Expense Limit And Reimbursement Agreement
Expense Limit and Reimbursement Agreement made as of February 26, 2003,
between Pioneer Investment Management, Inc. ("PIM") and Pioneer Protected
Principal Trust (the "Trust") on behalf of its series, Pioneer Protected
Principal Plus Fund II (the "Fund").
WHEREAS, the Trust is a Delaware statutory trust and is registered under
the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end
management company.
WHEREAS, the Trust and PIM have entered into a Management Contract, dated
as of February 26, 2003 (the "Management Contract"), pursuant to which PIM
provides investment management services to the Fund for compensation based on
the value of the average daily net assets of the Fund.
WHEREAS, PIM and the Trust wish to limit the expenses of the Fund during
the Guarantee Period (as such term is defined in the Financial Guarantee
Agreement, dated as of February 26, 2003 (the "Financial Guarantee Agreement"),
among the Trust, on behalf of the Fund, the PIM and Ambac Assurance Corporation.
NOW THEREFORE the parties agree as follows:
SECTION 1. PIM agrees to limit the Fund's expenses (the "Expense
Limitation") by waiving fees payable to PIM and/or reimbursing the Fund for the
Fund's ordinary operating expenses so that the total expenses of the Fund
(excluding the cost of defending or prosecuting any claim or litigation to which
the Fund is a party, together with any amount in judgment or settlement,
indemnification expense, income taxes incurred by the Fund and other
non-recurring, non-operating expenses (such excluded expenses, the
"Extraordinary Expenses")) with respect to Class A shares do not exceed 2.05%
per annum of average daily net assets attributable to Class A shares, with
respect to Class B shares do not exceed 2.80% of average daily net assets
attributable to Class B shares and with respect to Class C shares do not to
exceed 2.80% of average daily net assets attributable to Class C shares. During
the period when the Fund's assets are invested in a Defeasance Portfolio (as
such term is defined in the Financial Guarantee Agreement) pursuant to Article
IV of the Financial Guarantee Agreement, PIM agrees to limit the Fund's expenses
by waiving fees payable to PIM and/or reimbursing the Fund for the Fund's
ordinary operating expenses so that the total expenses of the Fund (other than
Extraordinary Expenses) with respect to Class A shares do not exceed 1.20% per
annum of average daily net assets attributable to Class A shares, with respect
to Class B shares do not exceed 1.95% of average daily net assets attributable
to Class B shares and with respect to Class C shares do not to exceed 1.95% of
average daily net assets attributable to Class C shares. To determine PIM's
obligations under this Section 1, the Fund's ordinary operating expenses for
each class of shares shall be calculated on each day that the Fund's net asset
value is calculated. For purposes of this Agreement, expenses related to the
Independent Verifier Agreement shall be considered ordinary operating expenses
of the Fund, but the costs of acquisition of portfolio securities, including any
brokerage commission and other investment related expenses shall not be
considered an expense of the Fund. In no event shall Pioneer Funds Distributor,
Inc. be required to waive or PIM be required to reimburse any fees payable under
the Fund's Rule 12b-1 plans.
SECTION 2. PIM may terminate or modify the Expense Limitation only in
accordance with this Agreement. PIM agrees that the Expense Limitation shall not
be modified or terminated prior to the Maturity Date (as defined in the
Financial Guarantee Agreement). PIM shall be entitled to modify or terminate the
Expense Limitation for any period subsequent to the Maturity Date, but only if,
PIM elects to modify or terminate the Expense Limitation with respect to such
subsequent period and such election is made prior to the effective date of the
Fund's post-effective amendment to its Registration Statement on Form N-1A with
respect to such subsequent period; provided that this Agreement shall remain in
effect at all times until the Fund's then current prospectus is amended or
supplemented to reflect the termination or modification of this Agreement. The
election by PIM referred to in the preceding sentence shall not be subject to
the approval of the Fund or its Board of Trustees, but PIM shall notify the
Board of Trustees in advance of the termination or modification of the Expense
Limitation.
SECTION 3. PIM shall keep a record of the amount of expenses for each class
of shares that it waived or reimbursed pursuant to Section 1 hereof ("Prior
Expenses"). If at any future date the total expenses of the Fund attributable to
Class A, Class B or Class C shares are less than the applicable Expense
Limitation (such excess amount, the "Excess Amount"), PIM shall be entitled to
be reimbursed for all or a portion of such Prior Expenses attributable to such
class to the extent possible and solely payable from the Excess Amount; provided
that no payments made to the Fund under the financial guarantee insurance policy
(the "Policy") issued in connection with the Financial Guarantee Agreement shall
be used to reimburse PIM for any Prior Expenses; provided further that in the
event that the Fund is required to invest all of its assets in a Defeasance
Portfolio (as such term is defined in the Financial Guarantee Agreement),
Pioneer shall not be reimbursed for any Prior Expenses prior to the Maturity
Date and, following the Maturity Date, Pioneer may only be reimbursed for
Prior Expenses if, following such reimbursement, the Fund would have sufficient
assets to redeem its shares for the Guaranteed Amount on the Maturity Date
without drawing on the Policy. If the expenses of any class subsequently exceed
the applicable Expense Limitation, the reimbursement of Prior Expenses shall be
suspended and, if subsequent reimbursement of Prior Expenses of such class shall
be resumed to the extent that expenses do not exceed the applicable Expense
Limitation (unless previously terminated by PIM),the Expense Limitation shall be
applied. Notwithstanding anything in this Section 3 to the contrary, the Fund
shall not reimburse PIM for any Prior Expense pursuant to this Section 3 more
than three (3) years after the expense was incurred.
SECTION 4. It is not intended by PIM or the Fund that the reimbursement of
Prior Expenses in Section 3 shall be an obligation of the Fund (a) unless and
until the total expenses of the Fund attributable to a class of shares are less
than the Expense Limitation applicable to such class and then only to the extent
of the Excess Amount, (b) unless such Prior Expense was incurred less than three
years prior to the reimbursement or (c) if any payment made to the Fund under
the Policy would be used to reimburse PIM for any Prior Expense. PIM understands
that total expenses of the Fund attributable to Class A, Class B or Class C
shares may never be reduced below the applicable Expense Limitation and there is
no assurance that the Prior Expenses shall be reimbursed. In addition, the Fund
shall have the right to terminate this Agreement, including its obligation to
reimburse Prior Expenses, at any time upon notice to PIM. This Agreement
automatically terminates without obligation by the Fund upon termination of the
Management Contract.
SECTION 5. In addition to the expense limitation in Section 1 hereof, PIM
agrees that for the current fiscal year and, unless PIM otherwise notifies the
Fund that it is terminating or modifying the fee waiver in this Section 5 prior
to the filing of the Trust's amendment to its Registration Statement to include
updated financial disclosure regarding the Fund, any subsequent fiscal year, PIM
agrees to waive 5 basis points of its fee under the Management Contract. In
addition to the foregoing, at any time that any of the Fund's assets are
invested in Pioneer Funds, the fee under the Management Contract shall be
reduced daily by an amount equal to the Effective Pioneer Funds Management Fee
for such day. The Effective Pioneer Funds Management Fee shall be an amount,
computed daily, equal to one three hundred and sixty-fifth of the effective
management fee rate earned for such day times the net asset value of shares of
the Pioneer Funds held by the Fund. Section 3 of this Agreement shall not apply
to any expense limitation pursuant to this Section 5.
SECTION 6. This Agreement shall be governed by the laws of the State of
Delaware.
SECTION 7. Nothing herein contained shall be deemed to require the Fund or
the Trust to take any action contrary to the Trust's Declaration of Trust, or
any applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Trust's Board of Trustees of its
responsibility for and control of the conduct of the affairs of the Fund.
SECTION 8. Any question of interpretation of any term or provision of this
Agreement, including but not limited to the investment management fees payable
to PIM and the computations of average daily net assets, having a counterpart in
or otherwise derived from the terms and provisions of the Management Contract,
the Financial Guarantee Agreement or the 1940 Act, shall have the same meaning
as and be resolved by reference to such Management Contract, Financial Guarantee
Agreement or the 1940 Act.
In witness whereof, the parties hereto have caused this Agreement to be
signed as of February 26, 2003.
Pioneer Protected Principal Trust, Pioneer Investment Management, Inc.
on behalf of its series,
Pioneer Protected Principal Plus Fund II
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
Its: Executive Vice President Its: President
