against the
impact of natural disasters.
CYBERSECURITY ISSUES
With the increased use of technologies such as the Internet to conduct
business, the fund is susceptible to operational, information security and
related risks. In general, cyber incidents can result from deliberate attacks
or unintentional events. Cyber attacks include, but are not limited to, gaining
unauthorized access to digital systems (e.g., through "hacking" or malicious
software coding) for purposes of misappropriating assets or sensitive
information, corrupting data, or causing operational disruption. Cyber attacks
may also be carried out in a manner that does not require gaining unauthorized
access, such as causing denial-of-service attacks on websites (i.e., efforts to
make network services unavailable to intended users). Cybersecurity
8
failures or breaches by the fund's adviser, transfer agent, distributor and
other service providers (including, but not limited to, the fund's custodian
and financial intermediaries), and the issuers of securities in which the fund
invests, have the ability to cause disruptions and impact business operations
potentially resulting in financial losses, interference with the fund's ability
to calculate its NAV, impediments to trading, the inability of fund
shareholders to transact business, violations of applicable privacy and other
laws, regulatory fines, penalties, reputational damage, reimbursement or other
compensation costs, or additional compliance costs. In addition, substantial
costs may be incurred in order to prevent any cyber incidents in the future.
While the fund or its adviser has established business continuity plans in the
event of, and risk management systems to prevent, such cyber attacks, there are
inherent limitations in such plans and systems including the possibility that
certain risks have not been identified. Furthermore, the fund cannot control
the cyber security plans and systems put in place by service providers to the
fund and issuers in which the fund invests. The fund and its shareholders could
be negatively impacted as a result.
INVESTMENT COMPANY SECURITIES AND REAL ESTATE INVESTMENT TRUSTS
OTHER INVESTMENT COMPANIES
The fund may invest in the securities of other investment companies to the
extent that such investments are consistent with the fund's investment
objective and policies and permissible under the Investment Company Act of
1940, as amended (the "1940 Act") and the rules thereunder. Investing in other
investment companies subjects the fund to the risks of investing in the
underlying securities held by those investment companies. The fund, as a holder
of the securities of other investment companies, will bear its pro rata portion
of the other investment companies' expenses, including advisory fees. These
expenses are in addition to the direct expenses of the fund's own operations.
EXCHANGE TRADED FUNDS
The fund may invest in exchange traded funds ("ETFs"). ETFs, such as SPDRs,
iShares and various country index funds, are funds whose shares are traded on a
national exchange or the National Association of Securities Dealers' Automated
Quotation System ("NASDAQ"). ETFs may be based on underlying equity or fixed
income securities. SPDRs, for example, seek to provide investment results that
generally correspond to the performance of the component common stocks of the
Standard & Poor's 500 Stock Index (the "S&P 500"). ETFs do not sell individual
shares directly to investors and only issue their shares in large blocks known
as "creation units." The investor purchasing a creation unit then sells the
individual shares on a secondary market. Therefore, the liquidity of ETFs
depends on the adequacy of the secondary market. There can be no assurance that
an ETF's investment objective will be achieved. ETFs based on an index may not
replicate and maintain exactly the composition and relative weightings of
securities in the index. ETFs are subject to the risks of investing in the
underlying securities. The fund, as a holder of the securities of the ETF, will
bear its pro rata portion of the ETF's expenses, including advisory fees. These
expenses are in addition to the direct expenses of the fund's own operations.
Many ETFs have received exemptive orders issued by the Securities and Exchange
Commission that would permit the fund to invest in those ETFs beyond the
limitations applicable to other investment companies, subject to certain terms
and conditions. Some ETFs are not structured as investment companies and thus
are not regulated under the 1940 Act.
Certain ETFs, including leveraged ETFs and inverse ETFs, may have embedded
leverage. Leveraged ETFs seek to multiply the return of the tracked index
(e.g., twice the return) by using various forms of derivative transactions.
Inverse ETFs seek to negatively correlate with the performance of a particular
index by using various forms of derivative transactions, including by
short-selling the underlying index. An investment in an inverse ETF will
decrease in value when the value of the underlying index rises. By investing in
leveraged ETFs or inverse ETFs, the fund can commit fewer assets to the
investment in the securities represented on the index than would otherwise be
required.
9
Leveraged ETFs and inverse ETFs present all of the risks that regular ETFs
present. In addition, leveraged ETFs and inverse ETFs determine their return
over a specific, pre-set time period, typically daily, and, as a result, there
is no guarantee that the ETF's actual long term returns will be equal to the
daily return that the fund seeks to achieve. For example, on a long-term basis
(e.g., a period of 6 months or a year), the return of a leveraged ETF may in
fact be considerably less than two times the long-term return of the tracked
index. Furthermore, because leveraged ETFs and inverse ETFs achieve their
results by using derivative instruments, they are subject to the risks
associated with derivative transactions, including the risk that the value of
the derivatives may rise or fall more rapidly than other investments, thereby
causing the ETF to lose money and, consequently, the value of the fund's
investment to decrease. Investing in derivative instruments also involves the
risk that other parties to the derivative contract may fail to meet their
obligations, which could cause losses to the ETF. Short sales in particular are
subject to the risk that, if the price of the security sold short increases,
the inverse ETF may have to cover its short position at a higher price than the
short sale price, resulting in a loss to the inverse ETF and, indirectly, to
the fund. An ETF's use of these techniques will make the fund's investment in
the ETF more volatile than if the fund were to invest directly in the
securities underlying the tracked index, or in an ETF that does not use
leverage or derivative instruments. However, by investing in a leveraged ETF or
an inverse ETF rather than directly purchasing and/or selling derivative
instruments, the fund will limit its potential loss solely to the amount
actually invested in the ETF (that is, the fund will not lose more than the
principal amount invested in the ETF).
REAL ESTATE INVESTMENT TRUSTS ("REITS")
The fund may invest in REITs. REITs are companies that invest primarily in
income producing real estate or real estate-related loans or interests. Risks
associated with investments in REITs and other equity securities of real estate
industry issuers may include:
o The U.S. or a local real estate market declines due to adverse economic
conditions, foreclosures, 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 the fund's portfolio is, or is perceived by the market to be,
poorly managed
o If the fund's real estate related investments are concentrated in one
geographic area or property type, the fund will be particularly subject to
the risks associated with that area or property type
REITs are generally classified as equity REITs, mortgage REITs or a combination
of equity and mortgage REITs (known as hybrid REITs). Equity REITs invest the
majority of their assets directly in real property and derive income primarily
from the collection of rents. Equity REITs can also realize capital gains by
selling properties that have appreciated in value. Mortgage REITs invest the
majority of their assets in real estate mortgages and similar real estate
interests and derive income primarily from the collection of interest payments.
REITs are not taxed on income distributed to shareholders provided they comply
with the applicable requirements of the Code. The fund will indirectly bear its
proportionate share of any management and other expenses paid by REITs in which
it invests in addition to the expenses paid by the fund. Such indirect expenses
are not reflected in the fee table or expense example in the fund's prospectus.
Debt securities issued by REITs are, for the most part, general and unsecured
obligations and are subject to risks associated with REITs.
Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. An equity
REIT may be affected by changes in the value of the underlying properties owned
by the REIT. A mortgage REIT may be affected by changes in interest rates and
the ability of the issuers of its portfolio mortgages to repay their
obligations. Mortgage REITs are subject to the risks of default of the
mortgages or mortgage-related securities in which they invest, and REITs that
invest in
10
so-called "sub-prime" mortgages are particularly subject to this risk. REITs
are dependent upon the skills of their managers and are not diversified. REITs
are generally dependent upon maintaining cash flows to repay borrowings and to
make distributions to shareholders and are subject to the risk of default by
lessees or borrowers. REITs are typically invested in a limited number of
projects or in a particular market segment or geographic region. REITs whose
underlying assets are concentrated in properties in one geographic area or used
by a particular industry, such as health care, will be particularly subject to
risks associated with such area or industry.
REITs (especially mortgage REITs) are also subject to interest rate risks. When
interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely, when interest rates rise, the
value of a REIT's investment in fixed rate obligations can be expected to
decline. If the REIT invests in adjustable rate mortgage loans, the interest
rates on which are reset periodically, yields on a REIT's investments in such
loans will gradually align themselves to reflect changes in market interest
rates. This causes the value of such investments to fluctuate less dramatically
in response to interest rate fluctuations than would investments in fixed rate
obligations.
REITs may have limited financial resources, may trade less frequently and in a
limited volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically REITs have been more volatile in
price than the larger capitalization stocks included in the S&P 500.
Many real estate companies, including REITs, utilize leverage (and some may be
highly leveraged), which increases investment risk and could adversely affect a
real estate company's operations and market value. Mortgage REITs tend to be
more leveraged than equity REITs. In addition, many mortgage REITs manage their
interest rate and credit risks through the use of derivatives and other hedging
techniques. In addition, capital to pay or refinance a REIT's debt may not be
available or reasonably priced. Financial covenants related to real estate
company leveraging may affect the company's ability to operate effectively.
DERIVATIVE INSTRUMENTS
DERIVATIVES
The fund may, but is not required to, 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 fund may use
derivatives for a variety of purposes, including: in an attempt to hedge
against adverse changes in the market prices of securities, interest rates or
currency exchange rates; as a substitute for purchasing or selling securities;
to attempt to increase the fund's return as a non-hedging strategy that may be
considered speculative; to manage portfolio characteristics (for example, for
funds investing in securities denominated in non-U.S. currencies, a portfolio's
currency exposure, or, for funds investing in fixed income securities, a
portfolio's duration or credit quality); and as a cash flow management
technique. The fund may choose not to make use of derivatives for a variety of
reasons, and any use may be limited by applicable law and regulations.
Using derivatives exposes the fund to additional risks and may increase the
volatility of the fund's net asset value and may not provide the expected
result. Derivatives may have a leveraging effect on the portfolio. Leverage
generally magnifies the effect of a change in the value of an asset and creates
a risk of loss of value in a larger pool of assets than the fund would
otherwise have had. Therefore, using derivatives can disproportionately
increase losses and reduce opportunities for gain. If changes in a derivative's
value do not correspond to changes in the value of the fund's other investments
or do not correlate well with the underlying assets, rate or index, the fund
may not fully benefit from, or could lose money on, or could experience
unusually high expenses as a result of, the derivative position. Derivatives
involve the risk of loss if the counterparty defaults on its obligation.
Certain derivatives may be less liquid, which may reduce the returns of the
fund if it cannot sell or terminate the derivative at an advantageous time or
price. The fund also may have to sell assets at inopportune times to satisfy
its obligations. The fund may not be able
11
to purchase or sell a portfolio security at a time that would otherwise be
favorable for it to do so, or may have to sell a portfolio security at a
disadvantageous time or price to maintain cover or to segregate securities in
connection with its use of derivatives. Some derivatives may involve the risk
of improper valuation. Suitable derivatives may not be available in all
circumstances or at reasonable prices and may not be used by the fund for a
variety of reasons.
Financial reform laws enacted after the financial crisis of 2008-2009, such as
the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"),
are changing many aspects of financial regulation applicable to derivatives.
For instance, Dodd-Frank calls for the comprehensive regulation of swaps by the
Commodity Futures Trading Commission (the "CFTC") and the Securities and
Exchange Commission (the "SEC"). The CFTC and the SEC are in the process of
adopting and implementing new regulations applicable to these instruments,
including rules with respect to recordkeeping, reporting, business conduct,
relationship documentation, margin, collateral, clearing, and trade execution
requirements. In addition, Dodd-Frank requires the registration of certain
parties that deal or engage in substantial trading, execution or advisory
activities in the markets for swaps. The extent and impact of these regulations
are not yet fully known and may not be known for some time.
The fund's use of derivatives may be affected by other applicable laws and
regulations and may be subject to review by the SEC, the CFTC, exchange and
market authorities and other regulators in the United States and abroad. The
fund's ability to use derivatives may be limited by tax considerations.
Certain derivatives transactions, including certain options, swaps, forward
contracts, and certain options on foreign currencies, are entered into directly
by the counterparties or through financial institutions acting as market makers
(OTC derivatives), rather than being traded on exchanges or in markets
registered with the CFTC or the SEC. Many of the protections afforded to
exchange participants will not be available to participants in OTC derivatives
transactions. For example, OTC derivatives transactions are not subject to the
guarantee of an exchange, and only OTC derivatives that are either required to
be cleared or submitted voluntarily for clearing to a clearinghouse will enjoy
all of the protections that central clearing provides against default by the
original counterparty to the trade. In an OTC derivatives transaction that is
not cleared, the fund bears the risk of default by its counterparty. In a
cleared derivatives transaction, the fund is instead exposed to the risk of
default of the clearinghouse and, to the extent the fund has posted any margin,
the risk of default of the broker through which it has entered into the
transaction. Information available on counterparty creditworthiness may be
incomplete or outdated, thus reducing the ability to anticipate counterparty
defaults.
Derivatives involve operational risk. There may be incomplete or erroneous
documentation or inadequate collateral or margin, or transactions may fail to
settle. For derivatives not guaranteed by an exchange or clearinghouse, the
fund may have only contractual remedies in the event of a counterparty default,
and there may be delays, costs, or disagreements as to the meaning of
contractual terms and litigation in enforcing those remedies.
Swap contracts that are required to be cleared must be traded on a regulated
execution facility or contract market that makes them available for trading.
The establishment of a centralized exchange or market for swap transactions may
disrupt or limit the swap market and may not result in swaps being easier to
trade or value. Market-traded swaps may become more standardized, and the fund
may not be able to enter into swaps that meet its investment needs. The fund
also may not be able to find a clearinghouse willing to accept the swaps for
clearing. The new regulations may make using swaps more costly, may limit their
availability, or may otherwise adversely affect their value or performance.
Risks associated with the use of derivatives are magnified to the extent that a
large portion of the fund's assets are committed to derivatives in general or
are invested in just one or a few types of derivatives.
12
OPTIONS ON SECURITIES AND SECURITIES INDICES
The fund may purchase and write put and call options on any security in which
it may invest or options on any securities index based on securities in which
it may invest. The fund may also be able to enter into closing sale
transactions in order to realize gains or minimize losses on options it has
purchased.
WRITING CALL AND PUT OPTIONS ON SECURITIES. A call option written by the fund
obligates the fund to sell specified securities to the holder of the option at
a specified price if the option is exercised at any time before the expiration
date. The exercise price may differ from the market price of an underlying
security. The fund has the risk of loss that the price of an underlying
security may decline during the call period. The risk may be offset to some
extent by the premium the fund receives. If the value of the investment does
not rise above the call price, it's likely that the call will lapse without
being exercised. In that case, the fund would keep the cash premium and the
investment. All call options written by the fund are covered, which means that
the fund will own the securities subject to the options as long as the options
are outstanding, or the fund will use the other methods described below. The
fund's purpose in writing covered call options is to realize greater income
than would be realized on portfolio securities transactions alone. However, the
fund may forgo the opportunity to profit from an increase in the market price
of the underlying security.
A put option written by the fund would obligate the fund to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. The fund has no control over
when it may be required to purchase the underlying securities. All put options
written by the fund would be covered, which means that the fund would have
segregated assets with a value at least equal to the exercise price of the put
option. The purpose of writing such options is to generate additional income
for the fund. However, in return for the option premium, the fund accepts the
risk that it may be required to purchase the underlying security at a price in
excess of its market value at the time of purchase.
Call and put options written by the fund will also be considered to be covered
to the extent that the fund's liabilities under such options are wholly or
partially offset by its rights under call and put options purchased by the
fund. In addition, a written call option or put may be covered by entering into
an offsetting forward contract and/or by purchasing an offsetting option or any
other option which, by virtue of its exercise price or otherwise, reduces the
fund's net exposure on its written option position.
WRITING CALL AND PUT OPTIONS ON SECURITIES INDICES. The fund may also write
(sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
The fund may cover call options on a securities index by owning securities
whose price changes are expected to be similar to those of the underlying
index, or by having an absolute and immediate right to acquire such securities
without additional cash consideration (or for additional consideration if cash
in such amount is segregated) upon conversion or exchange of other securities
in its portfolio. The fund may cover call and put options on a securities index
by segregating assets with a value equal to the exercise price.
Index options are subject to the timing risk inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level on the date when the option is exercised. If a fund
has purchased an index option and exercises it before the closing index value
for that day is available, it runs the risk that the level of the underlying
index may subsequently change. If such a change causes the exercised option to
fall "out-of-the-money", the fund will be required to pay cash in an amount of
the difference between the closing index value and the exercise price of the
option.
13
PURCHASING CALL AND PUT OPTIONS. The fund would normally purchase call options
in anticipation of an increase in the market value of securities of the type in
which it may invest. The purchase of a call option would entitle the fund, in
return for the premium paid, to purchase specified securities at a specified
price during the option period. The fund would ordinarily realize a gain if,
during the option period, the value of such securities exceeded the sum of the
exercise price, the premium paid and transaction costs; otherwise the fund
would realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in
the market value of securities in its portfolio ("protective puts") or in
securities in which it may invest. The purchase of a put option would entitle
the fund, in exchange for the premium paid, to sell specified securities at a
specified price during the option period. The purchase of protective puts is
designed to offset or hedge against a decline in the market value of the fund's
securities. Put options may also be purchased by the fund for the purpose of
affirmatively benefiting from a decline in the price of securities which it
does not own. The fund would ordinarily realize a gain if, during the option
period, the value of the underlying securities decreased below the exercise
price sufficiently to more than cover the premium and transaction costs;
otherwise the fund would realize either no gain or a loss on the purchase of
the put option. Gains and losses on the purchase of protective put options
would tend to be offset by countervailing changes in the value of the
underlying portfolio securities.
The fund may terminate its obligations under an exchange-traded call or put
option by purchasing an option identical to the one it has written. Obligations
under over-the-counter options may be terminated only by entering into an
offsetting transaction with the counterparty to such option. Such purchases are
referred to as "closing purchase transactions."
OPTIONS SPREADS AND STRADDLES. Option spread and straddle transactions require
a fund to purchase and/or write more than one option simultaneously. A fund may
engage in option spread transactions in which it purchases and writes put or
call options on the same underlying instrument, with the options having
different exercise prices and/or expiration dates.
A fund also may engage in option straddles, in which it purchases or sells
combinations of put and call options on the same instrument. A long straddle is
a combination of a call and a put option purchased on the same security where
the exercise price of the put is less than or equal to the exercise price of
the call. A short straddle is a combination of a call and a put written on the
same security where the exercise price of the put is less than or equal to the
exercise price of the call and where the same issue of security or currency is
considered cover for both the put and the call.
RISKS OF TRADING OPTIONS. There is no assurance that a liquid secondary market
on an options exchange will exist for any particular exchange-traded option, or
at any particular time. If the fund is unable to effect a closing purchase
transaction with respect to covered options it has written, the fund will not
be able to sell the underlying securities or dispose of its segregated assets
until the options expire or are exercised. Similarly, if the fund is unable to
effect a closing sale transaction with respect to options it has purchased, it
will have to exercise the options in order to realize any profit and will incur
transaction costs upon the purchase or sale of underlying securities.
Reasons for the absence of a liquid secondary market on an exchange include the
following: (i) there may be insufficient trading interest in certain options;
(ii) restrictions may be imposed by an exchange on opening or closing
transactions or both; (iii) trading halts, suspensions or other restrictions
may be imposed with respect to particular classes or series of options; (iv)
unusual or unforeseen circumstances may interrupt normal operations on an
exchange; (v) the facilities of an exchange or the Options Clearing Corporation
(the "OCC") may not at all times be adequate to handle current trading volume;
or (vi) one or more exchanges could, for economic or other reasons, decide or
be compelled at some future date to discontinue the trading of options (or a
particular class or series of options), in which event the secondary market on
that
14
exchange (or in that class or series of options) would cease to exist, although
it is expected that outstanding options on that exchange, if any, that had been
issued by the OCC as a result of trades on that exchange would continue to be
exercisable in accordance with their terms.
The fund may purchase and sell both options that are traded on U.S. and
non-U.S. exchanges and options traded over-the-counter with broker-dealers who
make markets in these options. The ability to terminate over-the-counter
options is more limited than with exchange-traded options and may involve the
risk that broker-dealers participating in such transactions will not fulfill
their obligations. Until such time as the staff of the SEC changes its
position, the fund will treat purchased over-the-counter options and all assets
used to cover written over-the-counter options as illiquid securities, except
that with respect to options written with primary dealers in U.S. government
securities pursuant to an agreement requiring a closing purchase transaction at
a formula price, the amount of illiquid securities may be calculated with
reference to the formula.
Transactions by the fund in options on securities and indices will be subject
to limitations established by each of the exchanges, boards of trade or other
trading facilities governing the maximum number of options in each class which
may be written or purchased by a single investor or group of investors acting
in concert. Thus, the number of options which the fund may write or purchase
may be affected by options written or purchased by other investment advisory
clients of Pioneer. An exchange, board of trade or other trading facility may
order the liquidations of positions found to be in excess of these limits, and
it may impose certain other sanctions.
The writing and purchase of options is a highly specialized activity which
involves investment techniques and risks different from those associated with
ordinary portfolio securities transactions. The successful use of protective
puts for hedging purposes depends in part on the ability of Pioneer to predict
future price fluctuations and the degree of correlation between the options and
securities markets.
The hours of trading for options may not conform to the hours during which the
underlying securities are traded. To the extent that the options markets close
before the markets for the underlying securities, significant price movements
can take place in the underlying markets that cannot be reflected in the
options markets.
In addition to the risks of imperfect correlation between the portfolio and the
index underlying the option, the purchase of securities index options involves
the risk that the premium and transaction costs paid by the fund in purchasing
an option will be lost. This could occur as a result of unanticipated movements
in the price of the securities comprising the securities index on which the
option is based.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS
The fund may purchase and sell various kinds of futures contracts, and purchase
and write (sell) call and put options on any of such futures contracts. The
fund may enter into closing purchase and sale transactions with respect to any
futures contracts and options on futures contracts. The futures contracts may
be based on various securities (such as U.S. government securities), securities
indices, foreign currencies and other financial instruments and indices. The
fund may invest in futures contracts based on the Chicago Board of Exchange
Volatility Index ("VIX Futures"). The VIX is an index of market sentiment
derived from the S&P 500 option prices, and is designed to reflect investors'
consensus view of expected stock market volatility over future periods. The
fund may invest in futures and options based on credit derivative contracts on
baskets or indices of securities, such as CDX. The fund will engage in futures
and related options transactions for bona fide hedging and non-hedging purposes
as described below. All futures contracts entered into by the fund are traded
on U.S. exchanges or boards of trade that are licensed and regulated by the
CFTC or on non-U.S. exchanges.
FUTURES CONTRACTS. A futures contract may generally be described as an
agreement between two parties to buy and sell particular financial instruments
for an agreed price during a designated month (or to deliver the final cash
settlement price, in the case of a contract relating to an index or otherwise
not calling for physical delivery at the end of trading in the contract).
15
When interest rates are rising or securities prices are falling, the fund can
seek to offset a decline in the value of its current portfolio securities
through the sale of futures contracts. When interest rates are falling or
securities prices are rising, the fund, through the purchase of futures
contracts, can attempt to secure better rates or prices than might later be
available in the market when it effects anticipated purchases. Similarly, the
fund can sell futures contracts on a specified currency to protect against a
decline in the value of such currency and a decline in the value of its
portfolio securities which are denominated in such currency. The fund can
purchase futures contracts on a foreign currency to establish the price in U.S.
dollars of a security denominated in such currency that the fund has acquired
or expects to acquire.
Positions taken in the futures markets are not normally held to maturity but
are instead liquidated through offsetting transactions which may result in a
profit or a loss. While futures contracts on securities or currency will
usually be liquidated in this manner, the fund may instead make, or take,
delivery of the underlying securities or currency whenever it appears
economically advantageous to do so. A clearing corporation associated with the
exchange on which futures on securities or currency are traded guarantees that,
if still open, the sale or purchase will be performed on the settlement date.
HEDGING STRATEGIES. Hedging, by use of futures contracts, seeks to establish
with more certainty the effective price, rate of return and currency exchange
rate on portfolio securities and securities that the fund owns or proposes to
acquire. The fund may, for example, take a "short" position in the futures
market by selling futures contracts in order to hedge against an anticipated
rise in interest rates or a decline in market prices or foreign currency rates
that would adversely affect the value of the fund's securities. Such futures
contracts may include contracts for the future delivery of securities held by
the fund or securities with characteristics similar to those of the fund's
securities. Similarly, the fund may sell futures contracts in a foreign
currency in which its portfolio securities are denominated or in one currency
to hedge against fluctuations in the value of securities denominated in a
different currency if there is an established historical pattern of correlation
between the two currencies. If, in the opinion of Pioneer, there is a
sufficient degree of correlation between price trends for the fund's securities
and futures contracts based on other financial instruments, securities indices
or other indices, the fund may also enter into such futures contracts as part
of its hedging strategies. Although under some circumstances prices of
securities in the portfolio may be more or less volatile than prices of such
futures contracts, Pioneer will attempt to estimate the extent of this
volatility difference based on historical patterns and compensate for any such
differential by having the fund enter into a greater or lesser number of
futures contracts or by attempting to achieve only a partial hedge against
price changes affecting the fund's securities. When hedging of this character
is successful, any depreciation in the value of portfolio securities will be
substantially offset by appreciation in the value of the futures position. On
the other hand, any unanticipated appreciation in the value of the portfolio
securities would be substantially offset by a decline in the value of the
futures position.
On other occasions, the fund may take a "long" position by purchasing futures
contracts. This may be done, for example, when the fund anticipates the
subsequent purchase of particular securities when it has the necessary cash,
but expects the prices or currency exchange rates then available in the
applicable market to be less favorable than prices or rates that are currently
available.
OPTIONS ON FUTURES CONTRACTS. The acquisition of put and call options on
futures contracts will give the fund the right (but not the obligation) for a
specified price to sell or to purchase, respectively, the underlying futures
contract at any time during the option period. As the purchaser of an option on
a futures contract, the fund obtains the benefit of the futures position if
prices move in a favorable direction, but limits its risk of loss in the event
of an unfavorable price movement to the loss of the premium and transaction
costs.
The writing of a call option on a futures contract generates a premium which
may partially offset a decline in the value of the fund's assets. By writing a
call option, the fund becomes obligated, in exchange for the premium, to sell a
futures contract (if the option is exercised), which may have a value higher
than the exercise price. Conversely, the writing of a put option on a futures
contract generates a premium which may partially offset an increase in the
price of securities that the fund intends to purchase. However, the
16
fund becomes obligated to purchase a futures contract (if the option is
exercised) which may have a value lower than the exercise price. Thus, the loss
incurred by the fund in writing options on futures is potentially unlimited and
may exceed the amount of the premium received. The fund will incur transaction
costs in connection with the writing of options on futures.
The holder or writer of an option on a futures contract may terminate its
position by selling or purchasing an offsetting option on the same series.
There is no guarantee that such closing transactions can be effected. The
fund's ability to establish and close out positions on such options will be
subject to the development and maintenance of a liquid market.
OTHER CONSIDERATIONS REGARDING FUTURES CONTRACTS. The fund will engage in
transactions in futures contracts and related options only to the extent such
transactions are consistent with the requirements of the Code for maintaining
its qualification as a regulated investment company for U.S. federal income tax
purposes.
Futures contracts and related options involve brokerage costs, require margin
deposits and, in the case of contracts and options obligating the fund to
purchase securities or currencies, require the fund to segregate assets to
cover such contracts and options.
While transactions in futures contracts and options on futures may reduce
certain risks, such transactions themselves entail certain other risks. Thus,
while the fund may benefit from the use of futures and options on futures,
unanticipated changes in interest rates, securities prices or currency exchange
rates may result in a poorer overall performance for the fund than if it had
not entered into any futures contracts or options transactions. When futures
contracts and options are used for hedging purposes, perfect correlation
between the fund's futures positions and portfolio positions may be impossible
to achieve, particularly where futures contracts based on individual securities
are currently not available. In the event of an imperfect correlation between a
futures position and a portfolio position which is intended to be protected,
the desired protection may not be obtained and the fund may be exposed to risk
of loss. It is not possible to hedge fully or perfectly against the effect of
currency fluctuations on the value of non-U.S. securities because currency
movements impact the value of different securities in differing degrees.
If the fund were unable to liquidate a futures contract or an option on a
futures position due to the absence of a liquid secondary market, the
imposition of price limits or otherwise, it could incur substantial losses. The
fund would continue to be subject to market risk with respect to the position.
In addition, except in the case of purchased options, the fund would continue
to be required to make daily variation margin payments and might be required to
maintain the position being hedged by the future or option or to maintain cash
or securities in a segregated account.
EQUITY SWAPS, CAPS, FLOORS AND COLLARS
The fund may enter into equity swaps, caps, floors and collars to hedge assets
or liabilities or to seek to increase total return. Equity swaps involve the
exchange by a fund with another party of their respective commitments to make
or receive payments based on notional equity securities. The purchase of an
equity cap entitles the purchaser, to the extent that the market value of a
specified equity security or benchmark exceeds a predetermined level, to
receive payments of a contractually based amount from the party selling the
cap. The purchase of an equity floor entitles the purchaser, to the extent that
the market value of a specified equity security or benchmark falls below a
predetermined level, to receive payments of a contractually based amount from
the party selling the floor. A collar is a combination of a cap and a floor
that preserves a certain return within a predetermined range of values.
Investments in swaps, caps, floors and collars are highly specialized
activities which involve investment techniques and risks different from those
associated with ordinary portfolio transactions. Investments in equity swaps,
caps, floors and collars may be considered speculative because they involve
significant risk of loss. If Pioneer is incorrect in its forecast of market
values, these investments could negatively impact the fund's performance. These
investments also are
17
subject to default risk of the counterparty and may be less liquid than other
portfolio securities. Moreover, investments in swaps, caps, floors and collars
may involve greater transaction costs than investments in other equity
securities.
FINANCIAL FUTURES AND OPTIONS TRANSACTIONS
Pioneer has claimed an exclusion from registration as a "commodity pool
operator" with respect to the fund under the Commodity Exchange Act (the
"CEA"), and, therefore, Pioneer will not, with respect to its management of the
fund, be subject to registration or regulation as a commodity pool operator.
Under this exemption, the fund will remain limited in its ability to trade
instruments subject to the jurisdiction of the CFTC, including commodity
futures (which include futures on broad-based securities indexes and interest
rate futures), options on commodity futures and swaps. This limitation also
applies with respect to any indirect exposure that the fund may have to these
instruments through investments in other funds. Pioneer may have to rely on
representations from the underlying fund's manager about the amount (or maximum
permitted amount) of investment exposure that the underlying fund has to
instruments such as commodity futures, options on commodity futures and swaps.
Under this exemption, the fund must satisfy one of the following two trading
limitations at all times: (1) the aggregate initial margin and premiums
required to establish the fund's positions in commodity futures, options on
commodity futures, swaps and other CFTC-regulated instruments may not exceed 5%
of the liquidation value of the fund's portfolio (after accounting for
unrealized profits and unrealized losses on any such investments); or (2) the
aggregate net notional value of such instruments, determined at the time the
most recent position was established, may not exceed 100% of the liquidation
value of the fund's portfolio (after accounting for unrealized profits and
unrealized losses on any such positions). The fund would not be required to
consider its exposure to such instruments if they were held for "bona fide
hedging" purposes, as such term is defined in the rules of the CFTC. In
addition to meeting one of the foregoing trading limitations, the fund may not
market itself as a commodity pool or otherwise as a vehicle for trading in the
markets for CFTC-regulated instruments.
DEBT SECURITIES AND RELATED INVESTMENTS
DEBT SECURITIES SELECTION
In selecting debt securities for the fund, Pioneer gives primary consideration
to the fund's investment objective, the attractiveness of the market for debt
securities given the outlook of Pioneer for the equity markets and the fund's
liquidity requirements. Once Pioneer determines to allocate a portion of the
fund's assets to debt securities, Pioneer generally focuses on short-term
instruments to provide liquidity and may invest in a range of fixed income
securities if the fund is investing in such instruments for income or capital
gains. Pioneer selects individual securities based on broad economic factors
and issuer-specific factors including the terms of the securities (such as
yields compared to U.S. Treasuries or comparable issues), liquidity and rating,
sector and issuer diversification.
DEBT SECURITIES RATING INFORMATION
Investment grade debt securities are those rated "BBB" or higher by Standard &
Poor's Ratings Group ("Standard & Poor's") or the equivalent rating of other
nationally recognized statistical rating organizations. Debt securities rated
BBB are considered medium grade obligations with speculative characteristics,
and adverse economic conditions or changing circumstances may weaken the
issuer's ability to pay interest and repay principal.
Below investment grade debt securities are those rated "BB" and below by
Standard & Poor's or the equivalent rating of other nationally recognized
statistical rating organizations. See "Appendix A" for a description of rating
categories. The fund may invest in debt securities rated "C" or better, or
comparable unrated securities as determined by Pioneer.
18
Below investment grade debt securities or comparable unrated securities are
commonly referred to as "junk bonds" and are considered predominantly
speculative and may be questionable as to principal and interest payments.
Changes in economic conditions are more likely to lead to a weakened capacity
to make principal payments and interest payments. The issuers of high yield
securities also may be more adversely affected than issuers of higher rated
securities by specific corporate or governmental developments or the issuers'
inability to meet specific projected business forecasts. The amount of high
yield securities outstanding has proliferated as an increasing number of
issuers have used high yield securities for corporate financing. The recent
economic downturn has severely affected the ability of many highly leveraged
issuers to service their debt obligations or to repay their obligations upon
maturity. Factors having an adverse impact on the market value of lower quality
securities will have an adverse effect on the fund's net asset value to the
extent that it invests in such securities. In addition, the fund may incur
additional expenses to the extent it is required to seek recovery upon a
default in payment of principal or interest on its portfolio holdings or to
take other steps to protect its investment in an issuer.
The secondary market for high yield securities is not usually as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. Under adverse market or economic
conditions, such as those recently prevailing, the secondary market for high
yield securities could contract further, independent of any specific adverse
changes in the condition of a particular issuer. As a result, the fund could
find it more difficult to sell these securities or may be able to sell the
securities only at prices lower than if such securities were widely traded.
Prices realized upon the sale of such lower rated or unrated securities, under
these and other circumstances, may be less than the prices used in calculating
the fund's net asset value.
Since investors generally perceive that there are greater risks associated with
lower quality debt securities of the type in which the fund may invest, the
yields and prices of such securities may tend to fluctuate more than those for
higher rated securities. In the lower quality segments of the debt securities
market, changes in perceptions of issuers' creditworthiness tend to occur more
frequently and in a more pronounced manner than do changes in higher quality
segments of the debt securities market, resulting in greater yield and price
volatility.
Lower rated and comparable unrated debt securities tend to offer higher yields
than higher rated securities with the same maturities because the historical
financial condition of the issuers of such securities may not have been as
strong as that of other issuers. However, lower rated securities generally
involve greater risks of loss of income and principal than higher rated
securities.
For purposes of the fund's credit quality policies, if a security receives
different ratings from nationally recognized statistical rating organizations,
the fund will use the rating chosen by the portfolio manager as most
representative of the security's credit quality. The ratings of nationally
recognized statistical rating organizations represent their opinions as to the
quality of the securities that they undertake to rate and may not accurately
describe the risk of the security. If a rating organization changes the quality
rating assigned to one or more of the fund's portfolio securities, Pioneer will
consider if any action is appropriate in light of the fund's investment
objective and policies.
U.S. GOVERNMENT SECURITIES
U.S. government securities in which the fund invests include debt obligations
of varying maturities issued by the U.S. Treasury or issued or guaranteed by an
agency, authority or instrumentality of the U.S. government, including the
Federal Housing Administration, Federal Financing Bank, Farm Service Agency,
Export-Import Bank of the U.S., Small Business Administration, Government
National Mortgage Association ("GNMA"), General Services Administration,
National Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan
Banks ("FHLBs"), Federal Home Loan Mortgage Corporation ("FHLMC"), Federal
National Mortgage Association ("FNMA"), Maritime Administration, Tennessee
Valley Authority and various institutions that previously were or currently are
part of the Farm Credit System (which has been undergoing reorganization
19
since 1987). Some U.S. government securities, such as U.S. Treasury bills,
Treasury notes and Treasury bonds, which differ only in their interest rates,
maturities and times of issuance, are supported by the full faith and credit of
the United States. Others are supported by: (i) the right of the issuer to
borrow from the U.S. Treasury, such as securities of the FHLBs; (ii) the
discretionary authority of the U.S. government to purchase the agency's
obligations, such as securities of FNMA; or (iii) only the credit of the
issuer. Such debt securities are subject to the risk of default on the payment
of interest and/or principal, similar to debt of private issuers. The maximum
potential liability of some U.S. government securities may greatly exceed their
current resources, including any legal right to support from the U.S.
government. Although the U.S. government provided financial support to FNMA and
FHLMC in the past, no assurance can be given that the U.S. government will
provide financial support in the future to these or other U.S. government
agencies, authorities or instrumentalities that are not supported by the full
faith and credit of the United States. Securities guaranteed as to principal
and interest by the U.S. government, its agencies, authorities or
instrumentalities include: (i) securities for which the payment of principal
and interest is backed by an irrevocable letter of credit issued by the U.S.
government or any of its agencies, authorities or instrumentalities; and (ii)
participations in loans made to non-U.S. governments or other entities that are
so guaranteed. The secondary market for certain loan participations described
above is limited and, therefore, the participations may be regarded as
illiquid.
U.S. government securities may include zero coupon securities that may be
purchased when yields are attractive and/or to enhance portfolio liquidity.
Zero coupon U.S. government securities are debt obligations that are issued or
purchased at a significant discount from face value. The discount approximates
the total amount of interest the security will accrue and compound over the
period until maturity or the particular interest payment date at a rate of
interest reflecting the market rate of the security at the time of issuance.
Zero coupon U.S. government securities do not require the periodic payment of
interest. These investments may experience greater volatility in market value
than U.S. government securities that make regular payments of interest. The
fund accrues income on these investments for tax and accounting purposes, which
is distributable to shareholders and which, because no cash is received at the
time of accrual, may require the liquidation of other portfolio securities to
satisfy the fund's distribution obligations, in which case the fund will forgo
the purchase of additional income producing assets with these funds. Zero
coupon U.S. government securities include STRIPS and CUBES, which are issued by
the U.S. Treasury as component parts of U.S. Treasury bonds and represent
scheduled interest and principal payments on the bonds.
CONVERTIBLE DEBT SECURITIES
The fund may invest in convertible debt securities which are debt obligations
convertible at a stated exchange rate or formula into common stock or other
equity securities. Convertible securities rank senior to common stocks in an
issuer's capital structure and consequently may be of higher quality and entail
less risk than the issuer's common stock. As with all debt securities, the
market values of convertible securities tend to increase when interest rates
decline and, conversely, tend to decline when interest rates increase.
Depending on the relationship of the conversion price to the market value of
the underlying securities, convertible securities may trade more like equity
securities than debt securities.
A convertible security entitles the holder to receive interest that is
generally paid or accrued until the convertible security matures, or is
redeemed, converted, or exchanged. Convertible securities have unique
investment characteristics, in that they generally (i) have higher yields than
common stocks, but lower yields than comparable non-convertible securities,
(ii) are less subject to fluctuation in value than the underlying common stock
due to their fixed-income characteristics and (iii) provide the potential for
capital appreciation if the market price of the underlying common stock
increases. A convertible security may be subject to redemption at the option of
the issuer at a price established in the convertible security's governing
instruments. If a convertible security held by the fund is called for
redemption, the fund will be required to permit the issuer to redeem the
security, convert it into the underlying common stock or sell it to a third
party. Any of these actions could result in losses to the fund.
20
OTHER INVESTMENTS AND INVESTMENT TECHNIQUES
SHORT-TERM INVESTMENTS
For temporary defensive or cash management purposes, the fund may invest in all
types of short-term investments including, but not limited to, (a) commercial
paper and other short-term commercial obligations; (b) obligations (including
certificates of deposit and bankers' acceptances) of banks; (c) obligations
issued or guaranteed by a governmental issuer, including governmental agencies
or instrumentalities; (d) fixed income securities of non-governmental issuers;
and (e) other cash equivalents or cash. Subject to the fund's restrictions
regarding investment in non-U.S. securities, these securities may be
denominated in any currency. Although these investments generally are rated
investment grade or are determined by Pioneer to be of equivalent credit
quality, the fund may also invest in these instruments if they are rated below
investment grade in accordance with its investment objective, policies and
restrictions.
ILLIQUID SECURITIES
The fund may invest up to 15% of its net assets in illiquid and other
securities that are not readily marketable. If due to subsequent fluctuations
in value or any other reasons, the value of the fund's illiquid securities
exceeds this percentage limitation, the fund will consider what actions, if
any, are necessary to maintain adequate liquidity. Repurchase agreements
maturing in more than seven days will be included for purposes of the foregoing
limit. Securities subject to restrictions on resale under the Securities Act of
1933, as amended (the "1933 Act"), are considered illiquid unless they are
eligible for resale pursuant to Rule 144A or another exemption from the
registration requirements of the 1933 Act and are determined to be liquid by
Pioneer. Pioneer determines the liquidity of Rule 144A and other restricted
securities according to procedures adopted by the Board of Trustees. Under the
direction of the Board of Trustees, Pioneer monitors the application of these
guidelines and procedures. The inability of the fund to dispose of illiquid
investments readily or at reasonable prices could impair the fund's ability to
raise cash for redemptions or other purposes. If the fund sold restricted
securities other than pursuant to an exception from registration under the 1933
Act such as Rule 144A, it may be deemed to be acting as an underwriter and
subject to liability under the 1933 Act.
REPURCHASE AGREEMENTS
The fund may enter into repurchase agreements with broker-dealers, member banks
of the Federal Reserve System and other financial institutions. Repurchase
agreements are arrangements under which the fund purchases securities and the
seller agrees to repurchase the securities within a specific time and at a
specific price. The repurchase price is generally higher than the fund's
purchase price, with the difference being income to the fund. A repurchase
agreement may be considered a loan by the fund collateralized by securities.
Under the direction of the Board of Trustees, Pioneer reviews and monitors the
creditworthiness of any institution which enters into a repurchase agreement
with the fund. The counterparty's obligations under the repurchase agreement
are collateralized with U.S. Treasury and/or agency obligations with a market
value of not less than 100% of the obligations, valued daily. Collateral is
held by the fund's custodian in a segregated, safekeeping account for the
benefit of the fund. Repurchase agreements afford the fund an opportunity to
earn income on temporarily available cash. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If
the court characterizes the transaction as a loan and the fund has not
perfected a security interest in the security, the fund may be required to
return the security to the seller's estate and be treated as an unsecured
creditor of the seller. As an unsecured creditor, the fund would be at risk of
losing some or all of the principal and interest involved in the transaction.
There is no specific limit on the fund's ability to enter into repurchase
agreements. The SEC frequently treats repurchase agreements as loans for
purposes of the 1940 Act.
21
REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements involve the sale of securities to a bank or other
institution with an agreement that the fund will buy back the securities at a
fixed future date at a fixed price plus an agreed amount of "interest" which
may be reflected in the repurchase price. Reverse repurchase agreements involve
the risk that the market value of securities purchased by the fund with
proceeds of the transaction may decline below the repurchase price of the
securities sold by the fund that it is obligated to repurchase. The fund will
also continue to be subject to the risk of a decline in the market value of the
securities sold under the agreements because it will reacquire those securities
upon effecting their repurchase. Reverse repurchase agreements may be
considered to be a type of borrowing. The 1940 Act permits a fund to borrow
money in amounts of up to one-third of the fund's total assets from banks for
any purpose and up to 5% of the fund's total assets from banks and other
lenders for temporary purposes. The fund will segregate assets in an amount at
least equal to the repurchase price of the securities.
SHORT SALES AGAINST THE BOX
The fund may sell securities "short against the box." A short sale involves the
fund borrowing securities from a broker and selling the borrowed securities.
The fund has an obligation to return securities identical to the borrowed
securities to the broker. In a short sale against the box, the fund at all
times owns an equal amount of the security sold short or securities convertible
into or exchangeable for, with or without payment of additional consideration,
an equal amount of the security sold short. The fund intends to use short sales
against the box to hedge. For example when the fund believes that the price of
a current portfolio security may decline, the fund may use a short sale against
the box to lock in a sale price for a security rather than selling the security
immediately. In such a case, any future losses in the fund's long position
should be offset by a gain in the short position and, conversely, any gain in
the long position should be reduced by a loss in the short position. The fund
may engage in short sales of securities only against the box.
If the fund effects a short sale against the box at a time when it has an
unrealized gain on the security, it may be required to recognize that gain as
if it had actually sold the security (a "constructive sale") on the date it
effects the short sale. However, such constructive sale treatment may not apply
if the fund closes out the short sale with securities other than the
appreciated securities held at the time of the short sale provided that certain
other conditions are satisfied. Uncertainty regarding the tax consequences of
effecting short sales may limit the extent to which the fund may make short
sales against the box.
DOLLAR ROLLS
The fund may enter into mortgage "dollar rolls" in which the fund sells
securities for delivery in the current month and simultaneously contracts with
the same counterparty to repurchase similar (same type, coupon and maturity),
but not identical securities on a specified future date. During the roll
period, the fund loses the right to receive principal and interest paid on the
securities sold. However, the fund would benefit to the extent of any
difference between the price received for the securities sold and the lower
forward price for the future purchase (often referred to as the "drop") or fee
income plus the interest earned on the cash proceeds of the securities sold
until the settlement date of the forward purchase. Unless such benefits exceed
the income, capital appreciation and gain or loss due to mortgage prepayments
that would have been realized on the securities sold as part of the mortgage
dollar roll, the use of this technique will diminish the investment performance
of the fund compared with what such performance would have been without the use
of mortgage dollar rolls. All cash proceeds will be invested in instruments
that are permissible investments for the fund. The fund will hold and maintain
in a segregated account until the settlement date cash or liquid securities in
an amount equal to its forward purchase price.
For financial reporting and tax purposes, the fund treats mortgage dollar rolls
as two separate transactions; one involving the purchase of a security and a
separate transaction involving a sale.
22
Dollar rolls involve certain risks including the following: if the
broker-dealer to whom the fund sells the security becomes insolvent, the fund's
right to purchase or repurchase the securities subject to the dollar roll may
be restricted and the instrument which the fund is required to repurchase may
be worth less than an instrument which the fund originally held. Successful use
of dollar rolls will depend upon Pioneer's ability to manage its interest rate
and prepayment exposure. There is no assurance that dollar rolls can be
successfully employed.
ASSET SEGREGATION
The 1940 Act requires that the fund segregate assets in connection with certain
types of transactions that may have the effect of leveraging the portfolio. If
the fund enters into a transaction requiring segregation, such as a forward
commitment or a reverse repurchase agreement, the custodian or Pioneer will
segregate liquid assets in an amount required to comply with the 1940 Act. Such
segregated assets will be valued at market daily. If the aggregate value of
such segregated assets declines below the aggregate value required to satisfy
the 1940 Act, additional liquid assets will be segregated. In some instances a
fund may "cover" its obligation using other methods to the extent permitted
under the 1940 Act, orders or releases issued by the SEC thereunder, or
no-action letters or other guidance of the SEC staff.
PORTFOLIO TURNOVER
It is the policy of the fund not to engage in trading for short-term profits,
although portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the fund. A high rate of portfolio
turnover (100% or more) involves correspondingly greater transaction costs
which must be borne by the fund and its shareholders. See "Annual Fee, Expense
and Other Information" for the fund's annual portfolio turnover rate.
LENDING OF PORTFOLIO SECURITIES
The fund may lend portfolio securities to registered broker-dealers or other
institutional investors deemed by Pioneer to be of good standing under
agreements which require that the loans be secured continuously by collateral
in the form of cash, cash equivalents, U.S. Government securities or
irrevocable letters of credit issued by banks approved by the fund. The value
of the collateral is monitored on a daily basis and the borrower is required to
maintain the collateral at an amount at least equal to the market value of the
securities loaned. The fund continues to receive the equivalent of the interest
or dividends paid by the issuer on the securities loaned and continues to have
all of the other risks associated with owning the securities. Where the
collateral received is cash, the cash will be invested and the fund will be
entitled to a share of the income earned on the investment, but will also be
subject to investment risk on the collateral and will bear the entire amount of
any loss in connection with investment of such collateral. The fund may pay
administrative and custodial fees in connection with loans of securities and,
where the collateral received is cash, the fund may pay a portion of the income
earned on the investment of collateral to the borrower, lending agent or other
intermediary. Fees and expenses paid by the fund in connection with loans of
securities are not reflected in the fee table or expense example in the fund's
prospectus. If the income earned on the investment of the cash collateral is
insufficient to pay these amounts or if the value of the securities purchased
with such cash collateral declines, the fund may take a loss on the loan. Where
the fund receives securities as collateral, the fund will earn no income on the
collateral, but will earn a fee from the borrower. The fund reserves the right
to recall loaned securities so that it may exercise voting rights on loaned
securities according to the fund's Proxy Voting Policies and Procedures.
The risk in lending portfolio securities, as with other extensions of credit,
consists of the possibility of loss to the fund due to (i) the inability of the
borrower to return the securities, (ii) a delay in receiving additional
collateral to adequately cover any fluctuations in the value of securities on
loan, (iii) a delay in recovery of the securities, or (iv) the loss of rights
in the collateral should the borrower fail financially. In addition, as noted
above, the fund continues to have market risk and other risks associated with
owning the securities on loan. Where the collateral delivered by the borrower
is cash, the fund will also have the risk of loss of principal and interest in
connection with its investment of collateral. If a borrower defaults, the value
of the
23
collateral may decline before the fund can dispose of it. The fund will lend
portfolio securities only to firms that have been approved in advance by
Pioneer, which will monitor the creditworthiness of any such firms. However,
this monitoring may not protect the fund from loss. At no time would the value
of the securities loaned exceed 33 1/3% of the value of the fund's total
assets.
INTERFUND LENDING
To satisfy redemption requests or to cover unanticipated cash shortfalls, a
fund may enter into lending agreements ("Interfund Lending Agreements") under
which the fund would lend money and borrow money for temporary purposes
directly to and from another Pioneer fund through a credit facility ("Interfund
Loan"), subject to meeting the conditions of an SEC exemptive order granted to
the funds permitting such interfund lending. All Interfund Loans will consist
only of uninvested cash reserves that the fund otherwise would invest in
short-term repurchase agreements or other short-term instruments.
If a fund has outstanding borrowings, any Interfund Loans to the fund (a) will
be at an interest rate equal to or lower than any outstanding bank loan, (b)
will be secured at least on an equal priority basis with at least an equivalent
percentage of collateral to loan value as any outstanding bank loan that
requires collateral, (c) will have a maturity no longer than any outstanding
bank loan (and in any event not over seven days) and (d) will provide that, if
an event of default occurs under any agreement evidencing an outstanding bank
loan to the fund, the event of default will automatically (without need for
action or notice by the lending fund) constitute an immediate event of default
under the Interfund Lending Agreement entitling the lending fund to call the
Interfund Loan (and exercise all rights with respect to any collateral) and
that such call will be made if the lending bank exercises its right to call its
loan under its agreement with the borrowing fund.
A fund may make an unsecured borrowing through the credit facility if its
outstanding borrowings from all sources immediately after the interfund
borrowing total 10% or less of its total assets; provided, that if the fund has
a secured loan outstanding from any other lender, including but not limited to
another Pioneer fund, the fund's interfund borrowing will be secured on at
least an equal priority basis with at least an equivalent percentage of
collateral to loan value as any outstanding loan that requires collateral. If a
fund's total outstanding borrowings immediately after an interfund borrowing
would be greater than 10% of its total assets, the fund may borrow through the
credit facility on a secured basis only. A fund may not borrow through the
credit facility nor from any other source if its total outstanding borrowings
immediately after the interfund borrowing would be more than 33 1/3% of its
total assets.
No fund may lend to another fund through the interfund lending credit facility
if the loan would cause its aggregate outstanding loans through the credit
facility to exceed 15% of the lending fund's net assets at the time of the
loan. A fund's Interfund Loans to any one fund shall not exceed 5% of the
lending fund's net assets. The duration of Interfund Loans is limited to the
time required to receive payment for securities sold, but in no event more than
seven days. Loans effected within seven days of each other will be treated as
separate loan transactions for purposes of this condition. Each Interfund Loan
may be called on one business day's notice by a lending fund and may be repaid
on any day by a borrowing fund.
The limitations detailed above and the other conditions of the SEC exemptive
order permitting interfund lending are designed to minimize the risks
associated with interfund lending for both the lending fund and the borrowing
fund. However, no borrowing or lending activity is without risk. When a fund
borrows money from another fund, there is a risk that the loan could be called
on one day's notice or not renewed, in which case the fund may have to borrow
from a bank at higher rates if an Interfund Loan were not available from
another fund. A delay in repayment to a lending fund could result in a lost
opportunity or additional lending costs.
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES
The fund may purchase securities, including U.S. government securities, on a
when-issued basis or may purchase or sell securities for delayed delivery. In
such transactions, delivery of the securities occurs beyond the normal
settlement period, but no payment or delivery is made by the fund prior to the
actual delivery or payment by the other party to the transaction. The fund will
not earn income on these securities until
24
delivered. The purchase of securities on a when-issued or delayed delivery
basis involves the risk that the value of the securities purchased will decline
prior to the settlement date. The sale of securities for delayed delivery
involves the risk that the prices available in the market on the delivery date
may be greater than those obtained in the sale transaction. When the fund
enters into when-issued or delayed delivery transactions it will segregate
liquid assets with a value equal to the fund's obligations. See "Asset
Segregation."
DISCLOSURE OF PORTFOLIO HOLDINGS
The Board of Trustees has adopted policies and procedures relating to
disclosure of the Pioneer funds' portfolio securities. These policies and
procedures are designed to provide a framework for disclosing information
regarding portfolio holdings, portfolio composition or other portfolio
characteristics consistent with applicable federal securities laws and
regulations and general principles of fiduciary duty relating to fund
shareholders. While Pioneer may manage other separate accounts and unregistered
products that have substantially similar investment strategies to those of
another Pioneer fund, and therefore portfolio holdings that may be
substantially similar, and in some cases nearly identical, to such fund, these
policies and procedures only relate to the disclosure of portfolio information
of the Pioneer funds that are registered management companies. Separate account
and unregistered product clients are not subject to these policies and
procedures. Separate account and unregistered product clients of Pioneer have
access to their portfolio holdings, and prospective clients have access to
representative holdings.
Generally, Pioneer will make a fund's full portfolio information available to
the public on a monthly basis with an appropriate delay based upon the nature
of the information disclosed. Pioneer normally will publish a fund's full
portfolio holdings thirty (30) days after the end of each month (this time
period may be different for certain funds. Such information shall be made
available on the funds' website (us.pioneerinvestments.com) and may be sent to
rating agencies, reporting/news services and financial intermediaries, upon
request. In addition, Pioneer generally makes publicly available information
regarding a fund's top ten holdings (including the percentage of a fund's
assets represented by each security), the percentage breakdown of a fund's
investments by country, sector and industry, various volatility measures (such
as beta, standard deviation, etc.), market capitalization ranges and other
portfolio characteristics (such as alpha, average P/E ratio, etc.) three (3)
business days after the end of each month.
Pioneer may provide a fund's full portfolio holdings or other information to
certain entities prior to the date such information is made public, provided
that certain conditions are met. The entities to which such disclosure may be
made as of the date of this statement of additional information are rating
agencies, plan sponsors, prospective separate account clients and other
financial intermediaries (i.e., organizations evaluating a fund for purposes of
investment by their clients, such as broker-dealers, investment advisers,
banks, insurance companies, financial planning firms, plan sponsors, plan
administrators, shareholder servicing organizations and pension consultants).
The third party must agree to a limited use of that information which does not
conflict with the interests of the fund's shareholders, to use the information
only for that authorized purpose, to keep such information confidential, and
not to trade on such information. The Board of Trustees considered the
disclosure of portfolio holdings information to these categories of entities to
be consistent with the best interests of shareholders in light of the agreement
to maintain the confidentiality of such information and only to use such
information for the limited and approved purposes. Pioneer's compliance
department, the local head of investment management and the global chief
investment officer may, but only acting jointly, grant exemptions to this
policy. Exemptions may be granted only if these persons determine that
providing such information is consistent with the interests of shareholders and
the third party agrees to limit the use of such information only for the
authorized purpose, to keep such information confidential, and not to trade on
such information. Although the Board of Trustees will periodically be informed
of exemptions granted, granting exemptions entails the risk that portfolio
holdings information may be provided to entities that use the information in a
manner inconsistent with their obligations and the best interests of a fund.
25
Currently, Pioneer, on behalf of the Pioneer funds, has ongoing arrangements
whereby the following entities may receive a fund's full portfolio holdings or
other information prior to the date such information is made public:
Metropolitan Life Insurance Company (within 30 days after month end for board
materials and advance preparation of marketing materials, as needed to evaluate
Pioneer funds); Roszel Advisors (within 30 days after month end for due
diligence and review of certain Pioneer funds included in fund programs);
Oppenheimer & Co. (within 30 days after month end for due diligence and review
of certain Pioneer funds included in fund programs); UBS (within 15 days after
month end for due diligence and review of certain Pioneer funds included in
fund programs); Beacon Pointe Advisors (as needed for quarterly review of
certain Pioneer funds); Commonwealth Financial Network (within 30 days after
month end for risk analysis on funds on behalf of their clients); Hartford
Retirement Services, LLC (as needed for risk analysis on funds on behalf of
their clients); Transamerica Life Insurance Company (as needed for performance
and risk analysis on funds on behalf of their clients); TIBCO Software
Inc./Spotfire Division (as needed to evaluate and develop portfolio reporting
software); Curcio Webb, LLC (as needed for evaluation and research purposes);
Fidelity Investments (as needed to evaluate Pioneer funds); Egan Jones Ratings
Company (as needed in order to evaluate and select Nationally Recognized
Statistical Rating Organizations (NRSROs)); DBRS Limited (as needed in order to
evaluate and select NRSROs); Wells Fargo Advisors (as needed for risk analysis
on funds on behalf of their clients and product review); and Capital Market
Consultants (as needed to complete quarterly due diligence research).
Compliance with the funds' portfolio holdings disclosure policy is subject to
periodic review by the Board of Trustees, including a review of any potential
conflicts of interest in the disclosures made by Pioneer in accordance with the
policy or the exceptions permitted under the policy. Any change to the policy
to expand the categories of entities to which portfolio holdings may be
disclosed or an increase in the purposes for which such disclosure may be made
would be subject to approval by the Board of Trustees and, reflected, if
material, in a supplement to the fund's statement of additional information.
The funds' full portfolio holdings disclosure policy is not intended to prevent
the disclosure of any and all portfolio information to the funds' service
providers who generally need access to such information in the performance of
their contractual duties and responsibilities, such as Pioneer, the funds'
custodian, fund accounting agent, principal underwriter, investment
sub-adviser, if any, independent registered public accounting firm or counsel.
In approving the policy, the Board of Trustees considered that the service
providers are subject to duties of confidentiality and duties not to trade on
non-public information arising under law or contract that provide an adequate
safeguard for such information. None of Pioneer, the funds, or any other party
receive any compensation or other consideration from any arrangement pertaining
to the release of a fund's full portfolio holdings information.
In addition, the funds make their portfolio holdings available semi-annually in
shareholder reports filed on Form N-CSR and after the first and third fiscal
quarters in regulatory filings on Form N-Q. These shareholder reports and
regulatory filings are filed with the SEC, as required by the federal
securities laws. Form N-Q is filed with the SEC within sixty (60) days after
the end of a fund's first and third fiscal quarters. Form N-CSR is filed with
the SEC within ten (10) days after the transmission to shareholders of a fund's
annual or semi-annual report, as applicable.
INVESTMENT RESTRICTIONS
FUNDAMENTAL INVESTMENT POLICIES
The fund has adopted certain fundamental investment policies which may not be
changed without the affirmative vote of the holders of a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the fund. For
this purpose, a majority of the outstanding shares of the fund means the vote
of the lesser of:
(1) 67% or more of the shares represented at a meeting, if the holders of
more than 50% of the outstanding shares are present in person or by
proxy; or
26
(2) more than 50% of the outstanding shares of the fund.
The fund's fundamental policies are as follows:
(1) The fund may not borrow money except as permitted by (i) the 1940 Act, or
interpretations or modifications by the SEC, SEC staff or other authority
of competent jurisdiction, or (ii) exemptive or other relief or
permission from the SEC, SEC staff or other authority of competent
jurisdiction.
(2) The fund may not engage in the business of underwriting the securities of
other issuers except as permitted by (i) the 1940 Act, or interpretations
or modifications by the SEC, SEC staff or other authority of competent
jurisdiction, or (ii) exemptive or other relief or permission from the
SEC, SEC staff or other authority of competent jurisdiction.
(3) The fund may lend money or other assets to the extent permitted by (i)
the 1940 Act, or interpretations or modifications by the SEC, SEC staff
or other authority of competent jurisdiction or (ii) exemptive or other
relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction.
(4) The fund may not issue senior securities except as permitted by (i) the
1940 Act, or interpretations or modifications by the SEC, SEC staff or
other authority of competent jurisdiction, or (ii) exemptive or other
relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction.
(5) The fund may not purchase or sell real estate except as permitted by (i)
the 1940 Act, or interpretations or modifications by the SEC, SEC staff
or other authority of competent jurisdiction, or (ii) exemptive or other
relief or permission from the SEC, SEC staff or other authority of
competent jurisdiction.
(6) The fund may purchase or sell commodities or contracts related to
commodities to the extent permitted by (i) the 1940 Act, or
interpretations or modifications by the SEC, SEC staff or other authority
of competent jurisdiction, or (ii) exemptive or other relief or
permission from the SEC, SEC staff or other authority of competent
jurisdiction.
(7) Except as permitted by exemptive or other relief or permission from the
SEC, SEC staff or other authority of competent jurisdiction, the fund may
not make any investment if, as a result, the fund's investments will be
concentrated in any one industry.
With respect to the fundamental policy relating to borrowing money set forth in
(1) above, the 1940 Act permits a fund to borrow money in amounts of up to
one-third of the fund's total assets from banks for any purpose, and to borrow
up to 5% of the fund's total assets from banks or other lenders for temporary
purposes (the fund's total assets include the amounts being borrowed). To limit
the risks attendant to borrowing, the 1940 Act requires the fund to maintain at
all times an "asset coverage" of at least 300% of the amount of its borrowings.
Asset coverage means the ratio that the value of the fund's total assets
(including amounts borrowed), minus liabilities other than borrowings, bears to
the aggregate amount of all borrowings. Borrowing money to increase a fund's
investment portfolio is known as "leveraging." Borrowing, especially when used
for leverage, may cause the value of a fund's shares to be more volatile than
if the fund did not borrow. This is because borrowing tends to magnify the
effect of any increase or decrease in the value of the fund's portfolio
holdings. Borrowed money thus creates an opportunity for greater gains, but
also greater losses. To repay borrowings, the fund may have to sell securities
at a time and at a price that is unfavorable to the fund. There also are costs
associated with borrowing money, and these costs would offset and could
eliminate a fund's net investment income in any given period. Currently, the
fund does not contemplate borrowing for leverage, but if the fund does so, it
will not likely do so to a substantial degree. The policy in (1) above will be
interpreted to permit the fund to engage in trading practices and investments
that may be considered to be borrowing to the extent permitted by the 1940 Act.
Reverse repurchase agreements may be considered to be a type of borrowing.
Short-term credits necessary for the settlement of securities transactions and
arrangements with respect to securities lending will not be considered
27
to be borrowings under the policy. Practices and investments that may involve
leverage but are not considered to be borrowings are not subject to the policy.
Such trading practices may include futures, options on futures, forward
contracts and other derivative investments.
A fund may pledge its assets and guarantee the securities of another company
without limitation, subject to the fund's investment policies (including the
fund's fundamental policy regarding borrowing) and applicable laws and
interpretations. Pledges of assets and guarantees of obligations of others are
subject to many of the same risks associated with borrowings and, in addition,
are subject to the credit risk of the obligor for the underlying obligations.
To the extent that pledging or guaranteeing assets may be considered the
issuance of senior securities, the issuance of senior securities is governed by
the fund's policies on senior securities. If the fund were to pledge its
assets, the fund would take into account any then-applicable legal guidance,
including any applicable SEC staff position, would be guided by the judgment of
the fund's Board and Pioneer regarding the terms of any credit facility or
arrangement, including any collateral required, and would not pledge more
collateral than, in their judgment, is necessary for the fund to obtain the
credit sought. Shareholders should note that in 1973, the SEC staff took the
position in a no-action letter that a mutual fund could not pledge 100% of its
assets without a compelling business reason. In more recent no-action letters,
including letters that address the same statutory provision of the 1940 Act
(Section 17) addressed in the 1973 letter, the SEC staff has not mentioned any
limitation on the amount of collateral that may be pledged to support credit
obtained. This does not mean that the staff's position on this issue has
changed.
With respect to the fundamental policy relating to underwriting set forth in
(2) above, the 1940 Act does not prohibit a fund from engaging in the
underwriting business or from underwriting the securities of other issuers; in
fact, the 1940 Act permits a fund to have underwriting commitments of up to 25%
of its assets under certain circumstances. Those circumstances currently are
that the amount of the fund's underwriting commitments, when added to the value
of the fund's investments in issuers where the fund owns more than 10% of the
outstanding voting securities of those issuers, cannot exceed the 25% cap. A
fund engaging in transactions involving the acquisition or disposition of
portfolio securities may be considered to be an underwriter under the
Securities Act of 1933, as amended (the "1933 Act"). Under the 1933 Act, an
underwriter may be liable for material omissions or misstatements in an
issuer's registration statement or prospectus. Securities purchased from an
issuer and not registered for sale under the 1933 Act are considered restricted
securities. There may be a limited market for these securities. If these
securities are registered under the 1933 Act, they may then be eligible for
sale but participating in the sale may subject the seller to underwriter
liability. These risks could apply to a fund investing in restricted
securities. Although it is not believed that the application of the 1933 Act
provisions described above would cause a fund to be engaged in the business of
underwriting, the policy in (2) above will be interpreted not to prevent the
fund from engaging in transactions involving the acquisition or disposition of
portfolio securities, regardless of whether the fund may be considered to be an
underwriter under the 1933 Act.
With respect to the fundamental policy relating to lending set forth in (3)
above, the 1940 Act does not prohibit a fund from making loans; however, SEC
staff interpretations currently prohibit funds from lending more than one-third
of their total assets, except through the purchase of debt obligations or the
use of repurchase agreements. (A repurchase agreement is an agreement to
purchase a security, coupled with an agreement to sell that security back to
the original seller on an agreed-upon date at a price that reflects current
interest rates. The SEC frequently treats repurchase agreements as loans.)
While lending securities may be a source of income to a fund, as with other
extensions of credit, there are risks of delay in recovery or even loss of
rights in the underlying securities should the borrower fail financially.
However, loans would be made only when the fund's manager or a subadviser
believes the income justifies the attendant risks. The fund also will be
permitted by this policy to make loans of money, including to other funds. The
fund has obtained exemptive relief from the SEC to make short-term loans to
other Pioneer funds through a credit facility in order to satisfy redemption
requests or to cover unanticipated cash shortfalls; as discussed in this
Statement of Additional Information under "Interfund Lending". The conditions
of the SEC exemptive order permitting interfund lending are designed to
minimize the risks associated with interfund lending,
28
however no lending activity is without risk. A delay in repayment to a lending
fund could result in a lost opportunity or additional lending costs. The policy
in (3) above will be interpreted not to prevent the fund from purchasing or
investing in debt obligations and loans. In addition, collateral arrangements
with respect to options, forward currency and futures transactions and other
derivative instruments, as well as delays in the settlement of securities
transactions, will not be considered loans.
With respect to the fundamental policy relating to issuing senior securities
set forth in (4) above, "senior securities" are defined as fund obligations
that have a priority over the fund's shares with respect to the payment of
dividends or the distribution of fund assets. The 1940 Act prohibits a fund
from issuing senior securities except that the fund may borrow money in amounts
of up to one-third of the fund's total assets from banks for any purpose. A
fund also may borrow up to 5% of the fund's total assets from banks or other
lenders for temporary purposes, and these borrowings are not considered senior
securities. The issuance of senior securities by a fund can increase the
speculative character of the fund's outstanding shares through leveraging.
Leveraging of a fund's portfolio through the issuance of senior securities
magnifies the potential for gain or loss on monies, because even though the
fund's net assets remain the same, the total risk to investors is increased.
Certain widely used investment practices that involve a commitment by a fund to
deliver money or securities in the future are not considered by the SEC to be
senior securities, provided that a fund segregates cash or liquid securities in
an amount necessary to pay the obligation or the fund holds an offsetting
commitment from another party. These investment practices include repurchase
and reverse repurchase agreements, swaps, dollar rolls, options, futures and
forward contracts. The policy in (4) above will be interpreted not to prevent
collateral arrangements with respect to swaps, options, forward or futures
contracts or other derivatives, or the posting of initial or variation margin.
With respect to the fundamental policy relating to real estate set forth in (5)
above, the 1940 Act does not prohibit a fund from owning real estate; however,
a fund is limited in the amount of illiquid assets it may purchase. Investing
in real estate may involve risks, including that real estate is generally
considered illiquid and may be difficult to value and sell. Owners of real
estate may be subject to various liabilities, including environmental
liabilities. To the extent that investments in real estate are considered
illiquid, the current SEC staff position generally limits a fund's purchases of
illiquid securities to 15% of net assets. The policy in (5) above will be
interpreted not to prevent the fund from investing in real estate-related
companies, companies whose businesses consist in whole or in part of investing
in real estate, instruments (like mortgages) that are secured by real estate or
interests therein, or real estate investment trust securities.
With respect to the fundamental policy relating to commodities set forth in (6)
above, the 1940 Act does not prohibit a fund from owning commodities, whether
physical commodities and contracts related to physical commodities (such as oil
or grains and related futures contracts), or financial commodities and
contracts related to financial commodities (such as currencies and, possibly,
currency futures). However, a fund is limited in the amount of illiquid assets
it may purchase. To the extent that investments in commodities are considered
illiquid, the current SEC staff position generally limits a fund's purchases of
illiquid securities to 15% of net assets. If a fund were to invest in a
physical commodity or a physical commodity-related instrument, the fund would
be subject to the additional risks of the particular physical commodity and its
related market. The value of commodities and commodity-related instruments may
be extremely volatile and may be affected either directly or indirectly by a
variety of factors. There also may be storage charges and risks of loss
associated with physical commodities. The policy in (6) above will be
interpreted to permit investments in exchange traded funds that invest in
physical and/or financial commodities.
With respect to the fundamental policy relating to concentration set forth in
(7) above, the 1940 Act does not define what constitutes "concentration" in an
industry. The SEC staff has taken the position that investment of 25% or more
of a fund's total assets in one or more issuers conducting their principal
activities in the same industry or group of industries constitutes
concentration. It is possible that interpretations of concentration could
change in the future. A fund that invests a significant percentage of its total
assets in a single industry may be particularly susceptible to adverse events
affecting that industry and may be more risky than a fund that does not
concentrate in an industry. The policy in (7) above will be interpreted
29
to refer to concentration as that term may be interpreted from time to time.
The policy also will be interpreted to permit investment without limit in the
following: securities of the U.S. government and its agencies or
instrumentalities; and repurchase agreements collateralized by any such
obligations. Accordingly, issuers of the foregoing securities will not be
considered to be members of any industry. The policy also will be interpreted
to give broad authority to the fund as to how to classify issuers within or
among industries. When identifying industries for purposes of its concentration
policy, the fund may rely upon available industry classifications. As of the
date of the SAI, the fund relies primarily on the MSCI Global Industry
Classification Standard (GICS) classifications, and, with respect to securities
for which no industry classification under GICS is available or for which the
GICS classification is determined not to be appropriate, the fund may use
industry classifications published by another source, which, as of the date of
the SAI, is Bloomberg L.P. As of the date of the SAI, the fund's adviser may
assign an industry classification for an exchange-traded fund in which the fund
invests based on the constituents of the index on which the exchange-traded
fund is based. The fund may change any source used for determining industry
classifications without shareholder approval.
The fund's fundamental policies are written and will be interpreted broadly.
For example, the policies will be interpreted to refer to the 1940 Act and the
related rules as they are in effect from time to time, and to interpretations
and modifications of or relating to the 1940 Act by the SEC, SEC staff or other
authority of competent jurisdiction as they are given from time to time. When a
policy provides that an investment practice may be conducted as permitted by
the 1940 Act, the policy will be interpreted to mean either that the 1940 Act
expressly permits the practice or that the 1940 Act does not prohibit the
practice.
NON-FUNDAMENTAL INVESTMENT POLICY
The following policy is non-fundamental and may be changed by a vote of the
Board of Trustees without approval of shareholders.
The fund may not invest in any investment company in reliance on Section
12(d)(1)(F) of the 1940 Act, which would allow the fund to invest in other
investment companies, or in reliance on Section 12(d)(1)(G) of the 1940 Act,
which would allow the fund to invest in other Pioneer funds, in each case
without being subject to the limitations discussed above under "Other
Investment Companies" so long as another investment company invests in the fund
in reliance on Section 12(d)(1)(G). The fund has adopted this non-fundamental
policy in order that the fund may be a permitted investment of the series of
Pioneer Asset Allocation Trust. If the series of Pioneer Asset Allocation Trust
do not invest in the fund, then this non-fundamental restriction will not
apply.
In addition, the fund's investment objective is non-fundamental and it and the
fund's non-fundamental investment policies may be changed by a vote of the
Board of Trustees without approval of shareholders at any time.
DIVERSIFICATION
The fund is currently classified as a diversified fund under the 1940 Act. A
diversified fund may not purchase securities of an issuer (other than
obligations issued or guaranteed by the U.S. government, its agencies or
instrumentalities) if, with respect to 75% of the fund's total assets, (a) more
than 5% of the fund's total assets would be invested in securities of that
issuer, or (b) the fund would hold more than 10% of the outstanding voting
securities of that issuer. Under the 1940 Act, the fund cannot change its
classification from diversified to non-diversified without shareholder
approval.
3. TRUSTEES AND OFFICERS
The fund's Trustees and officers are listed below, together with their
principal occupations and other directorships they have held during at least
the past five years. Trustees who are interested persons of the fund within the
meaning of the 1940 Act are referred to as Interested Trustees. Trustees who
are not interested persons of the fund are referred to as Independent Trustees.
Each of the Trustees serves as a
30
Trustee of each of the 46 U.S. registered investment portfolios for which
Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all
Trustees and all officers of the fund is 60 State Street, Boston, Massachusetts
02109.
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- -------------------------- ------------------------------------------- -------------------------
INDEPENDENT TRUSTEES:
----------------------------- -------------------------- ------------------------------------------- ----
THOMAS J. PERNA (66) Trustee since 2006. Private investor (2004 - 2008 and Director, Broadridge
Chairman of the Board and Serves until a successor 2013 - present); Chairman (2008 - Financial Solutions,
Trustee trustee is elected or 2013) and Chief Executive Officer Inc. (investor
----
earlier retirement or (2008 - 2012), Quadriserv, Inc. communications and
removal. (technology products for securities securities processing
--------------------------
lending industry); and Senior provider for financial
Executive Vice President, The Bank services industry)
of New York (financial and securities (2009 - present);
services) (1986 - 2004) Director, Quadriserv,
-------------------------------------------
Inc. (2005 - 2013);
and Commissioner,
New Jersey State
Civil Service
Commission (2011 -
2015)
----
DAVID R. BOCK (73) Trustee since 2005. Managing Partner, Federal City Director of New York
Trustee Serves until a successor Capital Advisors (corporate advisory Mortgage Trust
----
trustee is elected or services company) (1997 - 2004 (publicly-traded
earlier retirement or and 2008 - present); Interim Chief mortgage REIT)
removal. Executive Officer, Oxford Analytica, (2004 - 2009, 2012
--------------------------
Inc. (privately held research and - present); Director of
consulting company) (2010); The Swiss Helvetia
Executive Vice President and Chief Fund, Inc.
Financial Officer, I-trax, Inc. (publicly (closed-end fund)
traded health care services (2010 - present);
company) (2004 - 2007); and Director of Oxford
Executive Vice President and Chief Analytica, Inc. (2008
Financial Officer, Pedestal Inc. - present); and
(internet-based mortgage trading Director of Enterprise
company) (2000 - 2002); Private Community
Consultant (1995 - 1997); Investment, Inc.
Managing Director, Lehman (privately-held
Brothers (1992 - 1995); Executive, affordable housing
The World Bank (1979 - 1992) finance company)
-------------------------------------------
(1985 - 2010);
-------------------------
BENJAMIN M. FRIEDMAN Trustee since 2008. William Joseph Maier Professor of Trustee, Mellon
(72) Serves until a successor Political Economy, Harvard Institutional Funds
Trustee trustee is elected or University (1972 - present) Investment Trust and
---- -------------------------------------------
earlier retirement or Mellon Institutional
removal. Funds Master
--------------------------
Portfolio (oversaw
17 portfolios in fund
complex) (1989 -
2008)
----
31
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- -------------------------- ------------------------------------- ---------------------
MARGARET B.W. GRAHAM Trustee since 1990. Founding Director, Vice-President None
----
(69) Serves until a successor and Corporate Secretary, The
Trustee trustee is elected or Winthrop Group, Inc. (consulting
---
earlier retirement or firm) (1982 - present); Desautels
removal. Faculty of Management, McGill
--------------------------
University (1999 - present); and
Manager of Research Operations
and Organizational Learning, Xerox
PARC, Xerox's advance research
center (1990-1994)
-------------------------------------
MARGUERITE A. PIRET (68) Trustee since 1990. President and Chief Executive Director of New
Trustee Serves until a successor Officer, Newbury Piret Company America High Income
---
trustee is elected or (investment banking firm) (1981 - Fund, Inc.
earlier retirement or present) (closed-end
-------------------------------------
removal. investment company)
--------------------------
(2004 - present);
and Member, Board
of Governors,
Investment Company
Institute (2000 -
2006)
----
FRED J. RICCIARDI (69) Trustee since 2014. Consultant (investment company None
----
Trustee Serves until a successor services) (2012 - present);
---
trustee is elected or Executive Vice President, BNY
earlier retirement or Mellon (financial and investment
removal. company services) (1969 - 2012);
--------------------------
Director, BNY International
Financing Corp. (financial services)
(2002 - 2012); Director, Mellon
Overseas Investment Corp.
(financial services) (2009 - 2012)
-------------------------------------
INTERESTED TRUSTEE:
----------------------------- -------------------------- ------------------------------------- ----
KENNETH J. TAUBES (58)* Trustee since 2014. Director and Executive Vice None
----
Trustee Serves until a successor President (since 2008) and Chief
---
trustee is elected or Investment Officer, U.S. (since
earlier retirement or 2010) of Pioneer Investment
removal Management USA Inc. ("PIM-USA");
--------------------------
Executive Vice President and Chief
Investment Officer, U.S. of Pioneer
(since 2008); Executive Vice
President of Pioneer Institutional
Asset Management, Inc. (since
2009); Portfolio Manager of Pioneer
(since 1999)
-------------------------------------
32
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- ------------------------ -------------------------------------- ---------------------
ADVISORY TRUSTEE:
----------------------------- ---- -------------------------------------- ----
LORRAINE H. MONCHAK Advisory Trustee since Chief Investment Officer, 1199 SEIU Trustee of Pioneer
(60)** 2014. Funds (healthcare workers union closed-end
----
Advisory Trustee pension funds) (2001 - present); investment
-----------------------------
Vice President - International companies (5
Investments Group, American portfolios) (Sept.
International Group, Inc. (insurance 2015-present)
----
company) (1993 - 2001); Vice
President Corporate Finance and
Treasury Group, Citibank, N.A.(1980
- 1986 and 1990 - 1993); Vice
President - Asset/Liability
Management Group, Federal Farm
Funding Corporation
(government-sponsored issuer of
debt securities) (1988 - 1990);
Mortgage Strategies Group,
Shearson Lehman Hutton, Inc.
(investment bank) (1987 - 1988);
Mortgage Strategies Group, Drexel
Burnham Lambert, Ltd. (investment
bank) (1986 - 1987)
--------------------------------------
FUND OFFICERS:
----------------------------- ---- -------------------------------------- ----
LISA M. JONES (55) Since 2014. Serves at Chair, Director, CEO and President Trustee of Pioneer
President and Chief the discretion of the of PIM-USA (since September closed-end
Executive Officer Board 2014); Chair, Director and CEO of investment
----------------------------- ----
Pioneer Investment Management, companies (5
Inc. (since September 2014); Chair, portfolios) (Sept.
Director and CEO of Pioneer Funds 2015-present)
----
Distributor, Inc. (since September
2014); Chair, Director, CEO and
President of Pioneer Institutional
Asset Management, Inc. (since
September 2014); Managing
Director, Morgan Stanley Investment
Management (2010 - 2013);
Director of Institutional Business,
CEO of International, Eaton Vance
Management (2005 - 2010)
--------------------------------------
CHRISTOPHER J. KELLEY (52) Since 2003. Serves at Vice President and Associate None
----
Secretary and Chief Legal the discretion of the General Counsel of Pioneer since
Officer Board January 2008; Secretary and Chief
--- ----
Legal Officer of all of the Pioneer
Funds since June 2010; Assistant
Secretary of all of the Pioneer Funds
from September 2003 to May
2010; Vice President and Senior
Counsel of Pioneer from July 2002
to December 2007
--------------------------------------
33
NAME, AGE AND TERM OF OFFICE AND OTHER DIRECTORSHIPS
POSITION HELD WITH THE FUND LENGTH OF SERVICE PRINCIPAL OCCUPATION HELD BY TRUSTEE
----------------------------- ----------------------- --------------------------------------- ---------------------
CAROL B. HANNIGAN (55) Since 2010. Serves at Fund Governance Director of None
---------------------
Assistant Secretary the discretion of the Pioneer since December 2006 and
-----------------------------
Board Assistant Secretary of all the
-----------------------
Pioneer Funds since June 2010;
Manager - Fund Governance of
Pioneer from December 2003 to
November 2006; and Senior
Paralegal of Pioneer from January
2000 to November 2003
---------------------------------------
THOMAS REYES (54) Since 2010. Serves at Senior Counsel of Pioneer since None
---------------------
Assistant Secretary the discretion of the May 2013 and Assistant Secretary
-----------------------------
Board of all the Pioneer Funds since June
-----------------------
2010; Counsel of Pioneer from June
2007 to May 2013
---------------------------------------
MARK E. BRADLEY (57) Since 2008. Serves at Vice President - Fund Treasury of None
---------------------
Treasurer and Chief the discretion of the Pioneer; Treasurer of all of the
Financial and Accounting Board Pioneer Funds since March 2008;
-----------------------
Officer Deputy Treasurer of Pioneer from
-----------------------------
March 2004 to February 2008; and
Assistant Treasurer of all of the
Pioneer Funds from March 2004 to
February 2008
---------------------------------------
LUIS I. PRESUTTI (51) Since 2000. Serves at Director - Fund Treasury of Pioneer; None
---------------------
Assistant Treasurer the discretion of the and Assistant Treasurer of all of the
-----------------------------
Board Pioneer Funds
----------------------- ---------------------------------------
GARY SULLIVAN (58) Since 2002. Serves at Fund Accounting Manager - Fund None
---------------------
Assistant Treasurer the discretion of the Treasury of Pioneer; and Assistant
-----------------------------
Board Treasurer of all of the Pioneer Funds
----------------------- ---------------------------------------
DAVID F. JOHNSON (37) Since 2009. Serves at Fund Administration Manager - Fund None
---------------------
Assistant Treasurer the discretion of the Treasury of Pioneer since November
-----------------------------
Board 2008; Assistant Treasurer of all of
-----------------------
the Pioneer Funds since January
2009; Client Service Manager -
Institutional Investor Services at
State Street Bank from March 2003
to March 2007
---------------------------------------
JEAN M. BRADLEY (64) Since 2010. Serves at Chief Compliance Officer of Pioneer None
---------------------
Chief Compliance Officer the discretion of the and of all the Pioneer Funds since
-----------------------------
Board March 2010; Chief Compliance
-----------------------
Officer of Pioneer Institutional Asset
Management, Inc. since January
2012; Chief Compliance Officer of
Vanderbilt Capital Advisors, LLC
since July 2012: Director of Adviser
and Portfolio Compliance at Pioneer
since October 2005; Senior
Compliance Officer for Columbia
Management Advisers, Inc. from
October 2003 to October 2005
---------------------------------------
KELLY O'DONNELL (45) Since 2006. Serves at Director - Transfer Agency None
---------------------
Anti-Money Laundering the discretion of the Compliance of Pioneer and
Officer Board Anti-Money Laundering Officer of all
----------------------------- -----------------------
the Pioneer Funds since 2006
---------------------------------------
34
* Mr. Taubes is an Interested Trustee because he is an officer or director
of the fund's investment adviser and certain of its affiliates.
** Ms. Monchak is a non-voting advisory trustee.
BOARD COMMITTEES
The Board of Trustees is responsible for overseeing the fund's management and
operations. The Chairman of the Board is an Independent Trustee. Independent
Trustees constitute more than 75% of the Board. During the most recent fiscal
year, the Board of Trustees held 8 meetings. Each Trustee attended at least 75%
of such meetings.
The Trustees were selected to join the Board based upon the following as to
each Board member: such person's character and integrity; such person's
willingness and ability to commit the time necessary to perform the duties of a
Trustee; as to each Independent Trustee, his or her status as not being an
"interested person" as defined under the 1940 Act; and, as to Mr. Taubes, his
association with Pioneer. Each of the Independent Trustees also was selected to
join the Board based on the criteria and principles set forth in the Nominating
Committee Charter. In evaluating a Trustee's prospective service on the Board,
the Trustee's experience in, and ongoing contributions toward, overseeing the
fund's business as a Trustee also are considered. In addition, the following
specific experience, qualifications, attributes and/or skills apply as to each
Trustee: Mr. Bock, accounting, financial, business and public company
experience as a chief financial officer and an executive officer and experience
as a board member of other organizations; Mr. Friedman, academic leadership,
economic and finance experience and investment company board experience; Ms.
Graham, academic leadership, experience in business, finance and management
consulting; Mr. Perna, accounting, financial, and business experience as an
executive officer and experience as a board member of other organizations; Ms.
Piret, accounting, financial and entrepreneurial experience as an executive,
valuation experience and investment company board experience; Mr. Ricciardi,
financial, business and investment company experience as an executive officer
of a financial and investment company services organization, and experience as
a board member of offshore investment companies and other organizations; and
Mr. Taubes, portfolio management experience and leadership roles with Pioneer.
However, in its periodic assessment of the effectiveness of the Board, the
Board considers the complementary skills and experience of individual Trustees
primarily in the broader context of the Board's overall composition so that the
Board, as a body, possesses the appropriate (and appropriately diverse) skills
and experience to oversee the business of the fund.
The Trust's Amended and Restated Agreement and Declaration of Trust provides
that the appointment, designation (including in any proxy or registration
statement or other document) of a Trustee as an expert on any topic or in any
area, or as having experience, attributes or skills in any area, or any other
appointment, designation or identification, shall not impose on that person any
standard of care or liability that is greater than that imposed on that person
as a Trustee in the absence of the appointment, designation or identification,
and no Trustee who has special attributes, skills, experience or expertise, or
is appointed, designated, or identified as aforesaid, shall be held to a higher
standard of care by virtue thereof.
The Board of Trustees has five standing committees: the Independent Trustees
Committee, the Audit Committee, the Governance and Nominating Committee, the
Policy Administration Committee and the Valuation Committee. Each committee is
chaired by an Independent Trustee and all members of each committee are
Independent Trustees.
The Chairs of the committees work with the Chairman of the Board and fund
management in setting the agendas for Board meetings. The Chairs of the
committees set the agendas for committee meetings with input from fund
management. As noted below, through the committees, the Independent Trustees
consider and address important matters involving the fund, including those
presenting conflicts or potential conflicts of interest for management. The
Independent Trustees also regularly meet without the presence of management and
are advised by independent legal counsel. The Board has determined that
delegation to the committees of specified oversight responsibilities helps
ensure that the fund has effective and independent governance
35
and oversight. Notwithstanding the fact that the Chairman of the Board is an
Independent Trustee, the Board continues to believe that the committee
structure enables the Board more effectively to provide governance and
oversight of the fund's affairs. Mr. Perna, Chairman of the Board, is a member
of each committee except the Audit Committee and the Valuation Committee, of
each of which he is a non-voting, ex-officio member.
During the most recent fiscal year, the Independent Trustees, Audit, Governance
and Nominating, Policy Administration, and Valuation Committees held 6, 5, 1, 5
and 5 meetings, respectively.
INDEPENDENT TRUSTEES COMMITTEE
David R. Bock, Benjamin M. Friedman, Margaret B.W. Graham, Lorraine H. Monchak
(non-voting advisory member), Thomas J. Perna (Chair), Marguerite A. Piret and
Fred J. Ricciardi.
The Independent Trustees Committee is comprised of all of the Independent
Trustees. The Independent Trustees Committee serves as the forum for
consideration of a number of issues required to be considered separately by the
Independent Trustees under the 1940 Act, including the assessment and review of
the fund's advisory agreement and other related party contracts. The
Independent Trustees Committee also considers issues that the Independent
Trustees believe it is advisable for them to consider separately from the
Interested Trustees.
AUDIT COMMITTEE
David R. Bock (Chair), Benjamin M. Friedman, Lorraine H. Monchak (non-voting
advisory member) and Marguerite A. Piret.
The Audit Committee, among other things, oversees the accounting and financial
reporting policies and practices of the fund, oversees the quality and
integrity of the fund's financial statements, approves, and recommends to the
Independent Trustees for their ratification, the engagement of the fund's
independent registered public accounting firm, reviews and evaluates the
accounting firm's qualifications, independence and performance, and approves
the compensation of the accounting firm. The Audit Committee also approves all
audit and permissible non-audit services provided to the fund by the fund's
accounting firm and all permissible non-audit services provided by the fund's
accounting firm to Pioneer and any affiliated service providers of the fund if
the engagement relates directly to the fund's operations and financial
reporting.
GOVERNANCE AND NOMINATING COMMITTEE
Margaret B.W. Graham (Chair), Thomas J. Perna and Fred J. Ricciardi.
The Governance and Nominating Committee considers governance matters affecting
the Board and the fund. Among other responsibilities, the Governance and
Nominating Committee reviews the performance of the Independent Trustees as a
whole, and reviews and recommends to the Independent Trustees Committee any
appropriate changes concerning, among other things, the size and composition of
the Board, the Board's committee structure and the Independent Trustees'
compensation. The Governance and Nominating Committee also makes
recommendations to the Independent Trustees Committee or the Board on matters
delegated to it.
In addition, the Governance and Nominating Committee screens potential
candidates for Independent Trustees. Among other responsibilities, the
Governance and Nominating Committee reviews periodically the criteria for
Independent Trustees and the spectrum of desirable experience and expertise for
Independent Trustees as a whole, and reviews periodically the qualifications
and requisite skills of persons currently serving as Independent Trustees and
being considered for re-nomination. The Governance and Nominating Committee
also reviews the qualifications of any person nominated to serve on the Board
by a shareholder or recommended by any Trustee, management or another person
and makes a recommendation as to the qualifications of such nominated or
recommended person to the Independent Trustees and the Board, and reviews
periodically the Committee's procedure, if any, regarding candidates submitted
by shareholders. The Governance and Nominating Committee does not have
specific, minimum qualifications for nominees,
36
nor has it established specific qualities or skills that it regards as
necessary for one or more of the Independent Trustees to possess (other than
qualities or skills that may be required by applicable law or regulation).
However, in evaluating a person as a potential nominee to serve as an
Independent Trustee, the Governance and Nominating Committee will consider the
following general criteria and principles, among any others that it may deem
relevant:
o whether the person has a reputation for integrity, honesty and adherence to
high ethical standards;
o whether the person has demonstrated business acumen and ability to exercise
sound judgment in matters that relate to the objectives of the fund and
whether the person is willing and able to contribute positively to the
decision-making process of the fund;
o whether the person has a commitment and ability to devote the necessary time
and energy to be an effective Independent Trustee, to understand the fund
and the responsibilities of a trustee of an investment company;
o whether the person has the ability to understand the sometimes conflicting
interests of the various constituencies of the fund and to act in the
interests of all shareholders;
o whether the person has a conflict of interest that would impair his or her
ability to represent the interests of all shareholders and to fulfill the
responsibilities of a trustee; and
o the value of diversity on the Board. The Governance and Nominating Committee
Charter provides that nominees shall not be discriminated against on the
basis of race, religion, national origin, sex, sexual orientation,
disability or any other basis proscribed by law.
The Governance and Nominating Committee also will consider whether the nominee
has the experience or skills that the Governance and Nominating Committee
believes would maintain or enhance the effectiveness of the Independent
Trustees' oversight of the fund's affairs, based on the then current
composition and skills of the Independent Trustees and experience or skills
that may be appropriate in light of changing business conditions and regulatory
or other developments. The Governance and Nominating Committee does not
necessarily place the same emphasis on each criterion.
The Governance and Nominating Committee does not have a formal policy for
considering trustee nominees submitted by the fund's shareholders. Nonetheless,
the Nominating Committee may, on an informal basis, consider any shareholder
recommendations of nominees that it receives. Shareholders who wish to
recommend a nominee should send recommendations to the fund's Secretary that
include all information relating to such persons that is required to be
included in solicitations of proxies for the election of trustees.
POLICY ADMINISTRATION COMMITTEE
Thomas J. Perna (Chair), Margaret B.W. Graham, and Fred J. Ricciardi.
The Policy Administration Committee, among other things, oversees and monitors
the fund's compliance with legal and regulatory requirements that are not
directly related to financial reporting, internal financial controls,
independent audits or the performance of the fund's internal audit function.
The Policy Administration Committee also oversees the adoption and
implementation of certain of the fund's policies and procedures.
VALUATION COMMITTEE
David R. Bock, Benjamin M. Friedman, Lorraine H. Monchak (non-voting advisory
member) and Marguerite A. Piret (Chair).
The Valuation Committee, among other things, determines with Pioneer the value
of securities under certain circumstances and considers other matters with
respect to the valuation of securities, in each case in accordance with the
fund's valuation procedures.
37
OVERSIGHT OF RISK MANAGEMENT
Consistent with its responsibility for oversight of the fund in the interests
of shareholders, the Board of Trustees oversees risk management of the fund's
investment management and business operations. In performing this oversight
function, the Board considers various risks and risk management practices
relating to the fund. The Board has delegated certain aspects of its risk
oversight responsibilities to the committees.
The fund faces a number of risks, such as investment risk, counterparty risk,
valuation risk, enterprise risk, reputational risk, cybersecurity risk, risk of
operational failure or lack of business continuity, and legal, compliance and
regulatory risk. The goal of risk management is to identify and address risks,
i.e., events or circumstances that could have material adverse effects on the
business, operations, shareholder services, investment performance or
reputation of the fund.
Most of the fund's investment management and business operations are carried
out by or through Pioneer, its affiliates, and other service providers, each of
which has an independent interest in risk management but whose policies and the
methods by which one or more risk management functions are carried out may
differ from the fund's and each other's in the setting of priorities, the
resources available or the effectiveness of relevant controls.
Under the overall supervision of the Board or the applicable committee of the
Board, the fund, or Pioneer and the affiliates of Pioneer or other service
providers to the fund employ a variety of processes, procedures and controls in
an effort to identify, address and mitigate risks. Different processes,
procedures and controls are employed with respect to different types of risks.
Various personnel, including the fund's and Pioneer's chief compliance officer
and Pioneer's chief risk officer and director of internal audit, as well as
various personnel of Pioneer and of other service providers, make periodic
reports to the applicable committee or to the Board with respect to various
aspects of risk management, and the applicable committee of the Board reviews
Financial Intermediary Controls and Compliance Assessment (FICCA) reports, if
available. The reports received by the Trustees related to risks typically are
summaries of relevant information.
The Trustees recognize that not all risks that may affect the fund can be
identified, that it may not be practical or cost-effective to eliminate or
mitigate certain risks, that it may be necessary to bear certain risks (such as
investment-related risks) to achieve the fund's goals, that the processes,
procedures and controls employed to address certain risks may be limited in
their effectiveness, and that some risks are simply beyond the control of the
fund or Pioneer and its affiliates or other service providers. As a result of
the foregoing and other factors, the fund's ability to manage risk is subject
to substantial limitations.
In addition, it is important to note that the fund is designed for investors
that are prepared to accept investment risk, including the possibility that as
yet unforeseen risks may emerge in the future.
COMPENSATION OF OFFICERS AND TRUSTEES
The Pioneer Funds, including the fund, compensate their Trustees. The
Independent Trustees review and set their compensation annually, taking into
consideration the committee and other responsibilities assigned to specific
Trustees. The table under "Annual Fees, Expense and Other Information -
Compensation of Officers and Trustees" sets forth the compensation paid to each
of the Trustees. The compensation paid to the Trustees is then allocated among
the funds as follows:
o each fund with assets less than $250 million pays each Independent Trustee an
annual fee of $1,000.
o the remaining compensation of the Independent Trustees is allocated to each
fund with assets greater than $250 million based on the fund's net assets.
o the Interested Trustees receive an annual fee of $500 from each fund, except
in the case of funds with net assets of $50 million or less, which pay each
Interested Trustee an annual fee of $200. Pioneer reimburses these funds for
the fees paid to the Interested Trustees.
38
Except for the chief compliance officer, the fund does not pay any salary or
other compensation to its officers. The fund pays a portion of the chief
compliance officer's compensation for her services as the fund's chief
compliance officer. Pioneer pays the remaining portion of the chief compliance
officer's compensation.
See "Compensation of Officers and Trustees" in "Annual Fee, Expense and Other
Information."
SALES LOADS
The fund offers its shares to Trustees and officers of the fund and employees
of Pioneer and its affiliates without a sales charge (excluding Class T shares)
in order to encourage investment in the fund by individuals who are responsible
for its management and because the sales to such persons do not entail any
sales effort by the fund, brokers or other intermediaries.
OTHER INFORMATION
The Amended and Restated Agreement and Declaration of Trust provides that no
Trustee, officer or employee of the fund shall be liable to the fund or any
shareholder for any action, failure to act, error or mistake except in cases of
bad faith, willful misfeasance, gross negligence or reckless disregard of duty.
The Amended and Restated Agreement and Declaration of Trust requires the fund
to indemnify each Trustee, director, officer, employee and authorized agent to
the fullest extent permitted by law against liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action, suit
or proceeding in which he becomes involved as a party or otherwise by virtue of
his being or having been such a Trustee, director, officer, employee, or agent
and against amounts paid or incurred by him in settlement thereof. The 1940 Act
currently provides that no officer or director shall be protected from
liability to the fund or shareholders for willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties of office. The Amended and
Restated Agreement and Declaration of Trust extends to Trustees, officers and
employees of the fund the full protection from liability that the law allows.
SHARE OWNERSHIP
See "Annual Fee, Expense and Other Information" for information on the
ownership of fund shares by the Trustees, the fund's officers and owners in
excess of 5% of any class of shares of the fund and a table indicating the
value of shares that each Trustee beneficially owns in the fund and in all the
Pioneer Funds.
PROXY VOTING POLICIES
Information regarding how the fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available to
shareowners without charge at http://us.pioneerinvestments.com and on the SEC's
website at http://www.sec.gov. The fund's proxy voting policies and procedures
are attached as "Appendix B".
4. INVESTMENT ADVISER
The fund has entered into an amended and restated management agreement
(hereinafter, the "management contract") with Pioneer pursuant to which Pioneer
acts as the fund's investment adviser. Pioneer is an indirect, wholly owned
subsidiary of UniCredit. Certain Trustees or officers of the fund are also
directors and/or officers of certain of UniCredit's subsidiaries (see
management biographies above). Pioneer has entered into an agreement with its
affiliate, Pioneer Investment Management Limited ("PIML"), pursuant to which
PIML provides certain services to Pioneer.
As the fund's investment adviser, Pioneer provides the fund with investment
research, advice and supervision and furnishes an investment program for the
fund consistent with the fund's investment objective and policies, subject to
the supervision of the fund's Trustees. Pioneer determines what portfolio
securities will be purchased or sold, arranges for the placing of orders for
the purchase or sale of portfolio securities, selects brokers or dealers to
place those orders, maintains books and records with respect to the fund's
securities transactions, and reports to the Trustees on the fund's investments
and performance.
39
The management contract will continue in effect from year to year provided such
continuance is specifically approved at least annually (i) by the Trustees of
the fund or by a majority of the outstanding voting securities of the fund (as
defined in the 1940 Act), and (ii) in either event, by a majority of the
Independent Trustees of the fund, with such Independent Trustees casting votes
in person at a meeting called for such purpose.
The management contract may be terminated without penalty by the Trustees of
the fund or by vote of a majority of the outstanding voting securities of the
fund on not more than 60 days' nor less than 30 days' written notice to
Pioneer, or by Pioneer on not less than 90 days' written notice to the fund,
and will automatically terminate in the event of its assignment (as defined in
the 1940 Act) by Pioneer. The management contract is not assignable by the fund
except with the consent of Pioneer.
The Trustees' approval of and the terms, continuance and termination of the
management contract are governed by the 1940 Act. Pursuant to the management
contract, Pioneer assumes no responsibility other than to render the services
called for under the management contract, in good faith, and Pioneer will not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution of securities
or other transactions for the fund. Pioneer, however, is not protected against
liability by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under the management contract. The management contract
requires Pioneer to furnish all necessary services, facilities and personnel in
connection with the performance of its services under the management contract,
and except as specifically stated therein, Pioneer is not responsible for any
of the fund's ordinary and extraordinary expenses.
ADVISORY FEE
As compensation for its management services and expenses incurred, the fund
pays Pioneer a fee at the annual rate of 0.60% of the fund's average daily net
assets up to $10 billion and 0.575% of the fund's average daily net assets over
$10 billion. The fee is computed and accrued daily and paid monthly.
See the table in Annual Fee, Expense and Other Information for management fees
paid to Pioneer during recently completed fiscal years.
ADMINISTRATION AGREEMENT
The fund has entered into an amended and restated administration agreement with
Pioneer pursuant to which Pioneer acts as the fund's administrator, performing
certain accounting, administration and legal services for the fund. Pioneer is
reimbursed for its cost of providing such services. The cost of providing these
services is based on direct costs and costs of overhead, subject to review by
the Board of Trustees. See "Annual Fee, Expense and Other Information" for fees
the fund paid to Pioneer for administration and related services. In addition,
Brown Brothers Harriman & Co. performs certain sub-administration services to
the fund pursuant to an agreement with Pioneer and the fund.
Under the terms of the amended and restated administration agreement with the
fund, Pioneer pays or reimburses the fund for expenses relating to its services
for the fund, with the exception of the following, which are to be paid by the
fund: (a) charges and expenses for fund accounting, pricing and appraisal
services and related overhead, including, to the extent such services are
performed by personnel of Pioneer, or its affiliates, office space and
facilities and personnel compensation, training and benefits; (b) the charges
and expenses of auditors; (c) the charges and expenses of any custodian,
transfer agent, plan agent, dividend disbursing agent and registrar appointed
by the fund; (d) issue and transfer taxes, chargeable to the fund in connection
with securities transactions to which the fund is a party; (e) insurance
premiums, interest charges, dues and fees for membership in trade associations
and all taxes and corporate fees payable by the fund to federal, state or other
governmental agencies; (f) fees and expenses involved in registering and
maintaining registrations of the fund and/or its shares with federal regulatory
agencies, state or blue sky securities agencies and foreign jurisdictions,
including the preparation of prospectuses and statements of additional
information for filing with such regulatory authorities; (g) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices,
40
proxy statements and all reports to shareholders and to governmental agencies;
(h) charges and expenses of legal counsel to the fund and the Trustees; (i) any
distribution fees paid by the fund in accordance with Rule 12b-1 promulgated by
the SEC pursuant to the 1940 Act; (j) compensation of those Trustees of the
fund who are not affiliated with or interested persons of Pioneer, the fund
(other than as Trustees), PIM-USA or the distributor; (k) the cost of preparing
and printing share certificates; (l) interest on borrowed money, if any; (m)
fees payable by the fund under management agreements and the administration
agreement; and (n) extraordinary expenses. The fund shall also assume and pay
any other expense that the fund, Pioneer or any other agent of the fund may
incur not listed above that is approved by the Board of Trustees (including a
majority of the Independent Trustees) as being an appropriate expense of the
fund. The fund shall pay all fees and expenses to be paid by the fund under the
sub-administration agreement with Brown Brothers Harriman & Co. In addition,
the fund shall pay all brokers' and underwriting commissions chargeable to the
fund in connection with securities transactions to which the fund is a party.
POTENTIAL CONFLICTS OF INTEREST
The fund is managed by Pioneer, which also serves as investment adviser to
other Pioneer mutual funds and other accounts (including separate accounts and
unregistered products) with investment objectives identical or similar to those
of the fund. Securities frequently meet the investment objectives of the fund,
the other Pioneer mutual funds and such other accounts. In such cases, the
decision to recommend a purchase to one fund or account rather than another is
based on a number of factors. The determining factors in most cases are the
amount of securities of the issuer then outstanding, the value of those
securities and the market for them. Other factors considered in the investment
recommendations include other investments which each fund or account presently
has in a particular industry and the availability of investment funds in each
fund or account.
It is possible that at times identical securities will be held by more than one
fund and/or account. However, positions in the same issue may vary and the
length of time that any fund or account may choose to hold its investment in
the same issue may likewise vary. To the extent that more than one of the
Pioneer mutual funds or a private account managed by Pioneer seeks to acquire
the same security at about the same time, the fund may not be able to acquire
as large a position in such security as it desires or it may have to pay a
higher price for the security. Similarly, the fund may not be able to obtain as
large an execution of an order to sell or as high a price for any particular
portfolio security if Pioneer decides to sell on behalf of another account the
same portfolio security at the same time. On the other hand, if the same
securities are bought or sold at the same time by more than one fund or
account, the resulting participation in volume transactions could produce
better executions for the fund. In the event more than one account purchases or
sells the same security on a given date, the purchases and sales will normally
be made as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each account. Although the other
Pioneer mutual funds may have the same or similar investment objectives and
policies as the fund, their portfolios do not generally consist of the same
investments as the fund or each other, and their performance results are likely
to differ from those of the fund.
PERSONAL SECURITIES TRANSACTIONS
The fund, Pioneer, and PFD have adopted a code of ethics under Rule 17j-1 under
the 1940 Act which is applicable to officers, trustees/directors and designated
employees of Pioneer and certain of Pioneer's affiliates. The code permits such
persons to engage in personal securities transactions for their own accounts,
including securities that may be purchased or held by the fund, and is designed
to prescribe means reasonably necessary to prevent conflicts of interest from
arising in connection with personal securities transactions. The code is on
public file with and available from the SEC.
41
5. PRINCIPAL UNDERWRITER AND DISTRIBUTION PLAN
PRINCIPAL UNDERWRITER
PFD, 60 State Street, Boston, Massachusetts 02109, is the principal underwriter
for the fund in connection with the continuous offering of its shares. PFD is
an indirect wholly owned subsidiary of PIM-USA.
The fund entered into an underwriting agreement with PFD which provides that
PFD will bear expenses for the distribution of the fund's shares, except for
expenses incurred by PFD for which it is reimbursed or compensated by the fund
under the distribution plan (discussed below). PFD bears all expenses it incurs
in providing services under the underwriting agreement. Such expenses include
compensation to its employees and representatives and to securities dealers for
distribution-related services performed for the fund. PFD also pays certain
expenses in connection with the distribution of the fund's shares, including
the cost of preparing, printing and distributing advertising or promotional
materials, and the cost of printing and distributing prospectuses and
supplements to prospective shareholders. The fund bears the cost of registering
its shares under federal and state securities law and the laws of certain
non-U.S. countries. Under the underwriting agreement, PFD will use its best
efforts in rendering services to the fund.
See "Sales Charges" for the schedule of initial sales charge reallowed to
dealers as a percentage of the offering price of the fund's Class A and Class T
shares.
See the tables under "Annual Fee, Expense and Other Information" for
commissions retained by PFD and reallowed to dealers in connection with PFD's
offering of the fund's Class A and Class C shares during recently completed
fiscal years.
The fund will not generally issue fund shares for consideration other than
cash. At the fund's sole discretion, however, it may issue fund shares for
consideration other than cash in connection with a bona fide reorganization,
statutory merger or other acquisition of portfolio securities.
It is the fund's general practice to repurchase its shares of beneficial
interest for cash consideration in any amount; however, the redemption price of
shares of the fund may, at Pioneer's discretion, be paid in portfolio
securities. The fund has elected to be governed by Rule 18f-1 under the 1940
Act pursuant to which the fund is obligated to redeem shares solely in cash up
to the lesser of $250,000 or 1% of the fund's net asset value during any 90-day
period for any one shareholder. Should the amount of redemptions by any
shareholder exceed such limitation, the fund will have the option of redeeming
the excess in cash or portfolio securities. In the latter case, the securities
are taken at their value employed in determining the fund's net asset value.
You may incur additional costs, such as brokerage fees and taxes, and risks,
including a decline in the value of the securities you receive, if the fund
makes an in-kind distribution.
DISTRIBUTION PLAN
The fund has adopted a distribution plan (the "Distribution Plan") pursuant to
Rule 12b-1 under the 1940 Act with respect to its Class A, Class C, Class R and
Class T shares. The fund has not adopted a Distribution Plan with respect to
its Class K or Class Y shares.
For each Class that has adopted a Distribution Plan, fees under the
Distribution Plan may be used to make payments to one or more principal
underwriters, broker-dealers, financial intermediaries (which may include
banks) and other parties that enter into a distribution, selling or service
agreement with respect to the shares of such Class (each of the foregoing, a
"Service Party"). The fund, its principal underwriter or other parties also may
incur expenses in connection with the distribution or marketing and sales of
the fund's shares that may be paid or reimbursed by the fund. The aggregate
amount in respect of such fees and expenses with respect to each Class shall be
the amount calculated at a percentage per annum of the average daily net assets
attributable to such Class as set forth below:
42
APPLICABLE PERCENTAGE
CLASS PER ANNUM
--------- ----------------------
Class A 0.25%
--------- ----
Class C 1.00%
--------- ----
Class R 0.50%
--------- ----
Class T 0.25%
--------- ----
Payments are made under the Distribution Plan for distribution services and
other activities in respect of the sale of shares of the fund and to make
payments for advertising, marketing or other promotional activity, and for
preparation, printing, and distribution of prospectuses, statements of
additional information and reports for recipients other than regulators and
existing shareholders. The fund also may make payments to Service Parties under
the Distribution Plan for providing personal service or the maintenance of
shareholder accounts. The amounts paid to each recipient may vary based upon
certain factors, including, among other things, the levels of sales of fund
shares and/or shareholder services provided; provided, however, that the fees
paid to a recipient with respect to a particular Class that may be used to
cover expenses primarily intended to result in the sale of shares of that
Class, or that may be used to cover expenses primarily intended for personal
service and/or maintenance of shareholder accounts, may not exceed the maximum
amounts, if any, as may from time to time be permitted for such services under
the Financial Industry Regulatory Authority ("FINRA") Conduct Rule 2341 or any
successor rule, in each case as amended or interpreted by FINRA.
The Distribution Plan also provides that the Service Parties may receive all or
a portion of any sales charges paid by investors.
The Distribution Plan permits the fund to pay fees to the Service Parties as
compensation for their services, not as reimbursement for specific expenses
incurred. Thus, even if their expenses exceed the fees provided for by the
Distribution Plan, the fund will not be obligated to pay more than those fees
and, if their expenses are less than the fees paid to them, they will realize a
profit. The fund may pay the fees to the Service Parties until the Distribution
Plan or any related distribution agreement is terminated or not renewed. In
that event, a Service Party's expenses in excess of fees received or accrued
through the termination date will be such Service Party's sole responsibility
and not obligations of the fund. In their annual consideration of the
continuation of the Distribution Plan for the fund, the Trustees will review
the Distribution Plan and the expenses for each Class within the fund
separately. The fund may participate in joint distribution activities with
other Pioneer funds. The costs associated with such joint distribution
activities are allocated to a fund based on the number of shares sold.
The Distribution Plan also recognizes that Pioneer, PFD or any other Service
Party may make payments for distribution-related expenses out of its own
resources, including past profits, or payments received from the fund for other
purposes, such as management fees, and that the Service Parties may from time
to time use their own resources for distribution-related services, in addition
to the fees paid under the Distribution Plan. The Distribution Plan
specifically provides that, to the extent that such payments might be deemed to
be indirect financing of any activity primarily intended to result in the sale
of shares of the fund within the context of Rule 12b-1, then the payments are
deemed to be authorized by the Distribution Plan but not subject to the maximum
amounts set forth above.
Under its terms, the Distribution Plan continues in effect for one year and
thereafter for successive annual periods, provided such continuance is
specifically approved at least annually by vote of the Board, including a
majority of the Independent Trustees who have no direct or indirect financial
interest in the operation of the Distribution Plan. The Distribution Plan may
not be amended to increase materially the amount of the service and
distribution fees without shareholder approval, and all material amendments of
the Distribution Plan also must be approved by the Trustees, including all of
the Independent Trustees, in
43
the manner described above. The Distribution Plan may be terminated with
respect to a Class of the fund at any time, without penalty, by vote of a
majority of the Independent Trustees or by vote of a majority of the
outstanding voting securities of such Class of the fund (as defined in the 1940
Act).
See "Annual Fee, Expense and Other Information" for fund expenses under the
Distribution Plan paid to PFD for the most recently completed fiscal year.
CLASS C SHARES
PFD will advance to dealers the first-year service fee at a rate equal to 0.25%
of the amount invested. As compensation therefor, PFD may retain the service
fee paid by the fund with respect to such shares for the first year after
purchase. Commencing in the 13th month following the purchase of Class C
shares, dealers will become eligible for additional annual distribution fees
and service fees of up to 0.75% and 0.25%, respectively, of the net asset value
of such shares. Dealers may from time to time be required to meet certain other
criteria in order to receive service fees.
SERVICE PLAN FOR CLASS R SHARES
The fund has adopted a service plan (the "Service Plan") with respect to its
Class R shares under which the fund is authorized to pay securities dealers,
plan administrators or other service organizations who agree to provide certain
services to plans or plan participants holding shares of the fund a service fee
of up to 0.25% of the fund's average daily net assets attributable to Class R
shares held by such plan participants. These services may include (a) acting,
directly or through an agent, as the shareholder of record and nominee for all
plan participants, (b) maintaining account records for each plan participant
that beneficially owns Class R shares, (c) processing orders to purchase,
redeem and exchange Class R shares on behalf of plan participants, and handling
the transmission of funds representing the purchase price or redemption
proceeds, and (d) addressing plan participant questions regarding their
accounts and the fund.
6. SHAREHOLDER SERVICING/TRANSFER AGENT
The fund has contracted with Boston Financial Data Services, Inc., 2000 Crown
Colony Drive, Quincy, Massachusetts, 02169, to act as shareholder servicing and
transfer agent for the fund.
Under the terms of its contract with the fund, Boston Financial Data Services,
Inc. services shareholder accounts, and its duties include: (i) processing
sales, redemptions and exchanges of shares of the fund; (ii) distributing
dividends and capital gains associated with the fund's portfolio; and (iii)
maintaining account records and responding to shareholder inquiries.
7. CUSTODIAN AND SUB-ADMINISTRATOR
Brown Brothers Harriman & Co. ("BBH"), 50 Post Office Square, Boston,
Massachusetts 02110, is the custodian of the fund's assets. The custodian's
responsibilities include safekeeping and controlling the fund's cash and
securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the fund's investments.
BBH also performs certain fund accounting and fund administration services for
the Pioneer Fund complex, including the fund. For performing such services, BBH
receives fees based on complex-wide assets.
8. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP, 200 Berkeley Street, Boston, MA 02116, independent
registered public accounting firm, provided audit services, tax return review
services, and assistance and consultation with respect to filings with the SEC
for the fiscal year ended October 31, 2016.
44
9. PORTFOLIO MANAGEMENT
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGERS
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS
The table below indicates, for the portfolio managers of the fund, information
about the accounts other than the fund over which the portfolio manager has
day-to-day investment responsibility. All information on the number of accounts
and total assets in the table is as of October 31, 2016. For purposes of the
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts but generally do not include the portfolio manager's personal
investment accounts or those which the manager may be deemed to own
beneficially under the code of ethics. Certain funds and other accounts managed
by the portfolio manager may have substantially similar investment strategies.
NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
---------------------- ---------------------------- ----------- ----------------- ---------------- --------------
John A. Carey Other Registered Investment
Companies 4 $4,986,401 1 $4,555,203
Other Pooled Investment
Vehicles 2 $1,460,611 1 $1,424,205
Other Accounts 0 $ 0 N/A N/A
---------------------- ---------------------------- ----------- ---------- ---------------- ----------
Walter Hunnewell Jr. Other Registered
Investment Companies 4 $5,267,622 1 $4,555,203
Other Pooled Investment
Vehicles 3 $1,579,131 1 $1,424,205
Other Accounts 0 $ 0 N/A N/A
---------------------- ---------------------------- ----------- ---------- ---------------- ----------
POTENTIAL CONFLICTS OF INTEREST
When a portfolio manager is responsible for the management of more than one
account, the potential arises for the portfolio manager to favor one account
over another. The principal types of potential conflicts of interest that may
arise are discussed below. For the reasons outlined below, Pioneer does not
believe that any material conflicts are likely to arise out of a portfolio
manager's responsibility for the management of the fund as well as one or more
other accounts. Although Pioneer has adopted procedures that it believes are
reasonably designed to detect and prevent violations of the federal securities
laws and to mitigate the potential for conflicts of interest to affect its
portfolio management decisions, there can be no assurance that all conflicts
will be identified or that all procedures will be effective in mitigating the
potential for such risks. Generally, the risks of such conflicts of interest
are increased to the extent that a portfolio manager has a financial incentive
to favor one account over another. Pioneer has structured its compensation
arrangements in a manner that is intended to limit such potential for conflicts
of interest. See "Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating new
investment opportunities that have limited supply, such as initial public
offerings and private placements. If, for example, an initial public
offering that was expected to appreciate in value significantly shortly
after the offering was allocated to a single account, that account may be
expected to have better investment performance than other accounts that did
not receive an allocation of the initial public offering. Generally,
45
investments for which there is limited availability are allocated based upon a
range of factors including available cash and consistency with the accounts'
investment objectives and policies. This allocation methodology necessarily
involves some subjective elements but is intended over time to treat each
client in an equitable and fair manner. Generally, the investment opportunity
is allocated among participating accounts on a pro rata basis. Although
Pioneer believes that its practices are reasonably designed to treat each
client in an equitable and fair manner, there may be instances where a fund
may not participate, or may participate to a lesser degree than other clients,
in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount that
may influence the market price of the security, accounts that purchased or
sold the security first may receive a more favorable price than accounts
that made subsequent transactions. The less liquid the market for the
security or the greater the percentage that the proposed aggregate purchases
or sales represent of average daily trading volume, the greater the
potential for accounts that make subsequent purchases or sales to receive a
less favorable price. When a portfolio manager intends to trade the same
security on the same day for more than one account, the trades typically are
"bunched," which means that the trades for the individual accounts are
aggregated and each account receives the same price. There are some types of
accounts as to which bunching may not be possible for contractual reasons
(such as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in the
best possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as favorable
a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or to
compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise. For
example, if a portfolio manager purchases a security for one account and
sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Pioneer seeks to avoid such potentially conflicting
situations. However, where a portfolio manager is responsible for accounts
with differing investment objectives and policies, it is possible that the
portfolio manager will conclude that it is in the best interest of one
account to sell a portfolio security while another account continues to hold
or increase the holding in such security.
COMPENSATION OF PORTFOLIO MANAGERS
Pioneer has adopted a system of compensation for portfolio managers that seeks
to align the financial interests of the portfolio managers with those of
shareholders of the accounts (including Pioneer funds) the portfolio managers
manage, as well as with the financial performance of Pioneer. The compensation
program for all Pioneer portfolio managers includes a base salary (determined
by the rank and tenure of
46
the employee) and an annual bonus program, as well as customary benefits that
are offered generally to all full-time employees. Base compensation is fixed
and normally reevaluated on an annual basis. Pioneer seeks to set base
compensation at market rates, taking into account the experience and
responsibilities of the portfolio manager. The bonus plan is intended to
provide a competitive level of annual bonus compensation that is tied to the
portfolio manager achieving superior investment performance and align the
interests of the investment professional with those of shareholders, as well as
with the financial performance of Pioneer. Any bonus under the plan is
completely discretionary, with a maximum annual bonus that may be in excess of
base salary. The annual bonus is based upon a combination of the following
factors:
o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance
calculation is based on pre-tax investment performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period (20%
weighting) and four-year period (80% weighting), measured for periods ending
on December 31. The accounts, which include the fund, are ranked against a
group of mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring the
performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Russell 1000 Value Index. As a
result of these two benchmarks, the performance of the portfolio manager for
compensation purposes is measured against the criteria that are relevant to
the portfolio manager's competitive universe.
o QUALITATIVE PERFORMANCE. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes objectives,
such as effectiveness in the areas of teamwork, leadership, communications
and marketing, that are mutually established and evaluated by each portfolio
manager and management.
o PIONEER RESULTS AND BUSINESS LINE RESULTS. Pioneer's financial performance,
as well as the investment performance of its investment management group,
affect a portfolio manager's actual bonus by a leverage factor of plus or
minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers participate in other programs designed to reward and
retain key contributors. Senior executives or other key employees are granted
performance units based on the stock price performance of UniCredit and the
financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGERS
The following table indicates as of October 31, 2016 the value, within the
indicated range, of shares beneficially owned by the portfolio managers of the
fund.
BENEFICIAL OWNERSHIP
NAME OF PORTFOLIO MANAGER OF THE FUND*
--------------------------- ---------------------
John A. Carey G
--------------------------- ---------------------
Walter Hunnewell Jr. G
--------------------------- ---------------------
* Key to Dollar Ranges
47
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
10. PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by Pioneer pursuant to authority contained in the fund's
management contract. Pioneer seeks to obtain overall 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 the fund and/or other investment companies or other accounts
managed by Pioneer over which it or its affiliates exercise investment
discretion. 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
the fund and other investment companies or accounts managed by Pioneer are
placed with broker-dealers (including broker-dealers on the listing) without
regard to the furnishing of such services, it is not possible to estimate the
proportion of such transactions directed to such dealers solely because such
services were provided. Pioneer believes that no exact dollar value can be
calculated for such services.
The research received from broker-dealers may be useful to Pioneer in rendering
investment management services to the fund as well as other investment
companies or other accounts managed by Pioneer, although not all such research
may be useful to the fund. Conversely, such information provided by brokers or
dealers who have executed transaction orders on behalf of such other accounts
may be useful to Pioneer in carrying out its obligations to the fund. The
receipt of such research 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.
The fund may participate in third-party brokerage and/or expense offset
arrangements to reduce the fund's total operating expenses. Pursuant to
third-party brokerage arrangements, the fund may incur lower expenses by
directing brokerage to third-party broker-dealers which have agreed to use part
of their
48
commission to pay the fund's fees to service providers unaffiliated with
Pioneer or other expenses. Since the commissions paid to the third party
brokers reflect a commission cost that the fund would generally expect to incur
on its brokerage transactions but not necessarily the lowest possible
commission, this arrangement is intended to reduce the fund's operating
expenses without increasing the cost of its brokerage commissions. Since use of
such directed brokerage is subject to the requirement to achieve best execution
in connection with the fund's brokerage transactions, there can be no assurance
that such arrangements will be utilized. Pursuant to expense offset
arrangements, the fund may incur lower transfer agency expenses due to interest
earned on cash held with the transfer agent. See "Financial highlights" in the
prospectus.
See the table in "Annual Fee, Expense and Other Information" for aggregate
brokerage and underwriting commissions paid by the fund in connection with its
portfolio transactions during recently completed fiscal years. The Board of
Trustees periodically reviews Pioneer's performance of its responsibilities in
connection with the placement of portfolio transactions on behalf of the fund.
11. DESCRIPTION OF SHARES
As an open-end management investment company, the fund continuously offers its
shares to the public and under normal conditions must redeem its shares upon
the demand of any shareholder at the next determined net asset value per share
less any applicable contingent deferred sales charge ("CDSC"). See "Sales
Charges." When issued and paid for in accordance with the terms of the
prospectus and statement of additional information, shares of the fund are
fully paid and non-assessable. Shares will remain on deposit with the fund's
transfer agent and certificates will not normally be issued.
The fund is a series of Pioneer Equity Income Fund, a Delaware statutory trust.
The Trustees have authorized the issuance of the following classes of shares of
the fund, designated as Class A, Class C, Class K, Class R, Class T and Class Y
shares. Until November 10, 2014, the fund offered Class B shares. All
outstanding Class B shares were converted to Class A shares on November 10,
2014. Until August 7, 2015, the fund offered Class Z shares. All outstanding
Class Z shares were converted to Class Y shares on August 7, 2015. Each share
of a class of the fund represents an equal proportionate interest in the assets
of the fund allocable to that class. Upon liquidation of the fund, shareholders
of each class of the fund are entitled to share pro rata in the fund's net
assets allocable to such class available for distribution to shareholders. The
Trust reserves the right to create and issue additional series or classes of
shares, in which case the shares of each class of a series would participate
equally in the earnings, dividends and assets allocable to that class of the
particular series.
The shares of each class represent an interest in the same portfolio of
investments of the fund. Each class has identical rights (based on relative net
asset values) to assets and liquidation proceeds. Share classes can bear
different class-specific fees and expenses such as transfer agent and
distribution fees. Differences in class-specific fees and expenses will result
in differences in net investment income and, therefore, the payment of
different dividends by each class. Share classes have exclusive voting rights
with respect to matters affecting only that class, including with respect to
the distribution plan for that class.
THE TRUST
The Trust's operations are governed by the Amended and Restated Agreement and
Declaration of Trust, dated as of July 1, 2008 (referred to in this section as
the declaration). A copy of the Trust's Certificate of Trust dated as of
January 8, 1998, as amended, is on file with the office of the Secretary of
State of Delaware.
49
Delaware law provides a statutory framework for the powers, duties, rights and
obligations of the board (referred to in this section as the trustees) and
shareholders of the Delaware statutory trust, while the more specific powers,
duties, rights and obligations of the trustees and the shareholders are
determined by the trustees as set forth in the declaration. Some of the more
significant provisions of the declaration are described below.
SHAREHOLDER VOTING
The declaration provides for shareholder voting as required by the 1940 Act or
other applicable laws but otherwise permits, consistent with Delaware law,
actions by the trustees without seeking the consent of shareholders. The
trustees may, without shareholder approval, where approval of shareholders is
not otherwise required under the 1940 Act, merge or consolidate the Trust into
other entities, reorganize the Trust or any series or class into another trust
or entity or a series or class of another entity, sell the assets of the Trust
or any series or class to another entity, or a series or class of another
entity, or terminate the Trust or any series or class.
The fund is not required to hold an annual meeting of shareholders, but the
fund will call special meetings of shareholders whenever required by the 1940
Act or by the terms of the declaration. The declaration gives the board the
flexibility to specify either per share voting or dollar-weighted voting. Under
per share voting, each share of the fund is entitled to one vote. Under
dollar-weighted voting, a shareholder's voting power is determined, not by the
number of shares the shareholder owns, but by the dollar value of those shares
determined on the record date. All shareholders of all series and classes of
the Trust vote together, except where required by the 1940 Act to vote
separately by series or by class, or when the trustees have determined that a
matter affects only the interests of one or more series or classes of shares.
ELECTION AND REMOVAL OF TRUSTEES
The declaration provides that the trustees may establish the number of trustees
and that vacancies on the board may be filled by the remaining trustees, except
when election of trustees by the shareholders is required under the 1940 Act.
Trustees are then elected by a plurality of votes cast by shareholders at a
meeting at which a quorum is present. The declaration also provides that a
mandatory retirement age may be set by action of two-thirds of the trustees and
that trustees may be removed at any time or for any reason by a majority of the
board or by a majority of the outstanding shareholders of the Trust.
AMENDMENTS TO THE DECLARATION
The trustees are authorized to amend the declaration without the vote of
shareholders, but no amendment may be made that impairs the exemption from
personal liability granted in the declaration to persons who are or have been
shareholders, trustees, officers or, employees of the trust or that limit the
rights to indemnification or insurance provided in the declaration with respect
to actions or omissions of persons entitled to indemnification under the
declaration prior to the amendment.
ISSUANCE AND REDEMPTION OF SHARES
The fund may issue an unlimited number of shares for such consideration and on
such terms as the trustees may determine. Shareholders are not entitled to any
appraisal, preemptive, conversion, exchange or similar rights, except as the
trustees may determine. The fund may involuntarily redeem a shareholder's
shares upon certain conditions as may be determined by the trustees, including,
for example, if the shareholder fails to provide the fund with identification
required by law, or if the fund is unable to verify the information received
from the shareholder. Additionally, as discussed below, shares may be redeemed
in connection with the closing of small accounts.
50
DISCLOSURE OF SHAREHOLDER HOLDINGS
The declaration specifically requires shareholders, upon demand, to disclose to
the fund information with respect to the direct and indirect ownership of
shares in order to comply with various laws or regulations, and the fund may
disclose such ownership if required by law or regulation.
SMALL ACCOUNTS
The declaration provides that the fund may close out a shareholder's account by
redeeming all of the shares in the account if the account falls below a minimum
account size (which may vary by class) that may be set by the trustees from
time to time. Alternately, the declaration permits the fund to assess a fee for
small accounts (which may vary by class) and redeem shares in the account to
cover such fees, or convert the shares into another share class that is geared
to smaller accounts.
SERIES AND CLASSES
The declaration provides that the trustees may establish series and classes in
addition to those currently established and to determine the rights and
preferences, limitations and restrictions, including qualifications for
ownership, conversion and exchange features, minimum purchase and account size,
expenses and charges, and other features of the series and classes. The
trustees may change any of those features, terminate any series or class,
combine series with other series in the trust, combine one or more classes of a
series with another class in that series or convert the shares of one class
into another class.
Each share of the fund, as a series of the Trust, represents an interest in the
fund only and not in the assets of any other series of the Trust.
SHAREHOLDER, TRUSTEE AND OFFICER LIABILITY
The declaration provides that shareholders are not personally liable for the
obligations of the fund and requires a fund to indemnify a shareholder against
liability arising solely from the shareholder's ownership of shares in the
fund. In addition, the fund will assume the defense of any claim against a
shareholder for personal liability at the request of the shareholder. The
declaration also provides that no Trustee, officer or employee of the Trust
owes any duty to any person (including without limitation any shareholder),
other than the Trust or any series. The declaration further provides that no
trustee, officer or employee of the fund shall be liable to the fund or any
shareholder for any action, failure to act, error or mistake except in cases of
bad faith, willful misfeasance, gross negligence or reckless disregard of duty.
The declaration requires the fund to indemnify each trustee, director, officer,
employee and authorized agent to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been such a
trustee, director, officer, employee, or agent and against amounts paid or
incurred by him in settlement thereof. The 1940 Act currently provides that no
officer or director shall be protected from liability to the fund or
shareholders for willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties of office. The declaration extends to trustees,
officers and employees of the fund the full protection from liability that the
law allows.
The declaration provides that the appointment, designation or identification of
a trustee as chairperson, a member of a committee, an expert, lead independent
trustee, or any other special appointment, designation or identification shall
not impose any heightened standard of care or liability on such trustee.
DERIVATIVE AND DIRECT ACTIONS
The declaration provides a detailed process for the bringing of derivative or
direct actions by shareholders in order to permit legitimate inquiries and
claims while avoiding the time, expense, distraction, and other harm that can
be caused to the fund or its shareholders as a result of spurious shareholder
demands and derivative actions. Prior to bringing a derivative action, a demand
by three unrelated shareholders must
51
first be made on the fund's trustees. The declaration details various
information, certifications, undertakings and acknowledgements that must be
included in the demand. Following receipt of the demand, the trustees have a
period of 90 days, which may be extended by an additional 60 days, to consider
the demand. If a majority of the trustees who are considered independent for
the purposes of considering the demand determine that maintaining the suit
would not be in the best interests of the fund, the trustees are required to
reject the demand and the complaining shareholders may not proceed with the
derivative action unless the shareholders are able to sustain the burden of
proof to a court that the decision of the trustees not to pursue the requested
action was not a good faith exercise of their business judgment on behalf of
the fund. The declaration further provides that shareholders owning shares
representing at least 10% of the voting power of the affected fund must join in
bringing the derivative action. If a demand is rejected, the complaining
shareholders will be responsible for the costs and expenses (including
attorneys' fees) incurred by the fund in connection with the consideration of
the demand, if a court determines that the demand was made without reasonable
cause or for an improper purpose. If a derivative action is brought in
violation of the declaration, the shareholders bringing the action may be
responsible for the fund's costs, including attorneys' fees, if a court
determines that the action was brought without reasonable cause or for an
improper purpose.
The declaration provides that no shareholder may bring a direct action claiming
injury as a shareholder of the Trust, or any series or class thereof, where the
matters alleged (if true) would give rise to a claim by the Trust or by the
Trust on behalf of a series or class, unless the shareholder has suffered an
injury distinct from that suffered by the shareholders of the Trust, or the
series or class, generally. Under the declaration, a shareholder bringing a
direct claim must be a shareholder of the series or class with respect to which
the direct action is brought at the time of the injury complained of, or have
acquired the shares afterwards by operation of law from a person who was a
shareholder at that time.
The declaration further provides that the fund shall be responsible for payment
of attorneys' fees and legal expenses incurred by a complaining shareholder
only if required by law, and any attorneys' fees that the fund is obligated to
pay shall be calculated using reasonable hourly rates. The declaration also
requires that actions by shareholders against the fund be brought only in
federal court in Boston, Massachusetts, or if not permitted to be brought in
federal court, then in state court in Boston, Massachusetts, and that
shareholders have no right to jury trial for such actions.
The declaration also provides that shareholders have no rights, privileges,
claims or remedies under any contract or agreement entered into by the Trust
with any service provider or other agent or contract with the Trust, including,
without limitation, any third party beneficiary rights, except as may be
expressly provided in any service contract or agreement.
12. SALES CHARGES
The fund continuously offers the following classes of shares: Class A, Class C,
Class K, Class R, Class T and Class Y share, as described in the prospectus.
The fund offers its shares at a reduced sales charge to investors who meet
certain criteria that permit the fund's shares to be sold with low distribution
costs. These criteria are described below or in the prospectus. The
availability of certain sales charge waivers and discounts may depend on
whether you purchase your shares directly from the fund or through a financial
intermediary. Please see the prospectus to determine any sales charge discounts
and waivers that may be available to you through your financial intermediary.
52
CLASS A SHARE SALES CHARGES
You may buy Class A shares at the public offering price, including a sales
charge, as follows:
SALES CHARGE AS A % OF
--------------------------------------
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
--------------------------------- ---------- ------------ ------------
Less than $50,000 5.75 6.10 5.00
--------------------------------- ---- ---- ----
$50,000 but less than $100,000 4.50 4.71 4.00
--------------------------------- ---- ---- ----
$100,000 but less than $250,000 3.50 3.63 3.00
--------------------------------- ---- ---- ----
$250,000 but less than $500,000 2.50 2.56 2.00
--------------------------------- ---- ---- ----
$500,000 or more 0.00 0.00 see below
--------------------------------- ---- ---- ------------
The schedule of sales charges above is applicable to purchases of Class A
shares of the fund by (i) an individual, (ii) an individual and his or her
spouse and children under the age of 21 and (iii) a trustee or other fiduciary
of a trust estate or fiduciary account or related trusts or accounts including
pension, profit-sharing and other employee benefit trusts qualified under
Sections 401 or 408 of the Code although more than one beneficiary is involved;
however, pension, profit-sharing and other employee benefit trusts qualified
under Sections 401 or 408 of the Code which are eligible to purchase Class R
shares may aggregate purchases by beneficiaries of such plans only if the
pension, profit-sharing or other employee benefit trust has determined that it
does not require the services provided under the Class R Service Plan. The
sales charges applicable to a current purchase of Class A shares of the fund by
a person listed above is determined by adding the value of shares to be
purchased to the aggregate value (at the then current offering price) of shares
of any of the other Pioneer mutual funds previously purchased and then owned,
provided PFD is notified by such person or his or her broker-dealer each time a
purchase is made which would qualify. Pioneer mutual funds include all mutual
funds for which PFD serves as principal underwriter. At the sole discretion of
PFD, holdings of funds domiciled outside the U.S., but which are managed by
affiliates of Pioneer, may be included for this purpose.
No sales charge is payable at the time of purchase on investments of $500,000
or more, or for purchases by participants in employer-sponsored retirement
plans described below subject to a CDSC of 1% which may be imposed in the event
of a redemption of Class A shares within 12 months of purchase. PFD may, in its
discretion, pay a commission to broker-dealers who initiate and are responsible
for such purchases as follows:
1.00% Up to $4 million
---- ---------------------------------
Greater than $4 million and less
0.50% than or equal to $50 million
---- ---------------------------------
0.25% Over $50 million
---- ---------------------------------
Commissions are based on cumulative investments in Class A shares of the
Pioneer funds. These commissions shall not be payable if the purchaser is
affiliated with the broker-dealer or if the purchase represents the
reinvestment of a redemption made during the previous 12 calendar months.
Broker-dealers who receive a commission in connection with Class A share
purchases at net asset value by employer-sponsored retirement plans with at
least $500,000 in total plan assets (or that has 1,000 or more eligible
participants for employer-sponsored retirement plans with accounts established
with Pioneer on or before March 31, 2004) will be required to return any
commissions paid or a pro rata portion thereof if the retirement plan redeems
its shares within 12 months of purchase.
If an investor eligible to purchase Class R shares is otherwise qualified to
purchase Class A shares at net asset value or at a reduced sales charge, Class
A shares may be selected where the investor does not require the distribution
and account services needs typically required by Class R share investors and/or
the broker-dealer has elected to forgo the level of compensation that Class R
shares provides.
53
LETTER OF INTENT ("LOI")
Reduced sales charges are available for purchases of $50,000 or more of Class A
shares (excluding any reinvestments of dividends and capital gain
distributions) made within a 13-month period pursuant to an LOI which may be
established by completing the Letter of Intent section of the Account
Application. The reduced sales charge will be the charge that would be
applicable to the purchase of the specified amount of Class A shares as if the
shares had all been purchased at the same time. A purchase not made pursuant to
an LOI may be included if the LOI is submitted to the fund's transfer agent
within 90 days of such purchase. You may also obtain the reduced sales charge
by including the value (at current offering price) of all your Class A shares
in the fund and all other Pioneer mutual funds held of record as of the date of
your LOI in the amount used to determine the applicable sales charge for the
Class A shares to be purchased under the LOI. Five percent of your total
intended purchase amount will be held in escrow by the fund's transfer agent,
registered in your name, until the terms of the LOI are fulfilled. When you
sign the Account Application, you agree to irrevocably appoint the fund's
transfer agent your attorney-in-fact to surrender for redemption any or all
shares held in escrow with full power of substitution. An LOI is not a binding
obligation upon the investor to purchase, or the fund to sell, the amount
specified in the LOI. Any share class for which no sales charge is paid cannot
be included under the LOI.
If the total purchases exceed the amount specified under the LOI and are in an
amount that would qualify for a further quantity discount, all transactions
will be recomputed on the expiration date of the LOI to effect the lower sales
charge. Any difference in the sales charge resulting from such recomputation
will be either delivered to you in cash or invested in additional shares at the
lower sales charge. The dealer, by signing the Account Application, agrees to
return to PFD, as part of such retroactive adjustment, the excess of the
commission previously reallowed or paid to the dealer over that which is
applicable to the actual amount of the total purchases under the LOI.
If the total purchases are less than the amount specified under the LOI, PFD
will recalculate your sales charge and the fund's transfer agent will redeem
the appropriate number of shares held in escrow to realize the difference and
release any excess.
If sufficient shares are not purchased to complete the LOI because all
registered account owners died within the 13-month period, PFD will consider
the LOI complete and will not adjust past transactions for purposes of the
sales charges paid. Commissions to dealers will not be adjusted or paid on the
difference between the LOI amount and the amount actually invested before the
shareholders' deaths.
CLASS C SHARES
You may buy Class C shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge;
however, Class C shares redeemed within one year of purchase will be subject to
a CDSC of 1%. The charge will be assessed on the amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. No CDSC will be imposed on increases in account value above the
initial purchase price, including shares derived from the reinvestment of
dividends or capital gain distributions. Class C shares do not convert to any
other class of fund shares.
In processing redemptions of Class C shares, the fund will first redeem shares
not subject to any CDSC and then shares held for the longest period of time
during the one-year period. As a result, you will pay the lowest possible CDSC.
Proceeds from the CDSC are paid to PFD and are used in whole or in part to
defray PFD's expenses related to providing distribution-related services to the
fund in connection with the sale of Class C shares, including the payment of
compensation to broker-dealers.
CLASS K SHARES
No front-end, deferred or asset-based sales charges are applicable to Class K
shares.
54
CLASS R SHARES
You may buy Class R shares at the net asset value per share next computed after
receipt of a purchase order without the imposition of an initial sales charge
or CDSC.
Class R shares are available to certain tax-deferred retirement plans
(including 401(k) plans, employer-sponsored 403(b) plans, 457 plans, profit
sharing and money purchase pension plans, defined benefit plans and
non-qualified deferred compensation plans) held in plan level or omnibus
accounts. Class R shares also are available to individual retirement account
rollovers from eligible retirement plans that offered one or more Pioneer funds
as investment options. Class R shares generally are not available to
non-retirement accounts, traditional and Roth IRA's, Coverdell Education
Savings Accounts, SEP's, SAR-SEP's, Simple IRA's, individual 403(b)'s or
retirement plans that are not subject to the Employee Retirement Income
Security Act of 1974.
Investors that are eligible to purchase Class R shares may also be eligible to
purchase other share classes. Your investment professional can help you
determine which class is appropriate. You should ask your investment
professional if you qualify for a waiver of sales charges on another class and
take that into consideration when selecting a class of shares. Your investment
firm may receive different compensation depending upon which class is chosen.
CLASS T SHARE SALES CHARGES
You may buy Class T shares at the public offering price, including a sales
charge, as follows:
SALES CHARGE AS A % OF
--------------------------------------
OFFERING NET AMOUNT DEALER
AMOUNT OF PURCHASE PRICE INVESTED REALLOWANCE
----------------------------------- ---------- ------------ ------------
Less than $250,000 2.50 2.56 2.50
----------------------------------- ---- ---- ----
$250,000 but less than $500,000 2.00 2.04 2.00
----------------------------------- ---- ---- ----
$500,000 but less than $1,000,000 1.50 1.52 1.50
----------------------------------- ---- ---- ----
$1,000,000 or more 1.00 1.01 1.00
----------------------------------- ---- ---- ----
CLASS Y SHARES
No front-end, deferred or asset-based sales charges are applicable to Class Y
shares.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
The financial intermediaries through which shares are purchased may receive all
or a portion of the sales charges and Rule 12b-1 fees discussed above. In
addition to those payments, Pioneer or one or more of its affiliates
(collectively, "Pioneer Affiliates") may make additional payments to financial
intermediaries in connection with the promotion and sale of shares of Pioneer
funds. Pioneer Affiliates make these payments from their own resources, which
include resources that derive from compensation for providing services to the
Pioneer funds. These additional payments are described below. The categories
described below are not mutually exclusive. The same financial intermediary may
receive payments under more than one or all categories. Many financial
intermediaries that sell shares of Pioneer funds receive one or more types of
these payments. The financial intermediary typically initiates requests for
additional compensation. Pioneer negotiates these arrangements individually
with financial intermediaries and the amount of payments and the specific
arrangements may differ significantly. A financial intermediary also may
receive different levels of compensation with respect to sales or assets
attributable to different types of clients of the same intermediary or
different Pioneer funds. Where services are provided, the costs of providing
the services and the overall array of services provided may vary from one
financial intermediary to another. Pioneer Affiliates do not make an
independent assessment of the cost of providing such services. While the
financial intermediaries may request additional compensation from Pioneer to
offset costs incurred by the financial intermediary in servicing its clients,
the financial intermediary may earn a profit on these payments, since the
amount of the payment may exceed the financial intermediary's costs.
55
In this context, "financial intermediary" includes any broker, dealer, bank
(including bank trust departments), insurance company, transfer agent,
registered investment adviser, financial planner, retirement plan administrator
and any other financial intermediary having a selling, administrative and
shareholder servicing or similar agreement with a Pioneer Affiliate.
A financial intermediary's receipt of additional compensation may create
conflicts of interest between the financial intermediary and its clients. Each
type of payment discussed below may provide your financial intermediary with an
economic incentive to actively promote the Pioneer funds over other mutual
funds or cooperate with the distributor's promotional efforts. The receipt of
additional compensation for Pioneer Affiliates may be an important
consideration in a financial intermediary's willingness to support the sale of
the Pioneer funds through the financial intermediary's distribution system.
Pioneer Affiliates are motivated to make the payments described above since
they promote the sale of Pioneer fund shares and the retention of those
investments by clients of financial intermediaries. In certain cases these
payments could be significant to the financial intermediary. The financial
intermediary may charge additional fees or commissions other than those
disclosed in the prospectus. Financial intermediaries may categorize and
disclose these arrangements differently than Pioneer Affiliates do. To the
extent financial intermediaries sell more shares of the funds or retain shares
of the funds in their clients' accounts, Pioneer Affiliates benefit from the
incremental management and other fees paid to Pioneer Affiliates by the funds
with respect to those assets.
REVENUE SHARING PAYMENTS
Pioneer Affiliates make revenue sharing payments as incentives to certain
financial intermediaries to promote and sell shares of Pioneer funds. The
benefits Pioneer Affiliates receive when they make these payments include,
among other things, entry into or increased visibility in the financial
intermediary's sales system, participation by the intermediary in the
distributor's marketing efforts (such as helping facilitate or providing
financial assistance for conferences, seminars or other programs at which
Pioneer personnel may make presentations on the funds to the intermediary's
sales force), placement on the financial intermediary's preferred fund list,
and access (in some cases, on a preferential basis over other competitors) to
individual members of the financial intermediary's sales force or management.
Revenue sharing payments are sometimes referred to as "shelf space" payments
because the payments compensate the financial intermediary for including
Pioneer funds in its fund sales system (on its "shelf space"). Pioneer
Affiliates also may pay financial intermediaries "finders'" or "referral" fees
for directing investors to the Pioneer funds. Pioneer Affiliates compensate
financial intermediaries differently depending typically on the level and/or
type of considerations provided by the financial intermediary.
The revenue sharing payments Pioneer Affiliates make may be calculated on sales
of shares of Pioneer funds ("Sales-Based Payments"); although there is no
policy limiting the amount of Sales-Based Payments any one financial
intermediary may receive, the total amount of such payments normally does not
exceed 0.25% per annum of those assets. Such payments also may be calculated on
the average daily net assets of the applicable Pioneer funds attributable to
that particular financial intermediary ("Asset-Based Payments"); although there
is no policy limiting the amount of Asset-Based Payments any one financial
intermediary may receive, the total amount of such payments normally does not
exceed 0.16% per annum of those assets. Sales-Based Payments primarily create
incentives to make new sales of shares of Pioneer funds and Asset-Based
Payments primarily create incentives to retain previously sold shares of
Pioneer funds in investor accounts. Pioneer Affiliates may pay a financial
intermediary either or both Sales-Based Payments and Asset-Based Payments.
ADMINISTRATIVE AND PROCESSING SUPPORT PAYMENTS
Pioneer Affiliates also may make payments to certain financial intermediaries
that sell Pioneer fund shares for certain administrative services, including
record keeping and sub-accounting shareholder accounts, to the extent that the
funds do not pay for these costs directly. Pioneer Affiliates also may make
payments to certain financial intermediaries that sell Pioneer fund shares in
connection with client
56
account maintenance support, statement preparation and transaction processing.
The types of payments that Pioneer Affiliates may make under this category
include, among others, payment of ticket charges per purchase or exchange order
placed by a financial intermediary, payment of networking fees in connection
with certain mutual fund trading systems, or one-time payments for ancillary
services such as setting up funds on a financial intermediary's mutual fund
trading system.
OTHER PAYMENTS
From time to time, Pioneer Affiliates, at their expense, may provide additional
compensation to financial intermediaries which sell or arrange for the sale of
shares of the Pioneer funds. Such compensation provided by Pioneer Affiliates
may include financial assistance to financial intermediaries that enable
Pioneer Affiliates to participate in and/or present at conferences or seminars,
sales or training programs for invited registered representatives and other
employees, client entertainment, client and investor events, and other
financial intermediary-sponsored events, and travel expenses, including lodging
incurred by registered representatives and other employees in connection with
client prospecting, retention and due diligence trips. Other compensation may
be offered to the extent not prohibited by federal or state laws or any
self-regulatory agency, such as FINRA. Pioneer Affiliates make payments for
entertainment events they deem appropriate, subject to Pioneer Affiliates'
guidelines and applicable law. These payments may vary depending upon the
nature of the event or the relationship.
As of January 1, 2017, Pioneer anticipates that the following broker-dealers or
their affiliates will receive additional payments as described in the fund's
prospectus and statement of additional information:
AIG VALIC
ADP Retirement Services
Ameriprise Financial Services, Inc.
Ascensus Broker Dealer Services, Inc.
Cetera Advisors Networks LLC
Charles Schwab & Co., Inc.
Citigroup Global Markets Inc.
Commonwealth Financial Network
Fidelity Brokerage Services LLC
First Clearing, LLC
First Command Financial Planning, Inc.
FSC Securities Corporation
Guardian Investor Services LLC
GWFS Equities, Inc.
H.D. Investment Services
Hartford Securities Distribution Company, Inc.
J.P. Morgan Securities LLC
Jefferson National Securities Corporation
Legend Equities Corporation
Lincoln Financial
LPL Financial Corp.
Merrill Lynch & Co., Inc.
MetLife Securities Inc.
Mid Atlantic Capital Corporation
MML Investors Services
Morgan Stanley & Co., Inc.
MSCS Financial Services, LLC
Mutual of Omaha Investor Services, Inc.
N.I.S. Financial Services, Inc.
National Financial Services LLC
57
Nationwide Securities, Inc.
Northwestern Investment Services, LLC
NYLife Securities, LLC
OneAmerica Securities, Inc.
Pershing LLC
PFS Investments Inc.
PNC Investments
Prudential Financial
Raymond James Financial Services, Inc.
RBC Dain Rauscher Inc.
Robert W. Baird & Co., Inc.
Royal Alliance Associates, Inc.
SagePoint Financial
Sammons Financial Network, LLC
Securities America, Inc.
Symetra Investment Services, Inc.
TD Ameritrade, Inc.
TIAA-CREF Individual & Institutional Services, LLC
T. Rowe Price Investment Services, Inc.
Transamerica Financial Advisors, Inc.
UBS Financial Services Inc.
U.S. Bancorp Investments, Inc.
Vanguard Marketing Corporation
Voya Financial Partners, LLC
Wells Fargo Investments, LLC
Woodbury Financial Services
Please contact your financial intermediary for details about any payments it
receives from Pioneer Affiliates or the funds, as well as about fees and/or
commissions it charges.
13. REDEEMING SHARES
Redemptions may be suspended or payment postponed during any period in which
any of the following conditions exist: the New York Stock Exchange (the
"Exchange") is closed or trading on the Exchange is restricted; an emergency
exists as a result of which disposal by the fund of securities owned by it is
not reasonably practicable or it is not reasonably practicable for the fund to
fairly determine the value of the net assets of its portfolio; or otherwise as
permitted by the rules of or by the order of the SEC.
Redemptions and repurchases are taxable transactions for shareholders that are
subject to U.S. federal income tax. The net asset value per share received upon
redemption or repurchase may be more or less than the cost of shares to an
investor, depending on the market value of the portfolio at the time of
redemption or repurchase.
SYSTEMATIC WITHDRAWAL PLAN(S) ("SWP") (CLASS A, CLASS C, CLASS R AND CLASS T
SHARES)
A SWP is designed to provide a convenient method of receiving fixed payments at
regular intervals from fund share accounts having a total value of not less
than $10,000. You must also be reinvesting all dividends and capital gain
distributions to use the SWP option.
Periodic payments will be deposited monthly, quarterly, semiannually or
annually directly into a bank account designated by the applicant or will be
sent by check to the applicant, or any person designated by the applicant.
Payments can be made either by check or electronic funds transfer to a bank
account
58
designated by you. Withdrawals from Class C and Class R share accounts are
limited to 10% of the value of the account at the time the SWP is established.
See "Qualifying for a reduced sales charge" in the prospectus. If you direct
that withdrawal payments be paid to another person, want to change the bank
where payments are sent or designate an address that is different from the
account's address of record after you have opened your account, a medallion
signature guarantee must accompany your instructions. Withdrawals under the SWP
are redemptions that may have tax consequences for you.
While you are making systematic withdrawals from your account, you may pay
unnecessary initial sales charges on additional purchases of Class A shares or
contingent deferred sales charges. SWP redemptions reduce and may ultimately
exhaust the number of shares in your account. In addition, the amounts received
by a shareholder cannot be considered as yield or income on his or her
investment because part of such payments may be a return of his or her
investment.
A SWP may be terminated at any time (1) by written notice to the fund or from
the fund to the shareholder; (2) upon receipt by the fund of appropriate
evidence of the shareholder's death; or (3) when all shares in the
shareholder's account have been redeemed.
You may obtain additional information by calling the fund at 1-800-225-6292.
REINSTATEMENT PRIVILEGE (CLASS A SHARES)
Subject to the provisions outlined in the prospectus, you may reinvest all or
part of your sale proceeds from Class A shares without a sales charge into
Class A shares of a Pioneer mutual fund. However, the distributor will not pay
your investment firm a commission on any reinvested amount.
14. TELEPHONE AND ONLINE TRANSACTIONS
You may purchase, exchange or sell shares by telephone or online. See the
prospectus for more information. For personal assistance, call 1-800-225-6292
between 8:00 a.m. and 7:00 p.m. Eastern time on weekdays. Computer-assisted
telephone transactions may be available to shareholders who have prerecorded
certain bank information (see "FactFone/SM/"). YOU ARE STRONGLY URGED TO
CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE OR
ONLINE TRANSACTION.
TELEPHONE TRANSACTION PRIVILEGES
To confirm that each transaction instruction received by telephone is genuine,
the fund will record each telephone transaction, require the caller to provide
validating information for the account and send you a written confirmation of
each telephone transaction. Different procedures may apply to accounts that are
registered to non-U.S. citizens or that are held in the name of an institution
or in the name of an investment broker-dealer or other third party. If
reasonable procedures, such as those described above, are not followed, the
fund may be liable for any loss due to unauthorized or fraudulent instructions.
The fund may implement other procedures from time to time. In all other cases,
neither the fund, the fund's transfer agent nor PFD will be responsible for the
authenticity of instructions received by telephone; therefore, you bear the
risk of loss for unauthorized or fraudulent telephone transactions.
ONLINE TRANSACTION PRIVILEGES
If your account is registered in your name, you may be able buy, exchange or
sell fund shares online. Your investment firm may also be able to buy, exchange
or sell your fund shares online.
To establish online transaction privileges:
o For new accounts, complete the online section of the account application
o For existing accounts, complete an account options form, write to the fund or
complete the online authorization screen on us.pioneerinvestments.com
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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 fund 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.
TELEPHONE AND WEBSITE ONLINE ACCESS
You may have difficulty contacting the fund by telephone or accessing
us.pioneerinvestments.com during times of market volatility or disruption in
telephone or Internet services. On Exchange holidays or on days when the
Exchange closes early, Pioneer will adjust the hours for the telephone center
and for online transaction processing accordingly. If you are unable to access
us.pioneerinvestments.com or to reach the fund by telephone, you should
communicate with the fund in writing.
FACTFONE/SM/
FactFone/SM/ is an automated inquiry and telephone transaction system available
to Pioneer mutual fund shareholders by dialing 1-800-225-4321. FactFone/SM/
allows shareholder access to current information on Pioneer mutual fund
accounts and to the prices of all publicly available Pioneer mutual funds. In
addition, you may use FactFone/SM/ to make computer-assisted telephone
purchases, exchanges or redemptions from your Pioneer mutual fund accounts,
access your account balances and last three transactions and order a duplicate
statement if you have activated your PIN. Telephone purchases or redemptions
require the establishment of a bank account of record. YOU ARE STRONGLY URGED
TO CONSULT WITH YOUR INVESTMENT PROFESSIONAL PRIOR TO REQUESTING ANY TELEPHONE
TRANSACTION. Shareholders whose accounts are registered in the name of a
broker-dealer or other third party may not be able to use FactFone/SM/. Call
the fund at 1-800-225-6292 for assistance.
FactFone/SM/ allows shareholders to hear the following recorded fund
information:
o net asset value prices for all Pioneer mutual funds;
o dividends and capital gain distributions on all Pioneer mutual funds.
The value of each class of shares (except for Pioneer U.S. Government Money
Market Fund, which seeks to maintain a stable $1.00 share price) will also
vary, and such shares may be worth more or less at redemption than their
original cost.
15. PRICING OF SHARES
The net asset value per share of each class of the fund is determined as of the
scheduled close of regular trading on the Exchange (normally 4:00 p.m. Eastern
time) on each day on which the Exchange is open for trading. If the exchange
closes at another time, the fund will calculate a net asset value for each
class of shares as of the scheduled closing time. As of the date of this
statement of additional information, the Exchange is open for trading every
weekday except for the days the following holidays are observed: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day. The net asset
value per share of each class of the fund is also determined on any other day
on which the level of trading in its portfolio securities is sufficiently high
that the current net asset value per share might be materially affected by
changes in the value of its portfolio securities. The fund is not required to
determine its net asset value per share on any day on which no purchase orders
in good order for fund shares are received and no shares are tendered and
accepted for redemption.
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The fund generally values its portfolio securities using closing market prices
or readily available market quotations, or, when closing market prices or
market quotations are not available or are considered by Pioneer to be
unreliable, the fund uses fair value methods to value its securities in
accordance with procedures approved by the fund's Trustees. Securities which
have not traded on the date of valuation or securities for which sales prices
are not generally reported are valued at the mean between the current bid and
asked prices. Securities quoted in foreign currencies are converted to U.S.
dollars utilizing foreign exchange rates employed by the fund's independent
pricing services. Generally, trading in non-U.S. securities is substantially
completed each day at various times prior to the close of regular trading on
the Exchange. The values of such securities used in computing the net asset
value of the fund's shares are determined as of such times. Foreign currency
exchange rates are also generally determined prior to the close of regular
trading on the Exchange. The fund also may use fair value pricing methods to
value its securities, 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 value of the security due to factors
affecting one or more relevant securities markets or the specific issuer.
Valuing securities using fair value methods may cause the net asset value of
the fund's 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 the fund could change on a day you cannot buy
or sell shares of the fund. In connection with making fair value determinations
of the value of fixed income securities, the fund's Trustees may use a pricing
matrix. The prices used for these securities may differ from the amounts
received by the fund upon sale of the securities, and these differences may be
substantial.
The net asset value per share of each class of the fund is computed by taking
the value of all of the fund's assets attributable to a class, less the fund's
liabilities attributable to that class, and dividing the result by the number
of outstanding shares of that class. For purposes of determining net asset
value, expenses of the classes of the fund are accrued daily and taken into
account. The fund's maximum offering price per Class A and Class T share is
determined by adding the maximum sales charge to the net asset value per Class
A and Class T share. Class C, Class K, Class R and Class Y shares are offered
at net asset value without the imposition of an initial sales charge (Class C
shares may be subject to a CDSC).
16. TAX STATUS
The fund has elected to be treated, and has qualified and intends to continue
to qualify each year, as a "regulated investment company" under Subchapter M of
the Code, so that it will not pay U.S. federal income tax on income and capital
gains distributed to shareholders. In order to qualify as a regulated
investment company under Subchapter M of the Code, the fund must, among other
things, (i) derive at least 90% of its gross income for each taxable year from
dividends, interest, payments with respect to certain securities loans, gains
from the sale or other disposition of stock, securities or foreign currencies,
or other income (including gains from options, futures and forward contracts)
derived with respect to its business of investing in such stock, securities or
currencies, and net income derived from an interest in a qualified publicly
traded partnership (as defined in Section 851(h) of the Code) (the "90% income
test") and (ii) diversify its holdings so that, at the end of each quarter of
each taxable year: (a) at least 50% of the value of the fund's total assets is
represented by (1) cash and cash items, U.S. government securities, securities
of other regulated investment companies, and (2) other securities, with such
other securities limited, in respect of any one issuer, to an amount not
greater than 5% of the value of the fund's total assets and to not more than
10% of the outstanding voting securities of such issuer and (b) not more than
25% of the value of the fund's total assets is invested in (1) the securities
(other than U.S. government securities and securities of other regulated
investment companies) of any one issuer, (2) the securities (other than
securities of other regulated investment companies) of two or more issuers that
the fund controls and that are engaged in the same, similar, or related trades
or businesses, or (3) the securities of one or more qualified publicly traded
partnerships.
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For purposes of the 90% income test, the character of income earned by certain
entities in which the fund invests that are not treated as corporations for
U.S. federal income tax purposes (e.g., partnerships other than certain
publicly traded partnerships or trusts that have not elected to be classified
as corporations under the "check-the-box" regulations) will generally pass
through to the fund. Consequently, in order to qualify as a regulated
investment company, the fund may be required to limit its equity investments in
such entities that earn fee income, rental income or other nonqualifying
income.
If the fund qualifies as a regulated investment company and properly
distributes to its shareholders each taxable year an amount equal to or
exceeding the sum of (i) 90% of its "investment company taxable income" as that
term is defined in the Code (which includes, among other things, dividends,
taxable interest, and the excess of any net short-term capital gains over net
long-term capital losses, as reduced by certain deductible expenses) without
regard to the deduction for dividends paid and (ii) 90% of the excess of its
gross tax-exempt interest income, if any, over certain disallowed deductions,
the fund generally will not be subject to U.S. federal income tax on any income
of the fund, including "net capital gain" (the excess of net long-term capital
gain over net short-term capital loss), distributed to shareholders. However,
if the fund meets such distribution requirements, but chooses to retain some
portion of its taxable income or gains, it generally will be subject to U.S.
federal income tax at regular corporate rates on the amount retained. The fund
may designate certain amounts retained as undistributed net capital gain in a
notice to its shareholders, who (i) will be required to include in income for
U.S. federal income tax purposes, as long-term capital gain, their
proportionate shares of the undistributed amount so designated, (ii) will be
entitled to credit their proportionate shares of the income tax paid by the
fund on that undistributed amount against their federal income tax liabilities
and to claim refunds to the extent such credits exceed their liabilities and
(iii) will be entitled to increase their tax basis, for federal income tax
purposes, in their shares by an amount equal to the excess of the amount of
undistributed net capital gain included in their respective income over their
respective income tax credits. The fund intends to distribute at least annually
all or substantially all of its investment company taxable income (computed
without regard to the dividends-paid deduction), net tax-exempt interest
income, and net capital gain.
If, for any taxable year, the fund does not qualify as a regulated investment
company or does not satisfy the 90% distribution requirement, it will be
treated as a U.S. corporation subject to U.S. federal income tax, thereby
subjecting any income earned by the fund to tax at the corporate level and to a
further tax at the shareholder level when such income is distributed. Under
certain circumstances, the fund may be able to cure a failure to qualify as a
regulated investment company, but in order to do so, the fund may incur
significant fund-level taxes and may be forced to dispose of certain assets.
Under the Code, the fund will be subject to a nondeductible 4% U.S. federal
excise tax on a portion of its undistributed ordinary income and capital gain
net income if it fails to meet certain distribution requirements with respect
to each calendar year and year ending October 31, respectively. The fund
intends to make distributions in a timely manner and accordingly does not
expect to be subject to the excise tax.
The fund generally distributes any net short- and long-term capital gains in
November. The fund generally pays dividends from any net investment income in
March, June, September and December. Dividends from income and/or capital gains
may also be paid at such other times as may be necessary for the fund to avoid
U.S. federal income or excise tax.
Unless a shareholder specifies otherwise, all distributions from the fund to
that shareholder will be automatically reinvested in additional full and
fractional shares of the fund. For U.S. federal income tax purposes, all
dividends generally are taxable whether a shareholder takes them in cash or
reinvests them in additional shares of the fund. In general, assuming that the
fund has sufficient earnings and profits,
62
dividends from net investment income and net short-term capital gains are
taxable either as ordinary income or, if certain conditions are met, as
"qualified dividend income," taxable to individual and certain other
noncorporate shareholders at U.S. federal income tax rates of up to 20%.
In general, dividends may be reported by the fund as qualified dividend income
if they are attributable to qualified dividend income received by the fund.
Qualified dividend income generally means dividend income received from the
fund's investments in common and preferred stock of U.S. companies and stock of
certain qualified foreign corporations, provided that certain holding period
and other requirements are met by both the fund and the shareholders. If 95% or
more of the fund's gross income (calculated without taking into account net
capital gain derived from sales or other dispositions of stock or securities)
consists of qualified dividend income, the fund may report all distributions of
such income as qualified dividend income.
A foreign corporation is treated as a qualified foreign corporation for this
purpose if it is incorporated in a possession of the United States or it is
eligible for the benefits of certain income tax treaties with the United States
and meets certain additional requirements. Certain foreign corporations that
are not otherwise qualified foreign corporations will be treated as qualified
foreign corporations with respect to dividends paid by them if the stock with
respect to which the dividends are paid is readily tradable on an established
securities market in the United States. Passive foreign investment companies
are not qualified foreign corporations for this purpose. Dividends received by
the fund from REITs generally are not expected to qualify for treatment as
qualified dividend income.
A dividend that is attributable to qualified dividend income of the fund that
is paid by the fund to a shareholder will not be taxable as qualified dividend
income to such shareholder (1) if the dividend is received with respect to any
share of the fund held for fewer than 61 days during the 121-day period
beginning on the date which is 60 days before the date on which such share
became ex-dividend with respect to such dividend, (2) to the extent that the
shareholder is under an obligation (whether pursuant to a short sale or
otherwise) to make related payments with respect to positions in substantially
similar or related property, or (3) if the shareholder elects to have the
dividend treated as investment income for purposes of the limitation on
deductibility of investment interest. The "ex-dividend" date is the date on
which the owner of the share at the commencement of such date is entitled to
receive the next issued dividend payment for such share even if the share is
sold by the owner on that date or thereafter.
Distributions by the fund in excess of the fund's current and accumulated
earnings and profits will be treated as a return of capital to the extent of
(and in reduction of) the shareholder's tax basis in its shares and any such
amount in excess of that basis will be treated as gain from the sale of shares,
as discussed below.
Certain dividends received by the fund from U.S. corporations (generally,
dividends received by the fund in respect of any share of stock (1) with a tax
holding period of at least 46 days during the 91-day period beginning on the
date that is 45 days before the date on which the stock becomes ex-dividend as
to that dividend and (2) that is held in an unleveraged position) and
distributed and appropriately so reported by the fund may be eligible for the
70% dividends-received deduction generally available to corporations under the
Code. Certain preferred stock must have a holding period of at least 91 days
during the 181-day period beginning on the date that is 90 days before the date
on which the stock becomes ex-dividend as to that dividend in order to be
eligible. Capital gain dividends distributed to the fund from other regulated
investment companies are not eligible for the dividends-received deduction. In
order to qualify for the deduction, corporate shareholders must meet the
minimum holding period requirement stated above with respect to their fund
shares, taking into account any holding period reductions from certain hedging
or other transactions or positions that diminish their risk of loss with
respect to their fund shares, and, if they borrow to acquire or otherwise incur
debt attributable to fund shares, they may be denied a portion of the
dividends-received deduction with respect to those shares. The entire dividend,
including the otherwise deductible amount, will be included in determining the
excess, if any, of a corporation's
63
adjusted current earnings over its alternative minimum taxable income, which
may increase a corporation's alternative minimum tax liability. Any corporate
shareholder should consult its tax adviser regarding the possibility that its
tax basis in its shares may be reduced, for U.S. federal income tax purposes,
by reason of "extraordinary dividends" received with respect to the shares and,
to the extent such basis would be reduced below zero, current recognition of
income may be required.
Distributions from net capital gains, if any, that are reported as capital gain
dividends by the fund are taxable as long-term capital gains for U.S. federal
income tax purposes without regard to the length of time the shareholder has
held shares of the fund. Capital gain dividends distributed by the fund to
individual and certain other noncorporate shareholders will be taxed as
long-term capital gains, which are generally taxable to noncorporate taxpayers
at U.S. federal income tax rates of up to 20%. A shareholder should also be
aware that the benefits of the favorable tax rates applicable to long-term
capital gains and qualified dividend income may be affected by the application
of the alternative minimum tax to individual shareholders.
The U.S. federal income tax status of all distributions will be reported to
shareholders annually.
A 3.8% Medicare contribution tax generally applies to all or a portion of the
net investment income of a shareholder who is an individual and not a
nonresident alien for federal income tax purposes and who has adjusted gross
income (subject to certain adjustments) that exceeds a threshold amount
($250,000 if married filing jointly or if considered a "surviving spouse" for
federal income tax purposes, $125,000 if married filing separately, and
$200,000 in other cases). This 3.8% tax also applies to all or a portion of the
undistributed net investment income of certain shareholders that are estates
and trusts. For these purposes, dividends, interest and certain capital gains
(among other categories of income) are generally taken into account in
computing a shareholder's net investment income.
Although dividends generally will be treated as distributed when paid, any
dividend declared by the fund in October, November or December and payable to
shareholders of record in such a month that is paid during the following
January will be treated for U.S. federal income tax purposes as received by
shareholders on December 31 of the calendar year in which it was declared. In
addition, certain distributions made after the close of a taxable year of the
fund may be "spilled back" and treated for certain purposes as paid by the fund
during such taxable year. In such case, shareholders generally will be treated
as having received such dividends in the taxable year in which the
distributions were actually made. For purposes of calculating the amount of a
regulated investment company's undistributed income and gain subject to the 4%
excise tax described above, such "spilled back" dividends are treated as paid
by the regulated investment company when they are actually paid.
For U.S. federal income tax purposes, the fund is permitted to carry forward
indefinitely a net capital loss from any taxable year to offset its capital
gains, if any, in years following the year of the loss. To the extent
subsequent capital gains are offset by such losses, they will not result in
U.S. federal income tax liability to the fund and may not be distributed as
capital gains to shareholders. See "Annual Fee, Expense and Other Information"
for the fund's available capital loss carryforwards. Generally, the fund may
not carry forward any losses other than net capital losses. Under certain
circumstances, the fund may elect to treat certain losses as though they were
incurred on the first day of the taxable year immediately following the taxable
year in which they were actually incurred.
At the time of an investor's purchase of fund shares, a portion of the purchase
price may be attributable to realized or unrealized appreciation in the fund's
portfolio or to undistributed taxable income of the fund. Consequently,
subsequent distributions by the fund with respect to these shares from such
appreciation or income may be taxable to such investor even if the net asset
value of the investor's shares is, as a result of the distributions, reduced
below the investor's cost for such shares and the distributions economically
represent a return of a portion of the investment.
64
Redemptions and exchanges generally are taxable events for shareholders that
are subject to tax. Shareholders should consult their own tax advisers with
reference to their individual circumstances to determine whether any particular
transaction in fund shares is properly treated as a sale for tax purposes, as
the following discussion assumes, and to ascertain the tax treatment of any
gains or losses recognized in such transactions. In general, if fund shares are
sold, the shareholder will recognize gain or loss equal to the difference
between the amount realized on the sale and the shareholder's adjusted basis in
the shares. Such gain or loss generally will be treated as long-term capital
gain or loss if the shares were held for more than one year and otherwise
generally will be treated as short-term capital gain or loss. Any loss
recognized by a shareholder upon the redemption, exchange or other disposition
of shares with a tax holding period of six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions to
the shareholder of long-term capital gain with respect to such shares
(including any amounts credited to the shareholder as undistributed capital
gains).
The fund will report to the Internal Revenue Service (the "IRS") the amount of
sale proceeds that a shareholder receives from a sale or exchange of fund
shares. For sales or exchanges of shares acquired on or after January 1, 2012,
the fund will also report the shareholder's basis in those shares and whether
any gain or loss that the shareholder realizes on the sale or exchange is
short-term or long-term gain or loss. For purposes of calculating and reporting
basis, shares acquired prior to January 1, 2012 and shares acquired on or after
January 1, 2012 will generally be treated as held in separate accounts. If a
shareholder has a different basis for different shares of the fund, acquired on
or after January 1, 2012, in the same account (e.g., if a shareholder purchased
fund shares in the same account at different times for different prices), the
fund will calculate the basis of the shares sold using its default method
unless the shareholder has properly elected to use a different method. The
fund's default method for calculating basis will be the average basis method,
under which the basis per share is reported as the average of the bases of all
of the shareholder's fund shares in the account. A shareholder may elect, on an
account-by-account basis, to use a method other than average basis by following
procedures established by the fund. If such an election is made on or prior to
the date of the first exchange or redemption of shares in the account and on or
prior to the date that is one year after the shareholder receives notice of the
fund's default method, the new election will generally apply as if the average
basis method had never been in effect for such account. If such an election is
not made on or prior to such dates, the shares in the account at the time of
the election will retain their averaged bases. Shareholders should consult
their tax advisers concerning the tax consequences of applying the average
basis method or electing another method of basis calculation.
Losses on redemptions or other dispositions of shares may be disallowed under
"wash sale" rules in the event of other investments in the fund (including
those made pursuant to reinvestment of dividends and/or capital gain
distributions) within a period of 61 days beginning 30 days before and ending
30 days after a redemption or other disposition of shares. In such a case, the
disallowed portion of any loss generally would be included in the U.S. federal
tax basis of the shares acquired in the other investments.
Gain may be increased (or loss reduced) upon a redemption of Class A shares of
the fund within 90 days after their purchase followed by any purchase
(including purchases by exchange or by reinvestment), without payment of an
additional sales charge, of Class A shares of the fund or of another Pioneer
fund (or any other shares of a Pioneer fund generally sold subject to a sales
charge) before February 1 of the calendar year following the calendar year in
which the original Class A shares were redeemed.
Under Treasury regulations, if a shareholder recognizes a loss with respect to
fund shares of $2 million or more for an individual shareholder, or $10 million
or more for a corporate shareholder, in any single taxable year (or certain
greater amounts over a combination of years), the shareholder must file with
the IRS a disclosure statement on IRS Form 8886. Shareholders who own portfolio
securities directly are in many cases excepted from this reporting requirement
but, under current guidance, shareholders of regulated investment companies are
not excepted. A shareholder who fails to make the required disclosure to the
IRS may be subject to substantial penalties. The fact that a loss is reportable
under
65
these regulations does not affect the legal determination of whether or not the
taxpayer's treatment of the loss is proper. Shareholders should consult with
their tax advisers to determine the applicability of these regulations in light
of their individual circumstances.
Shareholders that are exempt from U.S. federal income tax, such as retirement
plans that are qualified under Section 401 of the Code, generally are not
subject to U.S. federal income tax on fund dividends or distributions, or on
sales or exchanges of fund shares unless the fund shares are "debt-financed
property" within the meaning of the Code. However, in the case of fund shares
held through a non-qualified deferred compensation plan, fund dividends and
distributions received by the plan and gains from sales and exchanges of fund
shares by the plan generally are taxable to the employer sponsoring such plan
in accordance with the U.S. federal income tax laws that are generally
applicable to shareholders receiving such dividends or distributions from
regulated investment companies such as the fund.
A plan participant whose retirement plan invests in the fund, whether such plan
is qualified or not, generally is not taxed on fund dividends or distributions
received by the plan or on gains from sales or exchanges of fund shares by the
plan for U.S. federal income tax purposes. However, distributions to plan
participants from a retirement plan account generally are taxable as ordinary
income, and different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their tax
advisers for more information.
Foreign exchange gains and losses realized by the fund in connection with
certain transactions involving foreign currency-denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gains and losses to be treated as ordinary income and
losses and may affect the amount, timing and character of distributions to
shareholders. Under Treasury regulations that may be promulgated in the future,
any gains from such transactions that are not directly related to the fund's
principal business of investing in stock or securities (or its options
contracts or futures contracts with respect to stock or securities) may have to
be limited in order to enable the fund to satisfy the 90% income test.
If the fund acquires any equity interest (under Treasury regulations that may
be promulgated in the future, generally including not only stock but also an
option to acquire stock such as is inherent in a convertible bond) in certain
foreign corporations (i) that receive at least 75% of their annual gross income
from passive sources (such as interest, dividends, certain rents and royalties,
or capital gains) or (ii) where at least 50% of the corporation's assets
(computed based on average fair market value) either produce or are held for
the production of passive income ("passive foreign investment companies"), the
fund could be subject to U.S. federal income tax and additional interest
charges on "excess distributions" received from such companies or on gain from
the sale of stock in such companies, even if all income or gain actually
received by the fund is timely distributed to its shareholders. The fund would
not be able to pass through to its shareholders any credit or deduction for
such a tax. A "qualified electing fund" election or a "mark to market" election
may be available that would ameliorate these adverse tax consequences, but such
elections could require the fund to recognize taxable income or gain (subject
to the distribution requirements applicable to regulated investment companies,
as described above) without the concurrent receipt of cash. In order to satisfy
the distribution requirements and avoid a tax on the fund, the fund may be
required to liquidate portfolio securities that it might otherwise have
continued to hold, potentially resulting in additional taxable gain or loss to
the fund. Gains from the sale of stock of passive foreign investment companies
may also be treated as ordinary income. In order for the fund to make a
qualified electing fund election with respect to a passive foreign investment
company, the passive foreign investment company would have to agree to provide
certain tax information to the fund on an annual basis, which it might not
agree to do. Under proposed Treasury regulations, certain income derived by the
fund for a taxable year from a passive foreign investment company with respect
to which the fund has
66
made a qualified electing fund election would generally constitute qualifying
income only to the extent the passive foreign investment company makes
distributions in respect of that income to the fund for that taxable year. The
fund may limit and/or manage its holdings in passive foreign investment
companies to limit its tax liability or maximize its return from these
investments.
If the fund invests in certain pay-in-kind securities, zero coupon securities,
deferred interest securities or, in general, any other securities with original
issue discount (or with market discount if the fund elects to include market
discount in income currently), the fund generally must accrue income on such
investments for each taxable year, which generally will be prior to the receipt
of the corresponding cash payments. However, the fund must distribute to its
shareholders, at least annually, all or substantially all of its investment
company taxable income (determined without regard to the deduction for
dividends paid), including such accrued income, to qualify to be treated as a
regulated investment company under the Code and avoid U.S. federal income and
excise taxes. Therefore, the fund may have to dispose of its portfolio
securities, potentially under disadvantageous circumstances, to generate cash,
or may have to borrow the cash, to satisfy distribution requirements. Such a
disposition of securities may potentially result in additional taxable gain or
loss to the fund.
The fund may invest in or hold debt obligations of issuers not currently paying
interest or that are in default. Investments in debt obligations that are at
risk of or are in default present special tax issues for the fund. Federal
income tax rules are not entirely clear about issues such as when the fund may
cease to accrue interest, original issue discount or market discount, when and
to what extent deductions may be taken for bad debts or worthless securities,
how payments received on obligations in default should be allocated between
principal and interest and whether certain exchanges of debt obligations in a
workout context are taxable. These and other issues will be addressed by the
fund, in the event it invests in or holds such securities, in order to seek to
ensure that it distributes sufficient income to preserve its status as a
regulated investment company and does not become subject to U.S. federal income
or excise tax.
Options written or purchased and futures contracts entered into by the fund on
certain securities, indices and foreign currencies, as well as certain forward
foreign currency contracts, may cause the fund to recognize gains or losses
from marking-to-market even though such options may not have lapsed or been
closed out or exercised, or such futures or forward contracts may not have been
performed or closed out. The tax rules applicable to these contracts may affect
the characterization of some capital gains and losses realized by the fund as
long-term or short-term. Certain options, futures and forward contracts
relating to foreign currency may be subject to Section 988 of the Code, as
described above, and accordingly may produce ordinary income or loss.
Additionally, the fund may be required to recognize gain if an option, futures
contract, forward contract, short sale or other transaction that is not subject
to the mark-to-market rules is treated as a "constructive sale" of an
"appreciated financial position" held by the fund under Section 1259 of the
Code. Any net mark-to-market gains and/or gains from constructive sales may
also have to be distributed to satisfy the distribution requirements referred
to above even though the fund may receive no corresponding cash amounts,
possibly requiring the disposition of portfolio securities or borrowing to
obtain the necessary cash. Such a disposition of securities may potentially
result in additional taxable gain or loss to the fund. Losses on certain
options, futures or forward contracts and/or offsetting positions (portfolio
securities or other positions with respect to which the fund's risk of loss is
substantially diminished by one or more options, futures or forward contracts)
may also be deferred under the tax straddle rules of the Code, which may also
affect the characterization of capital gains or losses from straddle positions
and certain successor positions as long-term or short-term. Certain tax
elections may be available that would enable the fund to ameliorate some
adverse effects of the tax rules described in this paragraph. The tax rules
applicable to options, futures, forward contracts and straddles may affect the
amount, timing and character of the fund's income and gains or losses and hence
of its distributions to shareholders.
67
The fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with
respect to its investments in those countries. Any such taxes would, if
imposed, reduce the yield on or return from those investments. Tax conventions
between certain countries and the U.S. may reduce or eliminate such taxes in
some cases. The fund does not expect to satisfy the requirements for passing
through to its shareholders any share of foreign taxes paid by the fund, with
the result that shareholders will not include such taxes in their gross incomes
and will not be entitled to a tax deduction or credit for such taxes on their
own tax returns.
The fund is required to withhold (as "backup withholding") a portion of
reportable payments, including dividends, capital gain distributions and the
proceeds of redemptions and exchanges or repurchases of fund shares, paid to
shareholders who have not complied with certain IRS regulations. The backup
withholding rate is 28%. In order to avoid this withholding requirement,
shareholders, other than certain exempt entities, must generally certify that
the Social Security Number or other Taxpayer Identification Number they provide
is their correct number and that they are not currently subject to backup
withholding, or that they are exempt from backup withholding. The fund may
nevertheless be required to backup withhold if it receives notice from the IRS
or a broker that the number provided is incorrect or backup withholding is
applicable as a result of previous underreporting of interest or dividend
income.
The description of certain federal tax provisions above relates only to U.S.
federal income tax consequences for shareholders who are U.S. persons, i.e.,
generally, U.S. citizens or residents or U.S. corporations, partnerships,
trusts or estates, and who are subject to U.S. federal income tax and hold
their shares as capital assets. Except as otherwise provided, this description
does not address the special tax rules that may be applicable to particular
types of investors, such as financial institutions, insurance companies,
securities dealers, other regulated investment companies, or tax-exempt or
tax-deferred plans, accounts or entities. Investors other than U.S. persons may
be subject to different U.S. federal income tax treatment, including a
non-resident alien U.S. withholding tax at the rate of 30% or any lower
applicable treaty rate on amounts treated as ordinary dividends from the fund
(other than certain dividends reported by the fund as (i) interest-related
dividends, to the extent such dividends are derived from the fund's "qualified
net interest income," or (ii) short-term capital gain dividends, to the extent
such dividends are derived from the fund's "qualified short-term gain") or, in
certain circumstances, unless an effective IRS Form W-8BEN or other authorized
withholding certificate is on file, to backup withholding on certain other
payments from the fund. "Qualified net interest income" is the fund's net
income derived from U.S.-source interest and original issue discount, subject
to certain exceptions and limitations. "Qualified short-term gain" generally
means the excess of the net short-term capital gain of the fund for the taxable
year over its net long-term capital loss, if any. Backup withholding will not
be applied to payments that have been subject to the 30% (or lower applicable
treaty rate) withholding tax on shareholders who are neither citizens nor
residents of the United States.
Unless certain non-U.S. entities that hold fund shares comply with IRS
requirements that will generally require them to report information regarding
U.S. persons investing in, or holding accounts with, such entities, a 30%
withholding tax may apply to fund distributions payable to such entities and,
after December 31, 2018, to redemptions and certain capital gain dividends
payable to such entities. A non-U.S. shareholder may be exempt from the
withholding described in this paragraph under an applicable intergovernmental
agreement between the U.S. and a foreign government, provided that the
shareholder and the applicable foreign government comply with the terms of such
agreement.
The fund does not expect to be a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code. If the fund were to
be classified as a United States real property holding corporation (or if it
would be so classified, were it not for certain exceptions), then distributions
made by the fund to non-U.S. shareholders might be subject to U.S. federal
withholding tax, and non-U.S. shareholders might be required to file U.S.
federal income tax returns to report distributions received from the fund.
68
Shareholders should consult their own tax advisers on these matters and on
state, local, foreign and other applicable tax laws.
If, as anticipated, the fund qualifies as a regulated investment company under
the Code, it will not be required to pay any Massachusetts income, corporate
excise or franchise taxes or any Delaware corporation income tax.
17. FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal year
ended October 31, 2016 appearing in the fund's annual report, filed with the
SEC on December 29, 2016 (Accession No. 0001388126-16-000023), are incorporated
by reference into this statement of additional information. Those financial
statements and financial highlights have been audited by Deloitte & Touche LLP,
independent registered public accounting firm, as indicated in their report
thereon, and are incorporated herein by reference in reliance upon such report,
given on the authority of Deloitte & Touche LLP as experts in accounting and
auditing.
The fund's annual report includes the financial statements referenced above and
is available without charge upon request by calling the fund at 1-800-225-6292.
18. ANNUAL FEE, EXPENSE AND OTHER INFORMATION
PORTFOLIO TURNOVER
The fund's annual portfolio turnover rate for the fiscal years ended October 31
2016 2015
------ -----
35% 40%
-- --
SHARE OWNERSHIP
As of February 1, 2017, the Trustees and officers of the fund owned
beneficially in the aggregate less than 1% of the outstanding shares of the
fund. The following is a list of the holders of 5% or more of any class of the
fund's outstanding shares as of February 1, 2017:
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS
---------------------------------------------- ------------- ------------------ -----------
CLASS A
---------------------------------------------- ------------- ------------- -----
Pershing LLC 1,212,503.012 5.391
------------- ------------- -----
One Pershing Plaza
Jersey City NJ 07399-0001
----------------------------------------------
National Financial Services LLC 1,238,502.817 5.51
------------- ------------- -----
For the Exclusive Benefit of Customers
Attn: Mutual Funds Department, 4th Floor
499 Washington Blvd.
Jersey City NJ 07310
----------------------------------------------
CLASS C
---------------------------------------------- ------------- ------------- -----
UBS WM USA 265,321.641 6.30
------------- ------------- -----
Omni Account M/F
Attn: Department Manager
499 Washington Blvd., Floor 9
Jersey City NJ 07310
----------------------------------------------
MLPF&S for the Sole Benefit of Its Customers 769,780.274 18.28
------------- ------------- -----
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
----------------------------------------------
69
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS
------------------------------------------------------------ ------------- ------------------ -----------
Pershing LLC 319,788.518 7.59
------------- ------------- -----
One Pershing Plaza
Jersey City NJ 07399-0001
------------------------------------------------------------
Special Custody Acct for the Exclusive Benefit of Customer 409,997.461 9.74
------------- ------------- -----
2801 Market Street
Saint Louis MO 63103-2523
------------------------------------------------------------
Morgan Stanley Smith Barney 492,184.982 11.69
------------- ------------- -----
Harborside Financial Center
Plaza 2, 3rd Floor
Jersey City NJ 07311
------------------------------------------------------------
Raymond James 321,565.930 7.64
------------- ------------- -----
Omnibus For Mutual Funds
Attn Courtney Waller
880 Carillon Pkwy
St. Petersburg, FL 33716
------------------------------------------------------------
CLASS K
------------------------------------------------------------ ------------- ------------- -----
National Financial Services LLC 624,007.736 45.65
------------- ------------- -----
For the Exclusive Benefit of Customers
Attn: Mutual Funds Department, 4th Floor
499 Washington Blvd.
Jersey City NJ 07310
------------------------------------------------------------
VOYA Retirement Insurance and 424,953.588 31.09
------------- ------------- -----
Annuity Company
One Orange Way B3N
Windsor CT 06095-4773
------------------------------------------------------------
Brown Brothers Harriman And Company 77,024.000 5.63
------------- ------------- -----
As Custodian
525 Washington Blvd
Jersey City NJ 07310-1692
------------------------------------------------------------
Charles Schwab & Co., Inc. 79,926.676 5.85
------------- ------------- -----
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
211 Main St
San Francisco CA 94105-1905
------------------------------------------------------------
CLASS R
------------------------------------------------------------ ------------- ------------- -----
VOYA Retirement Insurance and 1,069,012.650 43.25
------------- ------------- -----
Annuity Company
One Orange Way B3N
Windsor CT 06095-4773
------------------------------------------------------------
VOYA Institutional Trust Company 124,903.534 5.05
------------- ------------- -----
Custodial Acct
P.O. Box 990065
Hartford, CT 06199-0065
------------------------------------------------------------
MLPF&S for the Sole Benefit of Its Customers 453,618.482 18.35
------------- ------------- -----
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
------------------------------------------------------------
Sammons Financial Network LLC 320,920.441 12.98
------------- ------------- -----
4546 Corporate Dr Ste 100
WDM IA 50266-5911
------------------------------------------------------------
CLASS Y
------------------------------------------------------------ ------------- ------------- -----
70
RECORD HOLDER SHARE CLASS NUMBER OF SHARES % OF CLASS
----------------------------------------------------- ------------- ------------------ -----------
Charles Schwab & Co., Inc. 3,214,213.232 16.03
------------- ------------- -----
Special Custody Account for the Benefit of Customers
Attn: Mutual Funds
211 Main St
San Francisco CA 94105-1905
-----------------------------------------------------
Pershing LLC 2,036,196.715 10.16
------------- ------------- -----
One Pershing Plaza
Jersey City NJ 07399-0001
-----------------------------------------------------
VOYA Institutional Trust Company 2,205,769.191 11.00
------------- ------------- -----
Custodial Acct
P.O. Box 990065
Hartford, CT 06199-0065
-----------------------------------------------------
MLPF&S for the Sole Benefit of Its Customers 2,296,860.796 11.46
------------- ------------- -----
Mutual Fund Administration
4800 Deer Lake Drive East 2nd Floor
Jacksonville FL 32246-6484
-----------------------------------------------------
VOYA Retirement Insurance and 2,190,049.446 10.93
------------- ------------- -----
Annuity Company
One Orange Way B3N
Windsor CT 06095-4773
-----------------------------------------------------
----------------------------------------------------- ------------- ------------- -----
TRUSTEE OWNERSHIP OF SHARES OF THE FUND AND OTHER PIONEER FUNDS
The following table indicates the value of shares that each Trustee
beneficially owned in the fund and Pioneer Funds in the aggregate as of
December 31, 2016. Beneficial ownership is determined in accordance with SEC
rules. The share value of any closed-end fund is based on its closing market
price on December 31, 2016. The share value of any open-end Pioneer Fund is
based on the net asset value of the class of shares on December 31, 2016. The
dollar ranges in this table are in accordance with SEC requirements.
AGGREGATE DOLLAR RANGE OF EQUITY
DOLLAR RANGE OF SECURITIES IN ALL REGISTERED
EQUITY SECURITIES INVESTMENT COMPANIES OVERSEEN BY
NAME OF TRUSTEE IN THE FUND TRUSTEE IN THE PIONEER FAMILY OF FUNDS
----------------------- ------------------- ---------------------------------------
INTERESTED TRUSTEES:
----------------------- ------------------- ---------------------------------------
Kenneth J. Taubes Over $100,000 Over $100,000
----------------------- ------------------- ---------------------------------------
INDEPENDENT TRUSTEES:
----------------------- ------------------- ---------------------------------------
David R. Bock Over $100,000 Over $100,000
----------------------- ------------------- ---------------------------------------
Benjamin M. Friedman None Over $100,000
----------------------- ------------------- ---------------------------------------
Margaret B.W. Graham $10,001 - $50,000 Over $100,000
----------------------- ------------------- ---------------------------------------
Thomas J. Perna None Over $100,000
----------------------- ------------------- ---------------------------------------
Marguerite A. Piret $10,001 - $50,000 Over $100,000
----------------------- ------------------- ---------------------------------------
Fred J. Ricciardi None Over $100,000
----------------------- ------------------- ---------------------------------------
COMPENSATION OF OFFICERS AND TRUSTEES
The following table sets forth certain information with respect to the
compensation of each Trustee of the fund.
71
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ACCRUED TOTAL COMPENSATION
COMPENSATION AS PART OF FUND FROM THE FUND AND
NAME OF TRUSTEE FROM FUND** EXPENSES OTHER PIONEER FUNDS**
------------------------ -------------- ------------------ ----------------------
INTERESTED TRUSTEES: +
------------------------ ---------- ----- -------------
Kenneth J. Taubes * $ 0.00 $0.00 $ 0.00
------------------------ ---------- ----- -------------
INDEPENDENT TRUSTEES:
------------------------ ---------- ----- -------------
David R. Bock $ 9,587.33 $0.00 $ 251,750.00
------------------------ ---------- ----- -------------
Benjamin M. Friedman $ 9,555.67 $0.00 $ 251,000.00
------------------------ ---------- ----- -------------
Margaret B.W. Graham $ 8,397.60 $0.00 $ 223,500.00
------------------------ ---------- ----- -------------
Thomas J. Perna $11,489.65 $0.00 $ 296,750.00
------------------------ ---------- ----- -------------
Marguerite A. Piret $ 9,165.20 $0.00 $ 241,750.00
------------------------ ---------- ----- -------------
Fred J. Ricciardi $ 7,616.65 $0.00 $ 205,000.00
------------------------ ---------- ----- -------------
TOTAL $55,812.10 $0.00 $1,469,750.00
------------------------ ---------- ----- -------------
* Under the management contract, Pioneer reimburses the fund for any
Interested Trustee fees paid by the fund.
** For the fiscal year ended October 31, 2016. As of October 31, 2016, there
were 45 U.S. registered investment portfolios in the Pioneer Family of
Funds.
+ Ms. Lorraine H. Monchak is a non-voting Advisory Trustee of the Trust.
Ms. Monchak received aggregate compensation from the fund in the amount
of $8,354.17, pension or retirement benefits accrued as part of portfolio
expenses of $0.00, and total compensation from the fund and the other
Pioneer Funds in the amount of $222,479.00 for the fiscal year ended
October 31, 2016.
APPROXIMATE MANAGEMENT FEES THE FUND PAID OR OWED PIONEER
The following table shows the dollar amount of gross investment management fees
incurred by the fund, along with the net amount of fees that were paid after
applicable fee waivers or expense reimbursements, if any. The data is for the
past three fiscal years or shorter period if the fund has been in operation for
a shorter period.
FOR THE FISCAL YEARS ENDED OCTOBER 31 2016 2015 2014
--------------------------------------- ------------- ------------- -------------
Gross Fee Incurred $9,476,495 $8,923,615 $9,049,733
--------------------------------------- ---------- ---------- ----------
Net Fee Paid $9,476,495 $8,923,615 $9,049,733
--------------------------------------- ---------- ---------- ----------
FEES THE FUND PAID TO PIONEER UNDER THE ADMINISTRATION AGREEMENT
FOR THE FISCAL YEARS ENDED OCTOBER 31
----------------------------------------------
2016 2015 2014
-------------------- ----------- -----------
$577,858 $439,993 $477,023
---------- -------- --------
UNDERWRITING EXPENSES AND COMMISSIONS
FOR THE FISCAL YEARS ENDED OCTOBER 31 2016 2015 2014
--------------------------------------------------------------- ----------- ---------- ----------
Approximate Net Underwriting Expenses Retained by PFD $113,857 $ 78,659 $ 71,246
--------------------------------------------------------------- -------- -------- --------
Approximate Commissions Reallowed to Dealers (Class A shares) $650,716 $406,046 $405,531
--------------------------------------------------------------- -------- -------- --------
Approximate Brokerage and Underwriting Commissions (Portfolio
Transactions) $686,889 $576,905 $457,947
--------------------------------------------------------------- -------- -------- --------
72
FUND EXPENSES UNDER THE DISTRIBUTION PLAN
FOR THE FISCAL YEAR ENDED OCTOBER 31, 2016
----------------------------------------------------------------------
COMBINED PLAN CLASS A PLAN CLASS C PLAN CLASS R PLAN
------------------ -------------- -------------- --------------
$3,508,232 $1,852,400 $1,256,110 $399,722
------------ ---------- ---------- -------- --
ALLOCATION OF FUND EXPENSES UNDER THE DISTRIBUTION PLAN
An estimate by category of the allocation of fees paid by each class of shares
of the fund during the year ended September 30, 2016 is set forth in the
following table:
PAYMENTS
TO SERVICING SALES PRINTING
PARTIES/1/ ADVERTISING MEETINGS AND MAILING TOTAL
-------------- ------------- ---------- ------------- -------------
Class A $1,974,461 $45,673 $120,586 $39,694 $2,180,414
--------- ---------- ------- -------- ------- ----------
Class C $1,353,023 $15,296 $ 40,857 $13,471 $1,422,647
--------- ---------- ------- -------- ------- ----------
Class R $ 383,370 $13,123 $ 34,463 $11,332 $ 442,288
--------- ---------- ------- -------- ------- ----------
1 Payments to Servicing Parties include Pioneer Funds Distributor, Inc.,
broker-dealers, financial intermediaries and other parties that enter into
a distribution, selling or service agreement with respect to one or more
classes of the fund (annualized for the period ended September 30, 2016).
SECURITIES OF REGULAR BROKER-DEALERS
As of October 31, 2016, the fund held the following securities of its regular
broker-dealers (or affiliates of such broker-dealers):
Bank of America Corp. Equity $29,255,000
---------------------------------------- -------- -----------
JPMorgan Chase & Co. Equity $30,447,000
---------------------------------------- -------- -----------
US Bancorp Equity $25,538,000
---------------------------------------- -------- -----------
The PNC Financial Services Group, Inc. Equity $41,077,000
---------------------------------------- -------- -----------
Invesco, Ltd. Equity $18,789,000
---------------------------------------- -------- -----------
Northern Trust Corp. Equity $16,225,000
---------------------------------------- -------- -----------
State Street Corp. Equity $38,832,000
---------------------------------------- -------- -----------
The Bank of New York Mellon Corp. Equity $28,515,000
---------------------------------------- -------- -----------
Morgan Stanley Co. Equity $23,171,000
---------------------------------------- -------- -----------
CDSCS
During the fiscal year ended October 31, 2016, the following CDSCs were paid to
PFD:
$24,868
CAPITAL LOSS CARRYFORWARDS AS OF OCTOBER 31, 2016
At October 31, 2016, the fund had the following net capital loss carryforward:
$0
73
19. APPENDIX A - DESCRIPTION OF SHORT-TERM DEBT, CORPORATE BOND AND PREFERRED
STOCK RATINGS/1/
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S ("MOODY'S") SHORT-TERM
RATINGS:
Moody's short-term ratings are forward-looking opinions of the ability of
issuers to honor short-term financial obligations. Ratings may be assigned to
issuers, short-term programs or to individual short-term debt instruments. Such
obligations generally have an original maturity of thirteen months or less and
reflect the likelihood of a default on contractually promised payments.
Moody's employs the following designations to indicate the relative repayment
ability of rated issuers:
P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability
to repay short-term debt obligations.
P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability
to repay short-term debt obligations.
P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable
ability to repay short-term obligations.
NP: Issuers (or supporting institutions) rated Not Prime do not fall within any
of the Prime rating categories.
NOTE: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced
by the senior-most long-term rating of the issuer, its guarantor or
support-provider.
DESCRIPTION OF MOODY'S LONG-TERM CORPORATE RATINGS:
Moody's long-term obligation ratings are forward-looking opinions of the
relative credit risk of fixed-income obligations with an original maturity of
one year or more. They address the possibility that a financial obligation will
not be honored as promised. Such ratings use Moody's Global Long-Term Rating
Scale and reflect both on the likelihood of default on contractually promised
payments and the expected financial loss suffered in the event of default.
AAA: Obligations rated Aaa are judged to be of the highest quality, subject to
the lowest level of credit risk.
AA: Obligations rated Aa are judged to be of high quality and are subject to
very low credit risk.
A: Obligations rated A are considered upper-medium grade and are subject to low
credit risk.
BAA: Obligations rated Baa are judged to be medium-grade and subject to
moderate credit risk, and as such may possess certain speculative
characteristics.
BA: Obligations rated Ba are judged to be speculative and are subject to
substantial credit risk.
B: Obligations rated B are considered speculative and are subject to high
credit risk.
CAA: Obligations rated Caa are judged to be speculative and of poor standing
and are subject to very high credit risk.
------------------------
/1/ The ratings indicated herein are believed to be the most recent ratings
available at the date of this statement of additional information for the
securities listed. Ratings are generally given to securities at the time of
issuance. While the rating agencies may from time to time revise such
ratings, they undertake no obligation to do so, and the ratings indicated
do not necessarily represent ratings which will be given to these
securities on the date of the fund's fiscal year-end.
74
CA: Obligations rated Ca are highly speculative and are likely in, or very
near, default, with some prospect of recovery of principal and interest.
C: Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.
NOTE: Moody's appends numerical modifiers "1", "2", and "3" to each generic
rating classification from "Aa" through "Caa". The modifier "1" indicates that
the obligation ranks in the higher end of its generic rating category; the
modifier "2" indicates a mid-range ranking; and the modifier "3" indicates a
ranking in the lower end of that generic rating category. Additionally, a
"(hyb)" indicator is appended to all ratings of hybrid securities issued by
banks, finance companies and securities firms.
STANDARD & POOR'S RATINGS GROUP'S LONG-TERM ISSUE CREDIT RATINGS:
Issue credit ratings are based, in varying degrees, on Standard & Poor's
analysis of the following considerations:
o Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
o Nature of and provisions of the obligation;
o Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
Issue ratings are an assessment of default risk, but may incorporate an
assessment of relative seniority or ultimate recovery in the event of default.
Junior obligations are typically rated lower than senior obligations, to
reflect the lower priority in bankruptcy, as noted above. (Such differentiation
may apply when an entity has both senior and subordinated obligations, secured
and unsecured obligations, or operating company and holding company
obligations.)
AAA: An obligation rated "AAA" has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.
AA: An obligation rated "AA" differs from the highest-rated obligations only to
a small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.
A: An obligation rated "A" is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB: An obligation rated "BBB" exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.
BB, B, CCC, CC, AND C: Obligations rated "BB", "B", "CCC", "CC", and "C" are
regarded as having significant speculative characteristics. "BB" indicates the
least degree of speculation and "C" the highest. While such obligations will
likely have some quality and protective characteristics, these may be
outweighed by large uncertainties or major exposures to adverse conditions.
BB: An obligation rated "BB" is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.
B: An obligation rated "B" is more vulnerable to nonpayment than obligations
rated "BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.
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CCC: An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.
CC: An obligation rated "CC" is currently highly vulnerable to nonpayment.
C: A "C" rating is assigned to obligations that are currently highly vulnerable
to nonpayment, obligations that have payment arrearages allowed by the terms of
the documents, or obligations of an issuer that is the subject of a bankruptcy
petition or similar action which have not experienced a payment default. Among
others, the "C" rating may be assigned to subordinated debt, preferred stock or
other obligations on which cash payments have been suspended in accordance with
the instrument's terms or when preferred stock is the subject of a distressed
exchange offer, whereby some or all of the issue is either repurchased for an
amount of cash or replaced by other instruments having a total value that is
less than par.
D: An obligation rated "D" is in payment default. The "D" rating category is
used when payments on an obligation, including a regulatory capital instrument,
are not made on the date due even if the applicable grace period has not
expired, unless Standard & Poor's believes that such payments will be made
during such grace period. The "D" rating also will be used upon the filing of a
bankruptcy petition or the taking of a similar action if payments on an
obligation are jeopardized. An obligation's rating is lowered to "D" upon
completion of a distressed exchange offer, whereby some or all of the issue is
either repurchased for an amount of cash or replaced by other instruments
having a total value that is less than par.
PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
major rating categories.
NR: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.
STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS:
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity date of no more than 365 days - including
commercial paper. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. The result is a dual rating, in which the short-term rating
addresses the put feature, in addition to the usual long-term rating.
A-1: A short-term obligation rated "A-1" is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.
A-2: A short-term obligation rated "A-2" is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is satisfactory.
A-3: A short-term obligation rated "A-3" exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.
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B: A short-term obligation rated "B" is regarded as having significant
speculative characteristics. Ratings of "B-1", "B-2", and "B-3" may be assigned
to indicate finer distinctions within the "B" category. The obligor currently
has the capacity to meet its financial commitment on the obligation; however,
it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.
B-1: A short-term obligation rated "B-1" is regarded as having significant
speculative characteristics, but the obligor has a relatively stronger capacity
to meet its financial commitments over the short-term compared to other
speculative-grade obligors.
B-2: A short-term obligation rated "B-2" is regarded as having significant
speculative characteristics, and the obligor has an average speculative-grade
capacity to meet its financial commitments over the short-term compared to
other speculative-grade obligors.
B-3: A short-term obligation rated "B-3" is regarded as having significant
speculative characteristics, and the obligor has a relatively weaker capacity
to meet its financial commitments over the short-term compared to other
speculative-grade obligors.
C: A short-term obligation rated "C" is currently vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.
D: A short-term obligation rated "D" is in payment default. The "D" rating
category is used when payments on an obligation, including a regulatory capital
instrument, are not made on the date due even if the applicable grace period
has not expired, unless Standard & Poor's believes that such payments will be
made during such grace period. The "D" rating also will be used upon the filing
of a bankruptcy petition or the taking of a similar action if payments on an
obligation are jeopardized.
LOCAL CURRENCY AND FOREIGN CURRENCY RISKS
Country risk considerations are a standard part of Standard & Poor's analysis
for credit ratings on any issuer or issue. Currency of repayment is a key
factor in this analysis. An obligor's capacity to repay foreign currency
obligations may be lower than its capacity to repay obligations in its local
currency due to the sovereign government's own relatively lower capacity to
repay external versus domestic debt. These sovereign risk considerations are
incorporated in the debt ratings assigned to specific issues. Foreign currency
issuer ratings are also distinguished from local currency issuer ratings to
identify those instances where sovereign risks make them different for the same
issuer.
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20. APPENDIX B - PROXY VOTING POLICIES AND PROCEDURES
POLICY
Each of Pioneer Investment Management, Inc. and Pioneer Institutional Asset
Management, Inc. (collectively, "Pioneer") is a fiduciary that owes each of its
clients the duties of care and loyalty with respect to all services undertaken
on the client's behalf, including voting proxies for securities held by the
client. When Pioneer has been delegated proxy-voting authority for a client,
the duty of care requires Pioneer to monitor corporate events and to vote the
proxies. To satisfy its duty of loyalty, Pioneer must place the client's
interests ahead of its own and must cast proxy votes in a manner consistent
with the best interest of the client. It is Pioneer's policy to vote proxies
presented to Pioneer in a timely manner in accordance with these principles.
Pioneer's sole concern in voting proxies is the economic effect of the proposal
on the value of portfolio holdings, considering both the short- and long-term
impact. In many instances, Pioneer believes that supporting the company's
strategy and voting "for" management's proposals builds portfolio value. In
other cases, however, proposals set forth by management may have a negative
effect on that value, while some shareholder proposals may hold the best
prospects for enhancing it. Pioneer monitors developments in the proxy-voting
arena and will revise this policy as needed.
Pioneer's clients may request copies of their proxy voting records and of
Pioneer's proxy voting policies and procedures by either sending a written
request to Pioneer's Proxy Coordinator, or clients may review Pioneer's proxy
voting policies and procedures online at pioneerinvestments.com. Pioneer may
describe to clients its proxy voting policies and procedures by delivering a
copy of Pioneer's Form ADV (Part II), by separate notice to the client or by
other means.
APPLICABILITY
This Proxy Voting policy and the procedures set forth below are designed to
complement Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of companies
that are issuers of securities held in accounts managed by Pioneer. This policy
sets forth Pioneer's position on a number of issues for which proxies may be
solicited, but it does not include all potential voting scenarios or proxy
events. Furthermore, because of the special issues associated with proxy
solicitations by closed-end Funds, Pioneer will vote shares of closed-end Funds
on a case-by-case basis.
PURPOSE
The purposes of this policy is to ensure that proxies for United States ("US")
and non-US companies that are received in a timely manner will be voted in
accordance with the principles stated above. Unless the Proxy Voting Oversight
Group (as described below) specifically determines otherwise, all shares in a
company held by Pioneer-managed accounts for which Pioneer has proxy-voting
authority will be voted alike, unless a client has given specific voting
instructions on an issue.
Pioneer does not delegate the authority to vote proxies relating to securities
held by its clients to any of its affiliates, which include other subsidiaries
of UniCredit S.p.A. ("UniCredit").
Any questions about this policy should be directed to Pioneer's Director of
Investment Operations (the "Proxy Coordinator").
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PROCEDURES
PROXY VOTING SERVICE
Pioneer has engaged an independent proxy voting service to assist in the voting
of proxies. The proxy voting service works with custodians to ensure that all
proxy materials are received by the custodians and are processed in a timely
fashion. To the extent applicable, the proxy voting service votes all proxies
in accordance with the proxy voting guidelines established by Pioneer and set
forth herein. The proxy voting service will refer proxy questions to the Proxy
Coordinator (described below) for instructions under circumstances where: (1)
the application of the proxy voting guidelines is unclear; (2) a particular
proxy question is not covered by the guidelines; or (3) the guidelines call for
specific instructions on a case-by-case basis. The proxy voting service is also
requested to call to the Proxy Coordinator's attention specific proxy questions
that, while governed by a guideline, appear to involve unusual or controversial
issues. Pioneer reserves the right to attend a meeting in person and may do so
when it determines that the company or the matters to be voted on at the
meeting are strategically important to its clients.
PROXY COORDINATOR
The Proxy Coordinator coordinates the voting, procedures and reporting of
proxies on behalf of Pioneer's clients. The Proxy Coordinator will deal
directly with the proxy voting service and, in the case of proxy questions
referred by the proxy voting service, will solicit voting recommendations and
instructions from the Portfolio Management Group or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring that
these questions and referrals are responded to in a timely fashion and for
transmitting appropriate voting instructions to the proxy voting service. The
Proxy Coordinator is responsible for verifying with the Chief Legal Officer or
his or her designee whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an employee
benefit plan, the plan's trustee or other fiduciaries).
REFERRAL ITEMS
The proxy voting service will refer proxy questions to the Proxy Coordinator or
his or her designee that are described by Pioneer's proxy voting guidelines as
to be voted on a case-by-case basis, that are not covered by Pioneer's
guidelines or where Pioneer's guidelines may be unclear with respect to the
matter to be voted on. Under such circumstances, the Proxy Coordinator will
seek a written voting recommendation from the Head of Portfolio Management U.S.
or his or her designated equity portfolio-management representative. Any such
recommendation will include: (i) the manner in which the proxies should be
voted; (ii) the rationale underlying any such decision; and (iii) the
disclosure of any contacts or communications made between Pioneer and any
outside parties concerning the proxy proposal prior to the time that the voting
instructions are provided.
SECURITIES LENDING
In accordance with industry standards, proxies are not available to be voted
when the shares are out on loan through either Pioneer's lending program or a
client's managed security lending program. However, Pioneer will reserve the
right to recall lent securities so that they may be voted according to the
Pioneer's instructions. If a portfolio manager would like to vote a block of
previously lent shares, the Proxy Coordinator will work with the portfolio
manager and Investment Operations to recall the security, to the extent
possible, to facilitate the vote on the entire block of shares. Certain clients
participate in securities lending programs. Although such programs allow for
the recall of securities for any reason, Pioneer may determine not to vote
securities on loan and it may not always be possible for securities on loan to
be recalled in time to be voted.
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SHARE-BLOCKING
"Share-blocking" is a market practice whereby shares are sent to a custodian
(which may be different than the account custodian) for record keeping and
voting at the general meeting. The shares are unavailable for sale or delivery
until the end of the blocking period (typically the day after general meeting
date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time frame and
practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
PROXY VOTING OVERSIGHT GROUP
The members of the Proxy Voting Oversight Group include Pioneer's Head of
Portfolio Management U.S. or his or her designated equity portfolio management
representative, the Director of Investment Operations, and the Chief Compliance
Officer of the Adviser and Funds. Other members of Pioneer will be invited to
attend meetings and otherwise participate as necessary. The Director of
Investment Operations will chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating, and
changing (when necessary) Pioneer's proxy voting policies and procedures. The
group meets at least annually to evaluate and review this policy and procedures
and the services of its third-party proxy voting service. In addition, the
Proxy Voting Oversight Group will meet as necessary to vote on referral items
and address other business as necessary.
AMENDMENTS
Pioneer may not amend this policy without the prior approval of the Proxy
Voting Oversight Group and its corporate parent, Pioneer Global Asset
Management S.p.A. ("PGAM").
FILING FORM N-PX
The Proxy Coordinator and the Regulatory Compliance Manager are responsible for
ensuring that Form N-PX documents receive the proper review by a member of the
Proxy Voting Oversight Group prior to a Fund officer signing the forms.
The Investment Operations department will provide the Compliance department
with a copy of each Form N-PX filing prepared by the proxy voting service.
COMPLIANCE FILES N-PX.
The Compliance department will ensure that a corresponding Form N-PX exists for
each Pioneer registered investment company.
Following this review, each Form N-PX is formatted for public dissemination via
the EDGAR system.
Prior to submission, each Form N-PX is to be presented to the Fund officer for
a final review and signature.
Copies of the Form N-PX filings and their submission receipts are maintained
according to Pioneer record keeping policies.
PROXY VOTING GUIDELINES
ADMINISTRATIVE
While administrative items appear infrequently in U.S. issuer proxies, they are
quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
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o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
o Authorization of the transferring of reserves and allocation of income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine administrative
items; however, Pioneer will oppose any routine proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of the
proposal. Pioneer has also instructed its proxy voting service to inform
Pioneer of its analysis of any administrative items that may be inconsistent,
in its view, with Pioneer's goal of supporting the value of its clients'
portfolio holdings so that Pioneer may consider and vote on those items on a
case-by-case basis.
AUDITORS
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are concerned
about the auditors' independence or their past work for the company.
Specifically, we will oppose the ratification of auditors and withhold votes
for audit committee members if non-audit fees paid by the company to the
auditing firm exceed the sum of audit fees plus audit-related fees plus
permissible tax fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily required or
where rotation would demonstrably strengthen financial disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the company.
BOARD OF DIRECTORS
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in instances
where corporate performance has been very poor or where the board appears to
lack independence.
GENERAL BOARD ISSUES
Pioneer will vote for:
o Audit, compensation and nominating committees composed of independent
directors exclusively.
o Indemnification for directors for actions taken in good faith in accordance
with the business judgment rule. We will vote against proposals for broader
indemnification.
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o Changes in board size that appear to have a legitimate business purpose and
are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced directors, and
shareholder control is better achieved through annual votes.
o Requirements for union or special interest representation on the board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate performance.
ELECTIONS OF DIRECTORS
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid reason. We
support proposals that require disclosure of director attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the purposes of our
policy, we accept the definition of affiliated directors provided by our
proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the majority of
shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with very poor
corporate performance.
We will vote on a case-by-case basis on these issues:
o Re-election of directors who have implemented or renewed a dead-hand or
modified dead-hand poison pill (a "dead-hand poison pill" is a shareholder
rights plan that may be altered only by incumbent or "dead" directors. These
plans prevent a potential acquirer from disabling a poison pill by obtaining
control of the board through a proxy vote).
o Contested election of directors.
o Election of a greater number of independent directors (in order to move
closer to a majority of independent directors in cases of poor performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been approved by
shareholders for two consecutive years.
We will vote for:
o Precatory and binding resolutions requesting that the board changes the
company's bylaws to stipulate that directors need to be elected with
affirmative majority of votes cast, provided that the resolutions allow for
plurality voting in cases of contested elections.
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TAKEOVER-RELATED MEASURES
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increasing the ability for shareholders to call special meetings.
o Increasing the ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
- Control share acquisition statutes, which deny large holders voting rights
on holdings over a specified threshold.
- Control share cash-out provisions, which require large holders to acquire
shares from other holders
- Freeze-out provisions, which impose a waiting period on large holders
before they can attempt to gain control
- Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
- Disgorgement provisions, which require acquirers to disgorge profits on
purchases made before gaining control.
- Fair price provisions.
- Authorization of shareholder rights plans.
- Labor protection provisions.
- Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider voting
against proposals that require a supermajority vote to repeal or amend the
provision. Finally, we will consider the mechanism used to determine the
fair price; we are generally opposed to complicated formulas or requirements
to pay a premium.
o Opting out of state takeover statutes regarding fair price provisions. We
will use the criteria used for fair price provisions in general to determine
our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end funds, where we shall
vote on a case-by-case basis.
o Limiting shareholder ability to remove or appoint directors. We will support
proposals to restore shareholder authority in this area. We will review on
case-by-case basis proposals that authorize the board to make interim
appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support proposals
to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we ordinarily
support measures that encourage takeover bids, we believe that management
should have full control over corporate funds.
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o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g., amend
charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally allow
shareholders to buy additional shares at a below-market price in the event
of a change in control and may deter some bids.
CAPITAL STRUCTURE
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals in
this area. We will, however, reject proposals that impose high barriers to
potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Shares repurchase programs, if all shareholders may participate on equal
terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank check common stock placements (other than shares
issued in the normal course of business) submitted for shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
- Number of shares currently available for issuance;
- Size of requested increase (we would normally approve increases of up to
100% of current authorization);
- Proposed use of the proceeds from the issuance of additional shares, and
- Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank check preferred. We will normally oppose issuance of a new class of
blank check preferred, but may approve an increase in a class already
outstanding if the company has demonstrated that it uses this flexibility
appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
COMPENSATION
Pioneer supports compensation plans that link pay to shareholder returns and
believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same time,
stock-related compensation plans have a significant economic impact and a
direct effect on the balance sheet. Therefore, while we do not want to
micromanage a company's compensation programs, we will place limits on the
potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
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o Employee stock ownership plans (ESOPs), as long as shares allocated to ESOPs
are less than 5% of outstanding shares. Larger blocks of stock in ESOPs can
serve as a takeover defense. We will support proposals to submit ESOPs to
shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act of 1993
(OBRA), including:
- Amendments to performance plans to conform with OBRA;
- Caps on annual grants or amendments of administrative features;
- Adding performance goals, and
- Cash or cash and stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricing be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred compensation,
split-dollar life insurance, SERPs, and pension benefits).
o Employee stock purchase plans where the purchase price is equal to at least
85% of the market price, where the offering period is no greater than 27
months and where potential dilution (as defined below) is no greater than
10%.
We will vote on a case-by-case basis on the following issues:
o Shareholder proposals seeking additional disclosure of executive and director
pay information.
o Executive and director stock-related compensation plans. We will consider the
following factors when reviewing these plans:
- The program must be of a reasonable size. We will approve plans where the
combined employee and director plans together would generate less than 15%
dilution. We will reject plans with 15% or more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
- The plan must not:
- Explicitly permit unlimited option repricing authority or that have
repriced in the past without shareholder approval
- Be a self-replenishing "evergreen" plan, or a plan that grants discount
options and tax offset payments
- We are generally in favor of proposals that increase participation beyond
executives.
- We generally support proposals asking companies to adopt rigorous vesting
provisions for stock option plans such as those that vest incrementally
over, at least, a three- or four-year period with a pro rata portion of
the shares becoming exercisable on an annual basis following grant date.
- We generally support proposals asking companies to disclose their window
period policies for stock transactions. Window period policies ensure that
employees do not exercise options based on insider information
contemporaneous with quarterly earnings releases and other material
corporate announcements.
- We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
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o All other compensation-related proposals, including deferred compensation
plans, employment agreements, loan guarantee programs and retirement plans.
o All other proposals regarding stock compensation plans, including extending
the life of a plan, changing vesting restrictions, repricing options,
lengthening exercise periods or accelerating distribution of awards and
pyramiding and cashless exercise programs.
We will vote against:
o Pensions for non-employee directors. We believe these retirement plans reduce
director objectivity.
o Elimination of stock option plans.
We will vote on a case-by-case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
CORPORATE GOVERNANCE
Pioneer will vote for:
o Confidential voting.
o Equal access provisions, which allow shareholders to contribute their
opinions to proxy materials.
o Proposals requiring directors to disclose their ownership of shares in the
company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support reincorporations
supported by valid business reasons. We will oppose those that appear to be
solely for the purpose of strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand judicial
review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit shareholder
input, we prefer to leave the method of doing so to management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
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MERGERS AND RESTRUCTURINGS
Pioneer will vote on the following and similar issues on a case-by-case basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset sales,
joint ventures, conversions to holding company and conversions to
self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the company
be put up for sale.
MUTUAL FUNDS
Many of our portfolios may invest in shares of closed-end funds or
exchange-traded funds. The non-corporate structure of these investments raises
several unique proxy-voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes that do not
affect the investment objective or overall risk level of the fund. We will
examine more fundamental changes on a case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Election of a greater number of independent directors (in order to move
closer to a majority of independent directors) in cases of poor performance.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end funds, but will typically support such
proposals.
SOCIAL ISSUES
Pioneer will abstain on stockholder proposals calling for greater disclosure of
corporate activities with regard to social issues. "Social Issues" may
generally be described as shareholder proposals for a company to:
o Conduct studies regarding certain issues of public concern and interest;
o Study the feasibility of the company taking certain actions with regard to
such issues; or
o Take specific action, including ceasing certain behavior and adopting company
standards and principles, in relation to issues of public concern and
interest.
We believe these issues are important and should receive management attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against proposals
with regard to contributions, believing that management should control the
routine disbursement of funds.
87
AVOIDING CONFLICTS OF INTEREST
Pioneer recognizes that in certain circumstances a conflict of interest may
arise when Pioneer votes a proxy.
A conflict of interest occurs when Pioneer's interests interfere, or appear to
interfere with the interests of Pioneer's clients.
A conflict may be actual or perceived and may exist, for example, when the
matter to be voted on concerns:
o An affiliate of Pioneer, such as another company belonging to the UniCredit
S.p.A. banking group (a "UniCredit Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor, advisor,
manager, custodian, distributor, underwriter, broker, or other similar
capacity (including those securities specifically declared by PGAM to
present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredit has informed Pioneer that a
UniCredit Affiliate acts as a sponsor, advisor, manager, custodian,
distributor, underwriter, broker, or other similar capacity; or
o A person with whom Pioneer (or any of its affiliates) has an existing,
material contract or business relationship.
Any member of the Proxy Voting Oversight Group and any other associate involved
in the proxy voting process with knowledge of any apparent or actual conflict
of interest must disclose such conflict to the Proxy Coordinator and the Chief
Compliance Officer of Pioneer and the Funds. If any associate is lobbied or
pressured with respect to any voting decision, whether within or outside of
Pioneer, he or she should contact a member of the Proxy Voting Oversight Group
or Pioneer's Chief Compliance Officer.
The Proxy Voting Oversight Group will review each item referred to Pioneer by
the proxy voting service to determine whether an actual or potential conflict
of interest exists in connection with the proposal(s) to be voted upon. The
review will be conducted by comparing the apparent parties affected by the
proxy proposal being voted upon against the Controller's and Compliance
Department's internal list of interested persons and, for any matches found,
evaluating the anticipated magnitude and possible probability of any conflict
of interest being present. The Proxy Voting Oversight Group may cause any of
the following actions to be taken when a conflict of interest is present:
o Vote the proxy in accordance with the vote indicated under "Voting
Guidelines," If a vote is indicated;
o Direct the independent proxy voting service to vote the proxy in accordance
with its independent assessment; or
o As determined by the Proxy Voting Oversight Group in its discretion
consistent with its fiduciary duty.
If the Proxy Voting Oversight Group perceives a material conflict of interest,
the group may also choose to disclose the conflict to the affected clients and
solicit their consent to proceed with the vote, or may take such other action
in good faith (in consultation with counsel) that would protect the interest of
clients.
For each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a Conflicts
of Interest Report prepared by the Proxy Coordinator.
The Proxy Voting Oversight Group will review periodically the independence of
the proxy voting service. This may include a review of the service's conflict
management procedures and other documentation, and an evaluation as to whether
the service continues to have the competency and capacity to vote proxies.
DECISION NOT TO VOTE PROXIES
Although it is Pioneer's general policy to vote all proxies in accordance with
the principles set forth in this policy, there may be situations in which the
Proxy Voting Oversight Group does not vote a proxy referred to it. For example,
because of the potential conflict of interest inherent in voting shares of a
UniCredit
88
affiliate, Pioneer will abstain from voting the shares unless otherwise
directed by a client. In such a case, the Proxy Coordinator will inform PGAM
Global Compliance and the PGAM Independent Directors before exercising voting
rights.
There exist other situations in which the Proxy Voting Oversight Group may
refrain from voting a proxy. For example, if the cost of voting a foreign
security outweighs the benefit of voting, the Group may not vote the proxy. The
Group may not be given enough time to process a vote, perhaps because it
receives a meeting notice too late or it cannot obtain a translation of the
agenda in the time available. If Pioneer has outstanding "sell" orders, the
proxies for shares subject to the order may not be voted to facilitate the
sale. Although Pioneer may hold shares on a company's record date, if the
shares are sold prior to the meeting date, the Group may decide not to vote
those shares.
SUPERVISION
ESCALATION
It is each associate's responsibility to contact his or her business unit head,
the Proxy Coordinator, a member of the Proxy Voting Oversight Group or
Pioneer's Chief Compliance Officer if he or she becomes aware of any possible
noncompliance with this policy.
TRAINING
Pioneer will conduct periodic training regarding proxy voting and this policy.
It is the responsibility of the business line policy owner and the applicable
Compliance Department to coordinate and conduct such training.
RELATED POLICIES AND PROCEDURES
Pioneer Investment Management, Inc.'s Books and Records Policy and the Books
and Records of the Pioneer Funds' Policy.
RECORD KEEPING
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of each proxy statement received (unless the proxy statement
is available from the SEC's Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a registered
investment company; and
o Is able to promptly provide Pioneer with a copy of the voting record upon its
request.
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation
(i.e. conflicts of interest, exception votes and case-by-case votes) the
following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in making the
decision on how to vote the subject proxy;
o A copy of any recommendation of the proxy voting service; and
o A copy of any conflict notice, conflict consent or any other written
communication (including emails or other electronic communications) to or
from the client (or in the case of an employee benefit plan, the plan's
trustee or other fiduciaries) regarding the subject proxy vote cast by, or
the vote recommendation of, Pioneer.
Pioneer shall maintain the above records in the client's file in accordance
with applicable regulations.
RELATED REGULATIONS
Form N-1A, ICA Rule 30b1-4, Rule 31a1-3, Rule 38a-1 & IAA 206(4)-6, 204-2
89
ADOPTED BY THE PIONEER FUNDS' BOARD OF TRUSTEES
October 5, 2004
EFFECTIVE DATE:
October 5, 2004
REVISION DATE:
September 2009
22094-10-0317
90
PART C - OTHER INFORMATION
Item 28. Exhibits
Amended Form N-1A
Exhibit Reference
(a)(1) Amended and Restated Agreement and Declaration of Trust
(January 12, 2016).(11)
(a)(2) Certificate of Trust.(1)
(b) Amended and Restated By-Laws.(7)
(c) Specimen Share Certificate.(1)
(d) Amended and Restated Management Agreement.(9)
(e)(1) Underwriting Agreement with Pioneer Funds Distributor, Inc.(3)
(e)(2) Dealer Sales Agreement.(6)
(f) None.
(g)(1) Custodian Agreement with Brown Brothers Harriman & Co.(5)
(g)(2) Appendix A to Custodian Agreement (December 10, 2014).(10)
(g)(3) Amendment to Custodian Agreement (May 31, 2016).(12)
(h)(1) Transfer Agency Agreement (November 2, 2015).(12)
(h)(2) Amended and Restated Administration Agreement with Pioneer
Investment Management, Inc. (December 1, 2014).(10)
(h)(3) Administrative Agency Agreement, dated as of March 5, 2012,
between Brown Brothers Harriman & Co. and Pioneer Investment
Management, Inc.(8)
(h)(4) Appendix A to Administrative Agency Agreement (December 27, 2016).(12)
(i) Opinion of Counsel.(2)
(j) Consent of Independent Registered Public Accounting Firm.(12)
(k) None.
(l) None.
(m) Pioneer Funds Distribution Plan (January 10, 2017).(12)
(m)(2) Class R Service Plan.(4)
(n) Amended Multiple Class Plan Pursuant to Rule 18f-3
(January 10, 2017).(12)
(o) Not applicable.
(p) Code of Ethics of the Pioneer Funds, Pioneer Funds Distributor, Inc.,
Pioneer Institutional Asset Management, Inc., and Pioneer Investment
Management, Inc. (September 20, 2013).(9)
N/A Power of Attorney (November 17, 2014).(10)
------------------
(1) Previously filed. Incorporated herein by reference from the exhibits filed
with the Registrant's Initial Registration Statement (File Nos. 333-46453 and
811-08657) as filed with the Securities and Exchange Commission (the "SEC") on
February 17, 1998 (Accession No. 0000734072-98-000137).
(2) Previously filed. Incorporated herein by reference from the exhibits
filed with Pre-Effective Amendment No. 1 to the Registration Statement as filed
with the SEC on June 24, 1998 (Accession No. 0001016964-98-000063).
(3) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 7 to the Registration Statement as filed with
the SEC on March 1, 2002 (Accession No.0000869356-02-000005).
(4) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 8 to the Registration Statement as filed with
the SEC on January 8, 2003 (Accession No.0000869356-03-000003).
(5) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 13 to the Registration Statement as filed with
the SEC on February 28, 2006 (Accession No.0000869356-06-000013).
(6) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 14 to the Registration Statement as filed with
the SEC on February 27, 2007 (Accession No.0000863334-07-000008).
(7) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 17 to the Registration Statement as filed with
the SEC on February 27, 2009 (Accession No. 0000869356-09-000005)
(8) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 25 to the Registration Statement as filed with
the SEC on December 14, 2012 (Accession No. 0000869356-12-000016)
(9) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 29 to the Registration Statement as filed with
the SEC on February 28, 2014 (Accession No. 0000869356-14-000004)
(10) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 31 to the Registration Statement as filed with
the SEC on February 27, 2015 (Accession No. 0000869356-15-000004)
(11) Previously filed. Incorporated herein by reference from the exhibit filed
with Post-Effective Amendment No. 33 to the Registration Statement as filed with
the SEC on February 23, 2016 (Accession No. 0000869356-16-000016)
(12) Filed herewith
Item 29. Persons Controlled by or Under Common Control with the Fund
None.
Item 30. Indemnification
Except for the Amended and Restated Agreement and Declaration of Trust (the
"Declaration"), establishing the Fund as a statutory trust under Delaware law,
there is no contract, arrangement or statute under which any Trustee, officer,
underwriter or affiliated person of the Fund is insured or indemnified. The
Declaration provides that every person who is, or has been, a Trustee or an
officer, employee or agent of the Fund shall be indemnified by the Fund or the
appropriate Fund series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection with
any claim, action, suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Trustee, officer, employee or
agent and against amounts paid or incurred by him in the settlement thereof.
Insofar as indemnification for liability arising under the Securities Act
of 1933, as amended (the "1933 Act"), may be available to Trustees, officers and
controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund of expenses incurred or
paid by a Trustee, officer or controlling person of the Fund in the successful
defense of any action, suit or proceeding) is asserted by such Trustee, officer
or controlling person in connection with the securities being registered, the
Fund 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 1933 Act and will be governed by the final adjudication of such
issue.
Item 31. Business and Other Connections of Investment Adviser
Pioneer Investment Management, Inc. ("Pioneer Investments") is a registered
investment adviser under the Investment Advisers Act of 1940, as amended, and is
an indirect, wholly owned subsidiary of UniCredit S.p.A. ("UniCredit"). Pioneer
Investments manages investment companies, pension and profit sharing plans,
trusts, estates or charitable organizations and other corporations or business
entities.
To the knowledge of the Fund, none of Pioneer Investments' directors or
executive officers is or has been during their employment with Pioneer
Investments engaged in any other business, profession, vocation or employment of
a substantial nature for the past two fiscal years. Certain directors and
officers, however, may hold or may have held various positions with, and engage
or have engaged in business for, the investment companies that Pioneer
Investments manages and/or other UniCredito subsidiaries.
Item 32. Principal Underwriters
(a) Pioneer Funds Distributor, Inc. acts as principal underwriter
for the following investment companies:
Pioneer Asset Allocation Trust
Pioneer Bond Fund
Pioneer Emerging Markets Fund
Pioneer Equity Income Fund
Pioneer Fund
Pioneer High Yield Fund
Pioneer ILS Interval Fund
Pioneer Mid Cap Value Fund
Pioneer Money Market Trust
Pioneer Real Estate Shares
Pioneer Series Trust II
Pioneer Series Trust III
Pioneer Series Trust IV
Pioneer Series Trust V
Pioneer Series Trust VI
Pioneer Series Trust VII
Pioneer Series Trust VIII
Pioneer Series Trust X
Pioneer Series Trust XI
Pioneer Series Trust XII
Pioneer Short Term Income Fund
Pioneer Strategic Income Fund
Pioneer Variable Contracts Trust
(b) Directors and executive officers of Pioneer Funds Distributor,
Inc.:
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH FUND
Lisa M. Jones President, Director, Chairman President
and Chief Executive Officer
Laura J. Palmer Senior Vice President and None
Interim Head of U.S.
Intermediary Distribution
Erik D. Gosule Senior Vice President and None
Head of Marketing and Product
Development
Tracy L. Connelly Senior Vice President and None
Chief Operations Officer
Gregg M. Dooling Chief Financial Officer None
Terrence J. Cullen Senior Vice President and None
General Counsel
John M. Malone Senior Vice President and None
Chief Compliance Officer
Patrick D. Grecco Vice President and Controller None
The principal business address of each of these individuals is 60 State Street,
Boston, Massachusetts 02109-1820.
(c) Not applicable.
Item 33. Location of Accounts and Records
The accounts, books, and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder are maintained at the following offices:
(a) Registrant:
60 State Street
Boston, Massachusetts 02109
(b) Investment adviser and administrator:
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
(c) Principal underwriter:
Pioneer Funds Distributor, Inc.
60 State Street
Boston, Massachusetts 02109
(d) Custodian and sub-administrator:
Brown Brothers Harriman & Co.
50 Post Office Square
Boston, Massachusetts 02110
(e) Shareholder servicing and transfer agent:
Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, Massachusetts 02169
Item 34. Management Services
Not applicable.
Item 35. Undertakings
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, the Fund certifies that it
meets all of the requirements for effectiveness of this registration statement
under Rule 485(b) under the Securities Act and has duly caused this
Post-Effective Amendment No. 35 to its registration statement to be signed on
its behalf by the undersigned, duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts, on the 28th day of February, 2017.
PIONEER EQUITY INCOME FUND
By: /s/ Lisa M. Jones
----------------------------
Lisa M. Jones
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 indicated below on February 28, 2017:
Signature Title
/s/ Lisa M. Jones President (Principal Executive Officer)
-------------------
Lisa M. Jones
Mark E. Bradley* Treasurer (Principal Financial and
Mark E. Bradley Accounting Officer)
David R. Bock* Trustee
David R. Bock
Benjamin M. Friedman* Trustee
Benjamin M. Friedman
Margaret B. W. Graham* Trustee
Margaret B. W. Graham
Thomas J. Perna* Chairman of the Board
Thomas J. Perna and Trustee
Marguerite A. Piret* Trustee
Marguerite A. Piret
Fred J. Ricciardi* Trustee
Fred J. Ricciardi
Kenneth J. Taubes* Trustee
Kenneth J. Taubes
*By: /s/ Lisa M. Jones Dated: February 28, 2017
-------------------
Lisa M. Jones
Attorney-in-fact
Exhibit Index
Exhibit
Number Document Title
(g)(3) Amendment to Custodian Agreement (May 31, 2016)
(h)(1) Transfer Agency Agreement (November 2, 2015)
(h)(4) Appendix A to Administrative Agency Agreement
(December 27, 2016)
(j) Consent of Independent Registered Public Accounting Firm
(m) Pioneer Funds Distribution Plan (January 10, 2017)
(n) Amended Multiple Class Plan Pursuant to Rule 18f-3
(January 10, 2017)
EX-99.G CUST AGREEMT
2
amendmentcustody053116.txt
AMENDMENT TO CUSTODIAN AGREEMENT
AMENDMENT TO CUSTODIAN AGREEMENT
THIS AMENDMENT to CUSTODIAN AGREEMENT (this "Amendment") is dated
May 31, 2016, by and between each of the Pioneer open-end management investment
companies (each, a "Fund") listed on Appendix A to the Agreement (defined
below) and Brown Brothers Harriman & Co. (the "Custodian" or "BBH&Co.").
Reference is made to the Custodian Agreement between each Fund and
BBH&Co. dated July 1, 2001, as amended from time to time and as in effect on
the date hereof prior to giving effect to this Amendment (the "Agreement").
Capitalized terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Agreement.
WHEREAS, each Fund and Custodian have agreed to amend the terms of the
Agreement as set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree to as follows:
A. Amendments to the Agreement
1. The Agreement is hereby amended in Section 2 by adding at the end
thereof the following new Section 2.3 and 2.3.1:
"2.3 By providing an Instruction (defined in Section 4) in respect of an
Investment (which Instruction may relate to among other things, the
processing of orders and/or settlement of transactions in funds), the
Fund hereby (i) authorizes BBH&Co. to complete such documentation as may
be required or appropriate to carry out the Instruction, and agrees to
be contractually bound to the terms of such documentation "as is"
without recourse against BBH&Co.; (ii) represents, warrants and
covenants that it has accepted and agreed to comply with all Applicable
Law, terms and conditions to which it and/or its Investment may be
bound, including without limitation, requirements imposed by the
Investment prospectus or offering circular, subscription agreement, any
application or other documentation relating to an Investment (e.g.,
compliance with suitability requirements and eligibility restrictions);
(iii) acknowledges and agrees that BBH&Co. will not be responsible for
the accuracy of any information provided to it by or on behalf of the
Fund, or for any underlying commitment or obligation inherent to an
Investment; (iv) except as otherwise provided for in Section 2.6.1,
represents, warrants and covenants that it will not effect any sale,
transfer or disposition of Investment(s) held in BBH&Co.'s name by any
means other than the issuance of an Instruction by the Fund to BBH&Co.;
(v) acknowledges that collective investment schemes (and/or their
agent(s)) in which the Fund invests may pay to BBH&Co. certain fees
(including without limitation, shareholder servicing and/or trailer
fees) in respect of the Fund's investments in such schemes; (vi) agrees
that BBH&Co. shall have no obligation or responsibility whatsoever to
respond to, or provide capital in connection with any capital calls,
letters of intent or other requirements as set out in the prospectus or
offering circular of an Investment; (vii) represents, warrants and
covenants that it will provide BBH&Co. with such information as is
necessary or appropriate to enable BBH&Co.'s performance pursuant to an
Instruction or under this Agreement; (vii) undertakes to inform BBH&Co.
and to keep the same updated as to any tax withholding or benefit to
which an Investment may be subject; (ix) acknowledges that BBH&Co. shall
have no obligation to fund any order placed by the Fund for which the
Fund does not have sufficient cash on deposit with BBH&Co.; and (x)
agrees that BBH&Co. shall be held harmless for the acts, omissions or
any unlawful activity
1
of any agent of the Fund, or any transfer agent or other agent of an
Investment in which the Fund may invest.
2.3.1. To the extent that the Fund holds Investments in an account
opened in the name of BBH&Co. as custodian for and at the direction of
the Fund, and the Fund requests that BBH&Co. provide the Fund with the
capability to place orders and execute trades in fund shares directly
with such fund companies and/or their transfer agents which shall be
settled in an account established with each such fund company or its
transfer agent, the Fund hereby acknowledges that BBH&Co. is under no
obligation to agree to such arrangement but if BBH&Co. so agrees, the
Fund (i) acknowledges that all relevant terms under Section 2.6 above
apply thereto, (ii) authorizes BBH&Co. as custodian, to grant a limited
power of attorney to the Fund or its designated agent to enable the Fund
to so execute, (iii) agrees to ensure that any instructions issued by
the Fund or its designated agent shall also be concurrently submitted to
BBH&Co., and (iv) shall adhere to any BBH&Co. procedures established
with each such fund or its transfer agent with respect thereto
including, but not limited to, the terms of the limited power of
attorney. The Fund also acknowledges and agrees that (1) BBH&Co. is
acting solely in its capacity as custodian and is not acting as a broker
or introducing broker on behalf of the Fund, (2) BBH&Co. is not
receiving compensation in connection with the Fund's own execution
hereunder of trades with each such fund other than its usual and
customary custody fees and transaction charges, (3) it will provide such
account opening information to each such fund and/or transfer agent as
and when requested by such fund and/or transfer agent, and (4) BBH&Co.
is not responsible for (a) providing information published by the
relevant distributor of each such fund including, but not limited to,
the prospectus for each such Investment in a fund or for resolving
execution queries or complaints relative to any such Investment, and (b)
assessing the suitability of any such Investment executed directly by
the Fund.
B. Miscellaneous
1. Except as specifically amended hereby, the Agreement remains unchanged,
in full force and effect and binding on the parties in accordance with
its terms.
2. This Amendment shall be governed in accordance with the terms set forth
in Section 12.4 of the Agreement.
3. This Amendment may be executed in multiple original counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same Amendment.
IN WITNESS WHEREOF, each of the parties has caused their duly authorized
representatives to execute this Amendment to the Agreement, effective as of the
first date written above.
Each of the Funds listed on BROWN BROTHERS HARRIMAN & CO.
Appendix A to the Agreement, as amended from
time to time
By: /s/ Christopher J. Kelley By: /s/ Elizabeth E. Prickett
------------------------------------ -------------------------
Name: Christopher J. Kelley Name: Elizabeth E. Prickett
Title: Secretary Title: Managing Director
2
EX-99.H OTH MAT CONT
3
taagreement110215.txt
TRANSFER AGENCY AGREEMENT
AMENDMENT
TO AND ASSIGNMENT OF
MASTER AGREEMENT
This Amendment to and Assignment of the Master Agreement dated January 1, 2012,
as amended (the "Master Agreement"), between Pioneer Investment Management
Shareholder Services, Inc. ("PIMSS") and Boston Financial Data Services, Inc.
("Boston Financial") is made this 2nd day of November, 2015 and shall be
effective as of November 1, 2015 (the "Effective Date"). In accordance with
Sections 12.08 and 12.11 of the Master Agreement, Boston Financial, PIMSS,
Pioneer Investment Management, Inc. ("PIM Inc."), and the Pioneer Funds set
forth on Exhibit A to the Master Agreement (the "Funds") desire to modify the
Master Agreement and its Schedules as set forth herein. For purposes of this
Amendment to and Assignment of Master Agreement ("Amendment"), Boston
Financial, PIMSS, PIM Inc., and the Funds shall collectively be referred to as
the "Parties." Also, for purposes of this Amendment, references to the "Master
Agreement" shall be deemed to include both the body of the Master Agreement as
well as all Schedules to the Master Agreement except where the context
otherwise provides.
NOW THEREFORE, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, and in consideration of the mutual covenants of the
parties herein contained, the Parties acknowledge and agree as follows:
1. Parties and Assignment and Assumption. PIMSS hereby assigns to the Funds
(severally and not jointly), from and after the Effective Date, all of
PIMSS's rights and obligations under the Master Agreement and Schedules I
through IV, VII and VIII thereto (the "Fund Schedules"). Further, PIMSS
hereby assigns to PIM Inc., from and after the Effective Date, all of PIMSS'
rights and obligations under Schedules V and VI to the Master Agreement (the
"FAN Services Schedules"). In turn, the Funds severally agree to assume,
from and after the Effective Date, all of the obligations, rights and duties
assigned to them by PIMSS and each Fund severally agrees to be responsible
for all obligations incurred by it under the Master Agreement and the Fund
Schedules from and after the Effective Date. PIM Inc. agrees to assume, from
and after the Effective Date, all of the obligations, rights and duties
assigned to it by PIMSS and PIM Inc. agrees to be responsible for all
obligations incurred by it under the Master Agreement and the FAN Services
Schedules from and after the Effective Date. Accordingly, from and after the
Effective Date, each of the Funds set forth on Exhibit A to the Master
Agreement shall be a party to the Master Agreement and the Fund Schedules
and PIM Inc. shall be a party to the FAN Services Schedules. In addition,
from and after the Effective Date, PIMSS shall be removed as a party to the
Master Agreement and all Schedules thereto. Also, Boston Financial agrees
to: the addition of each of the Funds as parties to the Master Agreement and
the Fund Schedules; the addition of PIM Inc. as a party to the FAN Services
Schedules; PIMSS' assignment to the Funds of all PIMSS' rights and
obligations under the Master Agreement and Fund Schedules; PIMSS' assignment
to PIM Inc. of all PIMSS' rights and obligations under the FAN Services
Schedules; and the removal of PIMSS as a party to the Master Agreement and
all Schedules thereto, all as set forth above. Boston Financial, on behalf
of itself and its affiliates, agrees to provide the services and products
that were provided to PIMSS (i) under
the Fund Schedules to each of the Funds and (ii) under the FAN Services
Schedules to PIM Inc., from and after the Effective Date. Each of PIMSS and
Boston Financial hereby acknowledges and agrees that the Funds are not
assuming, and shall in no event be responsible for, any liability of PIMSS
arising directly or indirectly under the Master Agreement and all Schedules
thereto prior to the Effective Date (whether discovered or raised before or
after the Effective Date). In light of the changes discussed above, all
references to "Pioneer" throughout the Master Agreement and its Schedules
shall be deemed from and after the Effective Date to refer to (i) the Funds
(instead of PIMSS) for purposes of the Fund Schedules, and (ii) to PIM Inc.
(instead of PIMSS) with respect to the FAN Services Schedules, in each case
except when the context otherwise requires.
2. Section 6 (Representations and Warranties of Customer). Section 6 of the
Master Agreement is hereby amended by deleting such section in its
entirety, and replacing it with the following:
"Each of the Funds severally represents and warrants to Boston Financial
as follows:
6.01 The Fund is a statutory trust duly organized, validly existing
and in good standing under its state of organization;
6.02 The Fund is empowered under applicable laws and regulations and
by its declaration of trust and bylaws to enter into and perform its
obligations and duties under this Master Agreement and its Schedules;
6.03 All requisite trust proceedings have been taken and all
necessary registrations filed and approved to authorize the Fund to
enter into and perform this Master Agreement and its Schedules and to
utilize Boston Financial's Products as contemplated in this Master
Agreement, and this Master Agreement and each Schedule thereto is, or
will be, when executed and delivered, a legal, valid and binding
obligation of the Fund, enforceable in accordance with its terms; and
6.04 That, to the extent that any Licensed Software utilizes third
party software or the Fund installs such Licensed Software on equipment
not provided to the Fund by Boston Financial or its Affiliates and
provided Boston Financial shall have advised the Fund of any such third
party software required prior to the later of installing such Licensed
Software or the execution of the applicable Schedule, the Fund shall
have obtained, at the Fund's own expense, a license or the right to use
any such third party software which is included in or required to
operate the Licensed Software."
3. Section 7 (Indemnification, Liability Limitations And Force Majeure).
Section 7.01 of the Master Agreement is hereby amended by deleting
Subsection (c) and replacing it with the following:
"(c) Notwithstanding anything in this Master Agreement or its Schedules
to the contrary, the aggregate liability of Boston Financial, or the
Affiliate executing a Schedule hereunder, during any Term with respect
to, arising from or arising in connection with this Master Agreement, or
from all services provided or omitted to be provided under this Master
Agreement shall be limited to the aggregate amount specified
2
with respect thereto in the applicable Schedule under which such claim
arises. If no limitation upon Boston Financial or its Affiliate's
maximum aggregate liability shall be specified in a Schedule, then the
maximum aggregate liability of Boston Financial or its Affiliate under
this Master Agreement and its Schedules during any Term thereof shall be
limited to:
(i) the aggregate of the amounts actually received by Boston
Financial from all of the Funds as fees and charges for the Services
or Licenses provided under such Schedule, exclusive of reimbursements
by the Funds to Boston Financial for reimbursable expenses, during
the preceding twelve (12) calendar months; or
(ii) with respect to claims arising from breaches by Boston Financial
or its Affiliate of their confidentiality or privacy obligations
under this Agreement or its Schedules, the aggregate of the amounts
actually received by Boston Financial or its Affiliate from all of
the Funds as fees and charges for the Services or Licenses provided
under such Schedule, exclusive of reimbursements by the Funds to
Boston Financial for reimbursable expenses, during the preceding
eighteen (18) calendar months."
4. Section 8 (Term of the Master Agreement). Section 8.01 of the Master
Agreement is hereby amended by deleting the first sentence and replacing it
with the following: "Except as otherwise provided herein, this Master
Agreement and its Schedules shall remain in full force and effect through
the close of business on December 31, 2021 (the "Initial Term")."
5. Schedule I (Transfer Agency Services). Schedule I to the Master Agreement is
hereby amended as follows:
(i) Schedule I shall be renamed as "Schedule I - Transfer Agency Services."
All references to "Sub-Transfer Agency" in the Master Agreement and Schedule
I, shall be deemed to refer to the "Transfer Agency Services;"
(ii) For purposes of Schedule I, all references to Pioneer shall be deemed
to refer to the Funds (instead of PIMSS) and the Funds shall replace PIMSS
as the party to and the entity executing the Schedule;
(iii) The first "Whereas" clause of Schedule I is hereby deleted in its
entirety and the second "Whereas" clause is replaced with the following:
"Whereas, the Funds have entered into the Master Agreement with Boston
Financial and in connection therewith the Funds desire to appoint Boston
Financial as transfer agent and dividend disbursing agent for the Funds,
and Boston Financial desires to accept such appointment, on the terms
and conditions set forth in the Master Agreement and this Schedule."
(iv) Section 2 (Appointment; Services) of Schedule I is hereby amended as
follows:
(a) by replacing Section 2.01 with the following: "Subject to the terms
and conditions set forth in the Master Agreement and this Schedule the
Funds each hereby employ and appoint Boston Financial as its transfer
agent and dividend disbursing agent."
3
(b) by replacing Section 2.02 with the following: "Boston Financial
hereby accepts such appointment and agrees that it will act as transfer
agent and dividend disbursing agent for each of the Funds specified on
Exhibit A to the Master Agreement, which Exhibit may be amended in
writing by the parties from time to time. Boston Financial agrees that
it will also act as agent on behalf of each Fund in connection with any
accumulation, open-account, retirement plans or similar plan provided to
the shareholders of the Fund ("Shareholders") and set out in the
currently effective prospectus and statement of additional information
("prospectus") of the Fund, including without limitation any periodic
investment plan or periodic withdrawal program. As used herein, the term
"Shares means the authorized and issued shares of common stock, or
shares of beneficial interest, as the case may be, for each of the Funds
(including each series thereof)."
(c) by replacing subparagraph (14) of Section 2.03 with the following:
"14) Receive all correspondence pertaining to any former, existing or
new Shareholder account, process such correspondence for proper
recordkeeping and respond to Shareholder correspondence in accordance
with agreed upon Procedures;"
(d) by replacing subparagraph (17) of Section 2.03 with the following:
"17) withholding taxes on U.S. and non-resident alien Shareholder
accounts as required by applicable U.S. federal law, collecting,
reviewing and retaining account applications and all associated tax
forms as required under applicable U.S. federal law, preparing,
filing and/or delivering to Shareholders, as applicable, U.S.
Internal Revenue Service Forms 1099 and other appropriate forms
required by the IRS or other federal authorities for all Shareholders
with respect to dividends, distributions and redemption proceeds;"
(e) by replacing the last sentence of subparagraph (23) of Section 2.03
with the following:
"Boston Financial shall provide all of the services described herein
in accordance with the Procedures agreed upon by Boston Financial and
the Funds and in accordance with applicable law."
(f) by replacing subparagraph (27) of Section 2.03 with the following:
"27) With respect to Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE
IRAs, Coverdell Education Saving Accounts, and 403(b)(7) accounts,
Boston Financial, at the request of the Fund, shall arrange for the
provision of applicable documentation as well as provide or arrange
for the provision of various services to such accounts, which
services may include, but are not limited to: account set-up,
maintenance, and disbursements, custodial services (to be provided by
Boston Financial as custodial agent for State Street Bank and Trust
Company) and such other services as the parties hereto shall mutually
agree upon;"
4
(g) by replacing the last sentence of subparagraph (28) of Section 2.03
with the following:
"The services to Plan Sponsors and Participants shall be provided
either on the DST Systems, Inc. ("DST") TRAC 2000 System ("TRAC") or
the DST TA 2000 System as mutually agreed by the parties."
(h) by adding new subparagraph (32) to Section 2.03, which shall read as
follows:
"32) Boston Financial shall answer telephone inquiries from 8a.m. to
7p.m., Eastern Time, each day on which the New York Stock Exchange is
open for trading. Boston Financial shall answer and respond to
inquiries from existing Shareholders, prospective Shareholders of the
Funds and broker-dealers on behalf of such Shareholders in accordance
with the telephone scripts agreed upon by the Funds and Boston
Financial, such inquiries may include requests for information on
account set-up and maintenance, general questions regarding the
operation of the Funds, general account information including dates
of purchases, redemptions, exchanges and account balances, requests
for account access instructions and literature requests;"
(i) by adding new subparagraph (33) to Section 2.03, which shall read as
follows:
"33) Boston Financial shall manage and oversee the print output by
the Funds' designated print /mail vendor (currently DST Output LLC)
in connection with the production by such vendor of the Funds'
statements, confirms, checks and other miscellaneous mailings. The
Funds or a Fund affiliate shall retain responsibility for their
contractual relationship with the print/mail vendor, including
invoice review and payment of such vendor."
(j) by adding new subparagraph (34) to Section 2.03, which shall read as
follows:
"34) Boston Financial shall work with the Funds' dedicated team at
DST and coordinate the execution of projects, events, enhancements
and implementation processes on DST's TA2000 system;"
(k) by adding new subparagraph (35) to Section 2.03, which shall read as
follows:
"35) National Securities Clearing Corporation (the "NSCC"). Boston
Financial shall (i) accept and effectuate the registration and
maintenance of accounts through Networking and the purchase,
redemption, transfer and exchange of shares in such accounts through
Fund/SERV (Networking and Fund/SERV being programs operated by the
NSCC on behalf of NSCC's participants, including the Funds), in
accordance with, instructions transmitted to and received by Boston
Financial by transmission from NSCC on behalf of authorized
broker-dealers on the Fund dealer file maintained by Boston
Financial; (ii) issue instructions to the Fund's banks for the
settlement of transactions between the Fund and NSCC (acting on
behalf of its broker-dealer and bank participants); (iii) provide
account and transaction information from the affected Fund's records
on DST's TA2000
5
System in accordance with NSCC's Networking and Fund/SERV rules for
those broker-dealers; and (iv) maintain Shareholder accounts on the
DST TA2000 System through Networking; and"
(v) by deleting Section 4.01 of Schedule I in its entirety and replacing it
with the following:
"In addition to all of the representations and warranties set forth in
Section 6 of the Master Agreement, each Fund severally represents and
warrants to Boston Financial that:
(a)It is an open-end investment company registered under the Investment
Company Act of 1940; and.
(b)A registration statement under the Securities Act of 1933, as
amended, for each Fund is currently effective and will remain
effective during the term of the Master Agreement, and appropriate
state securities law filings have been made and will continue to be
made, with respect to all Shares being offered for sale by the Fund."
(vi) by deleting Section 7.02 of Schedule I in its entirety and replacing it
with the following:
"7.02 Boston Financial's maximum aggregate liability during any term of
this Schedule with respect to, arising from or arising in
connection with this Schedule, or from all services provided or
omitted to be provided by Boston Financial under this Schedule,
whether in contract, or in tort, or otherwise, shall be limited to:
(i) the aggregate of the amounts actually received by Boston
Financial from all of the Funds as fees and charges for the
Services provided under this Schedule, exclusive of
reimbursements by the Funds to Boston Financial for
reimbursable expenses, during the preceding twelve
(12) calendar months; or
(ii)with respect to claims arising from breaches by Boston
Financial of its confidentiality or privacy obligations under
the Agreement or this Schedule, the aggregate of the amounts
actually received by Boston Financial from all of the Funds as
fees and charges for the Services provided under this
Schedule, exclusive of reimbursements by Pioneer to Boston
Financial for reimbursable expenses, during the preceding
eighteen (18) calendar months."
6. Schedule II (TA2000 Remote Services). Schedule II to the Master Agreement is
hereby amended by deleting Section 6 of Schedule II in its entirety and
replacing it with the following:
6
"In addition to all of the representations and warranties set forth in
Section 6 of the Master Agreement, each Fund severally represents and
warrants to Boston Financial that:
(a) It is an open-end investment company registered under the
Investment Company Act of 1940; and
(b) A registration statement under the Securities Act of 1933, as
amended, for each Fund is currently effective and will remain
effective during the term of the Master Agreement, and appropriate
state securities law filings have been made and will continue to be
made, with respect to all Shares being offered for sale by the
Fund; and
(c) It shall not use the TA2000 System or DST's services in any way
that is in violation of or will result in the violation of any law,
rule or regulation that is applicable to it or to DST, or which it
knows or has reasonable grounds to know will cause it or DST to
violate a law, rule or regulation applicable to either of them."
7. Exhibit B (Fee Schedule). Exhibit B to the Master Agreement is hereby
replaced in its entirety with the new Exhibit B, which is attached hereto
and incorporated herein.
8. All defined terms and definitions in the Master Agreement shall be the same
in this Amendment except as specifically revised by this Amendment and
except for the use of the acronym "PIMSS" to refer to Pioneer Investment
Management Shareholder Services, Inc. for purposes of this Amendment.
9. In the event of a conflict between the provisions of this Amendment and
those of the Master Agreement, the provisions of this Amendment shall
control. Except as expressly amended hereby, or as noted in Section 5 above,
all other terms and conditions of the Master Agreement shall remain in full
force and effect.
10.The obligations of each Fund under the Master Agreement and this Amendment
shall be several and not joint. Boston Financial agrees that for services
rendered to each Fund, or for any claim by it in connection with services
rendered to a Fund, it shall look only to assets of the Fund for
satisfaction and that it shall have no claim against the assets of any other
Fund. The undersigned officer of each Fund has executed this Amendment not
individually, but as an officer under the Fund's Declaration of Trust and
the obligations of the Fund under the Master Agreement and this Amendment
are not binding upon any of the Trustees, officers or shareholders of the
Fund individually.
11.This Amendment shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts,
without regard to its conflicts of law principles. This Amendment may be
executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
7
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
EACH OF THE PIONEER FUNDS SET FORTH ON BOSTON FINANCIAL DATA SERVICES,
EXHIBIT A TO THE MASTER AGREEMENT INC.
By: /s/ Mark E. Bradley By: /s/ Tracy W. Shelby
---------------------------------- ---------------------------
Name: Mark E. Bradley Name: Tracy W. Shelby
Title: Treasurer Title: Client Relationship Officer
Authorized representative of
each of the Pioneer Funds
PIONEER INVESTMENT MANAGEMENT PIONEER INVESTMENT MANAGEMENT, INC.
SHAREHOLDER SERVICES, INC.
By: /s/ Kelly O'Donnell By: /s/ Tracy Connelly
---------------------------------- ---------------------------
Name: Kelly O'Donnell Name: Tracy Connelly
Title: V.P. Title: SVP, COO
Acknowledged and Agreed for purposes of Schedules II, IV, V, VI, VII, and VIII
of the Master Agreement.
DST SYSTEMS, INC.
By: /s/ Scott Chelton
--------------------------
Name: Scott Chelton
Title: President, AMS
Acknowledged and Agreed for purposes of Schedule III of the Master Agreement.
DST TECHNOLOGIES, INC.
By: /s/ John Vaughn
--------------------------
Name: John Vaughn
Title: Vice President
8
ADDENDUM
Master Agreement
between
Pioneer Investment Management Shareholder Services, Inc.
and
Boston Financial Data Services, Inc.
This Addendum ("Addendum") is made as of June 18, 2014 (the "Addendum Effective
Date"), by and between Boston Financial Data Services, Inc., ("Boston
Financial") and Pioneer Investment Management Shareholder Services, Inc.
("Pioneer") to the Master Agreement dated January 1, 2012 (the "Master
Agreement").
NOW THEREFORE, the parties agree the Master Agreement is supplemented as
follows:
1. Background. Boston Financial has enhanced its lost shareholder,
escheatment, and shareholder outreach business line to assist its clients
with their federal and state unclaimed property requirements (the "UPA
Services"). The UPA Services are provided by Boston Financial and/or its
third party subcontractor (the "UPA Subcontractor") on behalf of Boston
Financial. Boston Financial advises Pioneer that as of the date of this
Addendum the UPA Subcontractor is Venio LLC d/b/a Keane.
2. UPA Services. Subject to Pioneer's payment of the fees for the UPA Services
set forth on Exhibit B attached hereto (the "UPA Services Fee"), Boston
Financial agrees to provide and/or have UPA Subcontractor provide, as
applicable, to Pioneer's funds the UPA Services described on Exhibit A
attached hereto.
3. Integration. This Addendum shall be integrated into and form part of the
Master Agreement as of the Addendum Effective Date. In the event of any
inconsistency between this Addendum and the Master Agreement, this Addendum
shall control. Except as supplemented herein, the remaining terms and
provisions of the Master Agreement shall not be affected by this Addendum
and shall continue in full force and effect.
4. Liability. Boston Financial's aggregate liability during any term of this
Addendum with respect to, arising from or arising in connection with this
Addendum, or from all services provided or omitted to be provided by Boston
Financial under this Addendum for all of Pioneer's funds subject to this
Addendum, whether in contract, or in tort, or otherwise, is limited to, and
shall not exceed the aggregate of the amounts actually received hereunder
by Boston Financial as fees and charges, but not including reimbursable
expenses, for all of Pioneer's funds covered by this Addendum during the
three (3) calendar months immediately preceding the first event for which
recovery from Boston Financial is being sought.
Signatures on following page
ADDENDUM
Signature Page
9
IN WITNESS WHEREOF, Boston Financial and Pioneer have caused this Addendum to
be executed by their respective duly authorized representatives as of the
Addendum Effective Date.
BOSTON FINANCIAL DATA SERVICES, INC. PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC.
By: /s/ Richard J. Johnson By: /s/ Tracy Connelly
-------------------------------------- ------------------------------
Name: Richard J. Johnson Name: Tracy Connelly
-------------------------------------- ------------------------------
Title: Managing Director Title: SVP
-------------------------------------- ------------------------------
10
Exhibit A
Description of UPA Services
Dated: June 6, 2014
1. Lost Shareholder Services:
a. Pursuant to Section 2.03 of the Master Agreement, Boston Financial
shall accept any Shareholder checks and statement mailings returned
to Boston Financial as undeliverable due to incorrect shareholder
addresses ("RPO Mail"). Boston Financial shall record and research
each piece of RPO Mail and attempt to find an up-to-date address for
the intended recipient.
b. If, as a result of the two searches, a more current address for the
shareholder is provided, Boston Financial will update the address on
the account. If a more current address is not provided, Escheatment
Services will be provided, as below.
2. Escheatment Services/1/
a. Boston Financial will support the identification of accounts as lost
based on SEC Rule 17ad-17 and will escheat based on applicable state
dormancy periods. Any change to this method of identifying lost
accounts and escheating must be in writing and provided by Pioneer to
Boston Financial with reasonable notice.
b. Boston Financial will capture and maintain customer contact type and
date.
c. Boston Financial will mail a notice of escheatment to the shareholder
or the payee of an outstanding check (the "Due Diligence Letters")
based on the state mailing schedules using DSTO as the print vendor.
d. Boston Financial will escheat eligible property to the applicable
states based on the state remittance schedules.
3. Inactive Outreach Services:
a. Boston Financial will identify accounts that have been inactive for
at least two years ("Inactive Shareholders").
b. Boston Financial will identify all accounts where "date of last
contact" exceeds two year and load these accounts into a UPA database
to begin the outreach program to keep these accounts in an active
shareholder status.
c. Boston Financial will mail letters to inactive accounts requesting
the dealer and/or shareholder to contact Boston Financial to keep the
account active.
d. Account records will be updated and the response detail will be
provided at Pioneer's request on completion of the outreach services.
--------
/1/ Boston Financial will continue to perform the Escheatment Services
included within Master Agreement, and will apply the corresponding fees in
Exhibit B to Master Agreement.
11
4. Optional Services
a. Pioneer may, via written notice and subject to additional costs and
agreement by Boston Financial, request additional Inactive Outreach
and Legal Claimant Services as described in a and b below.
b. Additional Inactive Outreach. Boston Financial will send a file to
the UPA Subcontractor listing (i) Inactive Shareholder accounts,
(ii) RPO accounts which were unresponsive to the two required SEC
searches, and (iii) accounts reflecting outstanding checks. The UPA
Subcontractor will conduct discretionary search and research to
identify the shareholder as deceased. If beneficiary is located
accounts will follow the UPA Subcontractor legal claimant process.
The UPA Subcontractor will mail a confirmation letter for RPO
accounts and outstanding checks to newly located address. Letter will
instruct owners to contact Sub-Transfer Agent to update their account.
c. Legal Claimant Services. Where shareholder is deceased, and a
beneficiary is located, the UPA Subcontractor offers additional
services to assist the beneficiary to legally claim the account
("Legal Claimant Services") using shareholder data provided by Boston
Financial with Pioneer's consent. The UPA Subcontractor will
undertake to enter into a separate agreement with each identified
beneficiary ("Legal Claimant") for fees in consideration for the
recovery process services. For Boston Financial's role in supplying
the account information, UPA Subcontractor will pay a referral fee
based upon each account recovered.
As of the date of this Addendum, the Optional Services outlined in this section
are not provided to Pioneer as part of the Boston Financial UPA Offering.
12
MASTER AGREEMENT
THIS MASTER AGREEMENT (the "Master Agreement"), which is made effective as
of January 1, 2012, is between and among Pioneer Investment Management
Shareholder Services, Inc., a Massachusetts corporation, and a member of the
UniCredit banking group, register of banking groups, with offices at 60 State
Street, Boston, MA 02109 ("Pioneer"), Boston Financial Data Services, Inc., a
Massachusetts corporation with offices at 2000 Crown Colony Drive, Quincy, MA
02169 ("Boston Financial") and those Affiliates of Boston Financial who have
executed the various Schedules for Services. This Master Agreement incorporates
all Schedules for Services as executed.
WHEREAS, Boston Financial and certain of its Affiliates, as hereinafter
defined, and Pioneer and its Affiliates, as hereinafter defined, hereby agree
that Boston Financial or its Affiliates shall provide the Services (the
"Services") and license various software products for use by Pioneer and its
Affiliates (the "Licenses") with respect to the entities set forth on Exhibit A
(the "Funds") to this Master Agreement, each as set forth in Schedules to this
Master Agreement (the Services and Licenses, each a "Product" and together, the
"Products") and that Pioneer or its Affiliates shall use Boston Financial's
Products, as set forth in the Schedules to this Master Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pioneer and Boston Financial
hereby agree as follows:
SECTION 1 - Definitions
As used herein, the term:
"Affiliates" shall mean any entity Controlling, under Common Control with or
Controlled by Boston Financial or Pioneer; and all of the DST-related entities
that have executed the various Schedules attached to this Master Agreement are
Affiliates of Boston Financial;
"Control" shall mean ownership of fifty percent (50%) or more of the
outstanding voting shares of the affected entity; and
"Master Agreement" shall mean this Agreement and shall include all the Exhibits
and Schedules attached hereto or incorporated herein now or in the future;
SECTION 2 - Provision and Utilization of Services.
2.01 Boston Financial and/or its Affiliates will provide the Products to
Pioneer and/or its Affiliates in accordance with the Schedules. Each Service or
License will be evidenced by a Schedule to this Master Agreement executed by
Pioneer and Boston Financial or one of their Affiliates and is governed by the
terms and conditions of this Master Agreement as well as those terms and
conditions set forth in each applicable Schedule. In the event of a conflict
between the terms and conditions set forth in this Master Agreement and those
in a Schedule, those in the Schedule shall control unless this Master Agreement
or a Schedule explicitly otherwise provides. During the term, Pioneer may add
or delete one or more Products. In the case of Pioneer adding a Product, such
Product shall be added by Pioneer and Boston Financial (or Pioneer and the
affected Boston Financial Affiliate) negotiating a Schedule with respect to
such Product, which Schedule shall be separately executed by Pioneer and Boston
Financial (or Pioneer and the affected Boston Financial Affiliate). From and
after the date of execution of such Schedule, such Schedule shall become a part
hereof and the provision of and access to the applicable Product shall be
governed by the terms hereof and thereof. If such Schedule shall be executed by
an
13
Affiliate then that Affiliate shall be deemed to have executed this Master
Agreement and to have accepted its terms in place of its affiliated entity
solely with respect to the Product which is the subject of the affected
Schedule. In the case of deletion of any Product or Products, such deletion
shall be governed by the provisions of Section 9 hereof and the termination
provisions contained in any Schedule, with the latter provisions controlling in
the event of any discrepancy.
2.02 Initially, the Schedules attached to this Master Agreement shall
consist of the following Schedules:
. I: Sub-Transfer Agency Services
. II: TA2000 Remote Services
. III: AWD License, Consulting, and Maintenance and Support Services
. IV: AWD Data Center Remote Services for AWD Hosting Services
. V: FAN Mail Services - Mutual Funds
. VI: FAN Services --Mutual Funds (FANWeb/Vision)
. VII: PowerSelect Services
. VIII: DST Customer Centers
SECTION 3 - Facilities, Training and Technical Resources.
3.01 Boston Financial agrees to provide the necessary facilities, equipment,
and personnel to perform its duties and obligations hereunder and under all
Schedules. Availability of such facilities and equipment is subject to
emergency maintenance precipitated by unscheduled events. If, for any reason,
Boston Financial determines that Boston Financial's facilities or equipment
will need to be made unavailable during otherwise scheduled on-line periods,
Boston Financial shall use reasonable efforts to provide Pioneer with at least
three (3) business days prior written notice thereof and shall utilize all
commercially reasonable alternatives to avoid or minimize such unavailability
and to schedule any such unavailability so as to minimize any adverse effect on
Pioneer.
3.02 Boston Financial agrees to use reasonable efforts to provide requested
training for Pioneer's personnel at Boston Financial's facility or at Pioneer's
offices in connection with the Products. Except as may be provided in any
Schedule, this training will be provided at Boston Financial's then current
education rates. All reasonable travel and out-of-pocket expenses incurred by
Boston Financial or Pioneer personnel in connection with and during training
shall be borne by Pioneer; provided however, that Pioneer shall only be
responsible for expenses incurred in accordance with either Pioneer's published
travel policy in effect at the time that any given expense was incurred or in
accordance with a Boston Financial travel policy which has been previously
provided by Boston Financial to Pioneer and not objected to in writing or
e-mail.
SECTION 4 - Fees and Expenses.
4.01 Subject to the provisions in Section 4.04 hereof solely with respect to
the specific charge then being disputed in good faith, Pioneer shall pay Boston
Financial the fees, charges and expenses set forth in Exhibit B hereto and in
each Schedule (the "Fees") and reflected in an invoice (the "Invoice") prepared
by Boston Financial monthly and forwarded to the Pioneer Billing Contact Person
(defined below). The Invoice shall bear a single invoice number but may be
divided into categories and each category shall reference the Schedule to which
it relates (by name or number) and shall otherwise contain sufficient detail to
permit an identification of the charge and the Product to which the charge
relates.
4.02 Pioneer shall also reimburse Boston Financial for all reasonable
out-of-pocket expenses incurred by Boston Financial in the performance of this
Master Agreement and each Schedule.
14
4.03 Amounts due under this Master Agreement and each Schedule shall be due
and paid on or before the 30th calendar day after receipt of the Invoice by
Pioneer (the "Due Date"). Pioneer's failure to pay any amount due on or before
the Due Date will generate additional costs to Boston Financial such as
carrying, processing and accounting costs. If Pioneer does not pay Invoices by
the Due Date, Boston Financial may, after providing Pioneer five (5) days prior
written notice, charge Pioneer, and Pioneer will pay, a one and one-half
percent (1.5%) per month (prorated for a portion of a month) late payment
charge on any balances still outstanding after the Due Date and such late
notice. Late payment charges will not apply to amounts described in
Section 4.04 (i) and (ii). All amounts mentioned in this Master Agreement are
in U.S. Dollars.
4.04 Pioneer shall notify the Boston Financial Billing Contact Person
(defined below), by fax or e-mail, on or before the Due Date: (i) if any
portion of an Invoice lacks sufficient information, identifying which specific
items in or lines of the Invoice require clarification, or (ii) with an advice
identifying the specific charges for reimbursable expenses which Pioneer
disputes in good faith. Payment of those amount(s) or portion(s) of an Invoice
which are not being disputed in good faith shall be made in accordance with
Section 4.01, while the portion(s) of such amount(s) which are being disputed
in good faith shall be due at the earlier of (x) fifteen (15) days after a
reasonable person would conclude sufficient information has been provided to
support the charge or (y) on or before the close of the fifth (5th) business
day after the day on which Boston Financial and Pioneer have resolved any
dispute as to the charge, as applicable (but, in no event, earlier than the
original Due Date).
4.05 Except where expressly stated otherwise in a Schedule or with respect
to any specific charge which is actually being disputed in good faith under
Section 4.04, amounts payable to Boston Financial are payable in full, in
United States dollars, without deduction or offset, and are net of, and Pioneer
will be responsible for and will pay, all taxes arising out of the transactions
and relationships described in this Master Agreement and all the Schedules,
including, but not limited to, state or local sales, use, service or excise,
property and related taxes and duties, but exclusive of United States federal,
state and local taxes based upon the Boston Financial's net income. Boston
Financial will be responsible for all federal, state or local franchise or
income taxes levied on the income of Boston Financial, and any property taxes
on property owned or leased by Boston Financial and used to provide the
Services. Pioneer shall not deduct from payments due Boston Financial any
amounts paid or payable to third parties for duties or taxes, however
designated, except any withholding taxes that Pioneer is obligated to withhold
under applicable laws; provided, however, if such required withholding relates
to taxes described as being the responsibility of Pioneer in the first sentence
of this Section 4.05, Pioneer shall promptly reimburse Boston Financial for
such amounts withheld. All taxes payable by Pioneer hereunder shall become due
when billed by Boston Financial to Pioneer, or when assessed, levied or billed
by the appropriate taxing authority, even though such billing shall occur
subsequent to expiration or termination of this Master Agreement. Boston
Financial shall identify on its invoices the amount and type of any taxes, if
any, included on such invoice.
4.06 Boston Financial and Pioneer shall each appoint a billing contact
person (the "Billing Contact Person") to whom questions respecting any Invoice
or the payment thereof may be directed.
4.07 Boston Financial may increase the fees and charges applicable to a
Schedule under this Agreement, which are set forth on Exhibit B to the Master
Agreement, in the following circumstances: (a) for any Fund introduced by
Pioneer (whether new or currently in existence) which Fund seeks to offer,
utilize or require fund features that are, in any material way, inconsistent
with the Funds currently being serviced under the Master Agreement; or (b) if
changes in existing laws, rules or regulations materially increase the costs of
performance hereunder and other fund complexes are generally charged therefore.
In the event of Section (a) above, the parties shall confer, diligently and in
good faith, and agree upon a new fee to cover such new fund feature(s). In the
event of (b) above, fees may be increased by the amount
15
Boston Financial demonstrates, to the reasonable satisfaction of Pioneer, is
necessary, but not more than such amount, to reimburse Boston Financial for
Pioneer's portion of such increased performance costs.
SECTION 5 - Representations and Warranties of Boston Financial.
Boston Financial, or the Affiliate executing a Schedule hereunder,
represents and warrants to Pioneer as follows:
5.01 It is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
5.02 It is empowered under applicable laws and by its charter and bylaws to
enter into and perform the Services and grant the Licenses contemplated in this
Master Agreement and its Schedules;
5.03 All requisite corporate proceedings have been taken and all necessary
registrations filed and approved to authorize it to enter into and perform the
Services and grant the Licenses contemplated by this Master Agreement, and this
Master Agreement and each Schedule thereto has been, or will be, duly executed
and delivered by it and constitutes, or will constitute when executed and
delivered, a legal, valid and binding obligation of its, enforceable in
accordance with its terms;
5.04 It has and will continue to have and maintain the facilities,
equipment, licenses, and personnel necessary to perform its duties and
obligations under this Master Agreement and any Schedule;
5.05 Each Schedule may contain additional agreed upon warranties respecting
the relevant Product provided;
5.06 It either owns or has the right to license each Licensed System it
provides to Pioneer under this Master Agreement.
5.07 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR IN ANY SCHEDULE TO THE
CONTRARY, THE FOREGOING WARRANTIES IN THIS SECTION 5 AND ANY WARRANTIES
EXPRESSLY PROVIDED IN THE APPLICABLE SCHEDULES ARE THE ONLY WARRANTIES MADE IN,
UNDER OR PURSUANT TO THIS MASTER AGREEMENT AND ALL APPLICABLE SCHEDULES. ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE, ARE HEREBY DISCLAIMED.
SECTION 6 - Representations And Warranties Of Customer.
Pioneer represents and warrants to Boston Financial as follows:
6.01 Pioneer is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation;
6.02 Pioneer is empowered under applicable laws and regulations and by its
charter and bylaws to enter into and perform Pioneer's obligations and duties
under this Master Agreement and its Schedules;
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6.03 All requisite corporate proceedings have been taken and all necessary
registrations filed and approved to authorize Pioneer to enter into and perform
this Master Agreement and its Schedules and to utilize Boston Financial's
Products as contemplated in this Master Agreement, and this Master Agreement
and each Schedule thereto has been, or will be, duly executed and delivered by
Pioneer and constitutes, or will constitute when executed and delivered, a
legal, valid and binding obligation of Pioneer, enforceable in accordance with
its terms; and
6.04 That, to the extent that any Licensed Software utilizes third party
software or Pioneer installs such Licensed Software on equipment not provided
to Pioneer by Boston Financial or its Affiliates and provided Boston Financial
shall have advised Pioneer of any such third party software required prior to
the later of installing such Licensed Software or the execution of the
applicable Schedule, Pioneer shall have obtained, at Pioneer's own expense, a
license or the right to use any such third party software which is included in
or required to operate the Licensed Software.
SECTION 7 - Indemnification, Liability Limitations And Force Majeure.
7.01 By Boston Financial:
(a) Boston Financial or the Affiliate executing a schedule hereunder shall
indemnify, defend and hold harmless Pioneer, its Affiliates, and their
respective trustees, directors, officers, employees and agents
(collectively, the "Customer Indemnitees") from and against any and all
losses, damages, costs, charges, reasonable counsel fees, payments,
expenses, and liabilities including, without limitation, expenses and
reasonable counsel fees incurred in enforcing this right of indemnification
(each individually an "Adverse Consequence" and collectively the "Adverse
Consequences"), and Boston Financial will at its own expense defend any
action brought against any Pioneer Indemnitee to the extent such action is
based upon, any claim that any part of a Product used by Pioneer as
permitted by this Master Agreement and the Schedule applicable thereto
infringes any United States patent, copyright, trademark, service mark, or
any trade secret or other proprietary right of a third party (an
"Infringement"); provided that Boston Financial is promptly notified in
writing of any such claim; and provided further that Boston Financial or its
Affiliates, as applicable, shall have the exclusive right to control the
defense of any such action. Further, in the event of any such claim,
litigation or threat thereof, Boston Financial may, in its sole and absolute
discretion, either:
(i) Procure for Pioneer a right to continue to use such Product; or
(ii) Replace or modify such Product to make it non-infringing without
materially affecting the functionality and performance of such Product; or
(iii) Terminate the applicable Schedule, or in the alternative, Boston
Financial or its Affiliate, as applicable, may only partially terminate this
Schedule solely with respect to the allegedly infringing functionality if
that infringing portion (the "Non-Critical Functionality") can be separated
from the Product without materially affecting the functions and Services of
the Product available to Pioneer.
In the event of termination of a Schedule pursuant to Section 7.01(a)(iii),
Boston Financial or its Affiliate, as applicable, shall refund to Pioneer
all pre-paid Fees paid hereunder with respect to such Product , or portion
thereof, if any, less a reasonable amount attributable to Pioneer's use of
the Product prior to termination of such Schedule. In addition, if the
termination is only with respect to Non-Critical Functionality, and not with
respect to the Schedule as a whole, Boston Financial or its Affiliate, as
applicable, will cease charging Pioneer any additional fee applicable to
such discontinued Non-Critical Functionality. The discontinuation of an item
of Non-Critical
17
Functionality by Boston Financial or its Affiliates shall not be deemed a
material breach of the Master Agreement or its Schedules.
Boston Financial has and shall have no liability or obligation to indemnify
any Pioneer Indemnitee for any claim or Adverse Consequence to the extent
based upon a modification of the Product by anyone other than someone
employed by or acting under the direction of Boston Financial or its
Affiliates, use of a Product other than in accordance with this Master
Agreement or its Schedules or use of such Product in combination with other
software other than as authorized by Boston Financial or its Affiliates,
hardware or services not provided by or at the direction of Boston Financial
or its Affiliates if infringement could have been avoided by not using such
Product in combination with such other software, hardware or services. This
Section 7.01(a) states Boston Financial and it Affiliate's entire liability
and obligation with respect to curing an Infringement.
(b) Boston Financial, or the Affiliate executing the Schedule under which
the claim arises, shall indemnify, defend and hold harmless the Pioneer
Indemnitees from and against any and all Adverse Consequences, to the extent
arising out of or attributable to Boston Financial or such Affiliate's
negligence, bad faith, or willful misconduct in the performance of the
Services or provision of the Licenses hereunder.
(c) Notwithstanding anything in this Master Agreement or its Schedules to
the contrary, the aggregate liability of Boston Financial, or the Affiliate
executing a Schedule hereunder, during any Term with respect to, arising
from or arising in connection with this Master Agreement, or from all
services provided or omitted to be provided under this Master Agreement
shall be limited to the aggregate amount specified with respect thereto in
the applicable Schedule under which such claim arises. If no limitation upon
Boston Financial or its Affiliate's maximum aggregate liability shall be
specified in a Schedule, then the maximum aggregate liability of Boston
Financial or its Affiliate under this Master Agreement and its Schedules
during any Term thereof shall be the amount actually received by Boston
Financial from Pioneer as fees and charges for the Services or Licenses
provided under such Schedule during the nine (9) calendar months preceding
the event giving rise to the claim against Boston Financial or its Affiliate
that is then at issue, exclusive of reimbursements by Pioneer to Boston
Financial for reimbursable expenses.
7.02 Pioneer shall indemnify, defend and hold Boston Financial and its
Affiliates harmless from and against, any and all Adverse Consequences to the
extent arising out of or attributable to:
(a) All actions of Boston Financial or its Affiliates required to be
taken pursuant to this Master Agreement or its Schedules provided that
Boston Financial and such Affiliates have acted in good faith, without
negligence or willful misconduct.
(b) Any violations by Pioneer of federal, state or local laws or
regulations, which impact Boston Financial or its Affiliates in connection
with the Services, Products or Licenses provided hereunder, and/or Pioneer's
failure to use and employ the Products provided hereunder in accordance with
control and other procedures set forth in the training, training materials
and/or reference manuals made available to Pioneer;
(c) Pioneer's willful refusal or failure to comply with the terms of this
Master Agreement or any Schedule, or which arise out of Pioneer's willful
misconduct or which arise out of the breach of any representation or
warranty of Pioneer hereunder;
(d) Pioneer's errors and mistakes in the use of the Products;
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(e) The reliance by Boston Financial or its Affiliates on or use of
information, data, records and documents supplied by, or the carrying out of
any instructions or requests of, Pioneer, any custodian or any other
officers, directors, employees, representatives or agents of Pioneer
("Representatives") shown on Exhibit C. The foregoing shall apply to any
such written, faxed or imaged or qualifying oral instructions. Instructions
qualify if they are given over a recorded line or confirmed thereafter by
delivery to Pioneer of a Boston Financial written summary of the
conversation; and
(f)(i) Any inaccurate dates in or date formats other than an eight digit,
full century format in data provided by Pioneer, its agents, Pioneers or
other persons with whom Pioneer is doing business ("Pioneer Date Errors") or
(ii) inability of Boston Financial or any third party to manipulate or
process Pioneer Date Errors.
7.03 At any time, Boston Financial may apply to a person indicated on
Pioneer's "Schedule of Authorized Personnel", attached hereto as Exhibit C, as
a person authorized to give instructions under this section with respect to any
matter arising in connection with this Master Agreement or any Schedule.
Exhibit C may be amended by the Parties to each Schedule and grant additional
or different authorization to other Pioneer personnel for Products under that
Schedule only. Notwithstanding anything contained herein to the contrary,
Boston Financial may, without any liability or obligation, refuse any
instruction or request from any officer, director, employee or other person who
is not a Pioneer Authorized Person (defined below). Additionally, Pioneer shall
be responsible and liable for any and all Adverse Consequences, which may be
asserted against Boston Financial or for which it may be liable associated with
any delay in Boston Financial's carrying out of any instruction or request of
Pioneer while waiting for confirmation of any such instruction or request from
a Pioneer Authorized Person. For purposes of the above, a Pioneer Authorized
Person is a Person who is listed on Pioneer's "Schedule of Authorized
Personnel." Pioneer shall immediately provide Boston Financial with written
notice of any change of authority of persons authorized and enumerated in
Exhibit C to provide Boston Financial with instructions or directions relating
to services to be performed by Boston Financial under this Master Agreement.
7.04 IN NO EVENT AND UNDER NO CIRCUMSTANCES SHALL ANY PARTY UNDER THIS
MASTER AGREEMENT OR ANY SCHEDULE HERETO BE LIABLE TO THE OTHER PARTY FOR LOST
PROFITS OR FOR EXEMPLARY, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES EVEN IF
ADVISED OF THE POSSIBILITY THEREOF.
7.05 Promptly after the receipt by any party (the "Indemnitee") of notice of
any claim, determination, suit or cause of action with respect to which any
other party is obligated to provide indemnification (the "Indemnifying Party")
pursuant to Section 7 hereof, the Indemnitee shall give the Indemnifying Party
written notice thereof and the Indemnifying Party shall be entitled to assume
control of the defense and the negotiations, if any, regarding settlement of
this matter. If the Indemnifying Party assumes such control, the Indemnitee
shall be entitled to participate in the defense and negotiations of such matter
at its own expense. The parties agree to cooperate in such negotiations,
defense or settlement and to give each other full access to any information
relevant thereto. Except as otherwise provided herein, the Indemnitee shall not
enter into any settlement of such matter without the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed, and the Indemnifying Party shall not be obligated to indemnify the
Indemnitee for any settlement entered into without the written consent of the
Indemnifying Party. If the consent of the Indemnitee is required to effectuate
any settlement and the Indemnitee refuses to consent to any settlement
negotiated by the Indemnifying Party, then the liability of the Indemnifying
Party for losses arising out of or due to such matter shall be limited to the
amount of the rejected proposed settlement.
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7.06 Neither Pioneer nor Boston Financial shall be in default by reason of
any failure in performance of this Master Agreement or its Schedules in
accordance with its terms (other than a required payment of money) if such a
failure arises out of causes beyond the control and without the fault or
negligence of such party. Such causes may include, but are not restricted to,
acts of God or of a public enemy, acts of the government in either its
sovereign or contractual capacity, fires, floods, epidemics, terrorist acts,
quarantine restrictions, strikes, work stoppages, freight embargoes, failures
or shortages of equipment (provided such equipment has been reasonably
maintained) not owned or otherwise provided by Boston Financial or its
Affiliates, utilities or communications, and unusually severe weather, but in
every case the failure to perform must be beyond the reasonable control of and
without fault or negligence by the party failing to perform (a "Force Majeure
Condition" or the "Force Majeure Conditions").
SECTION 8 - Termination of Master Agreement.
8.01 Except as otherwise provided herein, this Master Agreement and its
Schedules shall be effective upon execution by both parties and shall remain in
full force and effect through the close of business on December 31, 2016.
Unless terminated as of the end of any term by either Party on not less than
six (6) month's written notice to the other Party, this Master Agreement shall
automatically extend for additional, successive three (3) year terms upon the
expiration of any term hereof (i) at the fees set forth in any mutually agreed
upon new schedule of fees or, in the absence of such Schedule, (ii) at the fees
in existence at the expiration of the expiring term, increased by the lesser of
the percentage increase in the CPI-U/2/ during the immediately preceding twelve
(12) months or five percent (5%) as of each anniversary in the new Term. Each
additional three (3) year term shall be an additional term of this Schedule.
8.02 In the event that this Master Agreement is terminated for other than
Pioneer's default, Boston Financial agrees that: (i) subject to compliance with
this Master Agreement and the Schedules hereto, Pioneer may extend this Master
Agreement and such Schedules from the scheduled date of termination on no less
than six (6) months prior written notice to Boston Financial for a period of up
to twelve (12) months (any such extended period to be hereinafter referred to
as the "Extension Period") at no additional charge but at the then current fees
plus any regularly scheduled increases; and (ii) in order to provide for
uninterrupted service to Pioneer, Boston Financial and/or its Affiliates, at
Pioneer's request, shall offer reasonable assistance to Pioneer in connection
with the conversion of the records of Pioneer from the TA2000 System to
whatever service or system is selected by Pioneer (the "Deconversion") (subject
to the recompense of Boston Financial or such Affiliate for such assistance at
its standard rates and fees in effect at the time). As used herein "reasonable
assistance" and "transitional assistance" shall not include requiring Boston
Financial or its Affiliates (i) to assist any new service or system provider
(the "New Agent") to modify, to alter, to enhance, or to improve the New
Agent's system, or to provide any new functionality to the New Agent's system,
(ii) to disclose any Confidential Information as defined in Section 11, or
(iii) to develop Deconversion software, to modify any Software of Boston
Financial or its Affiliates, or to otherwise alter the format of the data as
maintained on TA2000.
8.03 Each Schedule shall remain in full force and effect in accordance with
the terms set forth in such Schedule or, if no term is specified in a Schedule,
then the Term applicable to such Schedule shall be co-terminus with the Term of
this Master Agreement, unless terminated under Section 9.04 of this Master
Agreement.
--------
/2/ "CPI-U" shall mean the Consumer Price Index for all Urban Consumers
("CPI-U") in the Kansas City, Missouri-Kansas Standard Metropolitan
Statistical Area, All Items, Base 1982-1984 = 100 (or any successor
Index), as last reported by the U.S. Bureau of Labor Statistics. In the
event that this Agreement was not signed as of the first day of the month,
the fees and charges increase shall be effective as of the first day of
the month immediately following the month during which the anniversary
occurred.
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8.04(a) If any of the parties hereto shall materially breach any Schedule or
be materially in default in the performance of any of its duties and
obligations under any Schedule (the "Defaulting Party"), the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party
and if such default or breach shall not have been remedied within sixty
(60) days after such written notice is given, or, if not capable of remedy
within sixty (60) days, a good faith effort is not promptly commenced and
thereafter diligently pursued in an appropriate manner, then the Non-Defaulting
Party may terminate the affected Schedule(s) as between the Non-Defaulting
Party and the Defaulting Party by giving, within ninety (90) days of the date
on which such right of termination first commenced, one hundred and twenty
(120) days written notice of such termination (the "Termination Notice") to the
defaulting party. Except as is otherwise provided in Section 8.01 of this
Master Agreement and hereinafter in Subsection (b), the termination of one
Schedule by reason of a material breach of the terms of such Schedule shall not
affect this Master Agreement or any other Schedule unless the breached Schedule
so provides.
(b) Each party, in addition to any other rights and remedies, shall have the
right to terminate this Master Agreement and all Schedules forthwith upon the
occurrence at any time of any of the bankruptcy of the other party or its
assigns or the appointment of a receiver for the other party or its assigns.
8.05 Termination of this Master Agreement or any Schedule by one party as a
result of default or breach by the other party shall not constitute a waiver of
(i) any other rights of either party under this Master Agreement or any
Schedule or of (ii) rights of Boston Financial to recover payment for Products
prior to such termination or to be reimbursed for out-of-pocket expenditures
and conversion expenses as per this Master Agreement and the Schedules.
8.06(a) In the event of termination, Pioneer will promptly pay Boston
Financial all amounts due Boston Financial and its Affiliates under this Master
Agreement and the Schedules hereto that are then in effect. In addition, if
this Master Agreement is terminated by Pioneer for any reason other than the
material default under or material breach of this Master Agreement or the
Schedules hereto by Boston Financial or its Affiliates, Pioneer shall pay to
Boston Financial a termination fee (the "Termination Fee") consisting of:
(1) The amount equal to the average monthly fees paid by Pioneer to
Boston Financial and its Affiliates under this Master Agreement and its
Schedules multiplied by the number of months remaining in the Initial or
any subsequent Term and calculated as set forth on the then current Fee
Schedule, on the date notice of termination was given to Boston
Financial; plus
(2) The aggregate of the discounts received by Pioneer on fees which
would, other than for such discounts, have been due and owing by Pioneer
during the affected term of this Master Agreement (the "Discount
Recapture") already received during the then current term (all further
discounts due under the applicable fee schedule to cease and be of no
further force and effect upon the receipt of the notice of termination).
(b) No Termination Fee will be due with respect to (a) termination at the
expiration of the Initial Term, or (b) termination at the regularly
scheduled expiration of any subsequent Term.
(c) In any event, the effective date of any Deconversion as a result of
termination hereof shall not occur during the period from December 15th
through March 1st of any year to avoid adversely impacting year end.
21
8.07 Within thirty (30) days after completion of the Deconversion, Pioneer
will give notice to Boston Financial containing reasonable instructions
regarding the disposition of tapes, data, files and other property belonging to
Pioneer and then in Boston Financial's possession and payment for the
reasonable costs of Boston Financial and its Affiliate to comply with such
notice. If Pioneer fails to give that notice within thirty (30) days after
termination of this Schedule, then Boston Financial may dispose of such
property as it deems appropriate. The reasonable costs of any such disposition
or of the continued storage of such tapes, data files and other properties
shall be billed to, and within thirty (30) days of receipt of such invoice paid
by, Pioneer. Failure to pay such sums when due shall incur a late charge in
accordance with Section 4.03 of this Master Agreement.
SECTION 9 - Confidentiality; Non-Disclosure.
9.01 Pioneer acknowledges and agrees that the terms and conditions of this
Master Agreement and Schedules, and any other information obtained by Pioneer
from Boston Financial or its Affiliates concerning the use of the Products or
the software, applications, equipment configurations, customers and business of
Boston Financial or its Affiliates (including but not limited to ideas,
concepts, designs, drawings, specifications, techniques, algorithms, models,
data, source code, object code, data, screen and file formats, interfaces and
interface protocols and packages, documentation, diagrams, flow charts,
processes, procedures, "know-how," marketing techniques, materials and
development plans, customer names and other information related to customers of
Boston Financial or its Affiliates, in whatever form or media) (the "Boston
Financial Confidential Information") is confidential and proprietary to Boston
Financial and Pioneer hereby agrees (i) to use the Boston Financial
Confidential Information only as permitted by this Master Agreement and the
Schedules, (ii) to maintain the confidentiality of the Boston Financial
Confidential Information, and (iii) not to disclose the Boston Financial
Confidential Information, or any part thereof, to any other person, firm or
corporation. Pioneer acknowledges that disclosure of the Boston Financial
Confidential Information may give rise to an irreparable injury to Boston
Financial inadequately compensable in damages. Accordingly, Boston Financial
may seek (without the posting of any bond or other security) injunctive relief
against the breach of the foregoing undertaking of confidentiality and
nondisclosure, in addition to any other legal remedies that may be available.
Information regarding the software and systems may be provided to Pioneer's
outside auditors and attorneys to the extent required by their respective
functions. Pioneer may also disclose Boston Financial Confidential Information
(i) to the extent required by law, (ii) in response to any request from a
governmental or regulatory authority and (iii) to Pioneer's consultants who
have been retained to perform work for hire in connection with Pioneer's use of
the Boston Financial software and systems, provided that such consultants
and/or their affiliates are not direct competitors of Boston Financial or its
Affiliates and that all such consultants having access to Boston Financial
Confidential Information will execute a non-disclosure agreement in a form
reasonably acceptable to Boston Financial.
9.02 Boston Financial acknowledges and agrees that the information obtained
by Boston Financial concerning the software, software applications, equipment
configurations, and the customers and business of Pioneer (including but not
limited to ideas, concepts, designs, drawings, specifications, techniques,
algorithms, models, data, source code, object code, documentation, diagrams,
flow charts, processes, procedures, "know-how," marketing techniques, materials
and development plans, customer names and other information related to
customers, in whatever form or media) (the "Pioneer Confidential Information")
is confidential and proprietary to Pioneer and Boston Financial hereby agrees
to use Pioneer Confidential Information only as permitted by this Master
Agreement and Schedules, to maintain the confidentiality of Pioneer
Confidential Information and not to disclose Pioneer Confidential Information,
or any part thereof, to any other unaffiliated person, firm or corporation.
Boston Financial acknowledges that disclosure of Pioneer Confidential
Information may give rise to an irreparable injury to Pioneer inadequately
compensable in damages. Accordingly, Pioneer may seek (without the posting of
any bond or other security) injunctive relief against the breach of the
foregoing undertaking of confidentiality and nondisclosure, in addition to any
other legal remedies which may be available.
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9.03 The obligations of confidentiality and nondisclosure of each of Boston
Financial and Pioneer set forth in this Section 9 shall not apply to such
portions of the Confidential Information of the other which (i) are or become
generally available to the public other than as a result of a disclosure by the
receiving party or its employees, representatives or agents; or (ii) become
available to the receiving party on a non-confidential basis from a third party
which is entitled to disclose it; or (iii) was known to the receiving party on
a non-confidential basis prior to its disclosure to the receiving party by the
other party; or was independently developed by the receiving party without any
reference to or use of the Confidential Information of the disclosing party;
provided, however, that the party asserting the existence of one of the
foregoing exceptions in this Section 9.03 shall bear the burden of proving such
existence.
9.4 For purposes of this Agreement, "Customer Information" means all the
customer identifying data however collected or received, including without
limitation, through "cookies" or non-electronic means pertaining to or
identifiable to the shareholders of the Pioneer Funds, prospective shareholders
and plan administrators (collectively, "Fund Customers"), including without
limitation, (i) name, address, email address, passwords, account numbers,
personal financial information, personal preferences, demographic data,
marketing data, data about securities transactions, credit data or any other
identification data; (ii) any information that reflects the use of or
interactions with a Pioneer service, including Pioneer's web site; or (iii) any
data otherwise submitted in the process of registering for a Pioneer service.
For the avoidance of doubt, Customer Information shall include all "nonpublic
personal information," as defined under the Gramm-Leach-Bliley Act of 1999
(Public Law 106-102, 113 Stat. 1138) ("GLB Act") and all "personal information"
as defined in the Massachusetts Standards for the Protection of Personal
Information, 201 CMR 17.00, et seq., ("Mass Privacy Act").
9.5 Boston Financial will use the Confidential Information, including
Customer Information, only in compliance with (i) the provisions of this Master
Agreement and its Schedules, and (ii) federal and state privacy laws, including
the GLB Act and the Mass Privacy Act, as such applicable.
9.6 In the event that any requests or demands are made for the inspection of
the records of Pioneer, Boston Financial will use reasonable efforts to notify
Pioneer (except where prohibited by law) and to secure instructions from an
authorized officer of Pioneer as to such inspection. Boston Financial expressly
reserves the right, however, to exhibit Pioneer's records to any person
whenever it is advised by counsel that it may be held liable for the failure to
exhibit the records to such person. In the event that Boston Financial is
requested or authorized by Pioneer, or required by subpoena, administrative
order, court order or other legal process, applicable law or regulation, or
required in connection with any investigation, examination or inspection of
Pioneer by state or federal regulatory agencies, to produce such records of
Pioneer or Boston Financial's personnel as witnesses, Pioneer agrees to pay
Boston Financial for Boston Financial's time and expenses, as well as the fees
and expenses of Boston Financial's counsel, incurred in responding to any such
request, demand, subpoena, order, investigation, or other legal process,
provided that such request, demand, subpoena, order, investigation or other
legal process directly relates to data, information or records held or
maintained by Boston Financial with respect to Pioneer and the Funds.
9.7 Boston Financial and its Affiliates have implemented and maintain at
each service location physical and information security and data protection
safeguards against the destruction, loss, theft, unauthorized access,
unauthorized use, or alteration of Pioneer's Confidential Information,
including Customer Information, in the possession of Boston Financial that will
be no less rigorous than those in place at the effective date of this
Agreement, and from time to time enhanced in accordance with changes in
regulatory requirements. Boston Financial will, at a minimum, update its
policies to remain compliant with applicable regulatory requirements, including
those under the GLB Act and the Mass Privacy Act. Boston Financial will meet
with Pioneer, at its request, on an annual basis to discuss information
security safeguards. If Boston Financial or its agents discover or are notified
that someone
23
has violated security relating to Pioneer's Confidential Information, including
Customer Information, Boston Financial will promptly (a) notify Pioneer of such
violation, and (b) if the applicable Confidential Information was in the
possession or under the control of Boston Financial, its Affiliates or their
respective agents at the time of such violation, Boston Financial will promptly
(i) investigate, contain and address the violation, and (ii) advise Pioneer as
to the steps being taken that are reasonably designed to prevent future similar
violations.
9.8 All of the undertakings and obligations relating to confidentiality and
nondisclosure, whether contained in this Section or elsewhere in this Master
Agreement or a Schedule shall survive the termination or expiration of this
Master Agreement for a period of ten (10) years; provided that, to the extent
Confidential Information includes information that is also a Trade Secret as
defined by the Uniform Trade Secrets Act, the obligation to protect such Trade
Secrets as defined by the Uniform Trade Secrets Act, the obligation to protect
such Trade Secrets shall survive the termination of this Agreement and shall
remain for so long as such Confidential Information constitutes a Trade Secret,
as defined by the Uniform Trade Secrets Act.
SECTION 10 - Changes, Modifications and Ownership.
10.01 During the term of this Master Agreement, Boston Financial will make
available for Pioneer's use modifications and improvements to Boston Financial
Products utilized by Pioneer. No charges will be assessed therefore unless a
specific charge is made for such modifications and improvements in the standard
pricing schedules of Boston Financial and its Affiliates, and is charged
generally to other existing clients using the modified or improved system, in
which event such charges shall be based on number of accounts or some other
equitable measure allocating charges in accordance with number or users or
amount of usage.
10.02 In the event that changes in existing laws, rules or regulations or
industry practices require substantial system revisions or modifications,
Boston Financial may charge Pioneer for Pioneer's pro rata share (based on
number of accounts or other equitable measure based on the Service revised or
modified) of the cost of the system revisions or modifications necessitated by
such changed regulatory requirements or industry practices or for increases in
the cost of operating the affected Boston Financial system as a result thereof,
provided other Boston Financial clients using such system are generally charged
therefore.
10.03 Boston Financial shall have the right, at any time, and from time to
time, to alter and modify Products provided by Boston Financial to Pioneer,
provided that Boston Financial shall use reasonable efforts to minimize any
disruptions or adverse effects upon Pioneer's ability to use the affected
Boston Financial Product. Boston Financial will provide Pioneer ninety
(90) days written or electronic notice (which shall include any notices posted
on the Boston Financial or its Affiliates' Customer Centers) of any Product
alterations or modifications which Boston Financial believes may materially,
adversely affect Pioneer's operations and procedures or current Product
features, functionality or performance. Notwithstanding the foregoing, Boston
Financial shall remain responsible to assure that such altered or modified
Products still continue to perform in accordance with any Service Levels
applicable under the Schedules.
10.04 All enhancements, improvements, modifications, developments, new
functionality or new features added to or installed in any Boston Financial
Product ("Improvements"), whether licensed or provided as a Service under this
Master Agreement and any Schedule and regardless of who paid for such
Improvement, shall be and remain proprietary to and the exclusive property of
Boston Financial and/or its Affiliates. Customer Confidential Information
remains proprietary to and the exclusive property of Pioneer. Pioneer grants
Boston Financial a perpetual, nonexclusive license to incorporate and retain in
Improvements and Developments Pioneer business requirements based on Pioneer
Confidential
24
Information, but only to the extent such business requirements as incorporated
do not refer to Pioneer by name or otherwise identify or enable others to
identify Pioneer.
SECTION 11 - Covenants.
11.01 In the event that a system, which is operated by Boston Financial or
an Affiliate, that is accessed remotely by Pioneer fails to function properly
by reason of the failure of Boston Financial or its Affiliate to act in good
faith, with due diligence and reasonable care and, as a consequence, causes an
error or mistake in any record, report, data, information or output provided by
Boston Financial or its Affiliate, Boston Financial or its Affiliate, as
applicable, shall promptly correct and reprocess such records, at the expense
of Boston Financial or its Affiliate; provided, Pioneer shall have promptly and
timely notified Boston Financial in writing of such error or mistake, and,
further provided, that Pioneer shall have the obligation of maintaining in an
uncorrupted condition and having available backup copies of all data and
information that Pioneer transmits to Boston Financial or its Affiliate (the
"Data"). Neither Boston Financial nor its Affiliates shall have any obligation
to reconstruct or recompile Data not preserved by Pioneer through backup
procedures and Boston Financial and its Affiliates will not be responsible or
liable for the loss of any data or information that Boston Financial or such
Affiliate receives in an invalid, incorrect or otherwise corrupt condition or
which is improperly formatted or not in proper form in accordance with the
reference manuals provided by Boston Financial or its Affiliate, as applicable,
to Pioneer or the materials posted on the appropriate Customer Center or
website or as provided in Section 11.02 hereof. Pioneer accepts sole
responsibility for all Data and the accuracy and adequacy of all Data,
excluding any changes to such Data made by Boston Financial or its Affiliates.
11.02 Pioneer acknowledges that the communication circuits necessary to
enable Pioneer to utilize a system or service of Boston Financial or its
Affiliates on a remote basis and to interface with the Facilities of Boston
Financial or its Affiliates are to be provided by a third party vendor and that
such vendors traditionally assume little or no liability for problems with such
communication circuits and any Adverse Consequences arising out of a failure
thereof. Boston Financial and its Affiliates shall utilize communications
network control and monitoring capabilities to assist Pioneer with the
identification and resolution of any problems which appear to be related to
communications circuits, but neither Boston Financial nor its Affiliates shall
be responsible and or have any liability for inadequacies or failures to
perform related to or arising out of such communications circuits prior to
their entry into the Facilities of Boston Financial or its Affiliates. The
costs of the communication circuits required or used to utilize the systems and
Facilities of Boston Financial or its Affiliates remotely shall be billed to
Pioneer by Boston Financial as a reimbursable expense.
11.03 Pioneer shall not use any Product provided to it by Boston Financial
or its Affiliates in any way that is in violation of or will result in the
violation of any law, rule or regulation that is applicable to it, or which it
knows or has reasonable grounds to know will cause it or Boston Financial or
Boston Financial's Affiliates to violate a law, rule or regulation applicable
to them.
11.04 Throughout the Term, Boston Financial and its Affiliates shall comply
with Exhibit D (Information Protection Program), which is made a part of this
Master Agreement and its Schedules. The policies and procedures specified in
Exhibit D are subject to change at any time provided that the protections
afforded thereby will not be diminished in comparison with those provided by
Boston Financial and its Affiliates to Pioneer prior to the execution of this
Master Agreement and its Schedules. Boston Financial and its Affiliates will be
reasonably available to meet with and provide reasonable assurances to Pioneer
concerning its data security procedures.
SECTION 12 - Miscellaneous.
25
12.01 Boston Financial will furnish to Pioneer, on a semi-annual basis, a
report in accordance with Statements on Standards for Attestation Engagements
No. 16 (the "SSAE Report") as well as such other reports and information
relating to Boston Financial's policies and procedures and its compliance with
such policies and procedures and with the laws applicable to its business and
its services, as the parties may mutually agree upon.
12.02 Boston Financial will maintain a comprehensive business continuity
plan and will provide an executive summary of such plan upon reasonable request
of Pioneer. Boston Financial will test the adequacy of its business continuity
plan at least annually and upon request, Pioneer may participate in such test.
Upon request by Pioneer, Boston Financial will provide Pioneer with a letter
assessing the most recent business continuity test results. In the event of a
business disruption that materially impacts Boston Financial's provision of the
Products under this Master Agreement or Schedules, Boston Financial will
promptly notify Pioneer of the disruption and the steps being implemented under
the business continuity plan.
12.03 During the term of this Master Agreement, authorized representatives
of Pioneer may conduct periodic site visits of Boston Financial's facilities
and inspect Boston Financial's records and procedures solely as they pertain to
Boston Financial's Products provided to Pioneer under or pursuant to this
Master Agreement or its Schedules. Such inspections shall be conducted at
Pioneer's expense (which shall include costs related to providing materials,
copying, faxing, retrieving stored materials, and similar expenses) and shall
occur during Boston Financial's regular business hours and, except as otherwise
agreed to by the parties, no more frequently than twice a year. In connection
with such site visit and/or inspection, Pioneer shall not attempt to access,
nor will it review, the records of any other clients of Boston Financial and
Pioneer shall conduct the visit/inspection in a manner that will not interfere
with Boston Financial's normal and customary conduct of its business
activities, including the provision of services to Pioneer and to other
clients. Boston Financial shall have the right to immediately require the
removal of any Pioneer representatives from its premises in the event that
their actions, in the reasonable opinion of Boston Financial, jeopardize the
information security of its systems and/or other client data or otherwise are
disruptive to the business of Boston Financial. Boston Financial may require
any persons seeking access to its facilities to provide reasonable evidence of
their authority. Boston Financial may also reasonably require any of Pioneer's
representatives to execute a confidentiality agreement before granting such
individuals access to its facilities. Boston Financial will also provide
reasonable access to Pioneer's governmental regulators, at Pioneer's expense,
solely to (i) Pioneer's records held by Boston Financial and (ii) the
procedures of Boston Financial directly related to its provision of the
Products to Pioneer under the Master Agreement or its Schedules.
12.04 During the term of this Master Agreement, and for a twelve (12) month
period thereafter, Boston Financial and Pioneer each agrees that it will not
solicit for employment directly or indirectly any employee of the other without
the consent of the other, which consent will not be unreasonably withheld.
12.05 It is understood and agreed that all Services performed hereunder by
Boston Financial shall be as an independent contractor and not as an employee
of Pioneer. This Master Agreement and each Schedule is solely between Pioneer
and Boston Financial or the Affiliate that has executed such Schedule. There
are no third party beneficiaries under this Master Agreement or any Schedule.
12.06 All notices will be in writing and deemed given when delivered
personally, sent by courier or U.S. mail with confirmed receipt. All notices
must be addressed as set forth below or at another address designated in
writing by an authorized representative of the party pursuant to this provision.
Pioneer: Pioneer Investment Management Shareholder Services, Inc.
60 State Street
Boston, MA 02109
26
Attention: Legal Department
Boston Financial: Boston Financial Data Services, Inc.
2000 Crown Colony Drive
Quincy, MA 02169
Attention: Legal Department
27
With a copy to:
DST Systems, Inc.
333 West 11th Street, 5th Floor
Kansas City, Missouri 64105
Attention: Legal Department
12.07 If any provision of this Master Agreement or Schedule is determined by
a court of competent jurisdiction to be unenforceable as written but would be
enforceable if limited, it will be deemed to be so limited so as to be
enforceable to the fullest extent permitted by law, and all of the other
provisions of the Master Agreement or Schedule will remain in full force and
effect. To the extent that any provision herein is inconsistent with or in
violation of any applicable law, court decision, rule, regulation or otherwise,
that provision shall be deemed modified so as to comply with such law, rule or
regulation, and shall not otherwise affect any other provisions of this Master
Agreement. Any provision of this Master Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining provisions of this Master
Agreement or affecting the validity or enforceability of that term or any of
the provisions of this Master Agreement in any other jurisdiction.
12.08 The Schedules and all attachments thereto are incorporated into and a
part of this Master Agreement. All Schedules are in addition to the terms of
this Master Agreement. Except as otherwise explicitly otherwise provided in a
section or subsection of this Master Agreement, in the event of a conflict
between the provisions of a Schedule and those of this Master Agreement, the
conflicting provisions of the Schedule shall control and take precedence over
the conflicting provision of this Master Agreement, but only for the purpose
and to the extent of such specific Schedule. Except for such conflicting
provisions of a Schedule, the terms and conditions of this Master Agreement
shall not be deemed amended, waived or released. This Master Agreement and
Schedules represent the entire understanding between the parties with respect
to the subject matter hereof and terminates and supersedes any prior agreements
or understandings, oral or written. Any modification of this Master Agreement
or any Schedule is valid only when in writing and executed by both parties.
12.09 Either party's failure to insist upon strict compliance with any of
the provisions of this Master Agreement or Schedule shall not be deemed as a
waiver of the requirement to perform any obligation or requirement in the
future and shall not be construed as a waiver of any other rights or privileges.
12.10 Subject headings are for reference purposes only and shall not in any
way control the meaning or interpretation of this Master Agreement.
12.11 This Master Agreement and accompanying Schedules are binding upon and
will inure to the benefit of the parties and to their successors and permitted
assigns. Neither the Master Agreement nor any Schedules may be assigned by
either party without the prior written consent of the other, except that either
party may make an assignment to its parent, affiliates, and subsidiaries upon
prior written notice to the other party. Boston Financial may, without consent
of Pioneer, subcontract or delegate certain of its obligations hereunder to its
Affiliates. Boston Financial and its Affiliates shall not engage a Material
Subcontractor, as defined below, without obtaining Pioneer's prior written
consent, which consent will not be unreasonably withheld. The term Material
Subcontractor shall mean a non-affiliated person or entity on which Boston
Financial or its Affiliates rely to perform a material portion of the Services
and who, as a part of performing its obligations, will be provided Pioneer
Customer Information. For clarification, the requirement of prior consent by
Pioneer will not apply to (i) an Affiliate of Boston Financial, or
(ii) equipment providers or software providers or similar third party vendors
whom Boston Financial or its Affiliate engages to provide systems or software
necessary to provide the services to Pioneer. Boston Financial and/or its
Affiliates shall be responsible for the actions or omissions of a Material
Subcontractor;
28
provided, however, Boston Financial shall not be held responsible for any third
party service provider of the type referenced in Section 12.12 below, nor will
Boston Financial or its Affiliates be held responsible for: (i) third party
service providers whose services or products are the subject of a separate
agreement between Pioneer and the third party vendor (whether through Boston
Financial or directly with the third party vendor), or (ii) third party service
providers who provide services or products for which there is a separately
stated fee charged to Pioneer. Examples of this include NCR (eStub) and Choice
Point (CIP). The foregoing are third party vendors and shall not be deemed to
be agents, contractors or sub-contractors of Boston Financial or its Affiliates
as those terms are used in this Master Agreement and its Schedules and
Exhibits. Upon prior request by Pioneer (which may be made no more than two
times in any calendar year), Boston Financial and its Affiliates will inform
Pioneer the identities of any Material Subcontractor.
12.12 Nothing in this Master Agreement is intended to, nor shall it make,
Boston Financial or its Affiliates liable for the performance or omissions of
unaffiliated, national or regionally recognized third parties such as, by way
of example and not limitation, Airborne Services, Federal Express, UPS, the
U.S. Mails, AT&T, Sprint, MCI and other delivery, telecommunications and other
companies not under the reasonable control of Boston Financial or its
Affiliates, and third parties not under Boston Financial's reasonable control
providing services to the financial industry generally, such as, by way of
example and not limitation, The Depository Trust and Clearing Corporation's
subsidiaries, the National Securities Clearing Corporation and The Depository
Trust Company, the Federal Reserve System, custodian banks and administrators.
12.13 This Master Agreement and all Schedules may be executed in one or more
counterparts, each of which shall be deemed an original and all or which
together shall constitute one and the same agreement.
12.14 The Master Agreement and Schedules are construed in accordance with
the laws of the Commonwealth of Massachusetts, without regard to its conflicts
of law principles.
IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement to
be executed in their names on their behalf by and through their duly authorized
officers as of the day and year first above written.
PIONEER INVESTMENT MANAGEMENT BOSTON FINANCIAL DATA SERVICES,
SHAREHOLDER SERVICES, INC. INC.
By: Tracy Connelly By: Richard J. Johnson
Name: /s/ Tracy Connelly Name: /s/ Richard J. Johnson
------------------------------- ------------------------------
Title: Senior Vice President Title: Managing Director
29
EXHIBIT A
FUNDS
Dated as of: January 1, 2012
Pioneer Absolute Return Credit Fund
Pioneer America Income Trust
Pioneer AMPAC Growth Fund
Pioneer AMT-Free CA Municipal Fund
Pioneer AMT-Free Municipal Fund
Pioneer Balanced Fund
Pioneer Bond Fund
Pioneer Cash Reserves Fund
Pioneer Classic Balanced Fund
Pioneer Disciplined Growth Fund
Pioneer Disciplined Value Fund
Pioneer Emerging Markets Fund
Pioneer Emerging Markets Local Currency Debt Fund
Pioneer Equity Income Fund
Pioneer Equity Opportunity Fund
Pioneer Europe Select Equity Fund
Pioneer Floating Rate Fund
Pioneer Fund
Pioneer Fundamental Growth Fund
Pioneer Fundamental Value Fund
Pioneer Global Aggregate Bond Fund
Pioneer Global Diversified Equity Fund
Pioneer Global Equity Fund
Pioneer Global High Yield Fund
Pioneer Government Income Fund
Pioneer Growth Fund
Pioneer Growth Leaders Fund
Pioneer Growth Opportunities Fund
Pioneer Growth Shares
Pioneer High Income Municipal Fund
Pioneer High Yield Fund
Pioneer Ibbotson Aggressive Allocation
Pioneer Ibbotson Conservative Allocation Fund
Pioneer Ibbotson Growth Allocation
Pioneer Ibbotson Moderate Allocation
Pioneer Independence Fund
Pioneer Institutional Money Market Fund 1
Pioneer Institutional Money Market Fund 2
Pioneer Institutional Money Market Fund 3
Pioneer Intermediate Tax Free Income Fund
Pioneer International Equity
Pioneer International Value Fund
1
EXHIBIT A
FUNDS
Dated as of: January 1, 2012
(continued)
Pioneer Mid Cap Growth Fund
Pioneer Mid Cap Value Fund
Pioneer Money Market
Pioneer Multi-Asset Income Fund
Pioneer Multi-Asset Real Return Fund
Pioneer Multi-Asset Ultrashort Income Fund
Pioneer Oak Ridge All Cap Growth Fund
Pioneer Oak Ridge Large Cap Growth Fund
Pioneer Oak Ridge Small Cap Growth
Pioneer Protected Principal Plus Fund
Pioneer Protected Principal Plus II
Pioneer Real Estate Shares
Pioneer Research Fund
Pioneer Science & Technology
Pioneer Select Growth Fund
Pioneer Select Mid Cap Growth Fund
Pioneer Short Term Income Fund
Pioneer Small & Mid Cap Growth Fund
Pioneer Small Cap Value Fund
Pioneer Small Company Fund
Pioneer Stable Value Fund II
Pioneer Strategic Income Fund
Pioneer Tax Free Income Fund
Pioneer Tax Free Money Market Fund
Pioneer Treasury Reserves Fund
Pioneer Value Fund
2
EXHIBIT C
SCHEDULE OF AUTHORIZED PERSONNEL
The following persons, presently and until each party is advised in writing
to the contrary, are deemed "Authorized Personnel" for the purposes of the
Master Agreement and its Schedules are subject to amendment from time to time.
Tracey Connelly SVP
--------------------------------------- --------------------------------------
Name Title
Susan Warner SVP
--------------------------------------- --------------------------------------
Name Title
Nancy Arp SVP
--------------------------------------- --------------------------------------
Name Title
Kelly O'Donnell Director
--------------------------------------- --------------------------------------
Name Title
Susan Skeels Director
--------------------------------------- --------------------------------------
Name Title
Mark Goodwin COO
--------------------------------------- --------------------------------------
Name Title
1
EXHIBIT D
INFORMATION PROTECTION PROGRAM
Boston Financial and its Affiliates have a formal Information Protection
Program (IPP) that was established and exists as a working roadmap for their
security. Boston Financial and its Affiliates do Risk Assessments, Security
Assessments, Security Awareness for each corporation as a whole, targeted
training for specific applicable groups, and other security related activities.
Boston Financial and its Affiliates have a program and process pursuant to
which each reviews its technology and architecture and security requirements
and needs.
Integral to the function of the IPP are the Information Protection Committee
(IPC) and the Information Protection Board (IPB). The IPC convenes periodically
during the year and is responsible for 1) identifying, measuring and rating
risks, 2) approving policies, standards, and practices, and 3) assessing and
reporting progress towards compliance. The IPB convenes periodically during the
year and is responsible for providing executive level oversight and guidance to
the Information Protection Program.
A component of the IPP is each entity's Policies, Control Standards, and
Technology Baselines. The Security Management Console (SMC) is an on-line
system that provides Security Policies, Control Standards, and Technical
Baselines, oriented to the financial industry. The policies and standards
incorporated in the SMC are designed to be consistent and evolve with ISO27001,
HIPAA, Data Protection Act of 1998, IS Forum Standards, FFIEC IS Booklet, and
MAS to the extent Boston Financial and its Affiliates deem them applicable to
their respective businesses.
Boston Financial and its Affiliates have in place security log and activity
monitoring, on a 24x7x365 basis. They also have an Intrusion Detection System
(IDS) implemented to keep informed on network activity. Each entity has an
incident response process to deal with unexplainable logs and activities that
are observed. This process is reviewed for validity and effectiveness for the
purpose. Boston Financial and its Affiliates use third party security reviews
to also provide the information to support their security efforts.
All of the foregoing policies and procedures are subject to regular review and
modification without notice, it being agreed that (i) no change to the
foregoing shall diminish the over-all level of security and protections
afforded to Pioneer's Data as maintained on TA2000 and the Facilities of Boston
Financial and its Affiliates and (ii) Boston Financial and its Affiliates
hereby undertake that they shall at all times have in place data security
policies and standards that are reasonably designed to be consistent and evolve
with ISO27001, HIPAA, Data Protection Act of 1998, IS Forum Standards, FFIEC IS
Booklet, and MAS to the extent Boston Financial and its Affiliates reasonably
deem them applicable to their respective businesses.
1
SCHEDULE I
SUB TRANSER AGENCY SERVICES
SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
--------------------------------------------------------------------------------
SCHEDULE I TO
THE MASTER SERVICE AGREEMENT
BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC
AND
BOSTON FINANCIAL DATA SERVICES, INC. (the "Master Agreement")
THIS SCHEDULE I TO THE MASTER AGREEMENT is made effective as of the 1st day
of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT SHAREHOLDER
SERVICES, INC. ("Pioneer"), and BOSTON FINANCIAL DATA SERVICES, INC. ("Boston
Financial"), and is hereby attached to and incorporated into the Master
Agreement.
WHEREAS, Pioneer serves as transfer and dividend disbursing agent to and on
behalf of the Funds noted on Exhibit A to the Master Agreement, and whose
securityholder records are maintained, and whose transactions are effectuated
and accounted for on, the DST TA2000 System (the "Fund" or "Funds"); and
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, and in connection therewith
Pioneer desires to appoint Boston Financial as sub-transfer agent and
sub-dividend disbursing agent to Pioneer, and Boston Financial desires to
accept such appointment, on the terms and conditions set forth in the Master
Agreement and this Schedule.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pioneer and Boston Financial
hereby agree as follows:
SECTION 1. INCORPORATION OF THE MASTER AGREEMENT
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule.
SECTION 2. APPOINTMENT; SERVICES
2.01 Subject to the terms and conditions set forth in the Master Agreement
and this Schedule, Pioneer hereby employs and appoints Boston Financial as
sub-transfer agent and sub-dividend disbursing agent.
2.02 Boston Financial hereby accepts such appointment and agrees that it
will act as sub-transfer agent and sub-dividend disbursing agent on behalf of
Pioneer for the Funds specified on Exhibit A to the Master Agreement, which may
be amended in writing by the parties from time to time. Boston Financial agrees
that it will also act as agent on behalf of Pioneer for the shares of the Funds
in connection with any accumulation, open-account, retirement plans or similar
plan provided to the shareholders of each Fund ("Shareholders") and set out in
the currently effective prospectus and statement of additional information
("prospectus") of each such Fund, including without limitation any periodic
investment plan or periodic withdrawal program. As used herein, the term
"Shares" means the authorize and issued shares of common stock, or shares of
beneficial interest, as the case may be, for each of the Funds (including each
series thereof).
2.03 Boston Financial, utilizing TA2000(TM), DST's computerized data
processing system for securityholder accounting (the "TA2000 System") and in
accordance with the terms and conditions of the Master Agreement and this
Schedule, and with procedures established from time to time by agreement
between Pioneer and Boston Financial (the "Procedures"), will perform the
following services:
1
1) Establish each Shareholder's account in the Fund on the TA2000 system and
maintain such account for the benefit of such Shareholder in accordance
with the Procedures;
2) Receive for acceptance and process orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation thereof to the
Fund's authorized custodian (the "Custodian");
3) Pursuant to purchase orders (including purchases related to exchanges),
issue the appropriate number of Shares and hold such Shares in the
appropriate Shareholder account;
4) Receive for acceptance and process redemption requests (including
redemptions related to exchanges) and redemption directions and deliver the
appropriate documentation thereof to the Custodian;
5) In respect to items (1) through (4) above, Boston Financial may execute
transactions directly with broker-dealers and third party administrators
("TPAs") authorized by or on behalf of Pioneer Funds Distributor, Inc., the
principal underwriter to the Funds;
6) At the appropriate time as and when it receives monies paid to it by the
Custodian with respect to any redemption, pay over or cause to be paid over
in the appropriate manner such monies as instructed by the redeeming
Shareholders;
7) Effect transfers of Shares by the registered owners thereof upon receipt of
appropriate instructions;
8) Prepare and transmit payments for dividends and distributions declared by
the Funds or any Portfolio thereof, as the case may be;
9) If applicable, issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon receipt by Boston
Financial of indemnification satisfactory to Boston Financial and
protecting Boston Financial and the Fund, and Boston Financial at its
option, may issue replacement certificates in place of mutilated stock
and/or share certificates upon presentation thereof and without such
indemnity;
10) Issue replacement checks and place stop orders on original checks based on
Shareholder's representation that a check was not received or was lost.
Such stop orders and replacements will be deemed to have been made at the
request of the Fund or Pioneer;
11) Maintain records of account for and advise Pioneer and its Shareholders as
to the foregoing;
12) Record the issuance of Shares of the Fund and maintain, pursuant to SEC
Rule 17Ad-10(e), a record of the total number of Shares of the Fund which
are authorized, based upon data provided to it by the Fund, and issued and
outstanding. Boston Financial shall also provide Pioneer on a regular basis
as set forth in the agreed upon Procedures with the total number of Shares
which are authorized and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to monitor the issuance
of such Shares or to take cognizance of any laws relating to the issue or
sale of such Shares, which functions shall be the sole responsibility of
the Fund;
13) Accept any information, records, documents, data, or instructions in
printed form, or by machine readable input, facsimile, or electronic
instructions, including e-mail communications, which have been prepared,
maintained or provided by Pioneer or its authorized agents and accept any
information, records, documents, data, certificates or transaction requests
in printed form or by machine readable input, or facsimile which have been
prepared, maintained or provided by individual Shareholders or the
broker-dealers of record or TPAs on behalf of individual Shareholders. With
respect to transaction requests received by facsimile, email or other
electronic means, Boston Financial shall not be responsible for determining
that the original source documentation is in good order, which includes
compliance with Rule 22c-1 under the 1940 Act, and it will be the
responsibility of Pioneer or the Fund to require such broker-dealers or
TPAs to retain such documentation. E-mail exchanges on routine matters may
be made directly with Pioneer's contact at Boston Financial. Boston
Financial will not act on any e-mail communications coming to it directly
from Shareholders requesting transactions, including, but not limited to,
monetary transactions, change of ownership, or beneficiary changes;
2
14) Receive correspondence pertaining to any former, existing or new
Shareholder account, process such correspondence for proper recordkeeping
and respond to Shareholder correspondence in accordance with agreed upon
Procedures;
15) Process any request from a Shareholder to change account registration,
beneficiary, beneficiary information, transfer and rollovers in accordance
with the Procedures;
16) Preparing Shareholder lists for meetings;
17) Withhold taxes on U.S. resident and non-resident alien accounts; prepare
and file U.S. Treasury Department Forms 1099 and other appropriate forms
required with respect to dividends and distributions by federal authorities
for Shareholders, and provide Shareholder account information;
18) Maintain a daily record and produce a daily report for the Fund of all
transactions and receipts and disbursements of money and securities and
deliver a copy of such report for the Fund for each business day to the
Fund no later than 8:30 AM Eastern Time ("ET"), or such earlier time as the
Fund may reasonably require, on the next business day;
19) The Fund or Pioneer shall identify to Boston Financial in writing the
states and countries where the Shares of the Funds are registered or
exempt, and the number of shares registered for sale with respect to each
state or country, as applicable. Boston Financial shall establish the
foregoing parameters on the system for the designated Blue Sky vendor. The
Fund or Pioneer shall verify that such parameters have been correctly
established for each state or country on the system prior to activation and
thereafter shall be responsible for monitoring the daily activity for each
state or country. The responsibility of Boston Financial for the Fund's
blue sky registration status is solely limited to the initial establishment
of the parameters provided by the Fund or Pioneer for the blue sky vendor's
system;
20) Pioneer has elected to delegate to Boston Financial certain AML duties for
the Funds under this Schedule and the parties have agreed to such duties
and terms as stated in the Exhibit A to this Schedule, which may be amended
from time to time subject to mutual written agreement between the parties;
21) Under the terms of the Government Allotment Program, members (i.e., U.S.
government employees) who have joined the program may direct a specified
portion of their paychecks to be sent to a demand deposit account at a bank
with instructions to forward the funds to specified mutual funds, including
Pioneer, or other investment vehicles. If Pioneer elects to have Boston
Financial serve as its allotment agent under the Government Allotment
Program (and as mutually agreed upon by the parties as to any applicable
fees and expenses), the parties will agree to such duties and terms as
stated in Exhibit B to this Schedule, which may be changed from time to
time subject to mutual written agreement between the parties. The services
performed by Boston Financial with respect to the Government Allotment
Program hereunder will be of a ministerial nature only;
22) Upon request of Pioneer (and as mutually agreed upon by the parties as to
any applicable fees and expenses), Boston Financial will provide Pioneer or
the Fund with periodic reports on trading activity in the Fund based on
parameters provided to Boston Financial by Pioneer or the Fund, as amended
from time to time. The services to be performed by Boston Financial
hereunder will be ministerial only and Boston Financial shall have no
responsibility for monitoring or reviewing market-timing activities;
23) If requested by Pioneer (and as mutually agreed upon by the parties as to
any applicable fees and expenses), Boston Financial shall accept any
Shareholder checks and statements (including confirmation statements) and
broker-dealer statements that are returned to Boston Financial via the US
mail because the US post office was not able to deliver such checks and
statements due to incorrect Shareholder addresses ("RPO Mail"). Boston
Financial shall record and research each piece of RPO Mail and attempt to
find an up-to-date address for the intended recipient. If a valid address
is determined, Boston Financial shall update the TA2000 System accordingly.
In addition, for any Shareholders that cannot be located via the RPO Mail
process described above, Boston Financial will conduct a database search to
locate such lost Shareholder. If an updated address is discovered, Boston
Financial will send a letter or place a telephone call to the Shareholder.
If, after the foregoing efforts, a Shareholder still cannot be located,
Boston
3
Financial shall, as authorized by Pioneer, report and escheat abandoned
property to the state authorities of the Shareholder's last known state of
residence. Boston Financial shall provide all of the services described
herein in accordance with the Procedures agreed upon by Boston Financial
and Pioneer;
24) If requested by Pioneer (and as mutually agreed upon by the parties as to
any reasonable reimbursable expenses), Boston Financial shall provide
services with respect to garnishment orders, court notices pertaining to
bankruptcy and divorce proceedings and Internal Revenue Service and state
tax authority levies and summons, all in accordance with the Procedures
agreed upon by Boston Financial and Pioneer;
25) Boston Financial, as authorized by Pioneer, shall review the proper form of
instructions, signatures and signature guarantees and, where applicable,
any additional documents needed to support the opening of Shareholder
accounts, transfers, redemptions and other Shareholder account transactions
against the Procedures and requirements set forth in Boston Financial's
"Transfer Agency Manual," which has been made available to Pioneer, or such
other Procedures as have been mutually agreed upon by the parties, in each
case with such changes or deviations therefrom as may be from time to time
required or approved by Pioneer, and reject transactions or instructions
not in good order;
26) As requested by Pioneer, Boston Financial shall maintain and administer, as
agent for Pioneer, such demand deposit accounts ("DDAs") as Boston
Financial shall deem necessary for the performance of Boston Financial's
duties under this Schedule, including but not limited to, the processing of
Share purchases and redemptions and the payment of Fund dividends and
distributions. Boston Financial will maintain such DDAs at the banks deemed
appropriate by Boston Financial. The parties agree that any balance
earnings provided to Boston Financial by the banks in connection with the
DDAs that Boston Financial is maintaining in its capacity as agent for
Pioneer, shall be credited quarterly by Boston Financial to Pioneer on an
invoice;
27) Pioneer shall arrange for the provision of appropriate prototype plans to
Shareholders as well as provide or arrange for the provision of various
services for certain individual retirement accounts ("IRAs"), SEP IRAs,
Roth IRAs, and Education IRAs. At the request of Pioneer, Boston Financial
shall perform IRA account set-up maintenance and disbursements as well as
such other IRA administrative support services as the parties hereto shall
mutually agree upon. If requested by Pioneer and as mutually agreed, Boston
Financial may provide IRA custodial services through its affiliate, State
Street Bank and Trust Company;
28) Boston Financial agrees to provide certain recordkeeping and administrative
services, either directly or through an affiliate, as set forth on Exhibit
C to this Schedule, to Pioneer's employer retirement plan clients ("Plan
Sponsors") who adopt: (a) tax-qualified defined contribution plans under
Section 401(a) of the Internal Revenue Code of 1986, as amended, ("IRC")
which plans shall include profit sharing/401(k) plans and solo 401(k) plans
under Pioneer's "Uni-K" plan branding; (b) 403(b) plans under IRC Code
Section 403(b); and (c) Savings Incentive Match Plan for Employees of Small
Employers individual retirement accounts ("SIMPLE IRA") plans under IRC
Section 408(p) (collectively, "Plans" unless specified otherwise), for the
benefit of the employees who participate in such Plans ("Participants").
The services to Plan Sponsors and Participants shall be provided on the DST
Systems, Inc. TRAC 2000 system ("TRAC");
29) Boston Financial will research, track and provide status reports to Pioneer
on any daily support items that have been submitted by Pioneer and Boston
Financial will work internally and/or with DST or Pioneer to promptly
address such items; and
30) Boston Financial and Pioneer may from time to time agree upon additional
services to be performed by Boston Financial and the parties may add them
to this Schedule by written amendment.
4
SECTION 3. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF BOSTON FINANCIAL.
3.01 In addition to the representations and warranties set forth in
Section 5 of the Master Agreement, Boston Financial represents and warrants to
Pioneer that:
(a) It is duly registered as a transfer agent under Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and it will
remain so registered for the duration of the Master Agreement and this
Schedule. It will promptly notify Pioneer in the event of any material
change in its status as a registered transfer agent.
SECTION 4. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF PIONEER.
4.01 In addition to the representations and warranties of Pioneer set forth
in Section 6 of the Master Agreement, Pioneer represents and warrants to Boston
Financial that:
(a) It is duly registered as a transfer agent under Section 17A(c)(2) of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and it will
remain so registered for the duration of this Schedule. It will promptly
notify Boston Financial in the event of any material change in its status as
a registered transfer agent.
(b) It has been appointed by each of the Funds as transfer agent, dividend
disbursing agent and shareholder servicing agent and serves in such
capacities.
(c) It has entered into an agreement with each of the Funds pursuant to
which it is responsible for certain transfer agency and dividend disbursing
functions and has obtained all necessary approvals to engage Boston
Financial to perform in whole or in part Pioneer's obligations and duties
thereunder.
SECTION 5. FEES AND EXPENSES
5.01 The parties agree that in consideration for Boston Financial's services
under this Schedule, Pioneer will pay to Boston Financial compensation for such
services in accordance with Exhibit B to the Master Agreement.
5.02 Pioneer also agrees promptly to reimburse Boston Financial for all
reasonable billable expenses or disbursements incurred by Boston Financial in
connection with the performance of services under this Schedule including, but
not limited to, if applicable: AML/CIP annual fee, suspicious activity
reporting for networked accounts, audio response, checkwriting, CIP-related
database searches, commission fee application, data communications equipment,
computer hardware, DST disaster recovery charge, escheatment, express mail and
delivery services, FDIC deposit insurance account charges, federal wire
charges, forms and production, freight charges, household tape processing, lost
shareholder searches, lost shareholder tracking, magnetic tapes, reels or
cartridges, magnetic tape handling charges, manual check pulls,
microfiche/COOL, microfilm, network products, new fund implementation, NSCC
processing and communications, postage (to be paid in advance if so requested),
offsite records storage, outside mailing services, P.O. box rental, print/mail
services, programming hours, regulatory compliance fee per CUSIP, reporting (on
request and scheduled), returned checks, Short Term Trader, special mailing,
statements, supplies, tax reporting (federal and state), telecommunications
equipment, telephone (telephone and fax lines), training, transcripts, travel,
TIN certification (W-8 & W-9), vax payroll processing, year-end processing and
other expenses incurred by Boston Financial at the request or with the consent
of Pioneer will be promptly reimbursed by Pioneer.
5
SECTION 6. TERM AND TERMINATION
6.01 Subject to termination as hereinafter provided, this Schedule shall be
effective upon the date first noted above and shall be co-terminus with the
term of the Master Agreement and each new Term of the Master Agreement shall be
a new term of this Schedule.
SECTION 7. INDEMNIFICATION
7.01 In addition to the indemnification provisions set forth in Section 7 of
the Master Agreement, the parties agree that in connection with the services
performed under this Schedule Boston Financial shall not be responsible for,
and Pioneer shall indemnify and hold Boston Financial and with respect to
subparagraph (a) below, also State Street Bank and Trust Company, harmless from
and against, any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability (collectively, "Losses") arising out of or
attributable to:
(a) The negotiation and processing of any checks, wires and ACH
transmissions including without limitation for deposit into, or credit to,
the Fund's demand deposit accounts maintained by Boston Financial provided,
however, that Boston Financial has acted in accordance with mutually agreed
upon Procedures;
(b) The acceptance of: (i) electronic instructions (including e-mail
communications) from Pioneer or its authorized agents; and (ii) facsimile
transaction requests received from individual Shareholders as well as
broker-dealers, TPAs, Pioneer and its authorized agents and the Fund on
behalf of individual Shareholders, and the reliance by Boston Financial on
the broker-dealer, TPA, Pioneer and it authorized agents and the Fund
ensuring that the original source documentation is in good order and
properly retained provided, however, that Boston Financial has acted in
accordance with mutually agreed upon Procedures;
(c) With respect to the Uni-K Plans where Boston Financial processes
Participant trade orders for non-proprietary mutual fund shares ("Outside
Funds") through the Merrill Lynch Connect system ("ML Connect"), Boston
Financial's use of and reliance upon the information provided by vendors and
brokers selected by Pioneer to support the Uni-K Plan product, including
Merrill Lynch in connection with ML Connect, in regards to: (i) access to ML
Connect for trading Outside Fund shares made available to Plan by Pioneer;
and (ii) errors or delays caused by any Outside Funds, which shall include
Boston Financial's use and reliance upon net asset value ("NAV") of an
Outside Fund obtained from a source other than the Outside Fund or ML
Connect if such NAV information is not timely provided or inaccurate or if
the NAV provided by the Outside Fund or ML Connect is timely but inaccurate;
and
(d) With respect to the Plans, any act or omission of Pioneer, a Plan
Sponsor, a Plan fiduciary or a third-party administrator for a Plan that
occurred prior to the effective date of Boston Financial's provision of the
services specified in Exhibit C (Employer Sponsored Retirement Plan
Services) to this Schedule.
7.02 Boston Financial's aggregate liability during any Term of this Schedule
with respect to, arising from or arising in connection with this Schedule, or
from all services provided or omitted to be provided by Boston Financial under
this Schedule, whether in contract, or in tort, or otherwise, is limited to,
and shall not exceed, the aggregate of the amounts actually received from
Pioneer under this Schedule by Boston Financial as fees and charges, but not
including reimbursable expenses, during the nine calendar (9) months
immediately preceding the event for which recovery from Boston Financial is
being sought.
6
7.03 As Of Transactions. (a) Boston Financial shall follow the Securities
and Exchange Commission turnaround standards in processing transactions in the
Funds. Boston Financial shall use its best efforts, within reasonable limits,
to have all such transactions receive the price of the date that the items are
received by Boston Financial, if the items are received in good order, prior to
4:00 p.m. ET (or 12:00 P.M. ET, for Funds priced at that time). Transactions
received by Boston Financial after 4:00 p.m. ET (or 12:00 P.M. ET, for Funds
priced at that time), in good order, shall receive the next day's price. In the
event that a transaction is held and not processed the same day, Boston
Financial shall to the extent possible, estimate such transaction to the Fund
accountants. In the event that a transaction is not estimated, Boston Financial
shall follow the written Procedures agreed upon with Pioneer for monitoring,
tracking, reporting and resolving such transactions as set forth in Exhibit D
to this Schedule. Boston Financial agrees to provide reasonable support for,
and maintenance of, Boston Financial's estimate compiler application.
(b) The foregoing shall apply with respect to the retirement plan
services set forth in Exhibit C to this Schedule, except for the last
sentence and further, with respect to Uni-K Plans where Boston Financial
processes trade orders of Outside Fund shares through ML Connect, Boston
Financial shall follow the "Uni-K Transaction Error Processing Procedures"
set forth in Exhibit D-1 to this Schedule, instead of those set forth in
Exhibit D.
7.04 Uni-K Transaction Errors on ML Connect. (a) Limit on Liability. In
connection with Boston Financial's processing of Fund shares for certain Uni-K
Plans through ML Connect only (and excluding other 401(k) Plans, non-ML Connect
Uni-K Plans, 403(b) Plans and SIMPLE IRA Plans), the parties agree that such
processing shall be subject to the other subsections of this Section 7,
provided, however, that Boston Financial's aggregate liability for net losses
(the result of first netting any gains against such losses) with respect to
transaction related errors ("Uni-K Transaction Errors") caused directly and
solely by Boston Financial shall not exceed ten thousand dollars ($10,000) per
calendar year (the "Boston Financial Uni-K Threshold"). Subsequently, if Boston
Financial pays up to Boston Financial's Uni-K Threshold and there are
additional net losses caused by Boston Financial's Uni-K Transaction Errors,
the Pioneer agrees to pay such additional net losses up to a maximum of ten
thousand dollars ($10,000) per calendar year ("Pioneer Uni-K Treshold"). If
Pioneer pays up to Pioneer's Uni-K Threshold and there are additional net
losses caused by Boston Financial's Uni-K Transaction Errors, then the senior
management representatives of each party agree to discuss, in good faith, the
allocation of financial liability for such net loss.
(b) Procedures. The parties agree to act in accordance with the agreed
upon ML Connect Uni-K Transaction Error Processing Procedures, attached
hereto as Exhibit D-1, for tracking, reporting and paying Uni-K Transaction
Error net losses caused by (i) Boston Financial, subject to the limits set
forth in subparagraph (a) above; (ii) Pioneer, subject to the limits set
forth in (a) above; and (iii), Merrill Lynch and other third parties,
including Participants, Uni-K Plan Sponsors and advisors. Each January 1st,
the parties agree to reset their respective Uni-K Thresholds to $10,000. If
Boston Financial does not provide the Uni-K Plan services that involve ML
Connect for an entire calendar year, then the respective Uni-K Threshold
amounts will be prorated based on the number of months Uni-K Plan services
involving ML Connect were provided, rounded to the closest full month.
SECTION 8. SERVICE LEVELS
8.01 Boston Financial maintains a quality control process designed to
provide a consistent level of quality and timeliness for its transaction
processing. The parties are working in good faith to develop mutually agreed
upon Service Levels for certain services provided by Boston Financial under
this Schedule. Such Service Levels, once finalized, shall be added by amendment
and set forth on Exhibit E to this Schedule. In the event Boston Financial
fails to meet the applicable Service Level for a particular service, Boston
Financial will (i) promptly investigate, perform a root cause analysis on a
failure, identify the problem causing the failure and report to Pioneer;
(ii) correct the failure as soon as practicable; and (iii) advise Pioneer of
the status of the resolution of the failure as agreed upon by the parties. In
the event
7
of Boston Financial's continued failure to meet a Service Level, Pioneer shall
also have the right to initiate the escalation process set forth in Exhibit E
to this Schedule, including but not limited to, contacting those Senior
Officer(s) of Boston Financial designated on the Service Level Schedule, and
commencing meetings of the Senior Officers of Boston Financial and Pioneer to
agree upon and implement appropriate corrective actions to restore compliance
with the Service Levels. The parties agree to work together to resolve any
performance issues in the manner set forth in the Service Levels.
8.02 The parties shall review and discuss the Service Levels and shall make
such changes therein as to which they mutually agree. Boston Financial will
provide periodic reports (on a mutually agreed upon timeframe as set forth in
Exhibit E) to Pioneer with respect to Boston Financial's performance of the
services against the applicable Service Levels.
SECTION 9. ADDITIONAL PROVISIONS
9.01 Disaster Recovery and Business Continuity. Boston Financial shall
maintain at a location other than its normal location appropriate redundant
facilities for operational back-up in the event of a power failure, disaster or
other interruption. Boston Financial shall back up the Funds' files and data
maintained by Boston Financial and shall store the back-up in a secure manner
at a location other than its normal location. Boston Financial will maintain a
comprehensive business continuity plan in accordance with Section 12.02 of the
Master Agreement.
9.02 Compliance Program. Boston Financial maintains and will continue to
maintain a comprehensive compliance program reasonably designed to prevent
violations of the federal securities laws pursuant to Rule 38a-1 under the 1940
Act. Pursuant to its compliance program, Boston Financial will provide periodic
measurement reports to Pioneer. Upon request of Pioneer, Boston Financial will
provide to Pioneer in connection with any periodic annual or semi-annual
shareholder report filed by the Fund or, in the absence of the filing of such
reports, on quarterly basis, a sub-certification pursuant to the Sarbanes-Oxley
Act of 2002 with respect to Boston Financial's performance of the services set
forth in this Schedule and its internal controls related thereto. Boston
Financial shall use best efforts to notify Pioneer of substantive changes to
the compliance program ninety (90) days in advance of making such changes,
provided however, that Pioneer agrees that such notice period may be less than
ninety (90) days in the event that a law, regulation, requirement or industry
recommendation affecting the compliance program necessitates a change in a
shorter time frame. In addition, on a quarterly basis, Boston Financial will
provide to Pioneer a certification in connection with Rule 38a-1 under the 1940
Act. Boston Financial reserves the right to amend and update its compliance
program and the measurement tools and certifications provided thereunder from
time to time in order to address changing regulatory and industry developments.
8
IN WITNESS WHEREOF, the parties have caused this Schedule to be executed by
their respective duly authorized officers, to be effective as of the day and
year first above written.
BOSTON FINANCIAL DATA SERVICES, INC.
By: /s/ Richard J. Johnson
------------------------------
Title: Managing Director
PIONEER INVESTMENT MANAGEMENT
SERVICES, INC.
By: /s/ Tracy Connelly
------------------------------
Title: Senior Vice President
9
EXHIBIT A to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AML DELEGATION
1. Delegation.
1.1 In order to assist Pioneer with the Funds' AML responsibilities under
applicable AML laws, Boston Financial offers certain risk-based AML
Procedures that are reasonably designed to: (i) promote the detection and
reporting of potential money laundering activities; and (ii) assist in the
verification of persons opening accounts with the Funds. Pioneer has had an
opportunity to review the AML Procedures with Boston Financial and desires
to implement the AML Procedures as part of the Funds' overall AML program
(the "AML Program").
1.2 Accordingly, subject to the terms and conditions set forth in this
Schedule, Pioneer hereby instructs and directs Boston Financial to implement
the AML Procedures as set forth in Section 4 below on Pioneer and the Funds'
behalf and delegates to Boston Financial the day-to-day operation of the AML
Procedures. The AML Procedures set forth in Section 4 may be amended, from
time to time, by mutual agreement of Pioneer and Boston Financial upon the
execution by such parties of a revised Schedule 1.2(f) bearing a later date
than the date hereof.
1.3 Boston Financial agrees to perform such AML Procedures, with respect to
the ownership of Shares in the Funds for which Boston Financial maintains
the applicable shareholder information, subject to and in accordance with
the terms and conditions of this Schedule.
2. Consent to Examination. In connection with the performance by Boston
Financial of the AML Procedures, Boston Financial understands and
acknowledges that Pioneer remains responsible for assuring compliance with
the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001 ("USA PATRIOT Act")
and that the records that Boston Financial maintains for Pioneer and the
Funds relating to the AML Program may be subject, from time to time, to
examination and/or inspection by federal regulators in order that the
regulators may evaluate such compliance. Pioneer hereby consents to such
examination and/or inspection and agrees to cooperate with such federal
examiners in connection with their review. For purposes of such examination
and/or inspection, Boston Financial will use its best efforts to make
available, during normal business hours and on reasonable notice all
required records and information for review by such examiners, Pioneer or
the Funds.
3. Limitation on Delegation. Pioneer acknowledges and agrees that in accepting
the delegation hereunder, Boston Financial is agreeing to perform only the
AML Procedures, as may be amended from time to time, and is not undertaking
and shall not be responsible for any other aspect of the Funds' AML Program
or for the overall compliance by Pioneer or the Funds with the USA PATRIOT
Act or for any other matters that have not been delegated hereunder.
Additionally, the parties acknowledge and agree that Boston Financial shall
only be responsible for performing the AML Procedures with respect to the
ownership of, and transactions in, Shares in the Funds for which Boston
Financial maintains the applicable Shareholder information for Pioneer.
10
EXHIBIT A to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AML DELEGATION
4. AML Procedures
4.1 Consistent with the services provided by Boston Financial and with respect
to the ownership of Shares in the Funds for which Pioneer maintains the
applicable Shareholder information for Pioneer, Boston Financial shall:
(a) On a daily basis, submit all new customer account registrations and
registration changes against the Office of Foreign Assets Control ("OFAC")
database, the Politically Exposed Persons ("PEP") database, and such other
lists or databases as may be required from time to time by applicable
regulatory authorities;
(b) Submit all account registrations through the OFAC database, the PEP
database, and such other lists or databases as may be required from time
to time by applicable regulatory authorities;
(c) On a daily basis, submit special payee information from checks,
outgoing wires and systematic withdrawal files through the OFAC database;
(d) Review certain types of redemption transactions that occur within
thirty (30) days of an account establishment, registration change, or
banking information change (e.g. redemption by wire within 30 days of
banking information change; rapid depletion of account balance after
establishment; and redemption by check within 30 days of address change);
(e) Review wires sent pursuant to banking instructions other than those on
file with Boston Financial;
(f) Review accounts with small balances followed by large purchases;
(g) Review accounts with frequent activity within a specified date range
followed by a large redemption;
(h) Review purchase and redemption activity by check that meets or exceeds
$100,000 threshold on any given day;
(i) Compare all new customer account registrations and registration
changes through Boston Financial's known offenders database and notify
Pioneer of any match;
(j) Determine when a suspicious activity report ("SAR") should be filed as
required by regulations applicable to mutual funds; prepare the SAR and
provide a copy to Pioneer for review and approval; file the SAR; provide
Pioneer with a copy of the filed SAR within a reasonable time after
filing; and notify Pioneer if any further communication is received from
the U.S. Department of the Treasury or other law enforcement agencies
regarding such filing;
11
EXHIBIT A to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AML DELEGATION
(k) Compare account information to any FinCEN request received by Pioneer
or the Funds and provided to Boston Financial. Provide Pioneer with the
necessary information for the Funds to respond to such request within
required time frame;
(l)(i) Take reasonable steps to verify the identity of any person seeking
to become a new customer of the Funds and notify Pioneer in the event such
person cannot be verified, (ii) Maintain records of the information used
to verify the person's identity, as required, and (iii) Determine whether
the person appears on any lists of known or suspected terrorists or
terrorist organizations provided to the Funds by any government agency;
(m) Conduct due diligence and if required, enhanced due diligence in
accordance with 31 C.F.R. 103.176(b) for new and existing correspondent
accounts for foreign financial institutions (as defined in 31 C.F.R.
103.175). Boston Financial will perform an assessment of the money
laundering risk presented by the account based on a consideration of
relevant factors in accordance with applicable law and information
provided by the foreign financial institution in a financial institution
questionnaire. If an account is determined to have a medium or above
risk-ranking, Boston Financial will monitor the account on a monthly basis
for unusual activity. In the situation where due diligence cannot be
completed with respect to an account, Boston Financial will contact
Pioneer's AML Officer for further instruction.
(n) Upon the request by Pioneer, conduct due diligence to determine if the
Funds are involved with any foreign jurisdiction, institution, class of
transactions and a type of account designated, from time to time, by the
U.S. Department of Justice in order to identify and take certain "special
measures" against such entities as required under Section 311 of the USA
PATRIOT Act (31 C.F.R. 103.193).
(o) Create and retain records required under 31 CFR 103.33 in connection
with the transmittals of amounts equal to or in excess of $3,000, and
transmit such information on the transactions to the receiving financial
institutions.
4.2 In the event that Boston Financial detects activity as a result of the
foregoing procedures, which necessitates the filing by Boston Financial of
a SAR or other similar report or notice to OFAC, then Boston Financial
shall also immediately notify Pioneer, unless prohibited by applicable law.
12
EXHIBIT B to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
GOVERNMENT ALLOTMENT
1. Government Allotment Program. Under the US Government Allotment Program,
members, primarily US government employees, may direct a specified portion
of their paychecks to be sent to a demand deposit account at a bank with
instructions to forward the monies to specified mutual funds, including
Pioneer. Pioneer desires to appoint Boston Financial to act as its
Government Allotment Agent and to provide the services described below in
connection with the monies and instructions transmitted by members of the
US Government Allotment Program. Boston Financial desires to accept such
appointment.
2. Duties of Boston Financial as Allotment Agent
Boston Financial shall perform the following services:
2.1 Money Movement. Boston Financial shall perform money movement services as
follows:
(a) Boston Financial will receive Direct Deposit forms from the
government allotment program members (the "Members") and will
establish demand deposit accounts maintained at the Bank for the
Members based on the information provided in the Direct Deposit forms;
(b) receive for acceptance instructions from the Bank for the deposit and
withdrawal of monies for the purchase of Shares;
(c) within five (5) business days of receipt by Boston Financial of
allotment monies in the demand deposit account at the Bank, Boston
Financial will direct such allotment monies to Pioneer, if such
monies and the instructions accompanying such monies reconcile with
each other and the account information in Boston Financial's files.
2.2 Reconciliation/Record-keeping. Boston Financial will perform
reconciliation/record-keeping services as follows:
(a) reconcile data concerning the deposit of monies, account information
and instructions;
(b) forward monies to Pioneer for investment pursuant to the instructions
from the Members;
(c) maintain records of allotment instructions and direct deposit forms
submitted to it for processing for a period of no less than seven
(7) years;
(d) maintain records of allotment money transfers for a period of no less
than seven (7) years; and
(e) maintain records of the account for and advise Pioneer and the Bank
as to the foregoing.
13
EXHIBIT C to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
EMPLOYER SPONSORED RETIREMENT PLAN SERVICES
The services listed in this Exhibit C shall pertain to profit sharing/401(k)
Plans, Uni-K Plans, 403(b) Plans and SIMPLE IRA Plans, unless specified
otherwise. All references to "Business Days" shall mean each day the New York
Stock Exchange is open for business.
I. Record-keeping and Transaction Processing.
1. Plan Accounts / Data Maintenance. With respect to the Plans, upon receipt of
participant and beneficiary information (collectively, "Participant") and
demographic data from the employer sponsoring a Plan ("Plan Sponsor"), Boston
Financial shall enter such data into its TRAC recordkeeping system for the Plan
and provide for the proper operation and maintenance of the records of the Plan.
2. Participant Accounts. Upon receipt of all necessary Participant Data,
demographic and other Participant enrollment data from Plan Sponsors or
Participants, Boston Financial shall provide recordkeeping for each account as
set forth under the Plan ("Account"). Boston Financial shall maintain
individual Participant Accounts on its records on the DST TRAC System in the
name of the trustee or custodian of the Plan, respectively, for the benefit of
the individual Plan Participants. The Accounts of Participants will be credited
with shares of investment companies registered under the Investment Company Act
of 1940, amended from time to time, and/or such other investments as permitted
by Pioneer's consent ("Shares"). Boston Financial will, pursuant to
instructions from Plan Sponsors or Participants, purchase the instructed number
of Shares and hold such Shares in the appropriate Participant Account.
3. Contributions. Boston Financial shall accept contributions sent to it from
Plan Sponsors. Such contribution information must include: (a) a check for the
total amount of the contribution; and (b) a payroll roster in a medium and
format acceptable to Boston Financial (the parties agreed that hard copy is an
acceptable medium but in the future the parties may agree upon an electronic
medium). If the contributions and the Account Allocation Information (defined
below) do not reconcile, then Boston Financial shall notify the Plan Sponsor
and process pursuant to paragraph 8 below (Transactions "Not in Good Order").
If the contributions and the Account Allocation Information do reconcile, then
Boston Financial shall promptly allocate such contribution to Participants'
Accounts in accordance with the Account Allocation Information, allocate such
contribution to the investment options available under the Plan ("Investment
Options") in accordance with the Investment Allocation Information (as defined
below) and transfer the contributions to the various Plan Investment Options in
accordance with the Investment Allocation Information.
a) "Account Allocation Information" is the information supplied by the Plan
Sponsor regarding the various contribution sources and amounts under the
Plan; and
b) "Investment Allocation Information" is the Investment Option percentages
or amounts that the Participant or the Plan Sponsor has directed for
investment in an Investment Option from time to time.
14
EXHIBIT C to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
EMPLOYER SPONSORED RETIREMENT PLAN SERVICES
4. Crediting Participant's Accounts. After receipt of monies paid with respect
to any sale, Boston Financial will credit such monies to the appropriate
Account of selling Participants in accordance with its procedures.
5. Earnings and Losses. On each Business Day, Boston Financial shall allocate
earnings and losses as reported to Boston Financial for each investment option
to each Participant's Account.
6. Receipt of Dividends. Boston Financial, on behalf of the Plans, will receive
payments for dividends and distributions declared by issues of Shares and
credit each to the appropriate Participant Accounts.
7 Adjustment Processing. The Participant Accounts will be adjusted with Shares,
or Shares shall be reversed and re-entered, as instructed by the Plan Sponsor
and as permitted by Pioneer. The foregoing shall not apply with respect to
adjustments for Uni-K Plan Accounts where Outside Fund shares are processed
through ML Connect as any such adjustments are subject to the procedures set
forth on Schedule D-1 (ML Connect Uni-K Transaction Error Processing
Procedures).
8. Transactions "Not in Good Order" (NIGOs). For Plan Sponsor or Participant
transaction requests (including contributions received via payroll files) that
are not in good order when received by Boston Financial, Boston Financial shall
notify the Plan Sponsor or Participant, as the case may be, by telephone on the
day of receipt of such information in order to resolve any outstanding issues
relating to the transaction. If the outstanding issues relating to the
transaction are not, for whatever reason, resolved by Boston Financial within
five (5) Business Days then Boston Financial shall reject the transaction and
send a notice to the Plan Sponsor or Participant, as the case may be,
indicating the date of rejection and why.
9. Distribution Processing. Boston Financial shall process distributions to
Participants in accordance with the direction of the Plan Sponsor or
Participants. Boston Financial shall withhold and deposit federal and state
income taxes as may be required by law and provide such information to Pioneer
so that Pioneer can prepare Internal Revenue Service Form 1099-R or such other
forms as may be required under the Internal Revenue Code for the reporting of
distributions, including deemed loan distributions in connection with paragraph
10 below (Loan Processing).
10. Loan Processing. If so directed by a Plan Sponsor, Boston Financial will
receive for acceptance written loan instructions and direction via facsimile,
or other mutually agreed upon methods, from Plan Sponsors or Participants. If
directed by Pioneer and agreed to by Boston Financial, Boston Financial shall
provide loan modeling via the Plan Web functionality and generate loan
documentation and loan proceeds as directed by the Plan Sponsor or Participant.
15
EXHIBIT C to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
EMPLOYER SPONSORED RETIREMENT PLAN SERVICES
11. Tax Withholding. Boston Financial shall withhold taxes on U.S. resident and
non-resident alien Participant accounts if applicable, prepare and file with
the U.S. Treasury reports with respect to taxes withheld.
12. Plan Sponsor Instructions. Boston Financial will receive for acceptance
instructions (only via hardcopy written form) from Plan Sponsors or
Participants for: (i) distributions from Participants' Accounts as authorized
by the Plan Sponsors or Participants and (ii) loans as authorized by the Plan
Sponsor or Participants. Notwithstanding the above, Plan Sponsors will be
solely responsible for reimbursing impacted Participants to the extent a
transaction error was caused by a Plan Sponsor or a Participant instruction to
Boston Financial and such error caused an investment related loss to a
Participant.
13. ML Connect Trading Services for Certain Uni-K Plans. Subject to 7 and
Exhibit D-1 of the Schedule, Boston Financial shall, on behalf of Pioneer,
(a) Processing. (i) accept and effectuate the purchase, exchange and redemption
of Outside Fund shares through ML Connect in accordance with instructions
received from the Participants ("Orders"); and (ii) maintain
Participant(s)' accounts on TRAC through ML Connect for certain of the
Uni-K Plans as identified by Pioneer. In the event that ML Connect is not
functioning on a given Business Day, Boston Financial will transmit the net
purchase or redemption instructions to the Outside Fund via facsimile
transmission no later than 11:00 a.m. E.T. on that Business Day. Net
purchase and net redemption transaction Orders shall be settled in
accordance with ML Connect rules and procedures, and the settlement of
transactions not placed through ML Connect will be effected on the next
Business Day in the manner as agreed upon between Boston Financial and the
respective Outside Fund. In addition, Pioneer agrees that to the extent
NAVs provided through ML Connect are not timely available or delayed for
any reason then Boston Financial may use and rely upon a different source
(e.g., Bloomberg) to obtain such NAVs so that the processing of Orders is
not impeded or disrupted.
(b) Rule 22c-2 Compliance. With respect to compliance with Rule 22c-2 under the
Investment Company Act of 1940 ("Rule 22c-2"), Pioneer agrees that, to the
extent applicable, it is solely responsible for compliance with Rule 22c-2
regarding the Outside Fund shares processed through ML Connect and that for
any Rule 22c-2 related requests from an Outside Fund (e.g., to share data,
apply redemption fees or block transactions) Pioneer shall direct Boston
Financial in writing and Boston Financial shall act upon such written
requests as directed.
(c) Pre-Transfer Reconciliation. Pioneer shall reconcile all position file
discrepancies and/or Participant Account discrepancies between TRAC and ML
Connect prior to transferring the Plans to Boston Financial, provided
however, to the extent there are any discrepancies that occur during the
last business day before the day of the transfer to Boston Financial then
Boston Financial shall attempt to resolve such discrepancies but in no
event shall Boston Financial be responsible or liable for making any
payment to any party in connection with resolving such discrepancies.
Pioneer agrees to compensate Boston Financial for resolving pre-transfer
discrepancies based upon an agreed hourly rate.
16
EXHIBIT C to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
EMPLOYER SPONSORED RETIREMENT PLAN SERVICES
(d) Outside Fund Prices and Dividends. Each Business Day, for the Outside Funds
processed by Boston Financial through ML Connect, Boston Financial will
research and retrieve missing: (i) prices for the equity Outside Funds and
(ii) daily dividend rates for equity and non-equity Outside Funds. In
addition, Boston Financial will process dividends and capital gains, as
applicable, for each of the Outside Funds.
14. Anti-Money Laundering ("AML) Delegated Duties. With respect to Participant
accounts associated with: (a) non-ERISA 403(b) Plans, and (b) SIMPLE IRA Plans,
Boston Financial shall carry out the AML Delegated Duties set forth in Exhibit
A to this Schedule.
II. Transaction Processing Resolution and RPO Mail
1. Transaction Processing Resolution. Boston Financial shall respond to inbound
and outbound transaction processing related telephone calls from Plan Sponsors,
Participants and Advisors in a timely manner.
2. RPO Mail Processing. Boston Financial shall handle return post office mail
for Plan Sponsors and Participants in a timely manner.
III. Internet Services
If requested by Pioneer, Boston Financial will make available certain DST
System, Inc. web-based Internet services with respect to Plan Sponsors,
Participants and Advisors. Such services will be subject to a separate
agreement with DST Systems, Inc. and additional fees as agreed upon by the
parties.
IV. Services Not Provided
For greater clarity, the parties have agreed that Boston Financial shall not
provide the following services as part of this Exhibit.
. Preparing or providing Plan documents to Plan Sponsors;
. Amending Plan documents;
. Answering Participant initiated inquires via telephone or in a call
center environment;
. Responding to Plan Sponsor, Participant or Advisor correspondence;
. Performing non-discrimination testing or compliance related services;
. Preparing Form 5500s;
. Mailing annual notices to Plan Sponsors or Participants; and
. Billing Plan Sponsors for Plan related costs or expenses
. Arranging for the Plan custodial or trustee services
17
EXHIBIT D to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AS-OF PROCEDURES
As a provider of record keeping services to Pioneer for the Funds, Boston
Financial follows the Securities and Exchange Commission guidelines in its
transaction processing.
Boston Financial shall make every effort to ensure that the Funds' transactions
receive the price of the Business Day the items are received at Boston
Financial if the items are received in good order, prior to 4:00 PM ET (or
12:00 P.M. ET, for Funds priced at that time). Transactions received by Boston
Financial in good order after 4:00 PM ET (or 12:00 P.M. ET, for Funds priced at
that time) will receive the next Business Day's price. In the event that
transactions in the Funds are held and not processed the same Business Day
received, Boston Financial shall estimate, whenever possible, all such
transactions to the Fund accounting group of Pioneer Investment Management,
Inc., a transfer agent affiliate (the "Fund Accountants").
In the event that a transaction in a Fund is not estimated, Boston Financial
shall follow the procedures set forth below for monitoring and tracking such
as-of transactions.
On a daily basis Boston Financial shall:
I. Identification. Utilize the DST system to identify each Business Day all
share transactions in the Funds which involve purchase and redemption
orders that are processed at a time other than the time of the computation
of a Fund's net asset value per share ("NAV") next computed after the
receipt of such orders ("As-of Transactions).
II. Preparation and Authorization of Forms. Prepare a Delay-in-Processing Form
for every Fund As of Transaction that is not estimated that explains the
reason for the delay in processing this transaction. Each
Delay-in-Processing Form shall be reviewed, approved, and signed by the
appropriate level of Boston Financial's management prior to processing.
The following are the authorization levels for processing of As of
Transactions at Boston Financial:
Up to and including $50,000 Senior Specialist
Up to and including $150,000 Team Coordinator/Manager
Up to and including $500,000 Group Manager
Over $500,000 Division Manager/Officer
A set of responsibility codes will be established by Pioneer and Boston
Financial for identifying the party responsible for each As-of
Transaction. Boston Financial will provide a report identifying such As-of
Transactions and the party responsible to Pioneer if a Fund is impacted.
18
EXHIBIT D to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AS-OF PROCEDURES
III. Monitoring Threshold Limits. The dollar amount equivalent to one-half of
one cent per share shall be calculated systematically and this amount will
represent the threshold limit. If the net effect of the As of Transactions
that are determined to be caused by Boston Financial is negative and
exceeds the threshold limit, then Boston Financial shall promptly contact
Pioneer and the Funds Accountants. Boston Financial will work with Pioneer
and the Fund Accountants to determine what, if any, impact the threshold
break has on the calculation of a Fund's NAV and what, if any, further
action is required. These further actions may include but are not limited
to, having the Fund re-price the affected day(s) transactions, Boston
Financial re-processing, at its expense, all affected transactions in the
Fund that took place during the period, or a payment of the amount needed
to make the Fund whole. Consistent with the terms of these procedures, if
an error is caused by Boston Financial which results in a loss to the Fund
greater than $0.01 per share during a calendar quarter, which loss cannot
be mitigated, then Boston Financial will reimburse the Fund.
In the event an "as-of" loss is caused solely by Boston Financial, which
does not break the $0.01 per share threshold but which is deemed otherwise
significant by the parties under the criteria set forth below, then
Pioneer and Boston Financial agree to discuss in good faith the root
causes for such loss, appropriate corrective measures to prevent
reoccurrence, if applicable, and the appropriate resolution of such
transaction, including but not limited to, Boston Financial potentially
reimbursing the respective Fund for an amount agreed upon by the parties.
In the event an "as-of" gain or loss of a Fund class is determined to
result from an "as of" transaction between classes of the same Fund as the
result of the same event, there will be a matching gain within the same
Fund. Boston Financial will advise Pioneer and the Fund Accountants to
transfer the gain to the class with the matching loss, after obtaining
appropriate approvals from Pioneer and/or the Fund on the Business Day on
which the transaction was recorded.
Significant As Of Losses.
For the purposes of this As Of Transaction Policy and Procedure, an
"as-of" loss on a single transaction caused solely by Boston Financial
shall be deemed significant if it meets one of the following criteria:
For a Fund over $150 million, the loss equals or exceeds 0.015% of the
Fund's asset value.
For a Fund between $50 million and $150 million, the loss equals or
exceeds 0.05% of the Fund's asset value.
For a Fund between $5 million and $50 million, the loss equals or
exceeds 0.1% of the Fund's asset value.
For a Fund up to $5 million in value, the loss equals or exceeds one
($0.1) full cent per share times the number of shares outstanding for
such Fund.
19
EXHIBIT D to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
AS-OF PROCEDURES
Reviewing Reason Codes. Review the month-to-date error report for
transactions that may have invalid reason codes. If an invalid reason code
is identified, the gain/loss amount shall be moved to reflect the reason
code. Documentation will be maintained for those transactions requiring such
changes.
Monthly Reports:
On a monthly basis Boston Financial shall:
. Review the monthly detail report and accountability reports and provide
copies of those reports to Pioneer.
. Prepare a Compliance as-of monthly recap report.
Quarterly Adjustments:
On a Fund's calendar quarter end, Pioneer shall:
. Zero out the previous calendar quarter's net gains or loss on the daily
accountability month-to-date threshold section of the daily report by
using the current position figure.
20
EXHIBIT D-1 to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
ML CONNECT UNI-K TRANSACTION ERROR PROCESSING PROCEDURES
Subject to the provisions of Section 7 of this Schedule I and pursuant to
paragraph 13 of Exhibit C (ML Connect Trading Services for Certain Uni-K Plans)
of this Schedule, Boston Financial shall process Fund share orders as
instructed by Uni-K Plan Sponsors and Participants on a current basis through
ML Connect. Boston Financial will track all Fund share gains and losses related
to Uni-K Transaction Errors on ML Connect as described below. For the purpose
of this Exhibit D-1, all references to "Uni-K Transaction Errors" shall mean
those that occur with respect to ML Connect only.
I. Daily Tracking and Reporting of Gains and Losses.
Boston Financial will create a spreadsheet from PowerSelect with the following
information: Plan, Participant, Fund Name, Transaction Reason Code and
Description, Responsibility Code, Units, Dollar Amount, Current Price,
Gain/Loss. Boston Financial will receive the PowerSelect spreadsheet daily. An
assigned associate will enter the gain and loss and Fractional/Negative share
Cleanup, Manual Trade gain/loss etc on the daily settlement sheet. Boston
Financial will also review all gain and loss and assign a responsibility code.
The responsibility codes are: BF - Boston Financial, ML - Merrill Lynch, PIM -
Pioneer, OTH - Other. Boston Financial will also review Fractional/Negative
Share Cleanup and any other gain or loss from manual trades and assign a
responsibility code to these items as well. Once the daily settlement sheet is
balanced Boston Financial will email the spreadsheet to its Control Department.
Boston Financial's Control Department will reconcile the activity in the DDA
and create a difference for the total gain/loss, fractional/negative share
cleanup, manual trade gain loss on the EB Supersheet item for the day's
activity. Prior to creating the difference, Boston Financial's Control
Department will tie the amounts to the spreadsheet. Boston Financial's Control
Department will then enter the net gain or loss amounts, by responsibility code
onto the tracking spreadsheet. Boston Financial's Control Department will
confirm that the total gain or loss for the day equals both the created item in
the DDA and the total on the Settlement sheet. Each day Boston Financial's
Control Department will create a new item for that day's gain or loss and will
group the items for the calendar month. If there is a BF, ML, PIM or OTH
responsibility code for the gain or loss, Boston Financial's Control Department
will split those items out into individual items. On a daily basis, Boston
Financial will email Pioneer the gain/loss information for that day.
II. Month End and Annual Reporting; Settlement
A. Generally. Boston Financial will accrue the daily gain/loss amounts, by
responsibility code, for the calendar month. By the third business day of the
following month Boston Financial will send a report to Pioneer via email
notifying it of gains and losses with respect to the Funds or Plan Participant
accounts for the month and any settlement compensation due to or from Boston
Financial. Pioneer will review and approve the report and requests for
settlement compensation within 3 business days. Once approval is received,
Boston Financial's Control Department will move money: (i) from Pioneer write
off account for a net loss or (ii) to Pioneer write off account for a gain,
within one business day of receiving written approval from Pioneer's designee.
Except as stated otherwise in this Exhibit D-1, once Boston Financial loss
amount exceeds the Uni-K Threshold Boston Financial will request reimbursement
from Pioneer on a weekly basis and Pioneer agrees to pay such reimbursement.
21
EXHIBIT D-1 to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
ML CONNECT UNI-K TRANSACTION ERROR PROCESSING PROCEDURES
B. Detailed Responsibility Code Tracking and Reporting. As part of the
reporting and settlement process described above, Boston Financial shall
provide Pioneer with detailed information regarding gains and losses due to
errors caused by Boston Financial, Merrill Lynch, Pioneer and other parties.
If a loss results from a single Uni-K Transaction Error caused directly and
solely by Boston Financial and such loss exceeds five thousand dollars
($5,000), then Boston Financial and Pioneer agree to discuss in good faith the
root cause of such loss, the appropriate corrective measures to prevent
reoccurrence, if applicable, and the appropriate resolution of such loss,
including but not limited to, Boston Financial potentially reimbursing the
affected Fund(s) or Plan Participant accounts (but not both) for an amount up
to a maximum limit of one hundred thousand dollars ($100,000). The foregoing
shall apply regardless of whether or not Boston Financial's Uni-K Threshold for
a calendar year (and described in Section 7.04 of the Schedule) has been
exceeded and outside of the monthly settlement process; provided however, that
Boston Financial will compute such reimbursement by netting the Fund or Plan
Participant losses against any gains in that month.
With respect to Merrill Lynch errors, the parties agree that Pioneer, and not
Boston Financial, shall cover any losses caused by Merrill Lynch errors. To the
extent required, Pioneer agrees to compensate Boston Financial for such Merrill
Lynch errors through the monthly reporting settlement process described in
Section I. above.
The parties agree that these procedures are subject to change as mutually
agreed upon.
22
EXHIBIT E to SCHEDULE I
SUB-TRANSFER AGENCY SERVICES
SERVICE LEVEL STANDARDS
[To be added by the Parties by amendment.]
23
SCHEDULE II
TA2000 Remote Services
SCHEDULE NUMBER II TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. AND
BOSTON FINANCIAL DATA SERVICES, INC. (the "Master Agreement")
TA2000 Remote Services
THIS SCHEDULE NUMBER II TO THE MASTER AGREEMENT is made effective as of this
1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST SYSTEMS, INC. ("DST"), and is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, DST has developed a computerized data processing recordkeeping
system for securityholder accounting (the "TA2000(R) System") installed on DST
computer hardware located in Kansas City, Missouri and using DST software (the
"DST Facility" or "DST Facilities") to provide and support remote terminal and
data transmission access to the TA2000 System and DST Facilities for the
maintenance of securityholder records, processing of information and the
generation of output with respect thereto; and
WHEREAS, Pioneer has agreed to provide certain (i) registered investment
companies, (ii) investment companies exempt from registration, (iii) trusts,
(iv) accounts established in connection with Pioneer-sponsored Internal Revenue
Service prototype retirement plan vehicles (such as the Pioneer UNI-K/SM/ Plan)
each of which may hold assets in non-Pioneer advised funds and (v) other
similar collective entities set forth on Exhibit A to the Master Agreement, as
amended from time to time (the "Funds") with certain securityholder
recordkeeping services; and
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, and in connection therewith
Pioneer desires to obtain the right to use the TA2000 System and DST Facilities
to service the Funds; and
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pioneer and DST hereby agree
as follows:
SECTION 1. INCORPORATION OF THE MASTER AGREEMENT
The terms and conditions of the Master Agreement are hereby
incorporated in this Schedule as if fully set forth herein except as modified
in this Schedule. All capitalized terms used in this Schedule but not defined
herein shall have the meaning ascribed to them in the Master Agreement or, if
not defined in the Master Agreement, the meaning ascribed to them in any other
Schedule. DST and Pioneer agree that for purposes of this Schedule, DST shall
be deemed to have executed the Master Agreement in place of Boston Financial
and to have accepted the terms thereof, and Pioneer further agrees that DST and
not Boston Financial shall be solely responsible under this Schedule.
SECTION 2. USE OF THE TA2000 SYSTEM AND DST FACILITIES
2.01 Subject to the provisions of the Master Agreement and this Schedule,
Pioneer hereby agrees to use and/or employ the TA2000 System and DST Facilities
to maintain certain securityholder records on behalf of all of certain of the
Funds (which at a minimum shall include all of the U.S. registered investment
companies which are advised, sponsored or distributed by Pioneer or a Pioneer
Affiliate) it services and to generate output with respect to the
securityholders of such Funds; and, subject to the provisions of the Master
Agreement and this Schedule, DST hereby agrees to provide in accordance with
the terms and conditions of this Schedule Pioneer the use of such TA2000 System
and DST Facilities to maintain records of information
1
and data transmitted to DST by Pioneer with respect to such securityholder
records and to deliver or transmit to Pioneer such output as is generated by
the use of such TA2000 System and DST Facilities.
2.02 Pioneer, with computer equipment and through transmission facilities
installed on any of its premises, shall transmit to the DST Facilities in
Kansas City, Missouri, such information and data that Pioneer, at its sole
discretion, determines is to be input and, including at a minimum, that which
is required to maintain the records and generate the output required hereunder
with respect to the Funds serviced by Pioneer or its designees, or such other
arrangements as may mutually be agreed in writing by the parties.
2.03 DST will make on-line availability to the TA2000 System available to
Pioneer during the times as set forth on the Service Level Arrangement which
shall be added by amendment once finalized by the parties and attached hereto
as Exhibit A to this Schedule, which is incorporated into and made a part of
this Schedule except for: (i) such holidays as are observed by the New York
Stock Exchange, (ii) a failure, inadequacy in the performance of or
unavailability of communication lines or communication facilities (including
the equipment or computer being used to access the communication lines) outside
of the DST Facilities; (iii) a failure, inadequacy in the performance or
unavailability of the Internet; (iv) a cause set forth in Section 7.06 (Force
Majeure) of the Master Agreement; (v) a disaster which requires DST to process
at DST's disaster recovery facility or to implement its Business Contingency
Plan; (vi) a failure to perform properly or timely by a third party whose
actions are beyond DST's reasonable control, e.g., and without limitation,
Pioneer must have successfully completed its processing and allowed DST access
to the on-lines by no later than 9:00 p.m. (CT) before DST can commence nightly
processing; (vii) a pre-planned extraordinary event (e.g., a hardware or
software installation); and (viii) failures less than one (1) hour in duration
on the first calendar day of any calendar quarter. Also, to the extent the
timely availability of any DST System or service depends on equipment under
Pioneer's control (e.g., and without limitation, Pioneer's network, file
servers and workstations), Pioneer is responsible for the proper functioning of
such equipment and that such equipment properly utilizes DST's software, data
and Services. DST shall have no responsibility or liability for the
unavailability of a system or Service where such unavailability was caused or
contributed to by inadequacies of Pioneer's equipment. Access to the System at
other times will be by mutual agreement.
2.04 Pioneer shall be responsible for and pay all applicable costs of all
communication circuits necessary to enable Pioneer to utilize the TA2000 System
and interface with the DST Facilities. However, if, at Pioneer's election, DST
obtains communications circuits, on Pioneer's behalf, DST shall bill the costs
of the communications circuits and related network costs and expenses,
including DST's monitoring and problem resolution services described below, to
Pioneer as a reimbursable expense. In such event, DST shall utilize
communications network control and monitoring capabilities to assist Pioneer
with the identification and resolution of any problems which appear to be
related to the communications circuits obtained by DST on Pioneer's behalf, but
DST is not responsible and shall have no liability for inadequacies or failures
to perform related to or arising out of such communications circuits prior to
their entry into the DST Facilities. In the event Pioneer elects to engage a
third party directly to provide the communications circuits, Pioneer shall be
responsible for (i) providing connectivity between Pioneer's locations and the
DST Facilities necessary for Pioneer to access the TA2000 System; and (ii) for
the provision of communications network control and monitoring capabilities to
identify and to resolve any problems which occur prior to the entry of such
circuits to DST. DST shall, as reasonably possible, assist Pioneer with the
identification and resolution of problems with the communication lines to the
extent DST has personnel available and free to do so or as otherwise agreed by
the parties.
SECTION 3. TERM AND TERMINATION
3.01 Subject to termination as hereinafter provided, this Schedule shall be
effective upon the date first noted above and shall be co-terminus with the
term of the Master Agreement and each new Term of the Master Agreement shall be
a new term of this Schedule.
60
SECTION 4. FEES AND EXPENSES
4.01 Pioneer shall pay to Boston Financial the fees and charges for this
Schedule in the amounts as set out in Exhibit B of the Master Agreement, as
amended from time to time. Exhibit B is annexed hereto and made a part hereof.
The monthly fee for an open account shall be charged in the month during which
an account is opened through the month in which such account is closed. The
monthly fee for a closed account shall be charged in the month following the
month during which such account is closed and shall cease to be charged in the
month following the Purge Date, as hereinafter defined in Section 7.02.
4.02 Pioneer shall reimburse Boston Financial for all reimbursable expenses
described on Exhibit B to the Master Agreement. Pioneer shall also reimburse
Boston Financial for all reasonable reimbursable expenses incurred by DST at
the request of Pioneer which are not covered under Exhibit B of the Master
Agreement.
4.03 Pioneer shall add new funds to the TA2000 System upon reasonable prior
written or e mail notice, as soon as reasonably practicable but in no event
less three (3) days, to DST provided that: (i) the requirements of the new
funds are generally consistent with the capabilities of the TA2000 System as
then constituted/3/, and (ii) a Pioneer Affiliate (as defined below) shall act
as the primary registered investment adviser, sponsor or distributor for such
Fund or (iii) such fund is established in connection with Pioneer-sponsored
Internal Revenue Service prototype retirement plan vehicles (such as the
Pioneer UNI-K/SM/ Plan) which may hold assets in non-Pioneer advised funds.
Rates or charges for additional Funds shall be as set forth in Exhibit B to the
Master Agreement for the remainder of the contract term except as such Funds
use functions, features or characteristics for which DST has imposed an
additional charge as part of its standard pricing schedule. In the latter
event, rates and charges shall be in accordance with DST's then-standard
pricing schedule. In addition, Pioneer may terminate a Fund or merge two or
more Funds upon reasonable prior notice, generally thirty (30) days, to DST. In
the event of a Fund termination, all charges except closed account charges
shall cease upon the first day of the next month after the termination date and
DST shall no longer be required to provide services with respect to such Funds
except as mutually agreed to by the Parties. In the event of the merger of two
or more Funds, rates and charges for the surviving Fund(s) shall be as set
forth in Exhibit B to the Master Agreement for the remainder of the contract
term except as such Fund(s) use functions, features or characteristics for
which DST has imposed an additional charge as part of its standard pricing
schedule and all charges except closed account charges will cease as of the
merger date with respect to the Fund or Funds that do not survive a merger date
and DST shall no longer be required to provide services with respect to such
Funds except as mutually agreed to by the parties. Closed accounts fees for
Funds merged out of existence or terminated will continue to be billed in
accordance with the fees set forth in Exhibit B to the Master Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF DST
5.01 In addition to the representations and warranties of the Master
Agreement, DST represents and warrants that:
(a) The TA2000 System will function in all material respects in accordance
with the reference manuals provided by DST to Pioneer, provided the TA2000
System is operated by Pioneer in compliance with such reference manuals.
--------
/3/ If the TA2000 System is not then capable of satisfying the requirements of
the new funds, DST shall be entitled to service such funds under this
Agreement if DST is able to modify its operating systems to provide such
capabilities by the time such new funds go live. If DST is not able or
willing to so modify its systems, then Pioneer shall be free to obtain
shareholder accounting, recordkeeping and transaction processing services
for such new funds from another system provider.
61
SECTION 6. REPRESENTATIONS AND WARRANTIES OF PIONEER
6.01 In addition to the representations and warranties of the Master
Agreement, Pioneer represents and warrants that:
(a) It is, and will at all times material hereto continue to be, registered
in good standing as a transfer agent with the appropriate regulatory agency
(as defined in the Securities Exchange Act of 1934);
(b) Each of the Funds is registered under the Investment Company Act of 1940
as a management investment company or unit investment trust, unless
indicated otherwise on Exhibit A to the Master Agreement, as amended from
time to time;
(c) A registration statement under the Securities Act of 1933 has been filed
with the Securities and Exchange Commission and appropriate state securities
laws filings have been made by each Fund, and no business will be conducted
with respect to any Fund except while such statement and filings are
effective as to such Fund and such Fund is in compliance with all applicable
legal requirements with respect to the shares being offered for sale; and
(d) It shall not use the TA2000 System or DST's services in any way that is
in violation of or will result in the violation of any law, rule or
regulation that is applicable to it or to DST, or which it knows or has
reasonable grounds to know will cause it or DST to violate a law, rule or
regulation applicable to either of them.
SECTION 7. ADDITIONAL COVENANTS OF DST
7.01 DST shall maintain the appropriate computer files of all information
and data transmitted to the DST Facilities by Pioneer; provided, however, that
DST shall not be responsible or liable for any changes, alterations,
modifications therein or failure to maintain the same if Pioneer shall have
made such changes, alterations, or modifications or shall be the cause of such
failure to maintain the same. It is expressly understood that all such data
transmitted by Pioneer and maintained hereunder remains the exclusive property
of Pioneer.
7.02 The records to be maintained and preserved by DST under Sections 2.01
and 7.01 of this Schedule shall be maintained and preserved in accordance with
the following:
(a) Annual Purges by August 31: DST and Pioneer shall mutually agree upon
a date for the annual purge of the appropriate history transactions from the
Transaction History (A88) file for accounts (both regular and tax advantaged
accounts) that were open as of January 1 of the current year, such purge to
be completed no later than August 31. Purges completed after this date will
subject Pioneer to the Aged History Retention fees set forth in the Fee
Schedule attached as Exhibit B to the Master Agreement.
(b) Purge Criteria: In order to avoid the Aged History Retention fees,
history data for regular or ordinary accounts (that is, non-tax advantaged
accounts) must be purged if the confirmation date of the history transaction
is prior to January 1 of the current year and history data for tax
advantaged accounts (retirement and educational savings accounts) must be
purged if the confirmation date of the history transaction is prior to
January 1 of the prior year. All purged history information shall be
retained on magnetic tape for seven (7) years.
62
(c) Purged History Retention Options (entail an additional fee): For the
additional fees set forth on the Fee Schedule attached to the Master
Agreement as Exhibit B, Pioneer may choose (i) to place purged history
information on the Purged Transaction History (A19) table or (ii) to retain
history information on the Transaction History (A88) file beyond the
timeframes defined above. Retaining information on the A19 table allows for
viewing of this data through online facilities and E-Commerce applications.
This database does not support those histories being printed on statements
and reports and is not available for on request job executions.
7.03 Throughout the term of this Schedule, DST shall maintain reasonable
backup procedures for the protection and safekeeping of the data processing
files containing the information and data transmitted by Pioneer.
7.04 DST at all times shall use its best efforts to maintain adequate
insurance coverage to satisfy all of its reasonably foreseeable liabilities
hereunder.
7.05 In the event that a DST operated system that is accessed remotely by
Pioneer fails to function properly by reason of DST's failure to act in good
faith, with due diligence and reasonable care and, as a consequence, causes an
error or mistake in any record, report, data, information or output provided by
DST, DST shall promptly correct and reprocess such records, at DST's expense;
provided, Pioneer shall have promptly and timely notified DST in writing of
such error or mistake, and, further provided, that Pioneer shall have the
obligation of maintaining in an uncorrupted condition and having available
backup copies of all data and information that Pioneer transmits to DST (the
"Data"). DST shall have no obligation to reconstruct or recompile Data not
preserved by Pioneer through backup procedures and DST will not be responsible
or liable for the loss of any data or information that DST receives in an
invalid, incorrect or otherwise corrupt condition or which is improperly
formatted or not in proper form in accordance with the reference manuals
provided by DST to Pioneer or the materials posted on the appropriate DST
Pioneer Center or website or as provided in Section 8.03 hereof. Pioneer
accepts sole responsibility for all Data and the accuracy and adequacy of all
Data, excluding any changes to such Data made by DST.
7.06 In event of a disaster rendering the DST Facilities inoperable, DST,
provided Pioneer has elected to participate in and has paid the fees for the
second site disaster recovery facility (the "Recovery Facility"), shall convert
the designated Pioneer records to the Recovery Facility and continue to provide
Services to Pioneer in accordance with DST's then current Business Contingency
Plan, consisting of numerous scripts that are continuously updated. Pioneer
will have the right under this Schedule to review on-site such procedures and
plans in accordance with reasonable procedures and at reasonable frequencies.
If Pioneer has not been paying its pro rata charge for the availability of the
Recovery Facility, DST will assist Pioneer to obtain alternate sources of
service.
SECTION 8. ADDITIONAL COVENANTS AND INDEMNIFICATIONS OF PIONEER
8.01 Pioneer shall utilize and employ all reasonable control procedures
available under the TA2000 System of which Pioneer is advised or which are set
forth on the appropriate DST Customer Center or Website and Pioneer shall
promptly advise DST of any errors or mistakes in the data or information
transmitted to DST's Facilities, the records maintained or output generated
hereunder and, using normal audit and control procedures, Pioneer shall verify
all output received hereunder.
8.02 Pioneer shall transmit to the DST Facilities, in the formats and form
specified by DST, all information and data required in connection therewith so
that the output produced by the system shall be complete and accurate when it
is generated by the TA2000 System and DST Facilities, and Pioneer shall be
responsible and liable for the cost or expense of regenerating any output if
Pioneer shall have failed to transmit properly any such data or information,
shall have transmitted erroneous information or data, shall
63
have transmitted incorrect information or data and/or shall have failed to
verify timely any such data or information when it is generated by the TA2000
System and DST Facilities.
8.03 Pioneer at all times shall use its best efforts to maintain adequate
insurance coverage to satisfy all of its reasonably foreseeable liabilities
hereunder.
8.04 Pioneer shall be responsible for all state and local taxes, including
sales, use and personal property taxes, with respect to all services rendered
hereunder, as well as all terminals, modems, routers, and data communications
equipment, if any, provided by DST Technologies, Inc. (an affiliate of DST
Systems, Inc.) to Pioneer in connection with the services.
8.05 Pioneer's Affiliates shall be subject to the same terms and provisions
as is Pioneer in connection with the utilization of DST's services and systems
under this Schedule. Pioneer shall be liable and responsible for Pioneer
Affiliate's utilization of the DST's services and systems as if Pioneer were
utilizing such systems and services itself
SECTION 9. DST Output, LLC
9.01 If Pioneer elects to use the printing and mailing services of DST's
wholly-owned subsidiary, DST Output, LLC or one of DST Output, LLC's
subsidiaries or affiliates ("OTS"), DST shall invoice Pioneer for fees and
charges for services rendered by OTS hereunder, if any, as reimbursable
expenses under Section 4 of the Master Agreement.
SECTION 10. CHANGES AND MODIFICATIONS
10.01 Except as may otherwise be provided in Exhibit B to the Master
Agreement, during the term of this Schedule, DST will make available for
Pioneer's use all (i) modifications and improvements to the current TA2000
System done within the ordinary course of business and (ii) significant new
features or functions added to the TA2000 System. No charges will be assessed
for such modifications and improvements unless they become part of the standard
DST pricing schedule. For example, if additional charges are imposed generally
upon DST's customers who use the TA2000 System on a remote basis for
substantial system revisions or modifications necessary to comply with changes
in existing laws, rules or regulations, or in industry business practices or
methods, or for increases in the cost of operating the TA2000 System which are
incurred as a result thereof, DST may charge Pioneer for its pro rata share of
such charges (based on number of affected accounts in relation to the entire
universe of affected accounts). At Pioneer's expense, DST will use reasonable
efforts to make any reasonable changes to the TA2000 System requested by
Pioneer ("Client Requested Software"). Charges attendant to the development of
Client Requested Software shall be at DST's standard rates and fees in effect
at the time. If the cost to DST of operating the TA2000 System is increased by
the addition of Client Requested Software, DST shall be entitled to increase
its fees by an amount to be mutually agreed upon. Significant new features or
functions which are utilized by Pioneer may be charged for on a pro rata basis,
as aforesaid.
10.03 DST shall have the right, at any time, and from time to time, to alter
and modify any systems, programs, procedures or facilities used or employed in
performing its duties and obligations hereunder, provided that DST shall use
its reasonable best efforts to minimize any material disruptions or material
adverse effects upon Pioneer's ability to use the TA2000 System and further
provided that no such alteration or modification shall, without at least sixty
(60) days prior written notice, materially adversely change or affect the
operations and procedures of Pioneer in using or employing the TA2000 System or
DST Facilities hereunder.
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10.04 All enhancements, improvements, modifications, developments or new
features or functions added to or run on DST's Facilities as part of or in
conjunction or concurrently with the TA2000 System, including, without
limitation, Client Requested Software, shall be, and shall remain, the
confidential, exclusive property of, and proprietary to, DST.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
in their names on their behalf by and through their duly authorized officers as
of the day and year first above written. This Schedule may be executed by
facsimile signature and may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
------------------------------- ------------------------------
Title: Senior Vice President Title: Vice President
------------------------------- ------------------------------
65
EXHIBIT A
SERVICE LEVEL ARRANGEMENT
[To be added by the Parties by amendment.]
SCHEDULE III
AWD License, Consulting and Maintenance and Support
SCHEDULE NUMBER III TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
AND BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial") (the "Master
Agreement")
AWD LICENSE, CONSULTING, AND MAINTENANCE AND SUPPORT SERVICES
THIS SCHEDULE NUMBER III TO THE MASTER AGREEMENT, is made effective as of
this 1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST TECHNOLOGIES, INC. ("DSTTI"), is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, under which Pioneer desires to
license DSTTI's proprietary work management software known as "Automated Work
Distributor(TM)" or "AWD(R)", provided by DSTTI, a wholly owned subsidiary of
Boston Financial's Affiliate, DST Systems, Inc.;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in the Master Agreement and this Schedule, DSTTI and Pioneer agree as
follows:
SECTION 1. INCORPORATION OF THE MASTER AGREEMENT.
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DSTTI and
Pioneer agree that solely for purposes of this Schedule, DSTTI shall be deemed
to have executed the Master Agreement in place of Boston Financial and to have
accepted the terms thereof, and Pioneer further agrees that DSTTI and not
Boston Financial shall be solely responsible under this Schedule.
SECTION 2. DEFINITIONS
For the purpose of this Schedule the following are defined terms:
2.01 "Equipment" shall mean equipment and related operating and utility
software normally included with such equipment.
2.02 "Fund" or "Funds" shall mean a registered investment company or
investment companies, an investment company or investment companies exempt from
registration, trusts and other similar collective investment funds ("Investment
Products"), which, with respect to U.S. Investment Products, maintain the
majority of their U.S. shareholder records (the "Master Securityholder Files")
and process their U.S. shareholder transactions on DST Systems, Inc.'s
TA2000(R) System (the "DST System"), which is installed and operated on
mainframes at the DST Facilities, DST Systems, Inc.'s Winchester Data Center,
pursuant to a TA2000 Remote Service Schedule of even date herewith by and
between Pioneer and DST Systems, Inc. (the "Remote Service Agreement") and,
with respect to non-U.S. Investment Products, are listed as a CUSIP on the
TA2000 System and for whom a Pioneer Affiliate serves as the primary investment
adviser or as the manager (that is, manages the entire business affairs of the
Fund).
2.03 "Installation Site" shall, subject to Pioneer's compliance with the
provisions of Schedule IV to the Master Agreement - the AWD Data Center Remote
Services for AWD Hosting Services Schedule
1
(the "AWD Remote Schedule") between Pioneer and DST Systems, Inc., mean the DST
AWD Data Center currently located at Poindexter Building at 330 West 9th
Street, Kansas City, Missouri 64105 (the "AWD Data Center"), which is a
location owned by DST Systems, Inc., or such other location as the AWD Data
Center may be moved to. Subject to the terms and conditions contained in the
AWD Remote Agreement, Pioneer may change the Installation Site to another
location of Pioneer within the United States upon written notice to DSTTI.
2.04 "Non-Server Software" shall mean the Other Peripheral Components and
Per-User Components of the System, as described on Exhibit A to this Schedule.
2.05 "Pioneer's Equipment" shall mean the equipment made available by
Pioneer that has been configured by Pioneer in accordance with its own needs
and preferences to conform to the processing requirements of the System.
2.06 "Release" shall mean an Update to the base Version of the Licensed
Software that is associated with significant or material improvements or
program corrections.
2.07 "Server Software" shall mean the AWD Server and Peripheral Server
Components of the System, as described on Exhibit A.
2.08 "System" shall mean collectively the computer software described on
Exhibit A attached hereto (the "Licensed Software") and all related user and
system documentation (the "Documentation"), provided, however, the term
"System" shall not include any software or software code, including freeware,
computer code, or other items or materials that are subject to the GNU General
Public License, the Lesser or Library General Public License, the Apache
License or any other open source license agreement, that is created or provided
by a third party and is incorporated into the Licensed Software ("Embedded
Third Party Software").
2.09 "Third Party Users" shall mean customers of Pioneer who have a right to
access the System as provided in Section 6.01 below.
2.10 "Update" shall mean modifications, refinements, enhancements and
improvements, including patches, bug fixes and error corrections, that DSTTI
makes to the base Version of Licensed Software which DSTTI elects to
incorporate into and make a part of the base Version of Licensed Software and
which DSTTI does not separately market. DSTTI reserves the right to determine
which Updates are incorporated into the base Version of the Licensed Software.
2.11 "Version" shall mean a set of object code and associated documentation
of the Licensed Software that is associated with a specific hardware platform,
operating system or other technology, which distinguishes it from other forms
of the Licensed Software.
SECTION 3. EQUIPMENT
3.01 DSTTI agrees to sell, and the Pioneer agrees to purchase Equipment at
the purchase price set forth on purchase order(s) provided at such time and in
accordance with the terms and conditions set forth herein.
3.02 DSTTI sells the Equipment as is subject to DSTTI's assignment of all of
DSTTI's transferable rights under and to manufacturer's warranties and service
to Pioneer. The installation, maintenance and operation of the Equipment are
the responsibility of Pioneer.
2
3.03 Pioneer's payment for the Equipment shall be simultaneous with DSTTI's
obligation to the original manufacturer. If requested by Pioneer, DSTTI agrees
that it will provide Equipment, including without limitation, individual
workstations, subject to availability to DSTTI from the manufacturer at such
prices and on such terms as Pioneer and DSTTI may agree from time to time.
3.04 If requested by the Pioneer, DSTTI agrees that it may provide
additional Equipment, including without limitation, individual workstations,
subject to availability to DSTTI from the manufacturer at such prices as
Pioneer and DSTTI agree.
3.05 Risk of loss or damage to the Equipment shall pass to Pioneer upon
delivery to the location designated by Pioneer to which the Equipment is to be
shipped, provided Pioneer can refuse delivery if Pioneer reasonably believes
the Equipment is damaged.
3.06 Pioneer will pay any freight charges associated with shipping Equipment
to or from the Installation Site.
SECTION 4. SOFTWARE LICENSE
4.01 DSTTI hereby grants to Pioneer, and Pioneer accepts from DSTTI a
non-exclusive, non-transferable license (the "License") to use the machine
executable (object code) copy of the Licensed Software and the Documentation in
accordance with the terms and conditions of this Schedule.
4.02 Pioneer acknowledges and agrees that the System is the property of
DSTTI and its licensors and that this Schedule grants Pioneer no title or
rights of ownership in the System or any components thereof or any right to
use, copy, transfer or disclose all or any portions of the System except as
expressly provided in this Schedule. All changes, additions, and Updates in the
Licensed Software or Documentation provided pursuant to the Maintenance and
Support Services, as defined below, and all other work product provided by
DSTTI as part of the Professional Services, as defined in Section 13; shall
remain proprietary to DSTTI and Pioneer shall have a non-exclusive,
non-transferable license to such work product for its use pursuant to all of
the restrictions and other terms and conditions of the Statement of Work
("SOW"), if applicable, and this Schedule, including, but not limited to, use
limitations, the exclusion and limitation of warranties, limitation of
liability, and undertakings of confidentiality and non-disclosure.
SECTION 5. LICENSE FEES AND PAYMENT TERMS
5.01 The License Fee and terms of payment for the System are specified on
Exhibit B to the Master Agreement, which is incorporated herein. All Fees for
the initial term for the Maintenance and Support Services are as set forth in
Exhibit B to the Master Agreement. Where appropriate, each SOW shall set forth
estimated fees for the services to be performed by DSTTI under such SOW.
Pioneer shall pay all Invoices rendered under this Schedule to Boston Financial
in accordance with the terms and conditions of the Master Agreement.
5.02 On a monthly basis, Pioneer will execute and provide to DSTTI, a report
of Pioneer's production AWD User security table(s) to determine the number of
Users (the "Monthly Report"). At least quarterly the Pioneer shall provide
DSTTI with a written report, setting forth the number of instances of
installation of each Component by Component type, as described on Exhibit A,
and location, as well as the number of Users on Pioneer's production AWD User
security table(s) within AWD. Both such reports shall be executed by an officer
or such other person having the authority to bind Pioneer. Upon written notice
to Pioneer, and not more frequently than one (1) time per year, DSTTI shall be
entitled to audit, where installed, during normal business hours, the number
and location of (a) workstations on which the Licensed Software is installed or
accessed, and (b) users who are capable of accessing or using the Licensed
Software, and (c) instances Peripheral Server Components and/or Other
Peripheral Components. DSTTI shall be entitled to bill retroactively for any
previously undisclosed users, workstations, Peripheral Server
3
Components, Other Peripheral Components, and Third Party Software from the
month in which they were first installed or able to access or use the Licensed
Software. DSTTI agrees that such audit, if performed, will not unreasonably
interfere with Pioneer's normal business operations. DSTTI may provide the
results of any such audit to its licensors solely to the extent the results
pertain to such licensor's software applications
SECTION 6. USE
6.01 The System, and any part thereof, may be used only by Pioneer for
Pioneer or any of Pioneer's Affiliates to process information and documents
arising in the normal course of its own business (but not as a service bureau
or business process outsourcer) on behalf of the Funds and the businesses of
the clients of Pioneer and its Affiliates which use Pioneer retirement plan
products and retirement plan services to offer securities issued by the Funds
or by issuers unaffiliated with Pioneer as part of a Pioneer IRS prototype plan
maintained by Pioneer (the "Pioneer Prototype Plan Business"). The Server
Software may only be installed at the Installation Site and a backup site.
Pioneer shall give DSTTI written notice of a change in the Installation Site
and the location the backup site and any subsequent change. The Non-Server
Software may be installed upon or accessed from any workstation owned or
operated by Pioneer in the United States without regard to location. The
Per-User Components of the System, as described on Exhibit A, may be installed
upon or accessed from workstations at locations of Third Party Users; provided,
however, that Third Party Users may use such Workstation Software only to
access information in connection with such Third Party User's business with
Pioneer, Pioneer's Affiliates, Pioneer's Prototype Plan Business and the Funds.
Pioneer and its Affiliates may use the System to process the information and
documents of Third Party Users where such processing relates to the services
provided by Pioneer or its Affiliates to that Third Party User in connection
with the business of the Funds, including the Pioneer Prototype Plan Business.
Such Third Party Users shall, as a pre-condition to such usage: (i) acknowledge
in writing DSTTI's proprietary rights in the System; and (ii) agree in writing
to: (a) confidentiality obligations related to Confidential Information of
DSTTI at least as restrictive as those set forth herein; and (b) restrictions
on the use of the Licensed Software at least as restrictive as those set forth
in this Section. Pioneer shall indemnify, defend and hold harmless DSTTI for
any losses, damages, costs or expenses incurred by DSTTI resulting from the
failure by such third party to meet the terms of this Schedule. Pioneer may use
the System to process the information and documents of Third Party Users where
such processing is integral to the services provided by Pioneer to that Third
Party User. Except as provided above in this Section 6.01, Pioneer shall not
(a) permit any third party to use the System or any part of the System or
(b) use the System to process the documents or data of any third party. All
documents and data processed by the System and output produced by the System
shall be the property of and owned by Pioneer, Pioneer's Affiliates or the
Funds, save and except where such material remains the property of a Third
Party User pursuant to the terms of Pioneer's or its Affiliates' agreement for
services with such Third Party User related to the business of the Funds.
6.02 Neither the Licensed Software nor any other DSTTI written software may
be used in any way in connection with (i) any mutual funds business, other than
that of the Funds or the Pioneer Prototype Plan Business, or (ii) any insurance
business unless such DSTTI software was custom designed for Pioneer with an
exact disclosure of the intent and purpose for such use.
6.03 Unless specifically stated otherwise, the License granted herein
includes the right to copy the Licensed Software in non-printed, machine
readable form in whole or in part as reasonably necessary back-up and for
Pioneer's own business use. Pioneer agrees to maintain appropriate records of
the number and location of all such copies, and to make the records available
to DSTTI upon request. To protect DSTTI's trade secrets and copyrights in the
System, Pioneer agrees to reproduce and incorporate DSTTI's trade secrets or
copyright notice in any permitted copies, modifications or partial copies of
the System. Pioneer agrees not to remove any Licensed Software from an
Installation Site, except in an emergency (and then only for the period of the
emergency) without prior written consent of DSTTI, which consent
4
shall not be unreasonably withheld. Pioneer may not remove or modify any
program markings or any notice of DSTTI's or its licensor's proprietary rights.
6.04 Unless specifically stated otherwise, Pioneer may install copies of the
Server Software in additional environments and/or at additional Pioneer
locations solely for the purposes of disaster recovery, testing, development or
other non-production purposes at no additional fee or charge unless otherwise
specified.
6.05 Pioneer shall not reverse engineer, decompile, or disassemble the
Licensed Software or any portion thereof, or otherwise attempt to create or
derive the source code (including, but not limited to, review of data
structures or similar materials produced by the System).
6.06 If any use is made of the System (including any expansions of use)
other than that which is set forth in this Schedule, then, without prejudice to
DSTTI's other rights and remedies, Pioneer will immediately be liable to pay
DSTTI an amount equal to the then standard list price for such unauthorized
license or user as if DSTTI had granted a License to such user at the beginning
of the period of unauthorized use, for the period during which such
unauthorized use persists.
6.07 Pioneer shall immediately cease any use of the System (in any form) or
any part thereof upon termination of this Schedule. In such an event, Pioneer
shall deliver to DSTTI within ten (10) business days all Licensed Software and
Documentation in the form provided by DSTTI or as modified by Pioneer and all
copies thereof, in whole or in part, made by Pioneer or certify to DSTTI that
such Licensed Software or Documentation has been destroyed.
6.08 Unless specifically stated otherwise, Pioneer may install the Server
Software at additional Pioneer locations upon advance written notice to DSTTI
and the payment of the additional fee set forth in Exhibit B to the Master
Agreement.
6.09 Pioneer acknowledges that there may be third party software
applications embedded in the System. The use of such third party software is
limited to the use as integrated into the Licensed Software. Such third party
applications may include source code which such licensors may provide as part
of its standard shipment and such source code is subject to the terms of this
Schedule.
6.10 Pioneer may not use the System for rental, timesharing, subscription
service, hosting or outsourcing.
6.11 Pioneer may not publish the results of any benchmark testing run on the
System or any component thereof.
6.12 Third party technology that may be appropriate or necessary for use
with the System is specified in the application package documentation or as
otherwise notified by DSTTI and such third party technology is licensed to
Pioneer under the terms of a third party license agreement specified in the
Documentation or as otherwise notified by DSTTI and not under the terms of this
Schedule.
6.13 The License granted herein includes the right to use the Licensed
Software and the Documentation as provided herein and as necessary to receive
and use the services provided by DSTTI under the AWD Remote Schedule.
6.14 Pioneer's Affiliates shall be subject to the same terms and provisions
as is Pioneer in connection with the utilization of the Licensed Software under
this Schedule. Pioneer shall be liable and
5
responsible for Pioneer Affiliate's utilization of the Licensed Software as if
Pioneer were utilizing such software itself.
SECTION 7. USE OF DOCUMENTATION
7.01 During the Term, DSTTI hereby grants to Pioneer, the non-exclusive
right to reproduce, transmit, distribute, display, adapt, and incorporate the
Documentation solely into Pioneer's internal training materials (the "Training
Materials") and solely in connection with Pioneer's internal use of the System.
Such Training Materials may not be disseminated outside of Pioneer. Pioneer
agrees that any Training Materials that incorporate the Documentation shall
contain or refer to the copyright or proprietary notices as provided on the AWD
Customer Center. Any use of the Documentation by the Pioneer in a manner not
expressly authorized by DSTTI or in breach of any terms of this Schedule
constitutes copyright infringement, entitling DSTTI to exercise all rights and
remedies available to it under copyright laws around the world.
7.02 Pioneer acknowledges and agrees that DSTTI cannot ensure the editing or
proper adaptation and incorporation of any Documentation into Pioneer's
Training Materials. Pioneer agrees that DSTTI has no liability for any action
or inaction with respect to the Documentation content as incorporated into such
Training Materials, including updating or failing to update any such Training
Materials such updated Documentation.
7.03 Under no circumstances shall DSTTI be liable for any damages
whatsoever, whether direct, indirect, incidental, consequential, special, or
exemplary (even if DSTTI has been advised of, or has foreseen the possibility
of such damages), arising from the access, use, or inability to access or use
the Documentation as incorporated into the Training Materials, including,
without limitation, claims for loss of revenue or anticipated profits or lost
business.
7.04 DSTTI reserves the right, but has no duty, to review the Training
Materials.
7.05 Pioneer shall maintain readily accessible and readable copies of the
Training Materials during the Term of this Schedule. Upon written request from
DSTTI, Pioneer shall promptly make available all Training Materials
incorporation the Documentation.
SECTION 8. MAINTENANCE AND SUPPORT SERVICES INCLUDED
During the Term (as defined below), the maintenance and support services
shall be provided by DSTTI (the "Maintenance and Support Services") in
accordance with the then current AWD Product Support Guide available on the AWD
Customer Center website.
SECTION 9. MAINTENANCE AND SUPPORT SERVICES NOT INCLUDED
The Maintenance and Support Services includes maintenance and support to the
Version of the Licensed Software base system licensed hereunder made pursuant
to DSTTI's Annual Maintenance and Support Service Program. Not included within
the Maintenance and Support Services under this Schedule are:
(i) any new Versions of the Licensed Software;
(ii)any professional services whatsoever, including services related
to Updates (installation, configuration, etc.) issued by DSTTI;
(iii)any support for changes in the Licensed Software base system
which have been made outside DSTTI's Annual Maintenance and
Support Service Program, whether these changes were made by
Pioneer or DSTTI; or
(iv)any support for any custom software developed by DSTTI pursuant
to a SOW unless such SOW clearly sets forth the fees and other
terms and conditions for inclusion of support under this Schedule.
6
Should Pioneer request DSTTI to investigate and/or correct any System error
and said error is determined, by DSTTI, to not be caused by the software
comprising the Licensed Software base system, DSTTI will bill, and the Pioneer
will pay for such services at DSTTI's then prevailing rate and any expenses
will be billed to Pioneer at actual cost. Prior to initiating Services to
correct any such system error not caused by the software comprising the
Licensed Product base system, DSTTI will provide to Pioneer a SOW Form as
provided in Section 13. Pioneer must sign the SOW (e-mail with electronic
signature permitted) and return it to DSTTI. DSTTI will take no action unless a
copy of the SOW bearing the signature of Pioneer is returned to DSTTI.
Furthermore, such SOW shall contain fees for the time previously expended
diagnosing the error in determining that the error was not caused by the
Licensed Software. Services specified above which are not part of the
Maintenance and Support Services provided hereunder may be acquired from DSTTI
as part of the Professional Services provided under Section 13.
The Maintenance and Support Services described above shall be provided for
the most current generally available Release of the Licensed Software and for
the immediate prior Release within the most current generally available (GA)
Version and in accordance with the then current AWD Product Lifecycle Support
Policy available on the AWD Customer Center.
SECTION 10. CUSTOMER ASSISTANCE AND OBLIGATIONS
10.01 Problem Determination: Pioneer is responsible for performing problem
determination and isolation procedures to determine whether the problem is
attributed to a component covered by Maintenance and Support Services.
10.02 Pioneer Contacts: Pioneer must designate, by name, a specific
individual or group of individuals located within the continental United States
who may contact DSTTI for Maintenance and Support Services (the "M&S Contact").
DSTTI may, at DSTTI's option, decline maintenance requests from individuals
other than the M&S Contact.
10.03 Pioneer Assistance: Pioneer agrees to provide full cooperation in
locating and correcting programming errors, including providing dumps and test
time on Pioneer's equipment. DSTTI, when possible, will work with Pioneer to
schedule a mutually agreeable time for support activities that require the
system to be unavailable to Pioneer.
10.04 Pioneer will notify DSTTI within ten (10) business days of
discontinuing the use of the Licensed Software for the backup site or the
Installation Site.
10.05 Pioneer shall provide DSTTI with access to the Installation Site,
Pioneer's Equipment and any related records or data files as required by DSTTI
for the sole purposes of providing Maintenance and Support Services or
Professional Services or DSTTI exercising its audit rights specified in
Section 5.02.
10.06 Pioneer shall comply with the most current technical specifications
recommended by DSTTI for the System, which shall be provided to Pioneer by
DSTTI at the time of delivery of such Licensed Software.
10.07 Pioneer shall supply DSTTI personnel with suitable workspace, desks,
and other normal office equipment support and supplies, which may be necessary
in connection with the Maintenance and Support Services, any Professional
Services or for purposes of DSTTI exercising its audit rights specified in
Section 5.02.
10.08 Pioneer agrees to purchase any third-party software deemed necessary
by DSTTI to successfully operate the System on Pioneer's Equipment. Pioneer
shall have the option of purchasing
7
such third-party software: (i) directly from DSTTI or (ii) directly from the
third-party vendor. DSTTI provides no representations or warranties with
respect to any third-party software purchased through DSTTI; provided however,
DSTTI hereby assigns to Pioneer all of DSTTI's transferable rights under and to
manufacturer's warranties and service related to such third party software.
10.09 Pioneer shall assign computer systems operations personnel to maintain
the System who either: (i) have attended and successfully completed all
applicable training; and (ii) possess equivalent skills and are familiar with
the data processed by the System.
10.10 In the event that Pioneer requests that DSTTI personnel connect to
Pioneer's computer systems, Virtual Private Network ("VPN") technologies over
the Internet are the preferred method of connectivity between DSTTI and the
Installation Site.
SECTION 11. CUSTOMER MODIFICATIONS
11.01 Pioneer shall inform DSTTI in writing of any modification in the
applicable Licensed Software made by anyone other than DSTTI. DSTTI shall not
be responsible for maintaining such modified portions of the Licensed Software
or for maintaining the Licensed Software to the extent affected by such
modification.
SECTION 12. AWD CUSTOMER CENTER
12.01 In the event Pioneer uses the AWD CUSTOMER CENTER(TM), Pioneer accepts
and agrees to all terms and conditions of the DST Customer Centers set forth in
Schedule VIII to the Master Agreement. In the event of any conflict or
inconsistency between the terms included in Schedule VIII and the other terms
of this Schedule which may arise in connection with use of the AWD CUSTOMER
CENTER, the terms of Schedule VIII shall take precedence and control.
SECTION 13. ADDITIONAL SERVICES OF DSTTI
13.01 DSTTI will perform on a reasonable efforts basis the tasks (the
"Professional Services") described on the attached SOWs and on additional SOWs
agreed to from time to time by DSTTI and Pioneer.
13.02 Pioneer may at any time request a change in any SOW under this
Schedule, and the following change procedure will be followed: A DSTTI Change
Request Form ("Change Request") specifying the change or addition to a SOW will
be submitted in duplicate by Pioneer. If the change requested is acceptable to
DSTTI, DSTTI will estimate the additional fees, if any, resulting from the
change and the effect of the change on any work in process and completion
dates. DSTTI will then sign the Change Request and return it to Pioneer. No
action will be taken by DSTTI unless a copy of the Change Request bearing the
signature of an authorized representative of Pioneer is returned to DSTTI. If
the requested change is to be included in a project in process, DSTTI will
proceed to incorporate the change into such project. An approved Change Request
will serve to modify the fee estimate and any schedule set forth in the
appropriate SOW. A Change Request or SOW will not be considered valid unless
signed by an authorized representative of Pioneer as listed in Exhibit C to the
Master Agreement.
13.03 DSTTI shall own all software, software enhancements, documentation,
technical notes, tangible and intangible property, and work products required
to be delivered and/or produced or created by DSTTI in connection with the
Services provided under a SOW ("Deliverables"). Pioneer shall be entitled to
use all of such Deliverables pursuant to Section 6.01, above, in conjunction
with its use of the System. Notwithstanding anything to the contrary, the
parties recognize that from time to time Pioneer may, under this Schedule,
disclose Pioneer Confidential Information on which DSTTI shall partly rely to
design, structure or develop the Deliverable. Provided that, as developed, such
Deliverable contains no identifiable Pioneer Confidential Information,
(i) Pioneer hereby consents to DSTTI's use of such Pioneer
8
Confidential Information to design, to structure or to determine the scope of
such Deliverable or to incorporate into such Deliverable and that any such
Deliverable, regardless of who paid for it, shall be, and shall remain, the
sole and exclusive property of DSTTI and (ii) Pioneer hereby grants DSTTI a
perpetual, nonexclusive license to incorporate and retain in such Deliverables
the Pioneer Confidential Information. All Pioneer Confidential Information
shall be and shall remain the property of Pioneer.
SECTION 14. TERM AND TERMINATION OF SCHEDULE
14.01 Subject to termination as hereinafter provided, this Schedule shall be
effective upon the date first noted above and shall be co-terminus with the
term of the Master Agreement and each new Term of the Master Agreement shall be
a new term of this Schedule.
14.02 Notwithstanding anything to the contrary, this Schedule shall
terminate immediately upon the termination of the Master Agreement or Schedule
IV--AWD Data Center Remote Services for AWD Hosting--to the Master Agreement.
SECTION 15. DELIVERY
15.01 Pioneer and DSTTI agree that the System has been delivered.
15.02 Delivery of Updates shall be via electronic transmission, provided,
however, that Pioneer may, upon request, receive one copy of each Update on CD,
DVD or other similar media. Additional media-based copies of Updates shall be
subject to additional charges as set forth from time to time by DSTTI.
SECTION 16. WARRANTIES AND EXCLUSIONS WITH RESPECT TO THE SYSTEM
16.01 For a period of ninety (90) days from the date of installation, DSTTI
warrants that (a) the Licensed Software as provided by DSTTI shall perform in
all material respects in the manner specified in the Documentation provided to
Pioneer as of the date hereof, as updated by DSTTI from time to time (provided
that DSTTI shall not update such Documentation to reflect bugs, errors or other
software performance deficiencies) and that additional software packages,
upgrades and releases provided by DSTTI will not materially degrade individual
systems or package performance; provided, in each case, that Pioneer has not
modified or altered the Licensed Software and exclusive of conflicts or
non-compliance with any non-Licensed Software installed by Pioneer on an
affected workstation; and (b) that DSTTI has not placed any virus or any
disabling device intended to impair the operation of the Licensed Software,
including any software lock, shutdown device, or other disabling, interruption
or interference mechanism or device (collectively, "Malicious Code"), and DSTTI
is not aware of any Malicious Code being included within the Licensed Software,
provided that (i) Pioneer has not modified or altered the Licensed Software,
and (ii) the malfunctions of the system are not due to (x) the failure to
install promptly an Update provided by DSTTI or (y) conflicts or non-compliance
with any non-Licensed Software installed by Pioneer on an affected workstation
or system. DSTTI's sole obligations and liability under the preceding sentence
are to correct as promptly as reasonably practicable any non-conformity with
such warranties and to eliminate any such Malicious Code.
16.02 DSTTI does not warrant that: (i) the System will run properly on all
hardware; (ii) the System will operate in the combination of hardware/software
which may be independently selected by Pioneer; (iii) the use of the System
will be uninterrupted or error-free; (iv) the System will run properly
following unauthorized modifications by Pioneer or a third-party; or (v) all
System program errors will be corrected.
16.03 DSTTI is not responsible for the following:
9
(a) any changes to Pioneer's database caused by Pioneer or any
unauthorized third-party,
(b) in the event that Pioneer makes modifications to the System,
any repair of database, support of Licensed Software or compatibility
of the modified Licensed Software with any equipment, with the
unmodified System or with any future Licensed Software releases, or
(c) the proper editing, adaptation, or incorporation of any
Documentation into Pioneers Training Materials or the updating of or
failure to update such Training Materials.
16.04 IN NO EVENT WILL DSTTI'S LICENSORS HAVE ANY LIABILITY TO PIONEER FOR
(A) ANY DAMAGES, WHETHER DIRECT, INDIRECT, INCIDENTAL, PUNITIVE, SPECIAL OR
CONSEQUENTIAL, OR (B) ANY LOSS OF PROFITS, REVENUE, DATA OR DATA USE, ARISING
FROM PIONEER'S USE OF SUCH LICENSOR'S SOFTWARE APPLICATION.
SECTION 17. ADDITIONAL INDEMNIFICATION
17.01 Except for a claim for indemnification under Section 7.01 of the
Master Agreement, no action, at law or in equity, arising out of or connected
with this Schedule (other than in connection with services provided under
Sections 8 and 13) or DSTTI's performance hereunder, shall be commenced by
Pioneer more than twelve (12) months after Pioneer first has knowledge of the
facts giving rise to such cause of action. No action, at law or in equity,
arising out of or connected with services provided under Sections 8 and 13
hereof shall be commenced by Pioneer more than twelve (12) months after Pioneer
first has knowledge of the facts giving rise to such cause of action. Pioneer
warrants that it has all necessary power and authority to enter into and
perform this Schedule and that this Schedule and performance hereunder, to the
best of Pioneer's knowledge, does not violate the terms of any contract,
covenant or agreement between it and any third party now existing or
hereinafter entered into. Pioneer further represents and warrants that, to the
extent that it is using the Licensed Software on equipment not provided to
Pioneer by DSTTI, Pioneer has obtained a license or the right to use the
operating software that is included in the System.
SECTION 18. MISCELLANEOUS
18.01 The Licensed Software and Documentation may be subject to export
controls under the U.S. Export Administration Regulations and related U.S.
laws. Pioneer shall (i) comply strictly with all legal requirements established
under these controls; (ii) cooperate fully with DSTTI in any audit that relates
to these controls; and (iii) not export, re-export, divert, transfer or
disclose, directly or indirectly ("Export"), Licensed Software and
Documentation to any country, or any national or resident thereof, which the
U.S. Government determines from time to time is a country to which such Export
is restricted without obtaining the prior written authorization of the supplier
and the applicable U.S. Government agency. Unless DSTTI determines otherwise,
Pioneer will be responsible for complying with all local customs clearance
requirements and will be identified as the Importer of Record.
18.02 DSTTI shall, at no additional charge, place the source code pertaining
to the Licensed Software in escrow on behalf of Pioneer in accordance with the
terms and conditions of the Master Escrow Agreement currently in place between
DSTTI and United Missouri Bank, N.A. In the event Pioneer obtains the escrowed
source code, DSTTI hereby grants to Pioneer a license, at no extra charge in
addition to those set forth in this Schedule, to use, modify and copy the
escrowed software solely in order to maintain and support the Licensed Software
and solely for use as provided in this Schedule.
10
18.03 Pioneer agrees to serve as a reference for DSTTI and the System. This
will involve Pioneer participating in reference calls and hosting a reasonable
number of prospect visits as well as allowing DSTTI to list Pioneer as a user
of the System within a listing of clients both in print and on DSTTI's website.
Pioneer also agrees to allow DSTTI to publish pre-approved press releases and
case studies, which approval may not be unreasonably withheld.
18.04 The parties agree that the Uniform Computer Information Transactions
Act shall not apply to this Schedule.
IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be
executed in their names on their behalf by and through their duly authorized
officers as of the day and year first above written. This Schedule may be
executed by facsimile signature and may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
PIONEER INVESTMENT MANAGEMENT DST TECHNOLOGIES, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
---------------------------------- -----------------------------
Name Tracy Connelly Name Fred Quatrocky
---------------------------------- -----------------------------
Title Senior Vice President Title Vice President
---------------------------------- -----------------------------
11
EXHIBIT A to
SCHEDULE III
THE AUTOMATED WORK DISTRIBUTOR(TM) (AWD(R))
The table below represents the license quantities and the versions currently
being used by Pioneer in accordance with the License Agreement prior to the
License of AWD10 (the "Current Configuration").
Number of Operating
Component Units System Version
--------- --------- --------- -------
Server Components
Server 1 AS/400 2.x
Per-User Components
AWD BPM Named User/4/ 100 Windows 3.x
AWD BPM Named Casual User/5/ 6 Windows 3.x
AWD/Forms As Needed Windows 2.x
EnCorr User As Needed Windows 1.x
Peripheral Server Components
AWD/Fax 1 Windows 3.x
AWD/Business Intelligence 1 Windows 3.x
Other Peripheral Components
None
The table below represents the license quantities and the versions being used
by Pioneer in accordance with the License Agreement after the upgrade to AWD10
(the "New Configuration").
Number of Operating
AWD10 Module Units Products Included System Type of Component
------------ --------- ----------------------------------- --------- ---------------------------
BPM 1 Process Server Windows Server Component
100 AWD BPM Named User/1/ Windows Per User Component
6 AWD BPM Named Casual User/2/ Windows Per User Component
As Needed Screen Design (Replaces AWD/Forms) Windows Per User Component
AWD Monitoring/6/ 1/7/ Business Intelligence w/ Dashboard Windows Server Component
Communications 1/8/ EnCorr Client and Server Windows Server Component
1 Fax Out Windows Peripheral Server Component
--------
/4/ AWD BPM Named User - can be configured for access to all create, view,
inquiry, update, lookup, and work select functionality in the System,
excluding all document management and imaging functions.
/5/ AWD BPM Named Casual User - One who is not using the System in a call
center or processing environment, who has only inquiry access to AW and
who does not have "work select" or update capabilities.
/6/ If Pioneer changes the Installation Site from the AWD Data Center to any
other location, acceptance of additional terms and conditions defined in
Exhibit B attached hereto, will be required as well as payment of third
party fees for each environment whether production or non-production.
/7/ Assumes one (1) production environment. AWD Data Center has the discretion
to determine the quantity of non-production environments that will be
provided at no charge.
/8/ Assumes one (1) production environment.
12
EXHIBIT A to
SCHEDULE III
THE AUTOMATED WORK DISTRIBUTOR(TM) (AWD(R))
For purposes of Sections 3 and 5 of the License Agreement only, the term
"Licensed Software" shall all include the TA2000 Desktop.
For clarification, a User is defined as any person identified by an independent
entry on the W06 AWD User Security table and will include:
(a) any Users who have the ability to utilize the AWD workstation software
installed on a workstation to copy documents into the AWD database, to input
data, directly or indirectly (through other workstations or servers), to the
System, or to access, directly or indirectly (through other workstations or
servers), data stored in the AWD database (the "Fat Clients"); and
(b) any Users who have the ability to access, directly or indirectly, the
System or Client data or records maintained in or on System using a web browser
or similar interface in which AWD workstation software may not be fully
installed on the workstation being used (the "Thin Clients"); and
(c) any Users who have the ability to access, directly or indirectly, the
System or Client data or records using an interface that connects to the AWD
server and database via published or unpublished integration points in the
System (the "Service Layer Clients"); and
(d) any Users who have the ability to access, directly or indirectly, the
System or Client data or records maintained in or on the System through
Metaframe, Citrix, Windows Terminal Server, or any similar software or
connection method (the "Virtual Workstation Users"); and
Unless otherwise explicitly provided for under the license agreement, no human
being may access the System in any manner without having a discrete and
independent W06 AWD User Security table entry. For the avoidance of doubt,
Client may not utilize any software, systems or interfaces to aggregate access
to the System in any manner that utilizes a number of W06 AWD User Security
table entries less than the number of human beings accessing the System.
If additional AWD components not in the Initial Configuration are added, an
addendum in the form of a new Exhibit A will be executed by the parties.
13
EXHIBIT B to
SCHEDULE III
AWD MONITORING LICENSE ADDENDUM
This Agreement is made effective as of January 1, 2012, by and between DST
Technologies, Inc. ("DSTTI") and Pioneer Investment Management Shareholder
Services, Inc. ("Pioneer").
WHEREAS, Pioneer is a party to a License Agreement (the "License Agreement")
which provides for the licensing to Pioneer of use of DSTTI's proprietary work
management software known as "Automated Work Distributor"(TM) or "AWD"(R) (the
"Software"); and
WHEREAS, one component of AWD that Pioneer desires to license pursuant to
the License Agreement is Monitoring; and
WHEREAS, in addition to the terms contained in the License Agreement,
Monitoring is subject to additional terms and conditions contained herein.
NOW, THEREFORE, DSTTI and Pioneer agree as follows:
1. Pioneer acknowledges and agrees that the Monitoring component of AWD
contains third party software provided by Oracle USA, Inc. ("Oracle").
2. Pioneer acknowledges and agrees that Oracle is a third party beneficiary
of the License Agreement with right to enforce, solely as it relates to
software provided by Oracle.
3. If there is a conflict between the terms and conditions of the Agreement
and the Addendum, the terms and conditions of this Addendum shall
prevail.
IN WITNESS WHEREOF, this Addendum is executed by the parties by their duly
authorized representatives the day and year first above written.
PIONEER INVESTMENT MANAGEMENT DST TECHNOLOGIES, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
---------------------------------- ---------------------------------
Print Name: Tracy Connelly Print Name: Fred Quatrocky
Print Title: Senior Vice President Print Title: Vice President
Date: 4/1/2013 Date: 4/1/2013
14
SCHEDULE IV
AWD Data Center
Remote Services for AWD Hosting Services
15
SCHEDULE NUMBER IV TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
AND BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial")
(the "Master Agreement")
AWD DATA CENTER
REMOTE SERVICES
FOR AWD HOSTING SERVICES
THIS SCHEDULE NUMBER IV TO THE MASTER AGREEMENT, is made effective as of
this 1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST SYSTEMS, INC. ("DST"), and is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, subject to Schedule III to the Master Agreement, (the "License
Agreement"), Pioneer is a licensee of the proprietary work management software
known as "Automated Work Distributor"(TM) or "AWD"(R), provided by DST's wholly
owned subsidiary, DST Technologies, Inc. ("DSTTI") and a remote user of DST's
TA2000(TM) System under Schedule II to the Master Agreement (the "Remote
Service Agreement"); and
WHEREAS, Pioneer and Pioneer's Affiliates, as the term "Affiliates" is
defined in the Master Agreement, desires (1) to access and use the AWD Server
(the "DST AWD Server") owned and operated (and in certain cases may just be
operated) by DST to run the AWD Server software licensed by Pioneer under the
License Agreement and (2) to access and use certain other peripheral servers
(each, a "Peripheral Server" and collectively, the "Peripheral Servers") which
are owned and operated (and in certain cases may just be operated) by DST to
run the AWD Peripheral Software licensed by Pioneer under the License
Agreement, both such DST AWD Server and Peripheral Servers being located at
DST's AWD Data Center currently located at: (i) the Poindexter Building, 330
West 9th Street, Kansas City, Missouri 64105; or (ii) the Winchester Building,
7201 E. 64th Court, Kansas City, Missouri 64133 (collectively, the "AWD Data
Center") under and pursuant to the terms and conditions set forth in this
Schedule.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained in the Master Agreement and this Schedule, DST and Pioneer agree as
follows:
SECTION 1. INCORPORATION OF THE MASTER AGREEMENT.
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DST and
Pioneer agree that for purposes of this Schedule, DST shall be deemed to have
executed the Master Agreement in place of Boston Financial and to have accepted
the terms thereof, and Pioneer further agrees that DST and not Boston Financial
shall be solely responsible under this Schedule.
SECTION 2. USE OF THE DST AWD SERVER.
2.01 Subject to the provisions of this Schedule, Pioneer hereby agrees to
remotely access and use the DST AWD Server and Peripheral Servers to host the
AWD Server Software and AWD Peripheral Server Software licensed by Pioneer from
DSTTI under the License Agreement and to remotely access and use the related
image storage provided and maintained by DST in connection with Pioneer's use
of AWD and DST
1
hereby agrees to provide Pioneer such remote access and use of the DST AWD
Server, Peripheral Servers, and related image storage provided and maintained
by DST. The specifications for the DST AWD Server, the Peripheral Servers and
related image storage are set forth in Exhibit A attached hereto and
Section 7.01 of this Schedule. Notwithstanding anything herein to the contrary,
Pioneer may only remotely access and use the DST AWD Server, Peripheral Servers
and related image storage provided and maintained by DST at the AWD Data Center
for Pioneer's own business and that of its Affiliates and only for so long as
the use of the AWD Software on Pioneer's workstations is permitted under the
License Agreement. It is expressly understood that all data relating to Pioneer
and Pioneer's Affiliates and/or the Pioneer mutual funds will be maintained
separately and be distinct from data maintained for other DST clients.
2.02 Pioneer and Pioneer's Affiliates, with computer equipment and through
transmission facilities installed on its premises or other mutually agreed upon
locations, shall transmit to the AWD Data Center, such information and data
that Pioneer determines, in Pioneer's discretion but in accordance with DST's
operating manuals, is to be input and that is required to use the DST AWD
Server, the Peripheral Servers and the related image storage.
2.03 DST will make the DST AWD Server, the Peripheral Servers and related
image storage available to Pioneer on a remote basis as defined in Exhibit A
attached hereto. The term "holiday" shall have the meaning ascribed thereto by
the New York Stock Exchange. Availability is subject to emergency maintenance
and unavailability when capacity upgrades cannot be completed during normal
maintenance periods as provided in Exhibit A.
2.04 Pioneer shall be responsible for and pay the applicable costs of all
communication circuits necessary to enable Pioneer to utilize the DST AWD
Server, the Peripheral Servers and related image storage. However, if, at
Pioneer's election, DST obtains communications circuits, on Pioneer's behalf,
DST shall bill the costs of the communications circuits and related network
costs and expenses, including DST's monitoring and problem resolution services
described below, to Pioneer as a reimbursable expense. In such event, DST shall
utilize communications network control and monitoring capabilities to assist
Pioneer with the identification and resolution of any problems which appear to
be related to the communications circuits obtained by DST on Pioneer's behalf,
but DST is not responsible and shall have no liability for inadequacies or
failures to perform related to or arising out of such communications circuits
prior to their entry into the AWD Data Center. In the event Pioneer elects to
engage a third party directly to provide the communications circuits, Pioneer
shall be responsible for (i) providing connectivity between Pioneer's locations
and the AWD Data Center necessary for Pioneer to access the DST AWD Server, the
Peripheral Servers and image storage systems; and (ii) for the provision of
communications network control and monitoring capabilities to identify and to
resolve any problems which occur prior to the entry of such circuits to DST.
DST shall, as reasonably possible, assist Pioneer with the identification and
resolution of problems with the communication lines to the extent DST has
personnel available and free to do so or as otherwise agreed by the parties.
2.05 DST's support for Pioneer's use of the DST AWD Server, the Peripheral
Servers and related image storage is described on Exhibit A attached hereto.
DST will, when used in accordance with product specifications and within the
range of mutually agreed upon source volumes, meet the service standards set
forth on Exhibit A.
SECTION 3. TERM.
3.01 Subject to termination as hereinafter provided this Schedule shall be
effective upon the date first noted above and shall be co-terminus with the
term of the Master Agreement and each new Term of the Master Agreement shall be
a new term of this Schedule.
2
3.02 Notwithstanding anything to the contrary, this Schedule shall terminate
immediately upon the termination of the Master Agreement or Schedule III--AWD
License, Consulting Services and Maintenance and Support Services--to the
Master Agreement.
SECTION 4. FEES AND PAYMENT TERMS.
4.01 The Fees for use of the DST AWD Server, the Peripheral Servers, and the
related image storage are specified on Exhibit B to the Master Agreement and
incorporated herein, and, except as otherwise provided in a Work Request or
Proposal, shall commence to accrue as provided on Exhibit B to the Master
Agreement. In addition, Pioneer shall reimburse Boston Financial for all
reasonable expenses incurred by DST as set forth on Exhibit B to the Master
Agreement or a Work Request or proposal.
4.02 Boston Financial's invoices with respect to this Schedule shall be
based upon: (a) the number of workstations (whether such workstations are
configured as Full Users or Casual Users) on which AWD Workstation Software is
installed that have the ability to transmit, directly or indirectly, the AWD
Data Center (the "Fat Clients"); plus (b) any servers in excess of those
servers included in the workstation fee (the "Additional Servers"), plus
(c) any workstations or users (whether such workstations or users are
configured as Full Users or Casual Users) that are able to access the AWD Data
Center or Client data or records maintained in or on AWD Software through an
Internet connection (the "Thin Clients"); plus (d) the number of workstations
or users (whether such workstations or users are configured as Full Users or
Casual Users) able to access AWD Software through Metaframe software or any
other similar product (the "Metaframe Users").
4.03 At least quarterly Pioneer shall provide DST with a written report,
executed by an officer, setting forth the number of servers and workstations
(whether on which the Licensed Software is installed or accessed, the number of
active users (whether Fat Clients, Thin Clients or Metaframe Users and whether
such users are Full Users or Casual Users) who can access the Licensed
Software, and the locations of such servers, workstations and users. Up to
twice each calendar year, DST may from time to time, upon reasonable notice to
Pioneer and during Pioneer's regular business hours (which shall include any
hours during which Pioneer is using the Licensed Software) audit the number and
location of (a) servers and workstations on which the Licensed Software is
installed or accessed, and (b) of users (whether Fat Clients, Thin Clients or
Metaframe Users) who are capable of accessing or using the Licensed Software.
Boston Financial shall be entitled to bill Pioneer retroactively for any
previously undisclosed workstations, servers or users from the month in which
they were first installed or able to access or use the Licensed Software.
4.04 Taxes imposed on the use of the DST Server, AWD Server Software and
related equipment and storage media, and for any services performed in
connection with this Schedule shall be treated in the same manner as Taxes are
treated in the License Agreement.
SECTION 5. ADDITIONAL SERVICES OF DST
5.01 DST will perform on a reasonable efforts basis the tasks (the
"Professional Services") described on Work Requests and/or Proposals as
proposed from time to time by DST, and DST will only commence such work upon
the written authorization by Pioneer.
5.02 DST shall own all software, software enhancements, documentation,
technical notes, tangible and intangible property, and work products required
to be delivered and/or produced or created by DST in connection with the
Services provided under a Work Request or Proposal ("Deliverables").
Notwithstanding the above, all Deliverables provided by DST under a Work
Request or Proposal shall be, upon payment by Pioneer of all fees and expenses
relating thereto, licensed to Pioneer on a non-exclusive basis, during the term
of this Schedule, without the payment of further fees, for use in connection
with Pioneer's internal business operations. For clarification, Pioneer shall
not be entitled to any code or software
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developed by DST in order to provide such Deliverables. In no event may Pioneer
disclose any Deliverables to any third party. Notwithstanding anything to the
contrary, the parties recognize that from time to time Pioneer may, under this
Schedule, disclose Pioneer Confidential Information on which DST shall partly
rely to design, structure or develop the Deliverables. Provided that, as
developed, such Deliverables contains no identifiable Pioneer Confidential
Information, (i) Pioneer hereby consents to DST's use of such Pioneer
Confidential Information to design, to structure or to determine the scope of
such Deliverables or to incorporate into such Deliverables and that any such
Deliverables, regardless of who paid for it, shall be, and shall remain, the
sole and exclusive property of DST and (ii) Pioneer hereby grants DST a
perpetual, nonexclusive license to incorporate and retain in such Deliverables
the Pioneer Confidential Information. All Pioneer Confidential Information
shall be and shall remain the property of Pioneer.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.01 In addition to the representations and warranties contained in the
Master Agreement, DST represents and warrants that:
(a) It has and will continue to have and maintain the necessary system
and facilities to perform its duties and obligations under this Schedule.
(b) The AWD Server Software will function in all material respects in
accordance with the reference manuals provided by DST to Pioneer, provided the
AWD System is operated by Pioneer in compliance with such reference manuals.
(c) Pioneer acknowledges that, given the SEC's refusal to provide any
further guidance as to what technologies do and do not comply with the
aforementioned rules, it is impossible for DST to obtain certainty that any
particular storage device or media is and always will be compliant. DST has no
actual knowledge of any fact or circumstance or regulatory guidance issues by
the Securities Exchange Commission (the "SEC") that would make the following
statements untrue: (1) with respect to images received and created after the
date hereof and stored directly onto the AWD System (but not with respect to
images converted onto the AWD System which were received by Pioneer prior to
the date hereof and thereafter maintained by Pioneer in or on some form or
media other than the AWD System and subsequently converted onto the AWD System,
if any), the AWD Server Software and Peripheral Software as currently provided
to Pioneer by DSTTI is capable of compliance with the requirements of SEC Rules
17a-4(f)(2)(ii), 17a-4(f)(3)(iii), 17a-4(f)(3)(iv)(B), and 17a-4(f)(3)(iv)(C)
(the "Recordkeeping Rules"); and (2) DST's operation of the DST AWD Server
complies with the Recordkeeping Rules; provided, to the extent that such
compliance is a function of the manner in which the AWD Software is used by
Pioneer, that such AWD Software is used by Pioneer in compliance with all
published specifications therefore and in a manner which is compliant with and
fulfills the requirements of those provisions SEC Rule 17a-4(f) which are
applicable to the use of the AWD Software.
(d) THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS
OR IMPLIED, AND ALL SUCH OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT
NOT LIMITED TO, THOSE OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
AND THOSE ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE ARE HEREBY
DISCLAIMED.
6.02 In addition to the representations and warranties contained in the
Master Agreement, Pioneer represents and warrants that:
(a) It shall not use the AWD Software, the DST AWD Server, the
Peripheral Servers, the image storage or the AWD Data Center in any way that is
in violation of or will result in the violation of any law, rule or regulation
that is applicable to it or to DST, or which it knows or has reasonable grounds
to know will cause it or DST to violate a law, rule or regulation applicable to
either of them.
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SECTION 7. COVENANTS OF DST.
7.01 DST shall electronically store images and associated database records
("Electronically Stored Data") transmitted to the AWD Data Center by Pioneer
for the time periods specified in this Section; provided, however that DST
shall not be responsible or liable for any changes, alterations, modifications
therein or failure to maintain the same if Pioneer shall have made such
changes, alterations, or modifications or shall be the cause of such failure to
maintain the same. DST will retain such Electronically Stored Data on (i) DASD
or (ii) an alternative storage technology ("DASD Alternative") as selected by
DST from time to time until the earlier of (i) the termination or earlier
expiration of this Schedule (in which case return of such data shall be
governed by Section 9.05, or (ii) June 1 of the calendar year following the
calendar year during which the seven (7) year anniversary of the date such data
was sent by Pioneer to DST occurred. At such time, Pioneer may elect to have
DST continue to store Electronically Stored Data on DASD or DASD Alternative as
then available at DST beyond the aforementioned seven (7) year period;
provided, however DST will charge an additional fee for such continued DASD
storage. Alternatively, at such time, Pioneer may elect to have DST transfer
such Electronically Stored Data to (1) Pioneer, for Pioneer's continuing
retention, or (2) to another storage media supported by DST which other storage
media may not have comparable ease of access as DASD. DST reserves the right to
charge an additional fee for such transfer and/or continued storage. If Pioneer
(i) fails to provide instruction to DST, or (ii) refuses to pay for such
additional fee for such continued storage, DST may, after thirty (30) days
prior written notice to Pioneer and at DST's sole option and discretion, delete
such Electronically Stored Data. Notwithstanding anything contained above,
images will be retained on (i) a shared DMX DASD or (ii) an alternative storage
technology ("Short Term DASD Alternative") as selected by DST from time to time
as a short term storage solution for no less than thirty (30) days after the
create date and time stamp assigned by AWD to such image, after which time such
image may be moved by DST to (i) a shared DASD or (ii) an alternative storage
technology ("Long Term DASD Alternative") as selected by DST from time to time
as long term retention, where such image will be retained for the seven
(7) year period outlined above. It is expressly understood that all such
Electronically Stored Data transmitted by Pioneer and maintained hereunder
remains, as between DST and Pioneer, the exclusive property of Pioneer.
(b) Notwithstanding anything contained in (a) above, all Electronically
Stored Data related to Accounts which were purged from DST's TA2000 System
under the Remote Service Agreement will, within ninety (90) days of such purge
date, be deleted from DASD or DASD Alternative. At such time, Pioneer may elect
to have DST continue to store Electronically Stored Data on DASD or DASD
Alternative as then available at DST beyond the aforementioned period;
provided, however DST will charge an additional fee for such continued DASD
storage.
7.02 DST shall at all times use reasonable commercial efforts in providing
the AWD Software and performing services under this Agreement. Throughout the
Term, DST shall comply with Exhibit D to the Master Agreement (Information
Protection Program), which is made a part of this Schedule and applies to the
Services. DST will be reasonably available to meet with and provide reasonable
assurances to Pioneer concerning its data security procedures. With respect to
any claims for losses, damages, costs or expenses which may arise directly or
indirectly from the procedures, including the use of encryption technology,
implemented for purposes of protecting the integrity, confidentiality or
secrecy of, and the unauthorized interception, corruption, use of, or access
to, any data or information transmitted via the AWD Software and the DST
Facilities, as described in Exhibit D to the Master Agreement, which DST has
implemented or omitted, DST shall be presumed to have fulfilled its obligations
if it has followed, in all material respects, at least those Security
Procedures described in Exhibit D to the Master Agreement.
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7.03 DST shall maintain disaster recovery capabilities by providing backup
to a second server located at a second facility through the use of replication
software, as set forth in Exhibit A.
7.04 In the event a malfunction of the DST AWD Server or a Peripheral Server
causes an error or mistake in any record, report, data, information or output
provided by DST under the terms of this Schedule, DST shall, as its sole
obligation and Pioneer's sole remedy, correct and reprocess such records at
DST's expense; provided, Pioneer shall have promptly and timely notified DST in
writing of such error or mistake.
7.05 DST shall, on behalf of Pioneer, file with the U.S. Securities and
Exchange Commission (the "SEC") the undertaking required by
Section 17Ad-7(f)(6)(i), adopted under the Securities Exchange Act of 1934, and
is hereby authorized to make or provide any records maintained by DST on behalf
of Pioneer available to the SEC upon request as required by such rule and
undertaking.
SECTION 8. COVENANTS OF PIONEER.
8.01 Pioneer recognizes that DST will, at all times during the Term and any
subsequent Renewal Term, host Versions and Releases of the AWD Server Software
and the Peripheral Server Software installed on the DST AWD Server and the
Peripheral Servers (the "Hosted Software") that are supported by DSTTI. In the
event DSTTI ceases to provide maintenance and support for the Versions and
Releases of the Hosted Software then being hosted by DST hereunder, Pioneer
will license supported Versions and Releases as soon as practical after the
announcement by DSTTI of the sunset of the prior Version/Release. The timing of
the migration to the supported Version/Release shall be as mutually agreed, but
not later than a time that is commercially reasonable for such conversion to be
completed prior to the sunset of the prior Version/Release. In the event DST
elects, at Pioneer's request, to continue to host a Version and Release of the
AWD Server Software and Peripheral Server Software that are no longer supported
by DSTTI, the System Availability commitments specified on Exhibit A shall no
longer apply.
8.02 Pioneer shall transmit or cause to be transmitted to the AWD Data
Center, in the formats and form specified by DST, all information, data or
other documentation required or desirable in connection with Pioneer's use of
the DST AWD Server, the Peripheral Servers, or the AWD Data Center so that the
input shall be complete and accurate when it is received by the AWD Data
Center. Pioneer shall advise DST of any (i) errors or mistakes in the data,
information or documentation transmitted to the AWD Data Center, (ii) errors or
mistakes in the records maintained (or intended to be maintained) on the DST
AWD Server, the Peripheral Servers, and/or the related image storage systems,
(iii) errors or mistakes in the output generated hereunder or (iv) any other
issues with respect to Pioneer's use of the DST AWD Server, the Peripheral
Servers, the AWD Data Center, any third party software operated by or hosted by
the AWD Data Center and/or the operation of the AWD Server Software or the
Peripheral Server Software. Using normal audit and control procedures, Pioneer
shall verify (i) that all data, information and documentation transmitted to
the AWD Data Center hereunder is properly input into the AWD System and is
accessible by Pioneer hereunder and (ii) all output received hereunder.
Notification of any errors or mistakes or other issues shall be provided
promptly under the circumstance (but no later than 24 hours after Pioneer knows
or reasonably should know of such error or mistake or other issue). Pioneer
shall be responsible and liable for any resulting Losses and the cost or
expense of regenerating any output if Pioneer shall have (i) failed to utilize
and employ a reasonable control procedure available on the AWD System of which
Pioneer is advised or which are set forth on the appropriate DST Customer
Center, (ii) failed to transmit properly any information, data or
documentation, (iii) transmitted erroneous or incorrect information, data, or
documentation, or (iv) failed or delayed to notify DST of any error or mistake
in (x) any record, report, data or information sent to DST, (y) the records
maintained or supposed to be maintained on the DST AWD Server, the Peripheral
Servers, and/or the related image storage systems or (z) the output provided by
DST.
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8.03 In the event Pioneer uses the AWD DATA CENTER CUSTOMER CENTER(TM),
Pioneer accepts and agrees to all terms and conditions of the Customer Center
Usage and Non-Disclosure Agreement set forth in Schedule VIII to the Master
Agreement.
8.04 Pioneer will, at all times during the term hereof, obtain and pay for
DSTTI's standard maintenance and support for the AWD Software.
8.05 Pioneer's Affiliates shall be subject to the same terms and provisions
as is Pioneer in connection with the utilization of DST's services and systems
under this Schedule. Pioneer shall be liable and responsible for Pioneer
Affiliate's utilization of the DST's services and systems as if Pioneer were
utilizing such systems and services itself
8.06 Pioneer acknowledges and agrees that Pioneer is responsible for the
management of user Identities and passwords for Pioneer's directors, officers,
employees and agents ("Representatives") to enable Representatives to access
AWD Software and to deactivate such user Identities and passwords immediately
if Pioneer determines any Representative should no longer have access to the
AWD Software. Pioneer is responsible for ensuring that its Representatives do
not share their unique user identities or passwords with any other individuals;
its Representatives understand the need and take appropriate measures to keep
their respective user identities and passwords secret and confidential; each
computer network and individual workstation where one of its Representatives
will access the AWD Software is physically and electronically secure and has
not been configured to allow user identities or passwords to be "remembered"
and automatically entered when accessing the AWD Software. DST is authorized to
make available to any person or entity who supplies a valid appropriate user
identity and password all data and access associated with such user identity.
The Person supplying the appropriate user identity and password shall be
considered an authorized Representative of Pioneer, and DST may rely on such
user identity information without further duty to inquire. Pioneer acknowledges
and agrees that DST is not responsible, and Pioneer will indemnify, defend and
hold DST harmless from and against any Loss, arising from any person having
access to the AWD Software and Pioneer's documents, images and records if such
persons access the AWD Software through a valid user ID and password.
SECTION 9. TERMINATION.
9.01 This Schedule shall terminate contemporaneously with the termination of
the License Agreement.
9.02 Notwithstanding any other provision of this Schedule, in the event DST
is required to retain or maintain any of Pioneer's documents, images and
records or any other Pioneer Confidential Information, as defined below, beyond
the termination of this Schedule by a court order, subpoena or any
administrative or governmental agency, then Pioneer will continue to pay Boston
Financial the costs of such continued retention and services based on the fees
provided in Exhibit B to the Master Agreement until such time as DST is
permitted by applicable legal requirements to dispose of such documents, images
and records.
9.03 Upon expiration or any termination of this Schedule, if Pioneer
requests recovery by DST of its data and the delivery of such data to Pioneer,
DST will provide such data in a format mutually agreed to by the parties, and
Pioneer shall pay to Boston Financial the cost of such recovery and delivery at
DST's then current rates, plus the actual cost of reasonable out of pocket
expenses incurred. Such conversion services shall be subject to the terms of a
Work Request or Proposal as provided in Section 5.01 of this Schedule.
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IN WITNESS WHEREOF, the parties hereto have caused this Schedule to be executed
in their names on their behalf by and through their duly authorized officers as
of the day and year first above written. This Schedule may be executed by
facsimile signature and may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
---------------------------------- ---------------------------------
Name Tracy Connelly Name Fred Quatrocky
Title Senior Vice President Title Vice President
8
EXHIBIT A to
SCHEDULE IV
OPERATIONAL SPECIFICATIONS
[To be added by the Parties.]
9
SCHEDULE V
DST FAN Mail Services - Mutual Funds
10
SCHEDULE NUMBER V TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC. AND
BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial")
(the "Master Agreement")
DST FAN MAIL SERVICES - MUTUAL FUNDS
THIS SCHEDULE NUMBER V TO THE MASTER AGREEMENT, is made effective as of this
1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST SYSTEMS, INC. ("DST"), and is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, under which Pioneer desires to
utilize DST FAN Mail Services made available by DST from time to time pursuant
to this Schedule.
NOW, THEREFORE, in consideration of the foregoing premises, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows.
ARTICLE I
INCORPORATION OF THE MASTER AGREEMENT
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DST and
Pioneer agree that for purposes of this Schedule, DST shall be deemed to have
executed the Master Agreement in place of Boston Financial and to have accepted
the terms thereof, and Pioneer further agrees that DST and not Boston Financial
shall be solely responsible under this Schedule.
ARTICLE II
DEFINITIONS
The following definitions shall apply to this Schedule. Additional terms may
be defined in this Schedule and in the exhibits which describe the FAN Mail
Services to be provided by DST for Pioneer.
. "Distribution Support Services Web Site" shall mean the collection of
electronic documents or pages residing on the DST controlled World Wide
Web address (currently, https://www.dstdss.com), linked to the Internet
and accessible by hypertext link through the World Wide Web, which
Pioneer may access to view information about Recipients and approve/deny
access requests by Recipients.
. "DST Web Site" shall mean the collection of electronic documents or
pages residing on DST's computer system, linked to the Internet and
accessible by hypertext link through the World Wide Web, where the data
fields and related screens provided by DST may be viewed by Recipients
who access such site.
. "FAN Mail(R)" shall mean the DST-designed, developed and instituted
system known as "Financial Adviser Network Mail/TM/" or "FAN Mail,"
which enables DST to make data from DST's TA2000(R) mutual fund
recordkeeping systems and data provided to DST, in the format specified
by DST, from other mutual fund recordkeeping systems or recordkeeping
systems maintained by third parties for other Financial Products,
available through the Internet to authorized Recipients.
1
. "FAN Mail Services" shall mean the services provided by DST utilizing
FAN Mail, the Distribution Support Services Web Site, the Internet, and
other systems provided by DST and telecommunications carriers, as
described in the Service Exhibits which are attached to this Schedule
from time to time.
. "Financial Products" shall mean mutual funds, annuity, variable annuity
or variable universal life contracts or real estate investment trusts or
limited partnerships or other similar financial products, and "Financial
Product Units" shall mean the shares or units of a Financial Product
held by a record owner.
. "Person" shall mean an individual, corporation, partnership,
association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
. "Recipient(s)" shall mean the Persons described herein to whom data is
made available utilizing FAN Mail Services, including specified
authorized agents of record owners of Financial Product Units, including
registered financial advisers, financial planners and other financial
intermediaries.
. "Security Procedures" shall mean the procedures, which may include the
use of encryption technology, implemented for purposes of protecting the
integrity, confidentiality or secrecy of, and the unauthorized
interception, corruption, use of, or access to, any data or information
made available via FAN Mail Services.
ARTICLE III
USE OF FAN MAIL SERVICES BY PIONEER
Section 2.1 Selection of FAN Mail Services. DST will perform, and Pioneer
has selected, the FAN Mail Services described on the Service Exhibits attached
to this Schedule. New Service Exhibits describing additional FAN Mail Services
may be added to this Schedule from time to time by mutual written Schedule of
DST and Pioneer, and such additional FAN Mail Services shall be subject to the
terms of this Schedule.
Section 2.2 DST Responsibilities. During the Term and subject to the
provisions of this Schedule, DST shall, at its expense (unless otherwise
provided for herein or in a Service Exhibit) perform the FAN Mail Services as
described in each Service Exhibit, including provision of all computers,
telecommunications equipment and other equipment reasonably necessary at its
facilities to provide the FAN Mail Services.
Section 2.3 Delivery Methods. The delivery method for FAN Mail Services
shall be specified in the applicable Service Exhibits. DST may at any time
change the method of delivery or develop an internal delivery system.
Section 2.4 Pioneer Responsibilities. Pioneer shall at its expense (unless
otherwise provided for herein) fulfill the Pioneer obligations, if any, set
forth in each Service Exhibit to this Schedule.
Section 2.5 Scope of DST Obligations. DST shall at all times use reasonable
commercial efforts in performing FAN Mail Services under this Schedule. In the
absence of breach of its duties under this Schedule, DST shall not be liable
for any loss or damage suffered in connection with the use of FAN Mail
Services. With respect to all instructions given to DST by Pioneer, DST shall
be presumed to have fulfilled its obligations if it has acted in accordance
with the instructions provided by Pioneer. With respect to any claims for
losses, damages, costs or expenses which may arise directly or indirectly from
Security Procedures which DST has implemented or omitted, DST shall be presumed
to have fulfilled its obligations if it has followed, in all material respects,
at least those Security Procedures described in the Security Procedures
2
attachment to each Service Exhibit to this Schedule. DST may, but shall not be
required to, modify such Security Procedures from time to time to the extent it
believes, in good faith, that such modifications will not diminish the security
of FAN Mail Services. All data and information made available via FAN Mail
Services are for informational purposes only, and are not intended to satisfy
regulatory requirements or comply with any laws, rules, requirements or
standards of any federal, state or local governmental authority, agency or
industry regulatory body, including the securities industry, which compliance
is the sole responsibility of Pioneer. Pioneer acknowledges and agrees that its
Recipients are responsible for verifying the accuracy and receipt of all data
or information made available via FAN Mail Services. Pioneer is responsible for
advising its Recipients of their responsibility for promptly notifying the
appropriate transfer agent of any errors or inaccuracies relating to Financial
Product Unit holder data or other information made available via FAN Mail
Services.
ARTICLE IV
FEES
Section 3.1 Fees for FAN Mail Services. As consideration for the performance
by DST of the FAN Mail Services, Pioneer will pay Boston Financial the fees
relating to each such service as set forth in Exhibit B to the Master Agreement.
ARTICLE V
PROPRIETARY RIGHTS
Pioneer acknowledges and agrees that it obtains no rights in or to any of
the software, templates, screen and file formats, interface protocols, formats
and development tools and instructions, hardware, processes, trade secrets,
instruction manuals, enrollment authorization, authentication and other
business processes, proprietary information or distribution and communication
networks utilized by DST to provide FAN Mail Services, all of which are owned
by or licensed to DST. Any software, interfaces and interface formats and
protocols developed by DST shall not be used to connect Pioneer to any transfer
agency system or any other Person or otherwise used by Pioneer for any purpose
other than utilizing FAN Mail Services in accordance with this Schedule,
without DST's prior written approval. Pioneer shall not copy, decompile or
reverse engineer any software provided to Pioneer by DST. Pioneer also agrees
not to take any action which would mask, delete or otherwise alter any DST
on-screen disclaimers and copyright, trademark and service mark notifications
provided by DST from time to time, or any "point and click" features relating
to Recipient acknowledgment and acceptance of such disclaimers and
notifications.
ARTICLE VI
TERM AND TERMINATION
Section 5.1 Term. Unless terminated earlier as provided in this Article VI,
this Schedule shall be effective as of the date first noted above and shall
continue in force and effect until the expiration or termination of the last
Service Exhibit between DST and Pioneer then in effect (the "Term").
Section 5.2 Termination. Throughout the Term, either Party shall have the
right to terminate this Schedule, including all Service Exhibits then in
effect, on written notice to the other Party of the other Party's material
breach of this Schedule and such Party's failure to cure such breach within
thirty (30) days. Additionally, DST shall have the right, upon thirty (30) days
prior written notice to Pioneer, to terminate this Schedule, and all Service
Exhibits then in effect, in the event of the termination of the Master
Agreement or Schedule II - TA2000 Remote Services - to the Master Agreement.
Section 5.3 Effect of Termination. In the event of a termination under the
provisions of this Article VI, the Parties will have no continuing obligations
to one another other than the obligation to return to one another the
confidential or proprietary materials of the other in their possession.
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ARTICLE VII
INDEMNIFICATION; LIABILITY LIMITATIONS
Section 6.1 No Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN
THIS SCHEDULE, THE FAN MAIL SERVICES AND ALL SYSTEMS DESCRIBED IN THIS SCHEDULE
AND ITS EXHIBITS ARE PROVIDED "AS-IS," ON AN "AS AVAILABLE" BASIS, AND DST
HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, REGARDING SERVICES PROVIDED BY DST HEREUNDER, INCLUDING ANY
IMPLIED WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
Section 6.2 Limitation of Liability. Under no circumstances shall DST be
liable for indirect, incidental, consequential, special, exemplary or punitive
damages (even if DST has been advised of or has foreseen the possibility of
such damages), arising from the use or inability to use any of the FAN Mail
Services, or under any provision of this Schedule, such as, but not limited to,
loss of revenue or anticipated profits or lost business. Without limiting any
of the foregoing terms of this Section, DST's liability in connection with the
performance of FAN Mail Services under the terms of this Schedule, or under any
theory of law, tort or otherwise, shall not exceed (i) as to any single claim
an amount exceeding the aggregate fees received by DST pursuant to Article III
during the three months immediately preceding the act or occurrence from which
the claim arises, and (ii) as to all claims, an amount exceeding the aggregate
fees received by Boston Financial with respect to this Schedule pursuant to
Article III during the most recent twelve (12) month Term of the Service
Exhibit relating to the FAN Mail Service with respect to which the claims arise.
Section 6.3 Indemnity. Pioneer acknowledges that, if authorized by Pioneer,
DST will make Pioneer's data available to Recipients and other third parties
over the Internet. Pioneer acknowledges and agrees that DST has no control
over, and no responsibility for, the authorized or unauthorized disclosure,
dissemination, alteration or use of data by such Recipients or such other third
parties or by any other party that may obtain access to the data through the
Internet or from such Recipients or other third parties or in any other manner.
Pioneer hereby indemnifies and holds DST harmless from, and shall defend it
against any and all claims, demands, costs, expenses and other liabilities,
including reasonable attorneys' fees, arising in connection with the use of, or
inability to use, the FAN Mail Services by any Recipient, except to the extent
such liabilities result directly from the failure by DST to perform its
obligations under this Schedule.
ARTICLE VIII
CONFIDENTIALITY
Section 7.1 DST Confidential Information. In addition to the provisions of
Section 9 of the Master Agreement, Pioneer acknowledges and agrees that the
terms and conditions of this Schedule, FAN Mail (including by way of example
and without limitation all Security Procedures, processes, algorithms, designs,
techniques, code, screen and data formats, interface formats and protocols, and
structures contained or included therein) and other information obtained by it
concerning the other software, software applications, equipment configurations,
and business of DST (the "DST Confidential Information") is confidential and
proprietary to DST. Pioneer further agrees to use the DST Confidential
Information only as permitted by this Schedule, to maintain the confidentiality
of the DST Confidential Information and not to disclose the DST Confidential
Information, or any part thereof, to any other person, firm or corporation.
Pioneer acknowledges that disclosure of the DST Confidential Information may
give rise to an irreparable injury to DST inadequately compensable in damages.
Accordingly, DST may seek (without the posting of any bond or other security)
injunctive relief against the breach of the foregoing undertaking of
confidentiality and nondisclosure, in addition to any other legal remedies
which may be available. Pioneer consents to the obtaining of such injunctive
relief and in any proceeding upon a motion for such injunctive relief,
Pioneer's ability to answer in damages shall not be interposed as a defense to
the granting of such injunctive relief.
4
Section 7.2 Pioneer Confidential Information. In addition to the provisions
of Section 9 of the Master Agreement, DST acknowledges and agrees that the
terms and conditions of this Schedule, any information obtained by DST
concerning the software and software applications (including by way of example
and without limitation all data in the Files and algorithms, designs,
techniques, code, screen and data formats and structures contained or included
therein), equipment configurations, personal information regarding the
customers and consumers of Pioneer and business of Pioneer (the "Pioneer
Confidential Information") is confidential and proprietary to Pioneer. DST
hereby agrees to use the Pioneer Confidential Information only as permitted by
this Schedule, to maintain the confidentiality of the Pioneer Confidential
Information and not to disclose the Pioneer Confidential Information, or any
part thereof, to any other person, firm or corporation. DST acknowledges that
disclosure of the Pioneer Confidential Information may give rise to an
irreparable injury to Pioneer inadequately compensable in damages. Accordingly,
Pioneer may seek (without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of confidentiality and
nondisclosure, in addition to any other legal remedies which may be available.
DST consents to the obtaining of such injunctive relief and in any proceeding
upon a motion for such injunctive relief, DST's ability to answer in damages
shall not be interposed as a defense to the granting of such injunctive relief.
Section 7.3 Limitations; Survival. The provisions of this Article VIII shall
not apply to any information if and to the extent it was (i) independently
developed by the receiving Party as evidenced by documentation in such Party's
possession, (ii) lawfully received by it free of restrictions from another
source having the right to furnish the same, (iii) generally known or available
to the public without breach of this Schedule by the receiving Party or
(iv) known to the receiving Party free of restriction at the time of such
disclosure. The Parties agree that immediately upon termination of this
Schedule, without regard to the reason for such termination, the Parties shall
forthwith return to one another all written materials and computer software
which are the property of the other Party. All of the undertakings and
obligations relating to confidentiality and nondisclosure in this Schedule
shall survive the termination or expiration of this Schedule for a period of
ten (10) years, except with respect to any non-public personal information as
defined under federal and state privacy laws, for which information the
undertakings and obligations relating to confidentiality and nondisclosure in
this Schedule shall survive the termination or expiration of this Schedule for
the period of time required by such applicable law.
ARTICLE IX
FORCE MAJEURE
Pioneer acknowledges that the Internet is not a secure or reliable
environment, and that the ability of DST to deliver FAN Mail Services is
dependent upon the Internet and equipment, software, systems, data and services
provided by various telecommunications carriers, equipment manufacturers,
firewall providers and encryption system developers and other vendors and third
parties. DST shall not be liable for any delays or failures to perform any of
its obligations hereunder to the extent that such delays or failures are due to
circumstances beyond its reasonable control, including acts of God, strikes,
riots, terrorist acts, acts of war, power failures, functions or malfunctions
of the Internet, telecommunications services, firewalls, encryption systems and
security devices, or governmental regulations imposed after the date of this
Schedule.
5
IN WITNESS WHEREOF, the Parties hereto have set their hands by their
authorized representatives as of the Effective Date.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
6
SERVICE EXHIBIT
BASIC FAN MAIL SERVICES - TA2000
1. Basic FAN Mail Services. Pioneer has requested, and DST will provide, for
the Term set forth on the signature page of this Service Exhibit, Basic
FAN Mail Services as one of the FAN Mail Services pursuant to the terms of
the Master Agreement for DST FAN Mail Services (the "Agreement") between
Pioneer and DST.
2. DST Responsibilities. In connection with its performance of Basic FAN Mail
Services, DST shall:
(a) Receive data ("Files") from Pioneer or extract Files from TA2000 as
instructed by Pioneer, address the Files to Recipients who have been
designated by Pioneer to receive the Files and who have completed the
enrollment process for Basic FAN Mail Services described below, and
make the Files available to such Recipients. Files will be made
available through the Internet via hypertext link to the DST Web
Site. DST shall provide each Recipient utilizing the Internet with a
recipient ID (the "Recipient ID") and a password (the "Password") in
accordance with the then current Recipient Enrollment and
Authorization Procedures and shall permit access to the file(s)
associated with a given Recipient ID and Password whenever the
appropriate Recipient ID and Password is received at the DST Web
Site. Each Recipient is responsible for accessing and retrieving such
Recipient's Files.
(b) Make available to Recipients the Files set forth on the File and
Usage Fee Schedule attached to this Service Exhibit. DST may, from
time to time, and upon notice to Pioneer, add and/or delete Files
from the File and Usage Fee Schedule.
(c) Perform the following administrative functions: maintain a data base
which contains the Recipient's name, address, electronic mailing
address, forty-five (45) day history of Files made available and list
of Recipients by dealer/adviser number; provide billing to Pioneer;
reasonably assist Pioneer and Recipients to establish FAN Mail links;
monitor transmissions and provide ongoing technical support for FAN
Mail; and maintain a Website facilitating enrollment for Recipients
of Pioneer's Files.
(d) Establish links between Pioneer, the DST Web Site and the
Distribution Support Services Web Site, provide telephone support to
Pioneer and Recipients respecting use of FAN Mail, use reasonable
efforts to resolve problems, and establish and maintain the DST Web
Site so it is available.
(e) Perform all other DST obligations as set forth in the Agreement.
3. Pioneer and Recipient Responsibilities. During the Term and subject to the
provisions of this Agreement, Pioneer shall at its expense (unless
otherwise provided for herein) fulfill Pioneer obligations as follows:
(a) Pioneer. Pioneer must:
(i) Comply with all Recipient Enrollment and Authorization
Procedures described in the Basic FAN Mail Services Security
Procedures attached as part of this Exhibit;
(ii) Transmit Files daily from Financial Product recordkeeping
systems maintained by third parties to DST in formats specified
from time to time by DST, if applicable. For Files to be
extracted from TA2000, by execution of this Service Exhibit
Pioneer
7
hereby consents, and instructs DST to extract Files from TA2000
for Recipients who have been designated by Pioneer to receive
the Files;
(iii)Perform all other Pioneer obligations as set forth in the
Agreement.
(b) Recipient. As a condition of a Recipient's access to Files, Pioneer
acknowledges that each Recipient must:
(i) Obtain and pay for connectivity to the Internet or delivery
protocol;
(ii) Have the proper equipment and software to enable the Recipients
to access the DST Web Site and download the Files therein and
obtain all related maintenance, including support in the event
of download problems; and
(iii)Comply with all Recipient Enrollment and Authorization
Procedures described in the Basic FAN Mail Services Security
Procedures attached as part of this Exhibit.
Pioneer agrees that DST shall not be required to provide Files to any
Recipient who fails to comply with the foregoing.
4. Fees for Basic FAN Mail Services. As consideration for the performance by
DST of the Basic FAN Mail Services, Pioneer shall pay to Boston Financial
the fees and charges for this Schedule as set forth on Exhibit B to the
Master Agreement.
8
BASIC FAN MAIL SERVICES
Security Procedures
1. Encryption
The following encryption methods will be employed for all data files
residing outside of DST's secured environment:
Files available for Recipient download will be stored using 256-bit AES
(Advanced Encryption Standard) encryption.
Between the Recipient and the DST Web site or the Distribution Support
Services Web Site, the Files will be encrypted using Secure Sockets Layer
("SSL"). The purpose of using SSL is to encrypt data transmissions through
the DST Web Site and the Distribution Support Services Web Site and not
allow access through the DST Web Site or the Distribution Support Services
Web Site from Internet browsers which do not support SSL data encryption.
The standard level of encryption supported by the DST Web Site and the
Distribution Support Services Web Site is 128-bit encryption.
2. Network Access Control
A device referred to as a "firewall" is located between the Internet and the
DST Web Site. The purpose of the firewall is to control connectivity to the
DST Web Site at the port level. This equipment is located and administered
at DST's Winchester data center. Changes to the systems residing on this
computer are submitted through the DST change control process. DST is
advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web Site. Ports on the firewall are configured to be
consistent with ports at the DST Web Site.
All services and functions within the DST Web Site are deactivated with the
exception of services and functions which support the transfer of files. All
ports on the DST Web Site are disabled, except those ports required to
transfer files. All "listeners" are deactivated. Directory structures are
"hidden" from the user. Services which provide directory information are
also deactivated.
3. Limitation of DST Access
Access of DST personnel to the DST Web Site and the Distribution Support
Services Web Site and the FAN Mail application servers is restricted within
DST to a limited number of employees based upon DST system administration
requirements, as determined by appropriate DST systems managers from time to
time.
4. Right to Audit
Pioneer may audit, at its expense, the DST Web Site and the Distribution
Support Services Web Site once in each 12 month period and any associated
systems or networks after providing reasonable written notice to DST. The
audit may include review of configurations, audit trails, and maintenance of
systems and software associated with the DST Web Site and the Distribution
Support Services Web Site. Tools which may be used for the audit may include
network security tools; provided that DST may specify the time at which any
tool is used, if DST reasonably believes that such tool may affect system
performance. The audit will be coordinated through the DST Internal Audit
Office and DST will be entitled to observe all audit activity. Pioneer will
not perform any action that may interfere with the uptime or stability of
DST's systems or networks. Subject to the foregoing, Pioneer may perform any
audit activity which is technically possible for a user of the public
Internet. In particular, Pioneer and its review team will be considered
authorized users and DST will not seek prosecution under any computer crime
or other applicable statutes for such activity.
9
5.a. ID/Password Requirements - Recipient
DST will establish a single Recipient ID and Password for each Recipient
and will permit access to the Files residing on the DST Web Site
associated with the given Recipient ID and Password without further
inquiry. Each Recipient's Password will be encrypted.
5.b. ID/Password Requirements - Pioneer Point of Contact
DST will establish a single Operator ID and Password for use by the
Pioneer point of contact to access the Distribution Support Services Web
Site.
Required - The Operator ID shall have access as determined by the Pioneer.
Access will be specific to the management company associated with the
Pioneer. This may include the following access levels, at Pioneer's
option, inquiry only access (Pioneer point of contact may only view
information related to Recipients) or update access (Pioneer point of
contact may update profiles related to Recipients, including, but not
limited to, changing, adding and deleting Recipient information). DST
shall store the Operator ID and associated access levels. Any personnel
changes or access changes affecting the Pioneer point of contact must be
communicated to DST promptly.
Required - Password is used in conjunction with Operator ID to access the
Distribution Support Services Web Site, which consequently provides access
to any Recipient information (profile, firm, address, authorization
information, etc.)
10
RECIPIENT ENROLLMENT AND AUTHORIZATION PROCEDURES
FOR
BASIC FAN MAIL SERVICES
The following Enrollment and Authorization Procedures, which may be modified by
DST from time to time, are also part of the Security Procedures applicable to
the Basic FAN Mail Services:
1. Enrollment.
(a) New Recipients. Each Recipient is required to complete an online
enrollment found at http://www.dstfanmail.com and electronically submit
to DST the information called for in the enrollment process. In order to
complete the enrollment process, the Recipient must verify Recipient's
agreement to DST's Terms and Conditions for access to FAN Mail Services
by clicking an "I Agree" button. The Recipient must identify the
broker/dealer with which the Recipient is associated. If DST does not
already have a hard copy blanket Broker/Dealer Authorization Letter
completed and on file for the identified broker/dealer, the Recipient
must submit a hard copy Broker/Dealer Authorization Letter signed by the
broker/dealer. DST will not be required to verify that the person who
clicks agreement to the Terms and Conditions or that the person who
signs the Broker/Dealer Authorization Letter is legally authorized to do
so and DST shall be entitled to rely conclusively upon such agreement
keystroke or signature without further duty to inquire. The Recipient
must also provide all information requested concerning the Recipient's
practice and which financial products the Recipient wishes to access. A
Recipient ID and Password are established immediately upon completion of
the enrollment process.
(b) Currently Enrolled Recipients. Recipients who are currently enrolled and
authorized by Pioneer to receive Files for Basic FAN Mail Services at the
time of execution of this Service Exhibit under any prior FAN Mail Agreement
shall not be required to re-enroll and Pioneer agrees that authorization
shall be deemed to be given as to such Recipients until Pioneer notifies DST
otherwise.
2. Pioneer Authorization.
Upon DST's receipt of enrollment instructions from the Recipient, DST will
make available an Authorization Request to Pioneer (point of contact)
through the Distribution Support Services Web Site.
Through the Distribution Support Services Web Site, Pioneer's point of
contact is solely responsible for authorizing or denying each Recipient
request for access to the product. When authorizing requests, security
criteria must be verified by Pioneer. This includes verifying that each
field authorized in the security criteria accurately represents the
dealer/branch/representative, tax ID, or cumulative discount information or
any additional data extract criteria requested that appears on the master of
the Recipient's clients' accounts. 100% of the Recipient's accounts should
reflect the authorized criteria.
Pioneer assumes all responsibility for verifying and approving the security
level of each new Recipient authorization request. DST shall not be required
to verify that the person who processes the Authorization Request is legally
authorized to do so on behalf of Pioneer and DST shall be entitled to rely
conclusively upon such approval/denial without further duty to inquire. No
Files will be made available until the request is authorized by Pioneer.
11
3. Data Availability Notification.
When Pioneer approves an authorization request, the Recipient's ID is
updated for the authorized security and an e-mail is sent to the Recipient
notifying him/her that data is available for retrieval.
All other terms and conditions shall be governed by the Agreement into which
this Service Exhibit is incorporated.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"), this
Service Exhibit shall automatically renew for additional, successive twelve
(12)-month terms (each, a "Renewal Exhibit Term") unless terminated by either
Party by written notice to the other at least sixty (60) days prior to the end
of the Initial Exhibit Term or any Renewal Exhibit Term, in which case the
effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are referred to herein as the Exhibit Term. Nothing in
this paragraph shall alter or affect either Party's ability to terminate the
Agreement and this Service Exhibit as set forth in Article VI of the Agreement.
12
SERVICE EXHIBIT
INTERNET DEALER COMMISSIONS - TA2000
1. Internet Dealer Commissions. Pioneer has requested, and DST will provide,
for the Term set forth on the signature page of this Service Exhibit,
Internet Dealer Commissions as one of the FAN Mail Services pursuant to the
terms of the Master Agreement for DST FAN Mail Services (the "Agreement")
between Pioneer and DST. DST will use the Internet Dealer Commissions to
make commission data available to Broker/Dealers authorized by Pioneer.
Each Broker/Dealer authorized by Pioneer will have the ability to retrieve
commission data relating to the investment companies managed by Pioneer
from the DST Web Site.
2. Definitions. For purposes of this Exhibit, the following additional
definition shall apply (in addition to all other defined terms in the
Agreement):
. "Commission Data" shall mean front-end load, advanced, and 12b-1 dealer
compensation information relating to the investment companies managed by
Pioneer.
3. DST Responsibilities. In connection with services utilizing the Internet
Dealer Commissions, DST shall:
(a) Extract Commission Data as files ("Files") from TA2000 as instructed by
Pioneer, address the Files to Broker/Dealers who have been designated
by Pioneer to receive the Files and who have completed the enrollment
process for the Internet Dealer Commissions as described below and make
the Files available to such Broker/Dealers. All files will be made
available only through the Internet via the DST Web Site. DST shall
provide each Broker/Dealer utilizing the Internet with a Broker/Dealer
ID (the "Broker/Dealer ID") and a password (the "Password") and shall
permit access to the Commission Data associated with a given
Broker/Dealer ID and Password whenever the appropriate Broker/Dealer ID
and Password is received at the DST Web Site. Each Broker/Dealer is
responsible for accessing and retrieving such Broker/Dealer's Files.
(b) Perform the following administrative functions necessary to establish
the link between the Files and the Broker/Dealer's Internet directory:
facilitate enrollment for Broker/Dealers requesting Pioneer's
Commission Data; maintain a data base which contains the
Broker/Dealer's name, address, electronic mailing address, and forty
five (45) day history of Commission Data made available through the DST
Web Site; provide billing to Pioneer; reasonably assist Pioneer and
Broker/Dealers to establish Internet links; monitor transmissions; and
provide ongoing technical support for the Internet Dealer Commissions
services.
(c) Establish Internet links between the TA2000 system and the DST Web
Site; provide telephone support to Pioneer and Broker/Dealers
respecting use of the Internet Dealer Commissions; use reasonable
efforts to resolve problems; and establish and maintain the DST Web
Site so it is available for contact by Broker/Dealers.
(d) Perform all other DST obligations as set forth in the Agreement.
13
4. Pioneer and Broker/Dealer Responsibilities. During the Term and subject to
the provisions of this Agreement, Pioneer shall at its expense (unless
otherwise provided for herein) fulfill Pioneer obligations as follows:
(a) Pioneer. Pioneer must:
(i) Comply with all Broker/Dealer Enrollment and Authorization
Procedures described in the Internet Dealer Commissions Security
Procedures attached as a part of this Exhibit;
(ii)Instruct DST to make Commission Data from TA2000 available to
Broker/Dealers who have been designated by Pioneer to receive the
Files.
(iii)Perform all other Pioneer obligations as set forth in the Agreement.
(b) Broker/Dealer. As a condition of a Broker/Dealer's access to Files,
Pioneer acknowledges that each Broker/Dealer must:
(i) Obtain and pay for connectivity to the Internet or delivery
protocol; and
(ii)Have the proper equipment and software to enable the Broker/Dealer
to access the Files therein and obtain all related maintenance,
including support in the event of download problems; and
(iii)Comply with all Broker/Dealer Enrollment and Authorization
Procedures described in the Security Procedures attached as part of
this Exhibit.
Pioneer agrees that DST shall not be required to provide Files to any
Broker/Dealer who fails to comply with the foregoing.
5. Fees for Internet Dealer Commissions. As consideration for the performance
by DST of the Internet Dealer Commissions services described above, Pioneer
shall pay DST the fees and charges set forth on Exhibit B to the Master
Agreement.
14
INTERNET DEALER COMMISSIONS
Security Procedures
1. Encryption
The following encryption methods will be employed for all data files
residing outside of DST's secured environment:
Files available for Broker/Dealer download will be stored using 256-bit AES
(Advanced Encryption Standard) encryption.
Between the Broker/Dealer and the DST Web site or the Distribution Support
Services Web Site, the Files will be encrypted using Secure Sockets Layer
("SSL"). The purpose of using SSL is to encrypt data transmissions through
the DST Web Site and the Distribution Support Services Web Site and not
allow access through the DST Web Site or the Distribution Support Services
Web Site from Internet browsers which do not support SSL data encryption.
The standard level of encryption supported by the DST Web Site and the
Distribution Support Services Web Site is 128-bit encryption.
2. Network Access Control
A device referred to as a "firewall" is located between the Internet and the
DST Web Site. The purpose of the firewall is to control connectivity to the
DST Web Site at the port level. This equipment is located and administered
at DST's Winchester data center. Changes to the systems residing on this
computer are submitted through the DST change control process. DST is
advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web Site. Ports on the firewall are configured to be
consistent with ports at the DST Web Site.
All services and functions within the DST Web Site are deactivated with the
exception of services and functions which support the transfer of files. All
ports on the DST Web Site are disabled, except those ports required to
transfer files. All "listeners" are deactivated. Directory structures are
"hidden" from the user. Services which provide directory information are
also deactivated.
3. Limitation of DST Access
Access of DST personnel to the DST Web Site and the Internet Dealer
Commissions application servers is restricted within DST to a limited number
of employees based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
4. ID/Password Requirements
DST will establish a single Broker/Dealer ID and Password for each
Broker/Dealer and will permit access to the Files residing on the DST Web
Site associated with the given Broker/Dealer ID and Password without further
inquiry. Each Broker/Dealer's Password will be encrypted.
15
BROKER/DEALER ENROLLMENT AND AUTHORIZATION PROCEDURES
FOR
INTERNET DEALER COMMISSIONS
The following Enrollment and Authorization Procedures, which may be modified by
DST from time to time, are also part of the Security Procedures applicable to
the Internet Dealer Commissions.
1. Enrollment.
Each Broker/Dealer is required to complete an online enrollment found at
http://www.dstidc.com and electronically submit to DST the information
called for in the enrollment process. In order to complete the enrollment
process, the Broker/Dealer must verify Broker/Dealer's agreement to DST's
Terms and Conditions for access to Internet Dealer Commissions Services by
clicking an "I Agree" button. DST will not be required to verify that the
person who clicks agreement to the Terms and Conditions is legally
authorized to do so and DST shall be entitled to rely conclusively upon such
agreement keystroke or signature without further duty to inquire. The
Broker/Dealer must also provide all information requested concerning the
Broker/Dealer's practice and which financial products the Broker/Dealer
wishes to access. A Broker/Dealer ID and Password are established
immediately upon completion of the enrollment process.
2. Pioneer Authorization.
Upon DST's receipt of enrollment instructions from the Broker/Dealer, DST
will make available an authorization request to Pioneer (point of contact)
through the Distribution Support Services Web Site.
Pioneer's point of contact is solely responsible for authorizing or denying
each Broker/Dealer request for access to the product. When authorizing
requests, security criteria must be verified by Pioneer. 100% of the
Broker/Dealer's accounts should reflect the authorized criteria.
Pioneer assumes all responsibility for verifying and approving the security
level of each new Broker/Dealer authorization request. DST shall not be
required to verify that the person who processes the authorization request
is legally authorized to do so on behalf of Pioneer and DST shall be
entitled to rely conclusively upon such approval/denial without further duty
to inquire. No Commission Data will be made available until the request is
authorized by Pioneer.
16
All other terms and conditions shall be governed by the Agreement into which
this Service Exhibit is incorporated.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
-------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title Senior Vice President Title: Vice President
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"), this
Service Exhibit shall automatically renew for additional, successive twelve
(12)-month terms (each, a "Renewal Exhibit Term") unless terminated by either
Party by written notice to the other at least sixty (60) days prior to the end
of the Initial Exhibit Term or any Renewal Exhibit Term, in which case the
effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are referred to herein as the Exhibit Term. Nothing in
this paragraph shall alter or affect either Party's ability to terminate the
Agreement and this Service Exhibit as set forth in Article VI of the Agreement.
17
SCHEDULE VI
DST FAN Services - Mutual Funds (Web/Vision)
18
SCHEDULE NUMBER VI TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
AND BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial") (the "Master
Agreement")
DST FAN SERVICES - MUTUAL FUNDS
THIS SCHEDULE is made effective as of January 1st, 2012 by and between DST
Systems, Inc., a Delaware corporation ("DST") and Pioneer Investment Management
Shareholder Services, Inc., a Massachusetts corporation ("Pioneer"). DST and
Pioneer are together referred to herein as the "Parties" and individually as
the "Party".
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, under which Pioneer desires to
utilize DST FAN Services to provide access to account information and certain
on-line transaction request capabilities in accordance with the terms of this
Schedule.
NOW, THEREFORE, in consideration of the foregoing premises, and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereby agree as follows.
ARTICLE I
INCORPORATION OF MASTER AGREEMENT
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DST and
Pioneer agree that solely for purposes of this Schedule, DST shall be deemed to
have executed the Master Agreement in place of Boston Financial and to have
accepted the terms thereof, and Pioneer further agrees that DST and not Boston
Financial shall be solely responsible under this Schedule.
ARTICLE II
DEFINITIONS
Except as may be modified in a Service Exhibit, the following definitions
shall apply to this Schedule. Additional terms may be defined in the Master
Agreement, this Schedule, or in the exhibits that describe the FAN Services to
be provided by DST for Pioneer.
. "Customer-Controlled Content Areas" shall mean those DST-designated
areas within DST-designated screens of the DST Web Site where Pioneer
may optionally publish marketing or other types of Pioneer-specific
content. Pioneer makes content updates and changes directly to those
areas in the DST Web Site through a secured Application Programming
Interface (API) or through a password protected DST-provided update
facility made available by DST only to Pioneer.
. "DST Web Site" shall mean the collection of electronic documents or
pages residing on DST's computer system, linked to the Internet and
accessible by hypertext link through the World Wide Web, where the
Transaction data fields and related screens provided by DST may be
viewed by Users who access such site.
1
. "FAN" shall mean the DST Financial Access Network, a DST computer and
software system that provides an interface between the Internet and
public data network service providers and the transfer agency systems of
Funds for the purposes of communicating Fund data and information and
Transaction requests.
. "FAN Options" shall mean the series of edits and instructions provided
by Pioneer to DST in writing, through which Pioneer specifies its
instructions for Transactions available through the various FAN
Services, e.g., minimum and maximum purchase, redemption and exchange
amounts.
. "FAN Services" shall mean the services provided by DST utilizing FAN(R),
the DST Web Site, the Internet, and other software, equipment and
systems provided by DST and telecommunications carriers and firewall
providers, whereby Transactions may be requested in each Fund by Users
accessing the DST Web Site via the Internet.
. "Fund(s)" shall mean, solely for purposes of this Schedule and the
Service Exhibits, as defined below, the various registered investment
companies (mutual funds) for which Pioneer provides various services and
which Pioneer designates for participation in FAN Services from time to
time by written notice to DST.
. "Person" shall mean an individual, corporation, partnership,
association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
. "Security Procedures" shall mean the procedures, including the use of
encryption technology, implemented for purposes of protecting the
integrity, confidentiality or secrecy of, and the unauthorized
interception, corruption, use of, or access to, any data or information
transmitted via FAN Services.
. "Service Exhibit" shall mean the service exhibits attached hereto which
outline the particular FAN Services to be provided by DST to Pioneer.
. "Transactions" shall mean account inquiries, purchases, redemptions,
exchanges and other transactions offered through FAN Services as
specified in each Service Exhibit.
. "User(s)" shall mean record owners or authorized agents of record owners
of shares of a Fund, including brokers, investment advisors and other
financial intermediaries or the other Persons authorized to access a
particular FAN Service pursuant to the terms of a Service Exhibit.
ARTICLE III
USE OF FAN SERVICES BY PIONEER
Section 2.1 Selection of FAN Services. DST will perform, and Pioneer has
selected, the FAN Services described on the Service Exhibits attached to this
Schedule. New Service Exhibits describing additional FAN Services may be added
to this Schedule from time to time by mutual written agreement of DST and
Pioneer, and such additional FAN Services shall be subject to the terms of this
Schedule.
Section 2.2 DST Responsibilities. During the Term and subject to the
provisions of this Schedule, DST shall, at its expense (unless otherwise
provided for herein) perform the FAN Services as described in each Service
Exhibit, including provision of all computers, telecommunications connectivity
and equipment reasonably necessary at its facilities to operate and maintain
FAN and the DST Web Site.
Section 2.3 Pioneer Responsibilities. During the Term and subject to the
provisions of this Schedule, Pioneer shall at its expense (unless otherwise
provided for herein) fulfill, or cause to be fulfilled by the Funds or
otherwise, the Pioneer obligations, if any, set forth in each Service Exhibit
to this Schedule.
2
Section 2.4 Change in Designated Funds. Upon thirty (30) days prior notice
to DST, Pioneer may change the Funds designated to participate in FAN Services
by delivering to DST, in writing, a revised list of participating Funds.
Section 2.5 FAN Options. Pioneer is responsible for establishing
implementation procedures and options available for each FAN Service, as
specified in the applicable Service Exhibit.
Section 2.6 Scope of DST Obligations. DST shall at all times use reasonable
commercial efforts in performing FAN Services under this Schedule. In the
absence of breach of its duties under this Schedule, DST shall not be liable
for any loss or damage suffered in connection with the use of FAN Services.
With respect to those actions or services delineated in FAN Options and all
other instructions given to DST by Pioneer, DST shall be presumed to have
fulfilled its obligations if it has acted in accordance with the FAN Options
and other instructions provided by Pioneer. With respect to any claims for
losses, damages, costs or expenses which may arise directly or indirectly from
Security Procedures which DST has implemented or omitted, DST shall be presumed
to have fulfilled its obligations if it has followed, in all material respects,
at least those Security Procedures described in the Security Procedures
attachment to each Service Exhibit to this Schedule. DST may, but shall not be
required to, modify such Security Procedures from time to time to the extent it
believes, in good faith, that such modifications will not diminish the security
of FAN. All data and information transmissions via FAN Services are for
informational purposes only, and are not intended to satisfy regulatory
requirements or comply with any laws, rules, requirements or standards of any
federal, state or local governmental authority, agency or industry regulatory
body, including the securities industry, which compliance is the sole
responsibility of Pioneer. Pioneer acknowledges and agrees that its Users are
responsible for verifying the accuracy and receipt of all data or information
transmitted via FAN Services. Pioneer is responsible for advising its Users of
their responsibility for promptly notifying the Fund's transfer agent of any
errors or inaccuracies relating to shareholder data or information transmitted
via FAN Services.
ARTICLE IV
FEES
Section 3.1 Fees for FAN Services. As consideration for the performance by
DST of the FAN Services, Pioneer will pay Boston Financial the fees relating to
each such service under this Schedule as set forth in Exhibit B to the Master
Agreement.
Section 3.2 Invoicing; Fee Increases. DST may change any of the fees and
charges provided for in this Article IV upon thirty (30) days written notice to
Pioneer. All fees and charges shall be billed by Boston Financial and paid by
Pioneer as provided in the Master Agreement.
ARTICLE V
PROPRIETARY RIGHTS
Pioneer acknowledges and agrees that it obtains no rights in or to any of
the software, hardware, processes, templates, screen and file formats,
interface formats or protocols, and development tools and instructions, trade
secrets, proprietary information or distribution and communication networks of
DST. Any software, interfaces, interface formats or protocols developed by DST
shall not be used by Pioneer for any purposes other than utilizing FAN Services
pursuant to this Schedule or to connect Pioneer to any transfer agency system
or any other Person without DST's prior written approval. Pioneer also agrees
not to take any action which would mask, delete or otherwise alter any DST
on-screen disclaimers (including electronic forms which Users are required to
accept) and copyright, trademark and service mark notifications provided by DST
from time to time, or any "point and click" features relating to User
acknowledgment and acceptance of such disclaimers and notifications.
3
ARTICLE VI
TERM AND TERMINATION
Section 5.1 Term. Unless terminated earlier as provided in this Article VI,
this Schedule shall be effective as of the date first noted above and shall
continue in force and effect until the expiration or termination of the last
Service Exhibit between DST and Pioneer then in effect (the "Term").
Section 5.2 Termination. Throughout the Term, either Party shall have the
right to terminate this Schedule on written notice to the other Party of the
other Party's material breach of this Schedule and such Party's failure to cure
such breach within thirty (30) days. Additionally, DST shall have the right,
upon thirty (30) days prior written notice to Pioneer, to terminate this
Schedule, and all Service Exhibits then in effect, in the event of the
termination of the Master Agreement or Schedule II - TA2000 Remote Services -
to the Master Agreement.
Section 5.3 Effect of Termination. In the event of a termination under the
provisions of this Article VI, the Parties will have no continuing obligations
to one another other than the obligation to return to one another the
confidential or proprietary materials of the other in their possession.
ARTICLE VII
INDEMNIFICATION; LIABILITY LIMITATIONS
Section 6.1 No Other Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN
THIS SCHEDULE, THE FAN SERVICES AND ALL SOFTWARE AND SYSTEMS DESCRIBED IN THIS
SCHEDULE AND ITS EXHIBITS ARE PROVIDED "AS-IS," ON AN "AS AVAILABLE" BASIS, AND
DST HEREBY SPECIFICALLY DISCLAIMS ANY AND ALL REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, REGARDING SERVICES PROVIDED BY DST HEREUNDER, INCLUDING ANY
IMPLIED WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
Section 6.2 Limitation of Liability. Under no circumstances shall DST be
liable for indirect, incidental, consequential, special, exemplary or punitive
damages (even if DST has been advised of or has foreseen the possibility of
such damages), arising from the use or inability to use any of the FAN
Services, the DST Web Site or FAN, or under any provision of this Schedule,
such as, but not limited to, loss of revenue or anticipated profits or lost
business. Without limiting any of the foregoing terms of this Section, DST's
liability in connection with the performance of FAN Services under the terms of
this Schedule, or under any theory of law, tort or otherwise, shall not exceed
(i) as to any single claim an amount exceeding the aggregate fees received by
Boston Financial from Pioneer with respect to this Schedule pursuant to Article
IV during the three (3) months immediately preceding the act or occurrence from
which the claim arises, and (ii) as to all claims, an amount exceeding the
aggregate fees received by Boston Financial from Pioneer with respect to this
Schedule pursuant to Article IV during the most recent twelve (12) month Term
of the Service Exhibit relating to the FAN Service with respect to which the
claim arises.
Section 6.3 Indemnity. Pioneer hereby indemnifies and holds DST harmless
from, and shall defend it against any and all claims, demands, costs, expenses
and other liabilities, including reasonable attorneys' fees, arising in
connection with the use of, or inability to use, the FAN Services by any User,
except to the extent such liabilities result directly from the failure by DST
to perform its obligations under this Schedule.
4
ARTICLE VIII
CONFIDENTIALITY
Section 7.1 DST Confidential Information. In addition to the provisions of
Section 9 of the Master Agreement, Pioneer acknowledges and agrees that the
terms and conditions of this Schedule, FAN (including by way of example and
without limitation all Security Procedures, processes, algorithms, designs,
techniques, code, screen and data formats, interface formats and protocols, and
structures contained or included therein) and other information obtained by
them concerning the other software, software applications, equipment
configurations, and business of DST (the "DST Confidential Information") is
confidential and proprietary to DST. Pioneer further agrees to use the DST
Confidential Information only as permitted by this Schedule, to maintain the
confidentiality of the DST Confidential Information and not to disclose the DST
Confidential Information, or any part thereof, to any other person, firm or
corporation. Pioneer acknowledges that disclosure of the DST Confidential
Information may give rise to an irreparable injury to DST inadequately
compensable in damages. Accordingly, DST may seek (without the posting of any
bond or other security) injunctive relief against the breach of the foregoing
undertaking of confidentiality and nondisclosure, in addition to any other
legal remedies which may be available. Pioneer consents to the obtaining of
such injunctive relief and in any proceeding upon a motion for such injunctive
relief, Pioneer's ability to answer in damages shall not be interposed as a
defense to the granting of such injunctive relief.
Section 7.2 Pioneer Confidential Information. In addition to the provisions
of Section 9 of the Master Agreement, DST acknowledges and agrees that the
terms and conditions of this Schedule, any information obtained by DST
concerning the software and software applications (including by way of example
and without limitation all data in the Files and algorithms, designs,
techniques, code, screen and data formats and structures contained or included
therein), equipment configurations, personal information regarding the
customers and consumers of Pioneer and business of Pioneer (the "Pioneer
Confidential Information") is confidential and proprietary to Pioneer. DST
hereby agrees to use the Pioneer Confidential Information only as permitted by
this Schedule, to maintain the confidentiality of the Pioneer Confidential
Information and not to disclose the Pioneer Confidential Information, or any
part thereof, to any other person, firm or corporation. DST acknowledges that
disclosure of the Pioneer Confidential Information may give rise to an
irreparable injury to Pioneer inadequately compensable in damages. Accordingly,
Pioneer may seek (without the posting of any bond or other security) injunctive
relief against the breach of the foregoing undertaking of confidentiality and
nondisclosure, in addition to any other legal remedies which may be available.
DST consents to the obtaining of such injunctive relief and in any proceeding
upon a motion for such injunctive relief, DST's ability to answer in damages
shall not be interposed as a defense to the granting of such injunctive relief.
Section 7.3 Consumer Privacy. Pioneer and DST shall each comply with all
applicable laws, rules and regulations relating to privacy, confidentiality,
security, data security and the handling of personal financial information
applicable to it that may be established from time to time, including but not
limited to the Gramm-Leach-Bliley Act and Securities and Exchange Commission
Regulation S-P (17 CFR Part 248) promulgated thereunder and Massachusetts
Standards for the Protection of Personal Information, 201 CMR 17.00, et seq.
Section 7.4 Limitations; Survival. The provisions of this Article VIII shall
not apply to any information if and to the extent it was (i) independently
developed by the receiving Party as evidenced by documentation in such Party's
possession, (ii) lawfully received by it free of restrictions from another
source having the right to furnish the same, (iii) generally known or available
to the public without breach of this Schedule by the receiving Party or
(iv) known to the receiving Party free of restriction at the time of such
disclosure. The Parties agree that immediately upon termination of this
Schedule, without regard to the reason for such termination, the Parties shall
forthwith return to one another all written materials and computer software
which are the property of the other Party. All of the undertakings and
obligations relating to confidentiality and nondisclosure in this Schedule
shall survive the termination or expiration of this Schedule for a period of
ten (10) years.
5
ARTICLE IX
FORCE MAJEURE
Pioneer acknowledges that the Internet is not a secure organized or reliable
environment, and that the ability of DST to deliver FAN Services is dependent
upon the Internet and equipment, software, systems, data and services provided
by various telecommunications carriers, equipment manufacturers, firewall
providers and encryption system developers and other vendors and third parties.
DST shall not be liable for any delays or failures to perform any of its
obligations hereunder to the extent that such delays or failures are due to
circumstances beyond its reasonable control, including acts of God, strikes,
riots, terrorist acts, acts of war, power failures, functions or malfunctions
of the Internet, telecommunications services (including wireless), firewalls,
encryption systems and security devices, or governmental regulations imposed
after the date of this Schedule.
IN WITNESS WHEREOF, the Parties hereto have set their hands by their
authorized representatives as of the year and date first hereinabove indicated.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
---------------------------- -------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
----------------------------
with a copy to:
DST Systems, Inc.
Address: 333 W. 11th Street
----------------------------
Kansas City, Missouri 64105-1594
----------------------------
FAX: Fax: (816) 435-8630
----------------------------
Attention: Attention: General Counsel
----------------------------
6
SERVICE EXHIBIT
Web Services
1. Web Services. Pioneer has requested, and DST will provide Web Services as
one of the FAN Services provided pursuant to the terms of the DST FAN
Services Schedule (the "Schedule") between Pioneer and DST. Through Web
Services, Shareholders may submit Transaction requests to the Fund's
transfer agency system via the Internet as described further in this Service
Exhibit.
2. Definitions. For purposes of this Exhibit, the following additional
definitions shall apply (in addition to all other defined terms in the
Schedule):
. "Customer Web Site" shall mean the collection of electronic documents or
pages residing on the computer system of Pioneer (or an Internet Service
Provider ("ISP") hired by Pioneer) connected to the Internet and
accessible through the World Wide Web, where Shareholders may view
information about the Funds and access the various Transaction screens
provided by Pioneer.
. "FAN Web Authentication" shall mean the Shareholder authentication
process, utilized by Web Services if Pioneer has not chosen Single
Signon as one of the FAN Options, whereby Shareholder authentication
information is collected and transmitted, and Shareholder personal
identification number (PIN) information is created, changed and reset
via an Internet link between the DST Web Site and the Shareholder's web
browser.
. "Shareholder" shall mean the record owner or authorized agent of the
owner of shares of a Fund.
. "Single Signon" shall mean the function of Web Services, available to
Pioneer as one of the FAN Options, enabling Pioneer to (i) manage
Shareholder login procedures at the Customer Web Site and collect
Shareholder authentication information and pass such information to the
DST Web Site for Shareholder authentication utilizing server-to-server
"https" requests and text responses between the DST Web Site and the
Customer Web Site, and (ii) create, change and reset Shareholder
personal identification number (PIN) information directly at the
Customer Web Site.
3. DST Responsibilities. In connection with its performance of Web Services,
DST shall:
(a) receive Transaction requests electronically transmitted to the DST Web
Site via the Internet following execution of a link from the Customer
Web Site to the DST Web Site and route Transaction requests through
FAN to Pioneer's transfer agency system, using Single Signon or FAN
Web Authentication, as applicable, for the collection and presentation
of Shareholder authentication information;
(b) for each Transaction request received, route Transaction information
from Pioneer's transfer agency system through FAN to the Internet to
be viewed by Users;
(c) deliver to Pioneer a DST FAN Options User Guide and FAN Options
instruction form; and update FAN Options as necessary when provided
written instructions from Pioneer, and
(d) perform all other DST obligations as set forth in the Schedule.
7
4. Pioneer Responsibilities. In connection with its use of Web Services,
Pioneer shall:
(a) provide all computers, telecommunications equipment and other
equipment and software reasonably necessary to develop and maintain
the Customer Web Site;
(b) design and develop the Customer Web Site functionality necessary to
facilitate and maintain the hypertext links to the DST Web Site and
the various Transaction Web pages and otherwise make the Customer Web
Site available to Shareholders;
(c) provide the FAN Options to DST for each Fund in writing on forms
provided by DST and update the FAN Options in writing as required by
Pioneer from time to time;
(d) if Pioneer has selected Single Signon as one of the FAN Options,
collect at the Customer Web Site via Single Signon, and incorporate
into the Transaction request, the Shareholder authentication
information for the specified Transaction, as applicable for the
Transaction and the FAN Options chosen by Pioneer;
(e) provide DST with such other written instructions as it may request
from time to time relating to the performance of DST's obligations
hereunder; and
(f) perform all other Pioneer obligations as set forth in the Schedule.
5. Fees. The fees payable to Boston Financial by Pioneer for Web Services under
this Schedule are set forth on Exhibit B to the Master Agreement.
6. Customer-Controlled Content. DST provides Pioneer the ability to post
content (plain text or HTML) to Pioneer's portion of the DST Web Site rather
than have DST develop and install the content. This content is displayed and
viewable to all Users authorized by Pioneer. The use of this feature is
optional, at the discretion of Pioneer, and is subject to the following
terms and conditions:
(a) Pioneer is solely responsible for any and all content and hypertext
links displayed in the Customer-Controlled Content Areas of the DST
Web Site.
(b) Pioneer is solely responsible for compliance with all legal and
regulatory requirements which may apply to content and hypertext links
at the Customer-Controlled Content Areas of the DST Web Site,
including, but not limited to copyright, trade secret and intellectual
property laws and federal and state securities laws which may apply to
the promotion of mutual fund products and securities or other
Financial Products, as applicable, electronically and over the
Internet.
(c) DST reserves the right, but has no duty, to monitor the
Customer-Controlled Content Areas of the DST Web Site for adherence to
the terms of this Schedule and may disclose any and all data and
information posted to the Customer-Controlled Content Areas of the DST
Web Site to the extent necessary to protect the rights or property of
DST, its affiliates or licensees, or to satisfy any law, regulation or
authorized governmental request.
(d) DST reserves the right, but has no duty, to prohibit conduct,
promotional material, hypertext links to certain sites, comments,
responses or any communication, data, information or content posted to
the Customer-Controlled Content Areas of the DST Web Site which it
deems, in its sole discretion, to be harmful to DST, its customers or
any other person or entity.
8
(e) Pioneer acknowledges that DST cannot ensure editing or removal of any
inappropriate, questionable or illegal content posted to the
Customer-Controlled Content Areas of the DST Web Site or to any site
on the Internet accessed from a hypertext link at the
Customer-Controlled Content Areas of the DST Web Site. Accordingly,
Pioneer agrees that DST has no liability for any action or inaction
with respect to content or hypertext links posted to or deleted from
the Customer-Controlled Content Areas of the DST Web Site and Pioneer
shall indemnify and hold DST harmless from and against any and all
costs, damages and expenses (including attorney's fees) arising out of
the posting of content or hypertext links at the Customer-Controlled
Content Areas of the DST Web Site.
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"), this
Service Exhibit shall automatically renew for additional, successive twelve
(12)-month terms (each, a "Renewal Exhibit Term") unless terminated by either
Party by written notice to the other at least sixty (60) days prior to the end
of the Initial Exhibit Term or any Renewal Exhibit Term, in which case the
effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are referred to herein as the Exhibit Term. Nothing in
this paragraph shall alter or affect either Party's ability to terminate the
Schedule and this Service Exhibit as set forth in Article VI of the Schedule.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
----------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
-----------------------------
9
Security Procedures - Web Services
1. ID / Password Requirements
Initial authentication of a Shareholder in FAN is accomplished with account
number and Social Security Number (SSN) and is used to issue a personal
identification number (PIN) to the Shareholder.
Thereafter, Shareholder authentication may be accomplished by any of the three
following methods, determined by the FAN Options selected by Pioneer:
Method One
Required - Account number is used as the identification (ID) of the Shareholder.
Required - The PIN is used as the access to the entered account.
Optional Requirement - Social Security Number may be chosen as an additional
required field by Pioneer, as part of the FAN Options, to add another level of
authentication to access the entered account number.
Method Two
Required - Social Security Number (SSN) of the Shareholder.
Required - The PIN is used as the access to the entered account.
Method Three
Required - User ID of the Shareholder. As part of the initial access, the
Shareholder establishes a User ID based on criteria established by Pioneer as
part of the FAN Options.
Required - The PIN is used as the access to the entered account.
2. Encryption
The DST Web server runs Secure Sockets Layer ("SSL"). The purpose of using SSL
is to encrypt data transmissions through the DST Web Site and block
communications through the DST Web Site from Internet browsers which do not
support SSL data encryption. The standard level of encryption supported by the
DST Web Site is 128-bit encryption.
3. Network Access Control
A computer referred to as a "router" is located between the Internet backbone
connection and the DST Web server. The purpose of the router is to control the
connectivity to the DST Web server at the port level. This equipment is located
at DST's Winchester data center, but it is administered and maintained by an
independent firewall provider. Changes to the systems residing on this computer
are submitted to the firewall provider for remote administration. DST is
advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web server to the suite of Hyper-Text Transfer Protocols
("HTTP") transmissions. Ports on the router are configured to be consistent
with ports on the DST Web server. DST is advised by its current firewall
provider that all other ports on the router other than those configured for the
DST Web server are not accessible from the Internet.
The DST Web server utilizes a UNIX operating system. All services and functions
within the DST Web server operating system are deactivated with the exception
of services and functions which support HTTP. This is the
10
required service for HTML content which is what the FAN Transactions are based
upon. The general purpose of this feature is to prevent external users from
entering UNIX commands or running UNIX based processes on the DST Web server.
All ports on the DST Web server, except those required by FAN (the ports
accessed through the fire wall provider's router), are disabled. All
"listeners" are deactivated. Directory structures are "hidden" from the user.
Services which provide directory information are also deactivated.
DST administrators gain access to the DST Web server through the physical
console connected to the DST Web server, or through the internal network via
DST Secure ID.
FAN also incorporates a data mapping system referred to as the "CICS Mapper".
The function of the CICS Mapper is to perform data packaging, security
interrogation, and protocol conversion. Data received by the CICS Mapper from
the DST Web server is interrogated for authenticity, repackaged for the DST
TA/2000 mainframe system, and protocols are converted for communication.
The CICS Mapper is programmed to terminate the session/Transaction between the
Shareholder and FAN if data authentication fails. Alerts are provided to system
administrators upon termination.
4. Limitation of Users
Access of DST personnel to the DST Web server is restricted within DST to a
limited number of users based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
5. Independence of Each Pioneer's Location on the Web Server
Independence of customer presence on the DST Web server is accomplished by
establishing individual data set partitions on the DST Web server that are
designed to be separate from other partitions. Each customer's presence resides
within a separate data and directory structure on the DST Web server. The base
transaction code required by FAN is, however, shared by all data set partitions.
Each customer URL on the DST Web server will identify a separate customer
presence. The customer URL is designed to omit distinguishing characteristics
of the URL which could identify the customer or DST to the Shareholder, and
each customer will have a unique URL. The URL is in the following format:
128 bit encryption example:
https://www3.financialtrans.com/ft/Disclaim?cz=123456789
where the data following the 'cz=' will be unique to Pioneer. The Pioneer URL
is not advertised by DST. Initial access to the Pioneer presence on the DST Web
server will be through the Pioneer Web Site.
Book marking of HTML pages within Pioneer's site on the DST Web server is not
allowed with the exception of either a legal terms page or the logon page,
which is the initial page presented to the Shareholder upon entry to the DST
Web server. The FAN Options selected by Pioneer determine which initial page
will be displayed to the Shareholder.
6. Right to Audit
Pioneer may audit, at its expense, the DST Web Site once in each 12 month
period and any associated systems or networks within FAN, after providing
reasonable written notice to DST. The audit may include review of
configurations, audit trails, and maintenance of systems and software within
FAN associated with the DST Web Site. Tools which may be used for the audit may
include network security tools; provided, that DST may specify the time at
which any tool is used, if DST reasonably believes that such tool may affect
system performance. The
11
audit will be coordinated through the DST Internal Audit Office and DST will be
entitled to observe all audit activity. Pioneer will not perform any action
that may interfere with the uptime or stability of DST's systems or networks.
Subject to the foregoing, Pioneer may perform any audit activity which is
technically possible for a user of the public Internet. In particular, Pioneer
and its review team will be considered authorized users and DST will not seek
prosecution under any computer crime or other applicable statutes for such
activity.
12
SERVICE EXHIBIT
API Services
1. API Services. Pioneer has requested, and DST will provide Automated Public
Interface Services ("API Services") as one of the FAN Services provided
pursuant to the terms of the DST FAN Services Schedule (the "Schedule")
between Pioneer and DST. Through API Services, Shareholders use the Internet
to connect to Customer Web Site and submit Transaction requests to the
Fund's transfer agent via a dedicated communication line between the
Customer Web Site and FAN, as described further in this Service Exhibit.
2. Definitions. For purposes of this Exhibit, the following additional
definitions shall apply (in addition to all other defined terms in the
Schedule):
. "API Transaction Set" shall mean the DST proprietary file layouts used
by DST and Pioneer for transmission of data between the Customer Web
Site and the CICS Mapper.
. "Customer Web Site" shall mean the collection of electronic documents or
pages residing on the computer system of Pioneer (or an Internet Service
Provider ("ISP") hired by Pioneer) connected to the Internet and
accessible through the World Wide Web, where Shareholders may view
information about the Funds and access the various Transaction screens
provided by Pioneer.
. "Shareholder" shall mean the record owner or authorized agent of the
owner of shares of a Fund.
. "CICS Mapper" is a data mapping system that performs the following
functions: data packaging, security interrogation, and protocol
conversion.
. "FAN Firewall" is a computer system which defines filters that allow
client servers to access the FAN application that has been predefined
for the individual server so that one Pioneer may not access the FAN
application for another Pioneer. The system also provides an audit trail
of all connections to the CICS Mapper.
. "Secure Communication Link" is a communications line between DST and
Pioneer that is anchored on both ends by a device or set of devices that
(i) use Digital Certificates, (ii) encrypt all message traffic, and
(iii) use only those Internet Protocol ("IP") addresses specified by DST
and Pioneer.
. "Digital Certificate" is a security method used to identify the source
of communication messages transmitted via the Secure Communication Link.
3. DST Responsibilities. In connection with its performance of API Services,
DST shall:
(a) receive Transaction requests (including Shareholder authentication
information collected by Pioneer pursuant to paragraph 4(d) below)
electronically transmitted to the DST CICS Mapper via a dedicated Secure
Communication Link from the Customer Web Site and route Transaction requests
through the CICS Mapper to the DST service region dedicated to Pioneer;
(b) For each Transaction request received, route Transaction information
from Pioneer's service region at DST through the CICS Mapper to the Customer
Web Site via the dedicated Secure Communication Link, for viewing by the
User (Notwithstanding the foregoing, DST shall not be responsible for a
failure by Pioneer to receive Transaction
13
information at the Customer Web Site arising out of or resulting from a
failure of the Secure Communication Link);
(c) deliver to Pioneer a description of the API Transaction Set, a DST
FAN Options User Guide, FAN Options instruction form, list of acceptable
certificate authorities and Digital Certificates, and a list of authorized
IP addresses to which Pioneer may send Transaction requests; and
(d) perform all other DST obligations as set forth in the Schedule.
4. Pioneer Responsibilities. In connection with its use of API Services,
Pioneer shall:
(a) provide all computers, telecommunications equipment and other
equipment and software reasonably necessary to establish the API Services
dedicated communication line, and develop and maintain Customer Web Site;
(b) design and develop Customer Web Site functionality utilizing the API
Transaction Set, necessary to facilitate and maintain the communication link
to the DST CICS Mapper and otherwise make Customer Web Site available to
Shareholders;
(c) provide the FAN Options to DST for each Fund in writing on forms
provided by DST and update the FAN Options in writing as required by Pioneer
from time to time;
(d) collect at the Customer Web Site and incorporate into the Transaction
request the Shareholder authentication information for the specified
Transaction, as applicable for the Transaction and the FAN Options chosen by
Pioneer;
(e) develop, implement and support all Security Procedures at the
Customer Web Site and Pioneer's facilities to prevent any and all
unauthorized communications to any computer systems at DST via the Secure
Communication Link, whether originating within the operations and facilities
of Pioneer or outside such operations and facilities.
(f) provide DST with a written list of authorized IP addresses for
origination and receipt of Transaction requests or other messages from time
to time, and such other written instructions as DST may request from time to
time relating to the performance of DST's obligations hereunder; and
(g) perform all other Pioneer obligations as set forth in the Schedule.
5. Fees. The fees payable to Boston Financial by Pioneer for API Services under
this Schedule are set forth on Exhibit B to the Master Agreement.
6. Transactions. Transactions for purposes of FAN API Services include ACH
purchase to new or existing accounts, exchange to new or existing accounts,
redemption via ACH, wire, or check, ordering of duplicate tax-forms or
duplicate statements, checkbook re-orders, fulfillment requests, and PIN
changes.
14
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"),
this Service Exhibit shall automatically renew for additional, successive
twelve (12)-month terms (each, a "Renewal Exhibit Term") unless terminated
by either Party by written notice to the other at least sixty (60) days
prior to the end of the Initial Exhibit Term or any Renewal Exhibit Term, in
which case the effective date of such termination notice shall be the end of
the relevant Initial Exhibit Term or Renewal Exhibit Term. The Initial
Exhibit Term and any Renewal Exhibit Term(s) are referred to herein as the
Exhibit Term. Nothing in this paragraph shall alter or affect either Party's
ability to terminate the Schedule and this Service Exhibit as set forth in
Article VI of the Schedule.
PIONEER INVESTMENT
MANAGEMENT
SHAREHOLDER SERVICES, INC. DST SYSTEMS, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
----------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
-----------------------------
Security Procedures - API Services
1. ID / Password Requirements
Initial authentication of a Shareholder utilizing the Customer Web Site is
accomplished with account number and Social Security Number (SSN) and is used
to issue a personal identification number (PIN) to the Shareholder.
Thereafter, Shareholder authentication may be accomplished by any of the three
following methods, determined by the FAN Options selected by Pioneer:
Method One
Required - Account number is used as the identification (ID) of the Shareholder.
Required - The PIN is used as the access to the entered account.
Optional Requirement - Social Security Number may be chosen as an additional
required field by Pioneer, as part of the FAN Options, to add another level of
authentication to access the entered account number.
Method Two
Required - Social Security Number (SSN) of the Shareholder.
Required - The PIN is used as the access to the entered account.
15
Method Three
Required - User ID of the Shareholder. As part of the initial access, the
Shareholder establishes a User ID based on criteria established by Pioneer as
part of the FAN Options.
Required - The PIN is used as the access to the entered account.
Authentication and verification of a Shareholder utilizing the Customer Web Site
The information to be authenticated and verified is captured by Pioneer at the
Customer Web Site and forwarded to DST via the Secure Communication Link.
2. Encryption
Data transmitted between Customer Web Site and the DST CICS Mapper will pass
across a dedicated Secure Communication Line to a DST router (described below),
and then pass through the router and through the DST FAN Firewall before
passing the data to the CICS Mapper. Such data transmissions will be encrypted.
An option available to Pioneer, at Pioneer's expense, is to utilize an
encrypted virtual private network (VPN). If Pioneer elects this option, the VPN
could be used to encrypt data transmitted on the dedicated communication line
between Pioneer's Web Site and DST FAN Firewall.
3. Network Access Control
A device referred to as a "router" is located between Pioneer's dedicated
communication line and the DST FAN Firewall. The purpose of the router is to
filter TCP/IP packets and control the connectivity to the DST FAN Firewall by
interrogating data. The DST FAN Firewall is located between the router and the
DST CICS Mapper. This equipment is located at DST's Winchester data center, and
is administered and maintained by Winchester personnel. Ports on the router are
configured to be consistent with ports on the DST FAN Firewall. The DST router
is not accessible, except to the links that are configured for the router.
The DST FAN Firewall is utilizes a UNIX operating system with firewall software
selected by DST from time to time. All services and functions within the DST
FAN Firewall are deactivated with the exception of services and functions which
are required for API Services. The general purpose of this feature is to
prevent external users from entering UNIX commands or running UNIX based
processes on the DST FAN Firewall. DST administrators gain access to the DST
Firewall through the physical console connected to the DST firewall, or through
the internal network via DST Secure ID.
Data received by the CICS Mapper from Pioneer dedicated communication line via
the DST FAN Firewall, is interrogated for authenticity, repackaged for the DST
TA/2000 mainframe system, and protocols are converted for communication.
The CICS Mapper is programmed to terminate the session/Transaction between the
Shareholder and the CICS Mapper if data authentication fails. Alerts are
provided to system administrators upon termination.
4. Limitation of Users
Access of DST personnel to the DST FAN Switch is restricted within DST to a
limited number of users based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
5. Independence of Each Customer's Location on the DST FAN Firewall
Independence of Pioneer's presence on the DST FAN Firewall is accomplished by
establishing a unique port on the DST FAN Firewall that is designed to be
separate for each customer. Each customer's presence remains
16
separate through the DST FAN Firewall by a combination of unique port
assignments, TCP/IP address resolution and physical connections. The base
transaction code required by the FAN API is, however, shared by all data set
partitions.
6. Right to Audit
Pioneer may audit, at its expense, the DST CICS Mapper once in each 12 month
period, after providing reasonable written notice to DST. Tools which may be
used for the audit may include network security tools; provided, that DST may
specify the time at which any tool is used, if DST reasonably believes that
such tool may affect system performance. The audit will be coordinated through
the DST Internal Audit Office and DST will be entitled to observe all audit
activity. Pioneer will not perform any action that may interfere with the
uptime or stability of DST's systems or networks. Subject to the foregoing,
Pioneer may perform any audit activity that is technically possible for a user
of the CICS Mapper. In particular, Pioneer and its review team will be
considered authorized users and DST will not seek prosecution under any
computer crime or other applicable statutes for such activity.
17
SERVICE EXHIBIT
VISION SERVICES
1. Vision Services. Pioneer has requested, and DST will provide Vision Services
as one of the FAN Services pursuant to the terms of the DST FAN Services
Schedule (the "Schedule") between Pioneer and DST. The Vision Services (the
"Vision Services") consist of the services provided by DST utilizing FAN(R),
the Vision Web Site, the Distribution Support Services Web Site, the
Internet, and other systems provided by DST and telecommunications carriers,
whereby Users may view account information related to a Pioneer's Financial
Products or submit Transaction requests directly to the Financial Product's
transfer agent via the Internet, as described further in this Service
Exhibit.
2. Definitions. For purposes of this Exhibit, the following additional
definitions shall apply (in addition to all other defined terms in the
Agreement):
. "Customer Web Site" shall mean the collection of electronic documents or
pages residing on the computer system of Pioneer (or an Internet Service
Provider ("ISP") hired by Pioneer) connected to the Internet and
accessible through the World Wide Web, where Users may view information
about the Financial Products and access the various Transaction screens
made available through Vision Services.
. "Distribution Support Services Web Site" shall mean the collection of
electronic documents or pages residing on the DST controlled World Wide
Web address (currently, https://www.dstdss.com), linked to the Internet
and accessible through the World Wide Web, which Pioneer may access to
view information about Users and approve/deny access requests by Users.
. "Financial Products" shall mean mutual funds, or real estate investment
trusts or limited partnerships or other similar financial products, and
"Financial Product Units" or "Units" shall mean the shares or units of a
Financial Product held by a record owner.
. "Transactions" shall mean new account establishment, account inquiries,
purchases, redemptions through Automated Clearing House, fed wire, or
check to the address of record for the Financial Product account,
exchanges, maintenance and other transactions offered from time to time
through Vision Services.
. "Unit Holder" shall mean the record owner of Financial Product Units.
. "User(s)" shall mean the authorized agents, selling agents and other
intermediaries (i.e., broker/dealers, registered investment advisors or
registered representatives) acting on behalf of record owners of Units
of a Financial Product whom Pioneer has authorized to use Vision
Services.
. "Vision Web Site" shall mean the collection of electronic documents or
pages residing on the DST controlled World Wide Web address (currently
https://www.dstvision.com), linked to the Internet and accessible
through the World Wide Web, which Users may access to view account
information or to request Transactions on behalf of the record owners
for whom they are acting.
. "Vision Implementation Procedures" shall mean the optional features and
functions of Vision Services which are selected by Pioneer, and the
processes needed to activate these functions, for the various components
of Vision Services, a copy of which has been provided to Pioneer.
18
3. DST Responsibilities. In connection with its performance of Vision Services,
DST shall:
(a)receive Transaction requests electronically transmitted by Users to the
Vision Web Site via the Internet and route Transaction requests through
FAN to Pioneer's transfer agency system;
(b)deliver to Pioneer a Vision Implementation Procedures instruction form;
(c)provide all computers, telecommunications connectivity and equipment
reasonably necessary at its facilities to operate FAN, the Vision Web
Site and the Distribution Support Services Web Site;
(d)deliver a monthly billing report to Pioneer, which shall include a
report of Transactions, by type, processed through Vision Services; and
(e)perform all other DST obligations as set forth in the Schedule.
4. Pioneer Responsibilities. In connection with its use of Vision Services,
Pioneer shall:
(a)provide the Vision Implementation Procedures to DST for each Financial
Product in writing on forms provided by DST and update the FAN Options
in writing as required by Pioneer from time to time (Vision is offered
in a generic format with limited Financial Product customization, as
described in the Vision Implementation Procedures);
(b)provide DST with such other written instructions as it may request from
time to time relating to the performance of DST's obligations hereunder;
and
(c)perform all other Pioneer obligations as set forth in the Schedule.
As a condition of a User's access to the Vision Services, Pioneer
acknowledges that each User must comply with all User Enrollment and
Authorization Procedures described in the Security Procedures Section of
this Vision Exhibit.
If Pioneer chooses to allow Users to use the Vision Services via Pioneer's
Web Site, Pioneer shall also:
(d)provide all computers, telecommunications equipment and other equipment
and software reasonably necessary to develop and maintain the Pioneer
Web Site; and
(e)design and develop the Pioneer Web Site functionality necessary to
facilitate and maintain the hypertext links to the Vision Web Site and
the various related web pages and otherwise make the Pioneer Web Site
available to Users.
5. Customer Controlled Marketing Content. Through the Vision Web Site, DST
provides Pioneer the ability to post content (plain text or HTML) including
hypertext links to other Web sites, that is displayed and viewable to all
Users authorized by Pioneer. The use of this feature of Vision Services is
optional, at the discretion of Pioneer, and subject to the following terms
and conditions:
(a)Pioneer is solely responsible for any and all content and hypertext
links displayed in the Customer-Controlled Content Areas of the Vision
Web Site.
(b)Pioneer is solely responsible for compliance with all legal and
regulatory requirements which may apply to content and hypertext links
in the Customer-Controlled Content
19
Areas of the Vision Web Site, including, but not limited to copyright,
trade secret and intellectual property laws and federal and state
securities laws which may apply to the promotion of mutual fund products
and securities or other Financial Products, as applicable,
electronically and over the Internet.
(c)DST reserves the right, but has no duty, to electronically monitor the
Customer-Controlled Content Areas of the Vision Web Site for adherence
to the terms of this Schedule and may disclose any and all data and
information posted to the Customer-Controlled Content Areas of the
Vision Web Site to the extent necessary to protect the rights or
property of DST, its affiliates or licensees, or to satisfy any law,
regulation or authorized governmental request.
(d)DST reserves the right, but has no duty, to prohibit conduct,
promotional material, hypertext links to certain sites, comments,
responses or any communication, data, information or content posted to
the Customer-Controlled Content Areas of the Vision Web Site which it
deems, in its sole discretion, to be harmful to DST, its customers or
any other person or entity.
(e)Pioneer acknowledges that DST cannot ensure editing or removal of any
inappropriate, questionable or illegal content posted to the
Customer-Controlled Content Areas of the Vision Web Site or to any site
on the Internet accessed from a hypertext link at the
Customer-Controlled Content Areas of the Vision Web Site. Accordingly,
Pioneer agrees that DST has no liability for any action or inaction with
respect to content or hypertext links posted to or deleted from the
Customer-Controlled Content Areas of the Vision Web Site and Pioneer
shall indemnify and hold DST harmless from and against any and all
costs, damages and expenses (including attorney's fees) arising out of
the posting of content or hypertext links at the Customer-Controlled
Content Areas of the Vision Web Site.
6. Change in Designated Financial Products. Upon ten (10) business days prior
notice to DST, Pioneer may change the Financial Products designated to
participate in Vision Services by delivering to DST, in writing, a revised
list of participating Financial Products.
7. Indemnity for Actions of Users. Pioneer acknowledges that the use of Vision
by Users to conduct Transactions on behalf of Unit Holders presents risks
arising from the actions of such Users. Accordingly, Pioneer hereby
indemnifies and holds DST harmless from, and shall defend it against any and
all claims, demands, costs, expenses and other liabilities, including
reasonable attorneys' fees, arising out of financial or other consequences
of Transactions conducted by Users, or out of disputes as to the authority
of Users to conduct Transactions.
8. Fees. The fees payable to Boston Financial by Pioneer for Vision Services
under this Schedule are set forth on Exhibit B to the Master Agreement.
20
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"), this
Service Exhibit shall automatically renew for additional, successive twelve
(12)-month terms (each, a "Renewal Exhibit Term") unless terminated by either
Party by written notice to the other at least sixty (60) days prior to the end
of the Initial Exhibit Term or any Renewal Exhibit Term, in which case the
effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are referred to herein as the Exhibit Term. Nothing in
this paragraph shall alter or affect either Party's ability to terminate the
Schedule and this Service Exhibit as set forth in Article VI of the Schedule.
PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. DST SYSTEMS, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
----------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
-----------------------------
21
VISION
Security Procedures
1.a. ID/Password Requirements - Users
Authentication of a User in Vision is based on the Vision Operator ID and
Password.
Required - The Vision Operator ID, assigned by DST, shall have access
authorization as determined by Pioneer. This may include the following access
levels, at Pioneer's option, the contents of which shall be determined by
Pioneer:
Unrestricted Access - This allows the User to view any account information
for all of Pioneer's Financial Products.
Dealer Level Access - This allows the User to view any account information
with the authorized dealer number.
Dealer/Branch Level Access - This allows the User to view any account
information with the authorized dealer and branch combination.
Dealer/Representative Level Access - This allows the User to view any
account information with the authorized dealer and representative
combination.
Tax ID Level Access - This allows the User to view any account with the
authorized Social Security Number and/or TIN of the Unit Holder.
Trust/TPA Access - This allows the User to view any account with the
authorized trust company or Third Party Administrator number assigned to the
underlying account/contract.
Required - Password is used in conjunction with Vision Operator ID to access
the Vision Web Site, which consequently provides access to any Financial
Product account information that has been previously authorized by Pioneer.
Vision does not use a personal identification number (PIN).
1.b. ID/Password Requirements - Customer point of contact
Authentication of a customer point of contact in the Distribution Support
Services Web Site is based on an Operator ID and Password.
Required - The Operator ID, chosen by Pioneer, shall have access as determined
by Pioneer. Access will be specific to the management company associated with
Pioneer. This may include the following access levels, at Pioneer's option,
inquiry only access (Pioneer point of contact may only view information related
to Users) or update access (Pioneer point of contact may update profiles
related to Users, including, but not limited to, changing, adding and deleting
User information). DST shall store the Operator ID and associated access
levels. Any personnel changes or access changes affecting Pioneer point of
contact must be communicated to DST promptly.
Required - Password is used in conjunction with Operator ID to access the
Distribution Support Services Web Site, which consequently provides access to
any User information (profile, firm, address, authorization information, etc.).
22
2. Encryption
The DST Web server runs Secure Sockets Layer ("SSL"). The purpose of using SSL
is to encrypt data transmissions through the Vision Web Site and the
Distribution Support Services Web Site and block communications through the
Vision Web Site or the Distribution Support Services Web Site from Internet
browsers which do not support SSL data encryption. The standard level of
encryption supported by the Vision Web Site and the Distribution Support
Services Web Site is 128-bit encryption.
3. Network Access Control
A device referred to as a "firewall" is located between the Internet and the
collection of electronic documents or pages residing on DST's computer system,
linked to the Internet and accessible through the World Wide Web, where the
data fields and related screens provided by DST may be viewed by Users who
access such site ("DST Web Site"). The purpose of the firewall is to control
connectivity to the DST Web Site at the port level. This equipment is located
and administered at DST's Winchester data center. Changes to the systems
residing on this computer are submitted through the DST change control process.
DST is advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web Site. Ports on the firewall are configured to be
consistent with ports at the DST Web Site.
All services and functions within the DST Web Site are deactivated with the
exception of services and functions which support the transfer of files. All
ports on the DST Web Site are disabled, except those ports required to transfer
files. All "listeners" are deactivated. Directory structures are "hidden" from
the user. Services which provide directory information are also deactivated.
4. Limitation of Users
Access of DST personnel to the DST Web server is restricted within DST to a
limited number of users based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
5. Right to Audit
Pioneer may audit, at its expense, the Vision Web Site and the Distribution
Support Services Web Site once in each 12 month period and any associated
systems or networks within FAN, after providing reasonable written notice to
DST. The audit may include review of configurations, audit trails, and
maintenance of systems and software within FAN associated with the Vision Web
Site and the Distribution Support Services Web Site. Tools which may be used
for the audit may include network security tools; provided, that DST may
specify the time at which any tool is used, if DST reasonably believes that
such tool may affect system performance. The audit will be coordinated through
the DST Internal Audit Office and DST will be entitled to observe all audit
activity. Pioneer will not perform any action that may interfere with the
uptime or stability of DST's systems or networks. Subject to the foregoing,
Pioneer may perform any audit activity which is technically possible for a user
of the public Internet. In particular, Pioneer and its review team will be
considered authorized users and DST will not seek prosecution under any
computer crime or other applicable statutes for such activity.
23
USER ENROLLMENT AND AUTHORIZATION PROCEDURES
The following procedures are part of the Security Procedures applicable to
Vision Services.
1. Enrollment.
Each User is required to complete an Electronic Enrollment Form, which is
available at a URL designated by DST (at the date of this Schedule -
www.dstvision.com). Users enrolling for access may complete the enrollment
process by providing DST with information called for in the Electronic
Enrollment Form about their practice and the Financial Products they wish to
access.
2. Pioneer Authorization.
Upon receiving a completed Electronic Enrollment Form from a User, DST will
make available an Authorization Request to Pioneer (point of contact)
through the Distribution Support Services Web Site. The Authorization
Request will identify the level of access requested and the security
criteria as well as provide a sample client Tax ID/Social Security Number.
Through the Distribution Support Services Web Site, Pioneer point of contact
is solely responsible for authorizing or denying each User request for
access to Transactions through Vision Services. When authorizing requests,
security criteria must be verified by Pioneer. This includes verifying:
. Appropriate Level of Authorization. Please note, each authorization will
provide access to the level indicated on DST's Authorization Request.
Access may be requested at the dealer, dealer/branch,
dealer/representative, tax ID, or Trust/TPA level.
. Accurate Access Security Criteria. Pioneer must verify that each field
authorized in the security criteria accurately represents the
dealer/branch/representative or tax ID information which appears on the
master of the representative's clients accounts. 100% of the
representative's accounts should reflect the authorized criteria.
Pioneer assumes all responsibility for verifying the security level of each
new User authorization request. DST shall not be required to verify that the
person who processes the Authorization Request is legally authorized to do
so on behalf of Pioneer and DST shall be entitled to rely conclusively upon
such approval/denial without further duty to inquire.
3. Password & ID Notification.
When Pioneer approves an authorization request, the User's ID is updated for
the authorized security and an e-mail is sent to the User notifying him/her
of their access to the Vision Web Site. Users are required to establish
their own initial password at a URL designated by DST (at the date of this
Schedule - www.dstvision.com/assignpswd.html).
24
SERVICE EXHIBIT
TRAC PARTICIPANT INTERNET SERVICES
1. TRAC Participant Internet Services. Pioneer has requested, and DST will
provide TRAC Participant Internet Services as part of DST FAN Services,
pursuant to the terms of the DST FAN Services Schedule (the "Schedule")
between Pioneer and DST. Pioneer provides certain recordkeeping services to
sponsors of employer-sponsored retirement savings plans ('Retirement
Plans"). Through TRAC Participant Internet Services, Participant Transaction
requests are received via the Internet and routed to the computer systems
utilized by Pioneer to provide recordkeeping services for Retirement Plans,
as further described in this Service Exhibit.
2. Definitions. For purposes of this Service Exhibit, the following additional
definitions shall apply (in addition to all other defined terms in the
Schedule):
. "Customer Web Site" shall mean the collection of electronic documents or
pages residing on the computer system of Pioneer (or an Internet Service
Provider ("ISP") hired by Pioneer) connected to the Internet and
accessible through the World Wide Web, where Participants may view
information about the Retirement Plans and the Financial Products in
which Plans are, or may be, invested and access the various Transaction
screens provided by Pioneer.
. "FAN Web Authentication" shall mean the User authentication process,
utilized by TRAC Participant Internet Services if Pioneer has not chosen
Single Signon as one of the options from the TRAC Participant Internet
Advanced Package Guide, whereby User authentication information is
collected and transmitted, and User personal identification number (PIN)
information is created, changed and reset via an Internet link between
the DST Web Site and the User's web browser.
. "Financial Products" shall include the various securities which may be
held by Retirement Plan trustees, including capital stock of the
employers (or their affiliates) which sponsor Retirement Plans,
guaranteed interest contracts and shares of registered investment
companies other than those which are serviced by Pioneer, and any other
form of investment vehicle which is eligible for inclusion in a
Retirement Plan portfolio under the applicable Retirement Plan documents
and applicable law.
. "Participant" shall mean the record owner of interests in a Retirement
Plan with respect to which Pioneer provides recordkeeping services and
certain Financial Products held by a Retirement Plan.
. "Single Signon" shall mean the function of TRAC Participant Internet
Services, available to Pioneer as one of the options from the TRAC
Participant Internet Advanced Package Guide, enabling Pioneer to
(i) manage User login procedures at the Customer Web Site and collect
User authentication information and pass such information to the DST Web
Site for User authentication utilizing server-to-server "https" requests
and text responses between the DST Web Site and the Customer Web Site,
and (ii) create, change and reset User personal identification number
(PIN) information directly at the Customer Web Site.
. "TRAC Participant Internet Advanced Package Guide" shall mean the FAN
Options consisting of a guide explaining the optional features and
functions for the TRAC Participant Internet Access
25
which are selected by Pioneer, and the processes needed to activate
these functions, for the various components of the product, a copy of
which has been provided to Pioneer.
. For purposes of TRAC Participant Internet Services only, "Transactions"
shall mean Participant Retirement Plan balance inquiries, address
changes, exchanges or Participant investment reallocation, investment
election changes, loan requests, distribution requests and other
transactions offered by TRAC Participant Internet Services in the future.
. "User(s)" shall, for purposes of this Service Exhibit only, mean,
Participants.
3. DST Responsibilities. In connection with its performance of TRAC Participant
Internet Access Services, DST shall:
(a) receive Transaction requests electronically transmitted to the DST Web
Site via the Internet following execution of a link from the Customer
Web Site to the DST Web Site and route Transaction requests through
FAN to the computer systems utilized by Pioneer to provide
recordkeeping services for Retirement Plans using Single Signon or FAN
Web Authentication, as applicable, for the collection and presentation
of Participant authentication information;
(b) deliver to Pioneer a TRAC Participant Internet Advanced Package Guide
; and
(c) perform all other DST obligations as set forth in the Schedule.
4. Pioneer Responsibilities. In connection with its use of TRAC Participant
Internet Services, Pioneer shall:
(a) provide all computers, telecommunications equipment and other
equipment and software reasonably necessary to develop and maintain
the Customer Web Site;
(b) design and develop the Customer Web Site functionality necessary to
facilitate and maintain the hypertext links to the DST Web Site and
the various Transaction Web pages and otherwise make the Customer Web
Site available to Participants;
(c) configure and at all times maintain the FAN Options (including PIN
security options) via 3270 terminal screens at Pioneer's facilities in
accordance with the TRAC Participant Internet Advanced Package Guide;
(d) if Pioneer has selected Single Signon as one of the FAN Options from
the TRAC Participant Internet Advanced Package Guide, collect at the
Customer Web Site via Single Signon, and incorporate into the
Transaction request, the Participant authentication information for
the specified Transaction, as applicable for the Transaction and the
FAN Options from the TRAC Participant Internet Advanced Package Guide
chosen by Pioneer;
(e) provide DST with such written instructions as it may request from time
to time relating to the performance of DST's obligations hereunder; and
(f)perform all other Pioneer obligations as set forth in the Schedule.
5. Fees. The fees payable to Boston Financial by Pioneer for TRAC Participant
Internet Services under this Schedule are set forth on Exhibit B to the
Master Agreement.
26
6. Customer-Controlled Content. DST provides Pioneer the ability to post
content (plain text or HTML) to Pioneer's portion of the DST Web Site rather
than have DST develop and install the content. This content is displayed and
viewable to all Users authorized by Pioneer. The use of this feature is
optional, at the discretion of Pioneer, and is subject to the following
terms and conditions:
(a) Pioneer is solely responsible for any and all content and hypertext
links displayed in the Customer-Controlled Content Areas of the DST
Web Site.
(b) Pioneer is solely responsible for compliance with all legal and
regulatory requirements which may apply to content and hypertext links
at the Customer-Controlled Content Areas of the DST Web Site,
including, but not limited to copyright, trade secret and intellectual
property laws and federal and state securities laws which may apply to
the promotion of mutual fund products and securities or other
Financial Products, as applicable, electronically and over the
Internet.
(c) DST reserves the right, but has no duty, to monitor the
Customer-Controlled Content Areas of the DST Web Site for adherence to
the terms of this Schedule and may disclose any and all data and
information posted to the Customer-Controlled Content Areas of the DST
Web Site to the extent necessary to protect the rights or property of
DST, its affiliates or licensees, or to satisfy any law, regulation or
authorized governmental request.
(d) DST reserves the right, but has no duty, to prohibit conduct,
promotional material, hypertext links to certain sites, comments,
responses or any communication, data, information or content posted to
the Customer-Controlled Content Areas of the DST Web Site which it
deems, in its sole discretion, to be harmful to DST, its customers or
any other person or entity.
(e) Pioneer acknowledges that DST cannot ensure editing or removal of any
inappropriate, questionable or illegal content posted to the
Customer-Controlled Content Areas of the DST Web Site or to any site
on the Internet accessed from a hypertext link at the
Customer-Controlled Content Areas of the DST Web Site. Accordingly,
Pioneer agrees that DST has no liability for any action or inaction
with respect to content or hypertext links posted to or deleted from
the Customer-Controlled Content Areas of the DST Web Site and Pioneer
shall indemnify and hold DST harmless from and against any and all
costs, damages and expenses (including attorney's fees) arising out of
the posting of content or hypertext links at the Customer-Controlled
Content Areas of the DST Web Site.
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"), this
Service Exhibit shall automatically renew for additional, successive twelve
(12)-month terms (each, a "Renewal Exhibit Term") unless terminated by either
Party by written notice to the other at least sixty (60) days prior to the end
of the Initial Exhibit Term or any Renewal Exhibit Term, in which case the
effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are
27
referred to herein as the Exhibit Term. Nothing in this paragraph shall alter
or affect either Party's ability to terminate the Schedule and this Service
Exhibit as set forth in Article VI of the Schedule.
PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. DST SYSTEMS, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
----------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
-----------------------------
28
Security Procedures - TRAC Participant Internet Services
1. ID / Password Requirements
Initial authentication of a User in TRAC Participant Internet Services is
accomplished with the Social Security Number (SSN) and is used to issue a
personal identification number (PIN) to the User.
2. Encryption
The DST Web server runs Secure Sockets Layer ("SSL"). The purpose of using SSL
is to encrypt data transmissions through the DST Web Site and block
communications through the DST Web Site from Internet browsers which do not
support SSL data encryption. As part of the FAN Options, Pioneer may select the
standard level of encryption supported by the DST Web Site at 48 bit or 128-bit
encryption.
3. Network Access Control
A computer referred to as a "router" is located between the Internet backbone
connection and the DST Web server. The purpose of the router is to control the
connectivity to the DST Web server at the port level. This equipment is located
at DST's Winchester data center, but it is administered and maintained by an
independent firewall provider. Changes to the systems residing on this computer
are submitted to the firewall provider for remote administration. DST is
advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web server to the suite of Hyper-Text Transfer Protocols
("HTTP") transmissions. Ports on the router are configured to be consistent
with ports on the DST Web server. DST is advised by its current firewall
provider that all other ports on the router other than those configured for the
DST Web server are not accessible from the Internet.
The DST Web server utilizes a UNIX operating system. All services and functions
within the DST Web server operating system are deactivated with the exception
of services and functions which support HTTP. This is the required service for
HTML content which is what the FAN Transactions are based upon. The general
purpose of this feature is to prevent external users from entering UNIX
commands or running UNIX based processes on the DST Web server. All ports on
the DST Web server, except those required by FAN (the ports accessed through
the firewall provider's router), are disabled. All "listeners" are deactivated.
Directory structures are "hidden" from the user. Services which provide
directory information are also deactivated.
DST administrators gain access to the DST Web server through the physical
console connected to the DST Web server, or through the internal network via
DST Secure ID.
FAN also incorporates a data mapping system referred to as the "CICS Mapper".
The function of the CICS Mapper is to perform data packaging, security
interrogation, and protocol conversion. Data received by the CICS Mapper from
the DST Web server is interrogated for authenticity, repackaged for the DST
TA/2000 mainframe system, and protocols are converted for communication.
The CICS Mapper is programmed to terminate the session/Transaction between the
User and FAN if data authentication fails. Alerts are provided to system
administrators upon termination.
4. Limitation of Users
Access of DST personnel to the DST Web server is restricted within DST to a
limited number of users based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
5. Independence of Each Customer's Location on the Web Server
29
Independence of customer presence on the DST Web server is accomplished by
establishing individual data set partitions on the DST Web server that are
designed to be separate from other partitions. Each customer's presence resides
within a separate data and directory structure on the DST Web server. The base
transaction code required by FAN is, however, shared by all data set partitions.
Each customer URL on the DST Web server will identify a separate customer
presence. The customer URL is designed to omit distinguishing characteristics
of the URL which could identify the customer or DST to the User, and each
customer will have a unique URL. The URL is in the following format:
40 bit encryption example:
https://www2.financialtrans.com/ft/Disclaim?cz=123456789
128 bit encryption example:
https://www3.financialtrans.com/ft/Disclaim?cz=123456789
where the data following the 'cz=' will be unique to Customer. The Customer URL
is not advertised by DST. Initial access to the Customer presence on the DST
Web server will be through the Customer Web Site.
Book marking of HTML pages within Customer's site on the DST Web server is not
allowed with the exception of either a legal terms page or the logon page,
which is the initial page presented to the User upon entry to the DST Web
server. The FAN Options selected by Customer determine which initial page will
be displayed to the User.
6. Right to Audit
Pioneer may audit, at its expense, the DST Web Site once in each 12 month
period and any associated systems or networks within FAN, after providing
reasonable written notice to DST. The audit may include review of
configurations, audit trails, and maintenance of systems and software within
FAN associated with the DST Web Site. Tools which may be used for the audit may
include network security tools; provided, that DST may specify the time at
which any tool is used, if DST reasonably believes that such tool may affect
system performance. The audit will be coordinated through the DST Internal
Audit Office and DST will be entitled to observe all audit activity. Pioneer
will not perform any action that may interfere with the uptime or stability of
DST's systems or networks. Subject to the foregoing, Pioneer may perform any
audit activity which is technically possible for a user of the public Internet.
In particular, Pioneer and its review team will be considered authorized users
and DST will not seek prosecution under any computer crime or other applicable
statutes for such activity.
30
SERVICE EXHIBIT
TRAC PLAN SPONSOR INTERNET ACCESS
1. TRAC PLAN SPONSOR INTERNET ACCESS. Pioneer has requested, and DST will
provide TRAC Plan Sponsor Internet Access as one of the FAN Services
pursuant to the terms of the DST FAN Services Schedule (the "Schedule")
between Pioneer and DST. Pioneer provides certain recordkeeping services to
sponsors of employer-sponsored retirement savings plans ("Retirement
Plans"). TRAC Plan Sponsor Internet Access consists of the services provided
by DST, utilizing DST's FAN Services, whereby employer sponsors (the "Plan
Sponsors") of the Retirement Plans may submit Transaction requests via the
Internet directly to the computer systems utilized by Pioneer to provide
recordkeeping services for Plans, as described further in this Service
Exhibit.
2. Definitions. For purposes of this Exhibit, the following additional
definitions shall apply (in addition to all other defined terms in the
Schedule):
. "Customer Web Site" shall mean the collection of electronic documents or
pages residing on the computer system of Pioneer (or an Internet Service
Provider ("ISP") hired by Pioneer) connected to the Internet and
accessible through the World Wide Web, where Users may view information
about the Plans and the Financial Products in which the Retirement Plans
are, or may be, invested and access the various Transaction screens
provided by Pioneer.
. "TRAC Web Authentication" shall mean the User authentication process,
utilized by TRAC Plan Sponsor Internet Access Services if Pioneer has
not chosen Single Signon as one of the FAN Options, whereby User
authentication information is collected and transmitted, and User
personal identification number (PIN) information is created, changed and
reset via an Internet link between the DST Web Site and the User's web
browser.
. "Financial Products" shall include the various securities which may be
held by Retirement Plan trustees, including capital stock of the
employers (or their affiliates) which sponsor Retirement Plans,
guaranteed interest contracts, and shares of registered investment
companies other than those which are serviced by Pioneer and any other
form of investment vehicle which is eligible for inclusion in a
Retirement Plan portfolio under the applicable Retirement Plan documents
and applicable law.
. "Participant" shall mean a participant in a Retirement Plan with respect
to which Pioneer provides recordkeeping services.
. "Single Signon" shall mean the function of Web Services, available to
Pioneer as one of the FAN Options, enabling Pioneer to (i) manage User
login procedures at the Customer Web Site and collect User
authentication information and pass such information to the DST Web Site
for User authentication utilizing server-to-server "https" requests and
text responses between the DST Web Site and the Customer Web Site, and
(ii) create, change and reset User personal identification number (PIN)
information directly at the Customer Web Site.
. For the purposes of TRAC Plan Sponsor Internet Access only,
"Transactions" shall mean Retirement Plan and Plan Sponsor originated
Participant account inquiries, requests to change Participant investment
allocations (available only to Plan Sponsors), address
31
changes, distribution approvals and other transactions offered and
approved for use by Plan Sponsors by FAN Web in the future, and shall
not include the types of transactions processed by FAN for record for
record owners of shares of mutual funds held outside of Retirement Plans.
. "User(s)" shall, for purposes of the TRAC Plan Sponsor Internet Access
only, mean Plan Sponsors.
. "TRAC Plan Sponsor Internet Advanced Package Guide" shall mean the guide
explaining the optional features and functions for the TRAC Plan Sponsor
Internet Access which are selected by Pioneer, and the processes needed
to activate these functions, for the various components of the product,
a copy of which has been provided to Pioneer.
3. DST Responsibilities. In connection with its performance of TRAC Plan
Sponsor Internet Access Services, DST shall:
(a) receive Transaction requests electronically transmitted to the DST Web
Site via the Internet following execution of a link from the Customer
Web Site to the DST Web Site and route Transaction requests through
FAN to the computer systems utilized by Pioneer to provide
recordkeeping services for Retirement Plans using Single Signon or FAN
Web Authentication, as applicable for the collection and presentation
of User authentication information.
(b) deliver to Pioneer a TRAC Plan Sponsor Internet Advanced Package
Guide; and
(c) perform all other DST obligations as set forth in the Schedule and
this Service Exhibit.
4. Pioneer Responsibilities. In connection with its use of TRAC Plan Sponsor
Internet Access, Pioneer shall:
(a) configure and at all times maintain the function and display options
via 3270 terminal screens at Pioneer's facilities;
(b) if Pioneer has selected Single Signon as one of the FAN Options,
collect at the Customer Web Site via Single Signon, and incorporate
into the Transaction request, the User authentication information for
the specified Transaction, as applicable for the Transaction and the
FAN Options chosen by Pioneer;
(c) perform all other Pioneer obligations as set forth in the Schedule and
this Service Exhibit;
(d) provide all computers, telecommunications equipment and other
equipment and software reasonably necessary to develop and maintain
the Customer Web Site;
(e) design and develop the Customer Web Site functionality necessary to
facilitate and maintain the hypertext links to the DST Web Site and
the various Transaction Web pages and otherwise make the Customer Web
Site available to Users; and
32
(f) provide DST with such other written instructions as it may request
from time to time relating to the performance of DST's obligations
hereunder.
5. Fees. The fees payable to Boston Financial by Pioneer for TRAC Plan Sponsor
Internet Access Services under this Schedule are set forth on Exhibit B to
the Master Agreement.
6. Customer-Controlled Content. DST provides Pioneer the ability to post
content (plain text or HTML) to Pioneer's portion of the DST Web Site rather
than have DST develop and install the content. This content is displayed and
viewable to all Users authorized by Pioneer. The use of this feature is
optional, at the discretion of Pioneer, and is subject to the following
terms and conditions:
(a) Pioneer is solely responsible for any and all content and hypertext
links displayed in the Customer-Controlled Content Areas of the DST
Web Site.
(b) Pioneer is solely responsible for compliance with all legal and
regulatory requirements which may apply to content and hypertext links
at the Customer-Controlled Content Areas of the DST Web Site,
including, but not limited to copyright, trade secret and intellectual
property laws and federal and state securities laws which may apply to
the promotion of mutual fund products and securities or other
Financial Products, as applicable, electronically and over the
Internet.
(c) DST reserves the right, but has no duty, to monitor the
Customer-Controlled Content Areas of the DST Web Site for adherence to
the terms of this Schedule and may disclose any and all data and
information posted to the Customer-Controlled Content Areas of the DST
Web Site to the extent necessary to protect the rights or property of
DST, its affiliates or licensees, or to satisfy any law, regulation or
authorized governmental request.
(d) DST reserves the right, but has no duty, to prohibit conduct,
promotional material, hypertext links to certain sites, comments,
responses or any communication, data, information or content posted to
the Customer-Controlled Content Areas of the DST Web Site which it
deems, in its sole discretion, to be harmful to DST, its customers or
any other person or entity.
(e) Pioneer acknowledges that DST cannot ensure editing or removal of any
inappropriate, questionable or illegal content posted to the
Customer-Controlled Content Areas of the DST Web Site or to any site
on the Internet accessed from a hypertext link at the
Customer-Controlled Content Areas of the DST Web Site. Accordingly,
Pioneer agrees that DST has no liability for any action or inaction
with respect to content or hypertext links posted to or deleted from
the Customer-Controlled Content Areas of the DST Web Site and Pioneer
shall indemnify and hold DST harmless from and against any and all
costs, damages and expenses (including attorney's fees) arising out of
the posting of content or hypertext links at the Customer-Controlled
Content Areas of the DST Web Site.
33
Exhibit Term:
January 1, 2012 through December 31, 2016.
At the end of the initial Exhibit Term above (the "Initial Exhibit Term"),
this Service Exhibit shall automatically renew for additional, successive
twelve (12)-month terms (each, a "Renewal Exhibit Term") unless terminated by
either Party by written notice to the other at least sixty (60) days prior to
the end of the Initial Exhibit Term or any Renewal Exhibit Term, in which case
the effective date of such termination notice shall be the end of the relevant
Initial Exhibit Term or Renewal Exhibit Term. The Initial Exhibit Term and any
Renewal Exhibit Term(s) are referred to herein as the Exhibit Term. Nothing in
this paragraph shall alter or affect either Party's ability to terminate the
Schedule and this Service Exhibit as set forth in Article VI of the Schedule.
PIONEER INVESTMENT MANAGEMENT DST SYSTEMS, INC.
SHAREHOLDER SERVICES, INC.
By /s/ Tracy Connelly By /s/ Fred Quatrocky
----------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
Address: 60 State Street
Boston, Massachusetts 02109 Kansas City, Missouri 64105-1594
Tel: 617-422-4439 Tel: (816)
FAX: FAX: (816)
-----------------------------
34
TRAC PLAN SPONSOR INTERNET ACCESS
Security Procedures
1. ID / Password Requirements
Authentication of a User in TRAC Plan Sponsor Internet Access is based on a
TRAC Web Operator ID and Password.
Required - The TRAC Operator ID (assigned by the client or DST) has access
authorization levels at the Retirement Plan level. Additionally, each Operator
ID may, at Pioneer's option, have authorization levels at the User level as
well. Retirement Plan level security will be established in the TRAC PLNSECUR
on-line facility. The PLNSECUR facility is used to associate the appropriate
Retirement Plans with an established operator ID. This facility must be used to
attach Retirement Plans to and remove Retirement Plans from an operator ID
throughout the life of that ID.
Required - A password is used in conjunction with the TRAC Operator ID to
access the Customer Web Site, which consequently provides access to any plan
information that has been previously authorized by Pioneer.
2. Encryption
The DST Web server runs Secure Sockets Layer ("SSL"). The purpose of using SSL
is to encrypt data transmissions through the DST Web Site and block
communications through the DST Web Site from Internet browsers which do not
support SSL data encryption. The standard level of encryption supported by the
DST Web Site is 128-bit encryption.
3. Network Access Control
A computer referred to as a "router" is located between the Internet backbone
connection and the DST Web server. The purpose of the router is to control the
connectivity to the DST Web server at the port level. This equipment is located
at DST's Winchester data center, but it is administered and maintained by an
independent firewall provider. Changes to the systems residing on this computer
are submitted to the firewall provider for remote administration. DST is
advised by its current firewall provider that this equipment will not
interrogate data, and that its only function is to limit the type of traffic
accessing the DST Web server to the suite of Hyper-Text Transfer Protocols
("HTTP") transmissions. Ports on the router are configured to be consistent
with ports on the DST Web server. DST is advised by its current firewall
provider that all other ports on the router other than those configured for the
DST Web server are not accessible from the Internet.
The DST Web server utilizes a UNIX operating system. All services and functions
within the DST Web server operating system are deactivated with the exception
of services and functions which support HTTP. This is the required service for
HTML content which is what the FAN Transactions are based upon. The general
purpose of this feature is to prevent external users from entering UNIX
commands or running UNIX based processes on the DST Web server. All ports on
the DST Web server, except those required by FAN (the ports accessed through
the firewall provider's router), are disabled. All "listeners" are deactivated.
Directory structures are "hidden" from the user. Services which provide
directory information are also deactivated.
DST administrators gain access to the DST Web server through the physical
console connected to the DST Web server, or through the internal network via
DST Secure ID.
35
FAN also incorporates a data mapping system referred to as the "CICS Mapper".
The function of the CICS Mapper is to perform data packaging, security
interrogation, and protocol conversion. Data received by the CICS Mapper from
the DST Web server is interrogated for authenticity, repackaged for the DST
TA/2000 mainframe system, and protocols are converted for communication.
The CICS Mapper is programmed to terminate the session/Transaction between the
Shareholder and FAN if data authentication fails. Alerts are provided to system
administrators upon termination.
4. Limitation of Users
Access of DST personnel to the DST Web server is restricted within DST to a
limited number of users based upon DST system administration requirements, as
determined by appropriate DST systems managers from time to time.
5. Independence of Each Customer's Location on the Web Server
Independence of customer presence on the DST Web server is accomplished by
establishing individual data set partitions on the DST Web server that are
designed to be separate from other partitions. Each customer's presence resides
within a separate data and directory structure on the DST Web server. The base
transaction code required by FAN is, however, shared by all data set partitions.
Each customer URL on the DST Web server will identify a separate customer
presence. The customer URL is designed to omit distinguishing characteristics
of the URL which could identify the customer or DST to the User, and each
customer will have a unique URL. The URL is in the following format:
40 bit encryption example:
https://www2.financialtrans.com/ft/Disclaim?cz=123456789
128 bit encryption example:
https://www3.financialtrans.com/ft/Disclaim?cz=123456789
where the data following the 'cz=' will be unique to Customer. The Customer URL
is not advertised by DST. Initial access to the Customer presence on the DST
Web server will be through the Customer Web Site.
Book marking of HTML pages within Customer's site on the DST Web server is not
allowed with the exception of either a legal terms page or the logon page,
which is the initial page presented to the User upon entry to the DST Web
server. The FAN Options selected by Customer determine which initial page will
be displayed to the User.
6. Right to Audit
Pioneer may audit, at its expense, the DST Web Site once in each 12 month
period and any associated systems or networks within FAN, after providing
reasonable written notice to DST. The audit may include review of
configurations, audit trails, and maintenance of systems and software within
FAN associated with the DST Web Site. Tools which may be used for the audit may
include network security tools; provided, that DST may specify the time at
which any tool is used, if DST reasonably believes that such tool may affect
system performance. The audit will be coordinated through the DST Internal
Audit Office and DST will be entitled to observe all audit activity. Pioneer
will not perform any action that may interfere with the uptime or stability of
DST's systems or networks. Subject to the foregoing, Pioneer
36
may perform any audit activity which is technically possible for a user of the
public Internet. In particular, Pioneer and its review team will be considered
authorized users and DST will not seek prosecution under any computer crime or
other applicable statutes for such activity.
37
SCHEDULE VII
PowerSelect Services
38
SCHEDULE NUMBER VII TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
AND BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial")
(the "Master Agreement")-
PowerSelect(TM) Services
THIS SCHEDULE NUMBER VII TO THE MASTER AGREEMENT, is made effective as of
this 1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST SYSTEMS, INC. ("DST"), and is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, Pioneer has entered into the Master Agreement and Schedules with
Boston Financial and certain of its Affiliates, whereby Pioneer has agreed to
utilize the DST TA2000(R) System and DST Facilities to provide and support
Pioneer's needs to service the Funds' securityholders recordkeeping activities;
and
WHEREAS, in connection with such use of the TA2000 System and DST
Facilities, Pioneer desires to have the ability to access Pioneer's data and
information as maintained on the TA2000 System by means of a DST System which
supports comprehensive queries built by Pioneer ("PowerSelect").
WHEREAS, Pioneer desires to have the ability, with respect to Pioneer's own
data only, to use DST's PowerSelect to query data and produce reports with
respect to Pioneer's own data only (collectively, "Permitted Purposes");
WHEREAS, Pioneer believes that it will be beneficial to Pioneer and to its
successful utilization of the DST Systems if an agreed upon number of its
employees, designated by Pioneer, (the "Operator" or "Operators") are provided
with a limited access to the PowerSelect for the Permitted Purposes; and
WHEREAS, DST is willing to provide the Operators with limited access to
PowerSelect, and therefore to the DST Systems and DST Facilities, only upon the
terms and conditions set forth in the Master Agreement and hereinafter;
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Pioneer and DST hereby agree
as follows:
Section 1. INCORPORATION OF THE MASTER AGREEMENT.
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DST and
Pioneer agree that for purposes of this Schedule, DST shall be deemed to have
executed the Master Agreement in place of Boston Financial and to have accepted
the terms thereof, and Pioneer further agrees that DST and not Boston Financial
shall be solely responsible under this Schedule.
1
Section 2. POWERSELECT ID'S
DST shall provide those Operators designated by Pioneer on Exhibit A hereto,
as amended from time to time, up to the number thereof mutually agreed to by
DST and Pioneer, as set forth in Exhibit A, as amended from time to time, with
identity codes to enable them to enter PowerSelect and to access the DST
Systems and DST Facilities (the "PowerSelect ID's"). PowerSelect access shall
be permitted by Pioneer to only the Operators, each of whom will be an employee
of Pioneer or an affiliate of Pioneer, and not to any other individuals.
Section 3. PERMITTED PURPOSES
Pioneer represents, warrants and covenants that the Operators will use their
access to PowerSelect only to access Pioneer's own data and only as necessary
to accomplish the Permitted Purposes. Pioneer acknowledges that any access
other than such access as is necessary to accomplish Permitted Purposes or any
use, misuse or disclosure of any DST Confidential Information residing in or on
DST's computers is unauthorized and that any unauthorized access, use, misuse
or disclosure of such DST Confidential Information residing in or on DST's
computers may result in civil liabilities and may be subject to criminal
penalties under applicable state law.
Section 4. SUPERVISION OF OPERATORS
Appropriate Pioneer supervisory personnel shall supervise the work of the
Operators to assure that access is employed for: (a) only the Permitted
Purposes and (b) only in accordance with the terms and conditions hereof.
Section 5. DST SERVICES
DST shall be entitled to: (a) extract and populate a database on a server
(the "Server") with data and information as instructed by Pioneer from
Pioneer's data on the affected DST System, updating such data nightly on
business days; and (b) provide access to PowerSelect and comply with any
request transmitted to DST thereby so long as such access and query are
transmitted with or under a PowerSelect ID. PowerSelect IDs are provided by DST
upon receipt from Pioneer of a properly completed and executed Exhibit A.
Section 6. FEES AND CHARGES
Pioneer shall pay to Boston Financial, in accordance with the terms set
forth in the Master Agreement, upon receipt of Boston Financial's statement
with respect to this Schedule, the fees and charges in the amounts as set out
in Exhibit B to the Master Agreement, as amended from time to time, including
all reasonable reimbursable expenses incurred by DST at the request of Pioneer.
Section 7. LIABILITY; ADDITIONAL INDEMNIFICATION
7.01 Pioneer agrees that DST shall have no responsibility or liability for
any harm, damage, loss, cost, expense or any other adverse consequences
whatsoever arising out of or resulting from the choice of data and information
to be transmitted to and maintained on the Server, the designing and
structuring of queries and any reliance on or use made of the responses
received from or through PowerSelect. Except to the extent that DST's losses,
damages, harm, counsel fees and expenses resulted from DST's negligence or
willful misconduct, Pioneer hereby agrees, in addition to the provisions of
Section 7 of the Master Agreement, to indemnify DST and hold DST harmless
against any losses, damages, harm, reasonable counsel fees or expenses
whatsoever arising or resulting directly or indirectly
2
from (a) any use or reliance by Pioneer or any third party of the results
obtained from any query or (b) any improper accessing of Pioneer's data,
provided the person so accessing used a valid Operators' PowerSelect ID.
Pioneer and DST further agree that the obligations set forth herein shall
survive the termination of this Schedule and the Master Agreement.
Section 8. STATUTE OF LIMITATION ON ASSERTION OF CLAIMS
Except for a claim for indemnification under Section 7.01 of the Master
Agreement, no action, at law or in equity, arising out of or connected with
this Schedule, or DST's performance hereunder, shall be commenced by Pioneer
more than twelve (12) months after the receipt of the output produced in
response to a Pioneer query.
Section 9. NOTICE OF BREACH
Pioneer shall immediately notify DST any time it becomes aware that a breach
of this Schedule has occurred.
Section 10. DST's Proprietary Rights.
Pioneer recognizes the proprietary right of DST in and to PowerSelect,
including without limitation, all materials, information and data (exclusive of
Pioneer's own data, but inclusive of the data of any other DST client,
maintained on a DST operating system or the Server), in whatever form or media,
including without limitation, forms, documents, specifications, system designs,
technical manuals, structures, flow charts, file and screen formats,
transmission interfaces, algorithms, account and transaction information, and
code (the "Protected Information") and agrees that all Protected Information is
a trade secret of or confidential to, or, in the alternative if published, is a
copyright of, DST and is and shall remain the sole and exclusive property of DST
IN WITNESS WHEREOF, the parties hereto executed this Schedule the day and
year first above written.
PIONEER INVESTMENT DST SYSTEMS, INC.
MANAGEMENT SHAREHOLDER
SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
3
EXHIBIT A
SCHEDULE VII
POWERSELECT SERVICES
AUTHORIZED OPERATORS
The following persons, presently and until DST is advised in writing to the
contrary, are deemed to be authorized Operators for purposes of this Schedule
VII to the Master Agreement. The list of Operators is subject to amendment from
time to time by written notification to DST. DST shall return a signed copy of
any amendment prior to DST being required to permit access to any individual
added thereby.
Rob Cameron
Lenore Downs
Mike Gorajec
Joe Haddad
Jeff Lucia
Marvin Sutson
Diane Wilcox
Holly Lucas
Alan Chin
Steve Knight
John McHugh
ACCEPTED AND AGREED TO:
PIONEER INVESTMENT DST SYSTEMS, INC.
MANAGEMENT SHAREHOLDER
SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
------------------------------- ------------------------------
Title: SVP Title: Vice President
Proposed Effective Date Hereof (if not immediately effective upon acceptance by
DST):
-------------------
4
SCHEDULE VIII
DST Customer Centers
SCHEDULE NUMBER VIII TO
THE MASTER AGREEMENT
BY AND BETWEEN
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
AND BOSTON FINANCIAL DATA SERVICES, INC. ("Boston Financial")
(the "Master Agreement")-
DST CUSTOMER CENTERS
USAGE AND NON-DISCLOSURE
THIS SCHEDULE NUMBER VIII TO THE MASTER AGREEMENT, is made effective as of
this 1st day of January, 2012, by and between PIONEER INVESTMENT MANAGEMENT
SHAREHOLDER SERVICES, INC. ("Pioneer") and DST SYSTEMS, INC. ("DST"), and is
hereby attached to and incorporated into the Master Agreement.
WHEREAS, Pioneer has entered into the Master Agreement with Boston Financial
and certain Schedules thereto with Boston Financial's Affiliates, whereby
Pioneer is a licensee or user of certain DST software and related products and
services ("DST Products");
WHEREAS, DST provides and supports web sites on public and secured networks
(respectively, the "Internet" and "Intranet") to facilitate distribution of
technical documentation about DST Products (the web sites provided for this
purpose shall be referred to as the "DST CUSTOMER CENTER(S)");
WHEREAS, Pioneer has requested access to and use of DST CUSTOMER CENTER(S)
in connection with its use of DST Products; and
WHEREAS, DST is willing to allow Pioneer to access and use the DST CUSTOMER
CENTER(S) only upon acceptance by Pioneer of the terms and conditions of this
Schedule.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
contained in the Master Agreement and this Schedule, DST and Pioneer agree as
follows:
SECTION 1. INCORPORATION OF THE MASTER AGREEMENT.
The terms and conditions of the Master Agreement are hereby incorporated in
this Schedule as if fully set forth herein except as modified in this Schedule.
All capitalized terms used in this Schedule but not defined herein shall have
the meaning ascribed to them in the Master Agreement or, if not defined in the
Master Agreement, the meaning ascribed to them in any other Schedule. DST and
Pioneer agree that for purposes of this Schedule, DST shall be deemed to have
executed the Master Agreement in place of Boston Financial and to have accepted
the terms thereof, and Pioneer further agrees that DST and not Boston Financial
shall be solely responsible under this Schedule.
SECTION 2. ACCESS.
At no additional charge to Pioneer, DST will provide Pioneer with the
uniform resource locator for the pertinent DST CUSTOMER CENTER and assign
Pioneer an identifier and password to facilitate Pioneer's access to and use of
such DST CUSTOMER CENTER in accordance with the terms and conditions of this
Schedule. The assignment and delivery of Pioneer's identifier and password will
be conducted in accordance with DST security procedures for Internet or
Intranet DST CUSTOMER CENTERS, as applicable. The Intranet DST CUSTOMER CENTER
may be accessed only through a dedicated line to DST's Intranet site.
1
SECTION 3. PERMITTED USE.
Pioneer may only access and use the DST CUSTOMER CENTER(S) in the ordinary
course of its business, to use the technical documentation posted therein as a
reference and guide for Pioneer's permitted use, support and licensure of DST
Products and, if DST includes a news group in any DST CUSTOMER CENTER, to
participate in discussions about DST Products with DST and other DST customers
who execute a Usage and Non-Disclosure Agreement with DST. Pioneer may post its
questions and comments, and responses to any questions or comments posted by
DST or any other DST customer in such DST CUSTOMER CENTER. All questions,
comments and responses must be related solely to the permitted use, support or
licensure of DST Products. Pioneer may print and copy documents or graphics
from a DST CUSTOMER CENTER only for the permitted uses described above. Pioneer
agrees that all prints or copies shall contain or refer to the copyright or
proprietary notices in the DST CUSTOMER CENTER(S) from which it copied or
printed.
SECTION 4. PROHIBITED USE.
Pioneer will not access or use any DST CUSTOMER CENTER for any purpose other
than the permitted uses described in Section 3 of this Schedule. Without
limiting the foregoing sentence, Pioneer agrees that it will not:
(a) use the DST CUSTOMER CENTER(S) for personal communications or any
communication which does not concern DST and DST Products;
(b) modify any question, comment, response or other document after it has
been posted to any DST CUSTOMER CENTER;
(c) assist or permit any person not employed by Pioneer or any other entity
to access or use any DST CUSTOMER CENTER;
(d) transmit any worms, viruses or other disabling devices to, or otherwise
interfere with or disrupt, any DST CUSTOMER CENTER;
(e) print or copy documents created by parties other than DST and appearing
in any DST CUSTOMER CENTER, unless authorized in advance by DST;
(f) revise, delete or otherwise alter the format or content of the web site
through which the DST CUSTOMER CENTER(S) are conducted; or
(g) transmit any program code (source or machine readable) to, or download
or otherwise copy any such material from, any DST CUSTOMER CENTER, unless
authorized in advance by DST.
SECTION 5. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION OBTAINED UNDER THIS
SCHEDULE.
(a) For purposes of information obtained under this Schedule or through
access to or use of a DST CUSTOMER CENTER, "Confidential Information"
includes, in addition to the those materials, in whatever form or media,
described in the Master Agreement, all questions, comments, responses, data,
documents, software, Pioneer's identification number and password and all
other information posted on, or otherwise available through or relating to
the DST CUSTOMER CENTER(S).
2
(b) Confidential Information shall not include any information subject to
the provisions of Section 9.03 of the Master Agreement.
(c) Pioneer shall not use any Confidential Information except in connection
with its use of DST Products under written agreement(s) between Pioneer and
DST. All usage of such DST Products, including any documents or software
obtained through a DST CUSTOMER CENTER, is limited by the terms and
conditions of such written agreement(s). Pioneer shall not disclose any
Confidential Information to third parties without the prior express written
consent of DST. Pioneer may disclose the Confidential Information to
Pioneer's employees only as provided below. Pioneer shall take reasonable
security precautions, at least as great as the precautions it takes to
protect its own confidential information, to keep the Confidential
Information protected from disclosure to third parties.
(d) Pioneer may disclose Confidential Information only to those employees of
Pioneer who have a need-to-know, and only to such employees who are
obligated to maintain the confidentiality of such information and comply
with the terms and conditions of this Schedule. Pioneer shall be responsible
for ensuring compliance by all of its employees with the terms and
conditions of this Schedule. Upon the termination of employment of any
employee of Pioneer who has had access to any DST CUSTOMER CENTER, Pioneer
shall delete such person's user identifier and password and Pioneer shall
verify such as deleted in accordance with DST's security procedures for the
applicable DST CUSTOMER CENTER.
(e) Pioneer agrees to segregate all Confidential Information from materials
of other parties in order to prevent commingling. Confidential Information
may not be reproduced, summarized or distributed without the prior consent
of DST.
(f) Without limiting the foregoing, Confidential Information may not be used
by Pioneer: (i) in connection with the solicitation or evaluation of any
proposal for the sale of systems, goods or services by any competitor of
DST; or (ii) in connection with the conduct of any activity similar to the
DST CUSTOMER CENTER(S) in which a competitor of DST is participating.
SECTION 6. RIGHTS AND REMEDIES.
(a) Pioneer shall notify DST immediately upon discovery of any unauthorized
use of any DST CUSTOMER CENTER or unauthorized use or disclosure of
Confidential Information or any other breach of this Schedule by Pioneer,
and will cooperate with DST in every respect to help DST regain possession
of the Confidential Information and prevent any further unauthorized use of
any DST CUSTOMER CENTER or the Confidential Information.
(b) Upon receipt of written request by DST, Pioneer and its employees shall:
(i) return to DST any Confidential Information and all copies thereof;
(ii) destroy any analyses, compilations, studies or documents in whatever
form or media made by it or its employees, consultants, agents or
representatives containing any Confidential Information; and (iii) provide
DST with a written statement certifying compliance with this paragraph.
(c) In the event of any breach of this Schedule by Pioneer, DST may
immediately revoke Pioneer's access to all DST CUSTOMER CENTER(S) without
prior notice and terminate this Schedule.
(d) Pioneer acknowledges and agrees that in the event of any breach or
threatened breach of this Schedule, termination of this Schedule, revocation
of access, monetary damages and legal remedies may not be sufficient
remedies. DST may be entitled, without waiving any other rights
3
or remedies, to the issuance of an injunction (without payment of any bond
or other deposit) for the purpose of preventing any further breach or
threatened breach of this Schedule, as well as any other equitable and/or
other relief as may be deemed appropriate by a court of competent
jurisdiction.
SECTION 7. REVIEW AND RETENTION OF MATERIAL.
DST reserves the right, but has no duty, to monitor electronically the DST
CUSTOMER CENTER(S) for adherence to the terms and conditions of this Schedule
and may disclose any and all data and information posted to the DST CUSTOMER
CENTER(S) to the extent necessary to protect the rights or property of DST, its
affiliates or licensees, or to satisfy any law, regulation or authorized
governmental request. DST reserves the right, but has no duty, to prohibit
conduct, questions, comments, responses or any communication, data or
information posted to the DST CUSTOMER CENTER(S) which it deems, in its sole
discretion, to be harmful to DST, any affiliate of DST, any licensee or
customer thereof or any other third party. Pioneer acknowledges that DST does
not have the practical ability to restrict conduct, questions, comments,
responses or other communications which might violate this Schedule, the rights
of other parties or any laws prior to transmission to the DST CUSTOMER
CENTER(S) or prior to periodic monitoring of its contents by DST. Pioneer also
acknowledges that DST cannot ensure editing or removal of any inappropriate,
questionable or illegal question, comment, response or other communication or
material after it has been posted to the DST CUSTOMER CENTER(S). Accordingly,
Pioneer agrees that DST has no liability for any action or inaction with
respect to questions, comments, responses, communications or other materials
posted to or deleted from the DST CUSTOMER CENTER(S). All questions, comments,
responses, communications and other materials posted to any news group
established by DST in any DST CUSTOMER CENTER may be removed by DST thirty days
after they have been posted.
SECTION 8. LIMITATION OF LIABILITY; EXCLUSION OF WARRANTIES.
Under no circumstances shall DST be liable for any damages whatsoever,
whether direct, indirect, incidental, consequential, special or exemplary (even
if DST has been advised of, or has foreseen the possibility of such damages),
arising from the access, use, or inability to access or use any DST CUSTOMER
CENTER and the information on any DST CUSTOMER CENTER, including, without
limitation, claims for defamation or loss of revenue or anticipated profits or
lost business. THE DST CUSTOMER CENTER(S) ARE PROVIDED AS IS. DST DOES NOT
MAKE, AND DST HEREBY SPECIFICALLY DISCLAIMS, ANY AND ALL REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE DST CUSTOMER CENTER(S), INCLUDING
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
IMPLIED WARRANTIES ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE. NO
MATERIAL POSTED TO THE DST CUSTOMER CENTER(S) SHALL CONSTITUTE ANY
REPRESENTATION OR WARRANTY WITH RESPECT TO DST OR ANY OTHER PRODUCT OR SERVICE
OF DST OR ITS AFFILIATES, NOR SHALL ANY SUCH MATERIAL MODIFY OR AMEND THE TERMS
OF ANY LICENSE OR OTHER CONTRACT BETWEEN PIONEER AND DST OR ITS AFFILIATES.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, DST SPECIFICALLY DISCLAIMS
ANY WARRANTY REGARDING THE AVAILABILITY OF ANY DST CUSTOMER CENTER AT ANY
PARTICULAR TIME OR FOR ANY LENGTH OF TIME.
4
SECTION 9. TERM.
The term of this Schedule shall commence upon the first day on which any DST
Product provided under any Schedule to the Master Agreement shall be used in
production and shall remain in force until terminated by DST or Pioneer upon
thirty (30) days prior notice. This Schedule shall automatically terminate upon
the termination of the last license Schedule or service Schedule between DST
(or any of its affiliates) and Pioneer then in effect.
SECTION 10. MISCELLANEOUS.
(a) All Confidential Information posted to any DST CUSTOMER CENTER by DST is
and shall remain the property of DST. The posting of Confidential
Information to any DST CUSTOMER CENTER does not place such material in the
public domain or constitute any waiver by DST of any trademark, copyright or
other proprietary rights in such material, or the grant of any express or
implied right or license to Pioneer to, or under, DST's patents, copyrights,
trademarks, trade secrets or other intellectual property. Pioneer hereby
waives any and all copyrights or other proprietary rights to, or
restrictions upon the use of any question, comment, response or other data
or information posted to any DST CUSTOMER CENTER by Pioneer.
(b) This Schedule, together with the Master Agreement, constitutes the
entire agreement between the parties with respect to access to and use of a
DST CUSTOMER CENTER, and supersedes any prior Usage and Non-Disclosure
Agreements between the parties for access to a DST CUSTOMER CENTER.
(c) If either party employs attorneys to enforce any rights arising out of
or relating to this Schedule, the prevailing party shall be entitled to
recover the reasonable fees of its attorneys and costs of legal action.
(d) The obligations of Pioneer under Sections 3, 4 and 5 shall survive any
termination of this Schedule by DST or Pioneer.
PIONEER INVESTMENT DST SYSTEMS, INC.
MANAGEMENT SHAREHOLDER
SERVICES, INC.
By: /s/ Tracy Connelly By: /s/ Fred Quatrocky
------------------------------- ------------------------------
Name: Tracy Connelly Name: Fred Quatrocky
Title: Senior Vice President Title: Vice President
5
EX-99.H OTH MAT CONT
4
appendixa122716adminagency.txt
APPENDIX A TO ADMINISTRATIVE AGENCY AGREEMENT
APPENDIX A
TO
ADMINISTRATIVE AGENCY AGREEMENT
Dated as of December 27, 2016
The following is a list of Trusts and Funds for which the Administrator shall
provide services (as those services are described in Appendix B). This Appendix
A may be amended to include or delete Trusts, Funds or services provided an
executed copy of such revised Appendix is provided to the Administrator:
Open-End Funds
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Bond Pioneer Bond March 5, [X] [X] [X]
Fund Fund 2012
Pioneer Pioneer March 5, [X] [X]
Emerging Emerging 2012
Markets Fund Markets Fund
Pioneer Equity Pioneer Equity March 5, [X] [X] [X]
Income Fund Income Fund 2012
Pioneer Fund Pioneer Fund March 5, [X] [X] [X]
2012
Pioneer High Pioneer High March 5, [X] [X] [X]
Yield Fund Yield Fund 2012
Pioneer Asset Pioneer n/a [X] [X] [X] [X] [X]
Allocation Trust Solutions -
Conservative
Fund
Pioneer n/a [X] [X] [X] [X] [X]
Solutions
Growth Fund
Pioneer n/a [X] [X] [X] [X] [X]
Solutions -
Balanced Fund
Pioneer Mid Cap Pioneer Mid March 5, [X] [X]
Value Fund Cap Value Fund 2012
Pioneer Money Pioneer U.S. March 5, [X] [X] [X] [X] [X]
Market Trust Government 2012
Money Market
Fund
Pioneer Real Pioneer Real March 5, [X] [X] [X]
Estate Shares Estate Shares 2012
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust II AMT-Free 2012
Municipal Fund
Pioneer Select March 5, [X] [X]
Mid Cap Growth 2012
Fund
Pioneer Series Pioneer March 5, [X] [X]
Trust III Disciplined 2012
Value Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust IV Classic 2012
Balanced Fund
Pioneer March 5, [X] [X] [X]
Multi-Asset 2012
Income Fund
Pioneer Series Pioneer Global March 5, [X] [X]
Trust V Equity Fund 2012
Pioneer High March 5, [X] [X] [X]
Income 2012
Municipal Fund
Pioneer U.S. n/a [X] [X] [X]
Corporate High
Yield Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust VI Floating Rate 2012
Fund
Pioneer March 5, [X] [X]
Flexible 2012
Opportunities
Fund
Pioneer Cayman March 5, [X] [X]
Commodity Fund 2012
LTD
Pioneer Series Pioneer Global March 5, [X] [X] [X]
Trust VII High Yield Fund 2012
Pioneer Global March 5, [X] [X] [X]
Multisector 2012
Income Fund
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Series Pioneer March 5, [X] [X]
Trust VIII International 2012
Equity Fund
Pioneer Series Pioneer March 5, [X] [X] [X]
Trust X Dynamic Credit 2012
Fund
Pioneer March 5, [X] [X]
Fundamental 2012
Growth Fund
Pioneer March 5, [X] [X] [X]
Multi-Asset 2012
Ultra Short
Income Fund
Pioneer Series Pioneer Core March 5, [X] [X]
Trust XI Equity Fund 2012
Pioneer Series Pioneer March 5, [X] [X]
Trust XII Disciplined 2012
Growth Fund
Pioneer Short Pioneer Short March 5, [X] [X] [X]
Term Income Fund Term Income 2012
Fund
Pioneer Pioneer March 5, [X] [X] [X]
Strategic Strategic 2012
Income Fund Income Fund
Pioneer Pioneer Bond March 5, [X] [X] [X]
Variable VCT Portfolio 2012
Contracts Trust
Pioneer March 5, [X] [X]
Emerging 2012
Markets VCT
Portfolio
Pioneer Equity March 5, [X] [X]
Income VCT 2012
Portfolio
Pioneer Fund March 5, [X] [X]
VCT Portfolio 2012
Pioneer Select March 5, [X] [X]
Mid Cap Growth 2012
VCT Portfolio
Pioneer High March 5, [X] [X] [X]
Yield VCT 2012
Portfolio
Pioneer Mid March 5, [X] [X]
Cap Value VCT 2012
Portfolio
Pioneer Real March 5, [X] [X]
Estate Shares 2012
VCT Portfolio
Pioneer March 5, [X] [X] [X]
Strategic 2012
Income VCT
Portfolio
Closed-End Funds
Fund
Accounting /
Conversion Treasurer SEC Yield Compliance Expense
Trust Fund Date Support Calculation SOI Monitoring Tax Administration
----- ---- ---------- ------------ ----------- --- ---------- --- --------------
Pioneer Pioneer May 2, [X] [X] [X] [X] [X] [X]
Diversified Diversified 2012
High Income High Income
Trust Trust
Pioneer Pioneer April 2, [X] [X] [X] [X] [X] [X]
Floating Rate Floating Rate 2012
Trust Trust
Pioneer High Pioneer High April 2, [X] [X] [X] [X] [X] [X]
Income Trust Income Trust 2012
Pioneer ILS Pioneer ILS n/a [X] [X] [X]
Interval Fund Interval Fund
Pioneer Pioneer May 2, [X] [X] [X] [X] [X] [X]
Municipal High Municipal High 2012
Income Trust Income Trust
Pioneer Pioneer April 2, [X] [X] [X] [X] [X] [X]
Municipal High Municipal High 2012
Income Income
Advantage Trust Advantage Trust
BROWN BROTHERS HARRIMAN & CO.
By: /s/ Elizabeth E. Prickett
-----------------------------
Name: Elizabeth E. Prickett
Title: Managing Director
Date: 1/19/17
PIONEER INVESTMENT MANAGEMENT, INC. Each TRUST listed above,
on behalf of the above-named Funds
By: /s/ Gregg Dooling By: /s/ Mark E. Bradley
----------------------------- ----------------------------
Name: Gregg Dooling Name: Mark E. Bradley
Title: CFO Title: Treasurer and CFO
Date: 1/12/17 Date: 1/04/17
EX-99.J OTHER OPININ
5
ei022717consent.txt
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Post-Effective Amendment
No. 35 to Registration Statement Amendment No. 333-46453 on Form N-1A of our
report dated December 23, 2016, relating to the financial statements and
financial highlights of Pioneer Equity Income Fund (the "Fund"), appearing in
the Annual Report on Form N-CSR of the Fund for the year ended October 31, 2016.
We also consent to the references to us under the headings "Financial
Highlights" in the Prospectus and "Independent Registered Public Accounting
Firm" and "Financial Statements" in the Statement of Additional Information,
which are part of such Registration Statement.
/s/ DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 27, 2017
EX-99.M 12B-1 PLAN
6
distplan011017.txt
DISTRIBUTION PLAN
PIONEER FUNDS
DISTRIBUTION PLAN
February 1, 2008
(as amended January 10, 2017)
WHEREAS, the Board of Trustees (the "Board") of certain of the open-end
investment companies listed on Appendix B hereto have adopted separate
distribution plans pursuant to Rule 12b-1 (the "Rule") under the Investment
Company Act of 1940, as amended (the "1940 Act"), for certain classes of shares
(each a "Class") of each series of each such investment company; and
WHEREAS, the Board desires to combine, amend and restate in their entirety
all such distribution plans into this Distribution Plan (this "Plan"); and
WHEREAS, the Board of each of the other open-end investment companies listed
on Appendix B hereto desires to adopt this Plan with respect to certain of the
Classes offered by certain of its series;
NOW, THEREFORE, this Plan is amended and restated or adopted, as the case
may be, in accordance with the Rule with respect to those Classes listed on
Appendix A offered by the series (each a "Fund") of the investment companies
(each a "Trust) listed on Appendix B hereto, as each such Appendix may be
amended from time to time, to be effective as of the date set forth above or,
if later, the date indicated on Appendix B, subject to the following terms and
conditions:
Section 1. Annual Fee.
For each Class, a Fund may pay to one or more principal underwriters,
broker-dealers, financial intermediaries (which may include banks) and other
parties that enter into a distribution, underwriting, selling or service
agreement with respect to shares of such Class (each of the foregoing, a
"Servicing Party") distribution and/or service fees. The Fund, its principal
underwriter (together with any co-underwriters and successors, "Underwriters")
or other parties also may incur expenses in connection with the distribution or
marketing and sale of the Fund's shares that may be paid or reimbursed by the
Fund. The aggregate amount in respect of such fees and expenses to be paid by a
Fund pursuant to this Section 1 with respect to any Class shall be the amount
calculated at the percentage per annum of the average daily net assets
attributable to such Class as set forth in Appendix A hereto. The fees
described above will be calculated daily and paid monthly or at such other
intervals as the Board of each Trust may determine.
Payments under this Plan are not tied exclusively to actual distribution
and/or service fees and expenses incurred, and the payments under this Plan may
exceed (or be less than) actual fees and expenses incurred. A Servicing Party
may retain any fees hereunder that are in excess of its expenses incurred.
Section 2. Other Payments by Manager, Fund, Etc.
It is recognized that a Fund's investment manager ("Manager") or
Underwriters, a Servicing Party or an affiliate of any of them may use its
management or advisory fee revenues, past profits or its resources from other
sources to make payments to a Servicing Party or any other entity with respect
to expenses incurred in connection with the distribution or marketing and
sales of the Fund's shares, including the activities referred to above.
Notwithstanding any language to the contrary contained herein, to the extent
that any payments made by the Fund to its Manager or any affiliate thereof,
including payments made from such Manager's or affiliate's management or
advisory fee or administrative fee or payments made for shareholder services,
should be deemed to be indirect financing of any activity primarily intended to
result in the sale of Fund shares within the context of the Rule, then such
payments shall be deemed to be authorized by this Plan but shall not be subject
to the limitations set forth in Section 1.
It is further recognized that each Fund will enter into normal and customary
custodial, transfer agency, shareholder servicing, recordkeeping and dividend
disbursing agency and other service provider arrangements, and make separate
payments under the terms and conditions of those arrangements. These
arrangements shall not ordinarily be deemed pursuant to this Plan.
Section 3. Sales Charges.
It is understood that, as disclosed in each Fund's prospectus, an initial
sales charge may be paid by investors who purchase Fund shares, and the Fund
may pay to one or more Servicing Parties, or the Fund may permit such persons
to retain, as the case may be, such sales charge as full or partial
compensation for their services in connection with the sale of Fund shares. It
is also understood that, as disclosed in each Fund's prospectus, the Fund or a
Servicing Party may impose certain deferred sales charges in connection with
the repurchase of Fund shares, and the Fund may pay to a Servicing Party, or
the Fund may permit such persons to retain, as the case may be, all or any
portion of such deferred sales charges.
Section 4. Approval by Shareholders.
Except as otherwise permitted by applicable law, and other than with respect
to Classes of a Fund in existence as of the date first written above (as to
which this Plan amends and restates the existing distribution plans), this Plan
will not take effect, and no fee will be payable in accordance with Section 1
of this Plan, with respect to a Class of a Fund (other than a Class of a Fund
in existence as of the date first written above) until this Plan has been
approved by a vote of at least a majority of the outstanding voting securities
of that Class. This Plan will be deemed to have been approved with respect to a
Class of a Fund so long as a majority of the outstanding voting securities of
that Class votes for the approval of this Plan, notwithstanding that (a) this
Plan has not been approved by a majority of the outstanding voting securities
of any other Class, or (b) this Plan has not been approved by a majority of the
outstanding voting securities of the Fund.
Section 5. Approval by Trustees.
Neither this Plan nor any related agreements will take effect, with respect
to a Class of a Fund, until approved by a majority vote of both (a) the Board
and (b) those Trustees who are not interested persons of the Trust and who have
no direct or indirect financial interest in the operation of this Plan or in
any agreements related to this Plan (the "Qualified Trustees"), cast in person
at a meeting called for the purpose of voting on this Plan and the related
agreements.
Section 6. Continuance of this Plan.
The Plan will continue in effect with respect to each Class, provided that
such continuance is specifically approved at least annually by the Board and by
a majority of the Qualified Trustees in accordance with Section 5.
2
Section 7. Termination.
The Plan may be terminated at any time with respect to a Class of a Fund
(i) by the Fund without the payment of any penalty, by the vote of a majority
of the outstanding voting securities of such Class or (ii) by a majority vote
of the Qualified Trustees. The Plan may remain in effect with respect to a
Class even if this Plan has been terminated in accordance with this Section 7
with respect to any other Class of the same Fund.
Section 8. Amendments.
The Plan may not be amended with respect to a Class of a Fund to increase
materially the amount of the fees described in Section 1, unless the amendment
is approved by a vote of holders of at least a majority of the outstanding
voting securities of that Class. No material amendment to this Plan may be made
unless approved by the Board and the Qualified Trustees in the manner described
in Section 5.
Section 9. Selection of Certain Board Members.
While this Plan is in effect, the Trust will comply with paragraph (c) of
the Rule.
Section 10. Written Reports.
In each year during which this Plan remains in effect with respect to any
Class of a Fund, the proper officers of the Fund will prepare and furnish to
the Board and the Board will review, at least quarterly, written reports
complying with the requirements of the Rule, which set out the amounts expended
under this Plan and the purposes for which those expenditures were made.
Section 11. Preservation of Materials.
The Trust will preserve copies of this Plan, any agreement relating to this
Plan and any report made pursuant to Section 10 for a period of not less than
six years (the first two years in an easily accessible place).
Section 12. Meanings of Certain Terms.
As used in this Plan, the terms "interested person" and "majority of the
outstanding voting securities" will be deemed to have the meanings given to
those terms under the 1940 Act, and references to the "1940 Act" shall include
any rule, regulation or exemptive order of the Securities and Exchange
Commission (the "Commission") thereunder and interpretive guidance with respect
to the 1940 Act by the Commission or its staff.
Section 13. Limitation of Liability.
Notice is hereby given that this Plan has been adopted on behalf of each
Fund by the Trustees in their capacity as Trustees of the Trust and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the Trustees, officers or shareholders individually but
are binding only upon the assets and property of the Fund.
3
Section 14. Severability.
The provisions of this Plan are severable for each Fund and each
Class covered by this Plan, and actions taken with respect to this Plan in
conformity with the Rule may be taken separately for each Fund and Class.
Section 15. Governing Law.
This Plan shall be governed by, and construed in accordance with, the laws
of The Commonwealth of Massachusetts, except to the extent required to be
governed by the 1940 Act and the Rule.
Section 16. Pledge by Underwriter.
Notwithstanding anything to the contrary in this Plan or any underwriting
agreement, each Underwriter may assign, sell or pledge (collectively,
"Transfer") its rights to its portion of any fees payable to it hereunder. Upon
receipt of notice of a Transfer, the Trust will pay to the assignee, purchaser
or pledgee (each, a "Transferee"), as third party beneficiaries, such fees
payable to the principal underwriter as provided in written instructions from
the principal underwriter and the Transferee to the Trust. In the absence of
any such written instructions, the Trust shall have no obligations to a
Transferee.
4
APPENDIX A
DISTRIBUTION PLAN
Applicable Percentage
Class of each Fund Per Annum
------------------ ---------------------
Class A (other than Class A of Pioneer U.S. Government Money Market Fund, Pioneer Multi-Asset 0.25%
Ultrashort Income Fund and Pioneer Short Term Income Fund)
Class A of Pioneer U.S. Government Money Market Fund 0.15%
Class A of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.20%
Class C (other than Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income 1.00%
Fund)
Class C of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.50%
Class C2 of Pioneer Multi-Asset Ultrashort Income Fund and Pioneer Short Term Income Fund 0.50%
Class R 0.50%
Class T 0.25%
January 10, 2017
APPENDIX B
DISTRIBUTION PLAN
Trust Fund
----- ----
Pioneer Asset Allocation Trust Pioneer Solutions - Conservative Fund
Pioneer Solutions - Growth Fund
Pioneer Solutions - Balanced Fund
Pioneer Bond Fund Pioneer Bond Fund
Pioneer Emerging Markets Fund Pioneer Emerging Markets Fund
Pioneer Equity Income Fund Pioneer Equity Income Fund
Pioneer Fund Pioneer Fund
Pioneer High Yield Fund Pioneer High Yield Fund
Pioneer Mid Cap Value Fund Pioneer Mid Cap Value Fund
Pioneer Money Market Trust Pioneer U.S. Government Money Market
Fund
Pioneer Real Estate Shares Pioneer Real Estate Shares
Pioneer Series Trust II Pioneer AMT-Free Municipal Fund
Pioneer Select Mid Cap Growth Fund
Pioneer Series Trust III Pioneer Disciplined Value Fund
Pioneer Series Trust IV Pioneer Classic Balanced Fund
Pioneer Multi-Asset Income Fund
Pioneer Series Trust V Pioneer Global Equity Fund
Pioneer High Income Municipal Fund
Pioneer U.S. Corporate High Yield Fund
Pioneer Series Trust VI Pioneer Floating Rate Fund
Pioneer Flexible Opportunities Fund
Pioneer Series Trust VII Pioneer Global High Yield Fund
Pioneer Global Multisector Income Fund
Pioneer Series Trust VIII Pioneer International Equity Fund
Pioneer Series Trust X Pioneer Dynamic Credit Fund
Pioneer Fundamental Growth Fund
Pioneer Multi-Asset Ultrashort Income
Fund
Pioneer Series Trust XI Pioneer Core Equity Fund
Pioneer Series Trust XII Pioneer Disciplined Growth Fund
Pioneer Short Term Income Fund Pioneer Short Term Income Fund
Pioneer Strategic Income Fund Pioneer Strategic Income Fund
January 10, 2017
6
EX-99.N 18F-3 PLAN
7
ei18f3plan-tshs.txt
MULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3
PIONEER EQUITY INCOME FUND
Multiple Class Plan Pursuant to Rule 18f-3
Class A Shares, Class C Shares, Class K Shares, Class R Shares, Class T
Shares and Class Y Shares
January 10, 2017
Each class of shares of Pioneer Equity Income Fund (the "Fund") will
have the same relative rights and privileges and be subject to the same sales
charges, fees and expenses, except as set forth below. The Board of Trustees
may determine in the future that other distribution arrangements, allocations
of expenses (whether ordinary or extraordinary) or services to be provided to a
class of shares are appropriate and amend this Multiple Class Plan accordingly
without the approval of shareholders of any class. Except as set forth in the
Fund's prospectus(es), shares may be exchanged only for shares of the same
class of another Pioneer mutual fund.
Article I. Class A Shares
Class A Shares are sold at net asset value per share and subject to the
initial sales charge schedule or contingent deferred sales charge ("CDSC") and
minimum purchase requirements as set forth in the Fund's prospectus. Class A
Shares shall be entitled to the shareholder services set forth from time to
time in the Fund's prospectus with respect to Class A Shares. Class A Shares
are subject to fees calculated as a stated percentage of the net assets
attributable to Class A Shares under the Fund's Class A Rule 12b-1 Distribution
Plan as set forth in such Distribution Plan. The Class A Shareholders have
exclusive voting rights, if any, with respect to the Fund's Class A Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class A Shares on a
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the Internal Revenue Service ("IRS") relating to the
issuance of multiple classes of shares. Class A Shares shall bear the costs and
expenses associated with conducting a shareholder meeting for matters relating
to Class A Shares.
The initial purchase date for Class A Shares acquired through
(i) reinvestment of dividends on Class A Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class A
Shares were purchased.
Article II. Class C Shares
Class C Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class C Shares redeemed within one (1) year of
purchase will be subject to a CDSC as set forth in the Fund's prospectus.
Class C Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class C Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class C Shares. Class C Shares are subject to fees calculated as a stated
percentage of the net assets
attributable to Class C Shares under the Class C Rule 12b-1 Distribution Plan
as set forth in such Distribution Plan. The Class C Shareholders of the Fund
have exclusive voting rights, if any, with respect to the Fund's Class C Rule
12b-1 Distribution Plan. Transfer agency fees are allocated to Class C Shares
on a per account basis except to the extent, if any, such an allocation would
cause the Fund to fail to satisfy any requirement necessary to obtain or rely
on a private letter ruling from the IRS relating to the issuance of multiple
classes of shares. Class C Shares shall bear the costs and expenses associated
with conducting a shareholder meeting for matters relating to Class C Shares.
The initial purchase date for Class C Shares acquired through
(i) reinvestment of dividends on Class C Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class C
Shares were purchased.
Article III. Class K Shares
Class K Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class K Shares are not subject to a CDSC upon
redemption regardless of the length of the period of time such shares are held.
Class K Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class K Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class K Shares.
Class K Shares are not subject to fees payable under a distribution or other
plan adopted pursuant to Rule 12b-1 under the Investment Company Act of 1940,
as amended (the "Act"). The Class K Shareholders of the Fund have exclusive
voting rights, if any, with respect to the Fund's possible future adoption of a
Class K Rule 12b-1 Distribution Plan. Transfer agency fees are allocated to
Class K Shares on a per account basis except to the extent, if any, such an
allocation would cause the Fund to fail to satisfy any requirement necessary to
obtain or rely on a private letter ruling from the IRS relating to the issuance
of multiple classes of shares. Class K Shares shall bear the costs and expenses
associated with conducting a shareholder meeting for matters relating to
Class K Shares.
The initial purchase date for Class K Shares acquired through
(i) reinvestment of dividends on Class K Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class K
Shares were purchased.
Article IV. Class R Shares
Class R Shares are sold at net asset value per share without an initial
sales charge. Class R Shares are not subject to a CSDC upon redemption
regardless of the length of period of time such Shares are held. Class R Shares
are sold to retirement plans that meet the eligibility requirements for Class R
Shares set forth in the Fund's prospectus. Class R Shares shall be entitled to
the shareholder services set forth from time to time in the Fund's prospectus
with respect to Class R Shares. Class R Shares are subject to fees calculated
as a stated percentage of the net assets attributable to Class R Shares under
the Class R Rule 12b-1 Distribution Plan as set forth in such Distribution
Plan. The Class R Shareholders of the Fund have exclusive voting rights, if
any, with respect to the Fund's Class R Rule 12b-1 Distribution Plan. Transfer
agency
2
fees are allocated to Class R Shares on a per account basis except to the
extent, if any, such an allocation would cause the Fund to fail to satisfy any
requirement necessary to obtain or rely on a private letter ruling from the IRS
relating to the issuance of multiple classes of shares. Class R Shares shall
bear the costs and expenses associated with conducting a shareholder meeting
for matters relating to Class R Shares.
The initial purchase date for Class R Shares acquired through
(i) reinvestment of dividends on Class R Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class R
Shares were purchased.
Article V. Class T Shares
Class T Shares are sold at net asset value per share and subject to the
initial sales charge schedule and minimum purchase requirements as set forth in
the Fund's prospectus. Class T Shares are not subject to a CDSC upon redemption
regardless of the length of the period of time such shares are held. Class T
Shares shall be entitled to the shareholder services set forth from time to
time in the Fund's prospectus with respect to Class T Shares. Class T Shares
are subject to fees calculated as a stated percentage of the net assets
attributable to Class T Shares under the Fund's Class T Rule 12b-1 Distribution
Plan as set forth in such Distribution Plan. The Class T Shareholders have
exclusive voting rights, if any, with respect to the Fund's Class T Rule 12b-1
Distribution Plan. Transfer agency fees are allocated to Class T Shares on a
per account basis except to the extent, if any, such an allocation would cause
the Fund to fail to satisfy any requirement necessary to obtain or rely on a
private letter ruling from the Internal Revenue Service ("IRS") relating to the
issuance of multiple classes of shares. Class T Shares shall bear the costs and
expenses associated with conducting a shareholder meeting for matters relating
to Class T Shares.
The initial purchase date for Class T Shares acquired through reinvestment
of dividends on Class T Shares will be deemed to be the date on which the
original Class T Shares were purchased.
There is no exchange privilege for Class T Shares. Rights of accumulation
and letters of intent are not applicable to Class T Shares.
Article VI. Class Y Shares
Class Y Shares are sold at net asset value per share without the imposition
of an initial sales charge. Class Y Shares are not subject to a CDSC upon
redemption regardless of the length of the period of time such shares are held.
Class Y Shares are sold subject to the minimum purchase requirements set forth
in the Fund's prospectus. Class Y Shares shall be entitled to the shareholder
services set forth from time to time in the Fund's prospectus with respect to
Class Y Shares.
Class Y Shares are not subject to fees payable under a distribution or other
plan adopted pursuant to Rule 12b-1 under the Act. The Class Y Shareholders of
the Fund have exclusive voting rights, if any, with respect to the Fund's
possible future adoption of a Class Y Rule 12b-1 Distribution Plan. Transfer
agency fees are allocated to Class Y Shares on a per account basis except to
the extent, if any, such an allocation would cause the Fund to fail to satisfy
any
3
requirement necessary to obtain or rely on a private letter ruling from the IRS
relating to the issuance of multiple classes of shares. Class Y Shares shall
bear the costs and expenses associated with conducting a shareholder meeting
for matters relating to Class Y Shares.
The initial purchase date for Class Y Shares acquired through
(i) reinvestment of dividends on Class Y Shares or (ii) exchange from another
Pioneer mutual fund will be deemed to be the date on which the original Class Y
Shares were purchased.
Article VII. Approval by Board of Trustees
This Multiple Class Plan shall not take effect until it has been approved by
the vote of a majority (or whatever greater percentage may, from time to time,
be required under Rule 18f-3 under the Act) of (a) all of the Trustees of the
Fund and (b) those of the Trustees who are not "interested persons" (as such
term may be from time to time defined under the Act) of the Fund.
Article VIII. Amendments
No material amendment to this Multiple Class Plan shall be effective unless
it is approved by the Board of Trustees of the Fund in the same manner as is
provided for approval of this Multiple Class Plan in Article VII.
4