MANAGEMENT CONTRACT
THIS AGREEMENT dated this day of October, 1997 between Pioneer Variable
Contracts Trust, a Delaware business trust (the "Trust"), on behalf of Growth
and Income Portfolio (the "Portfolio"), and Pioneering Management Corporation, a
Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust, on behalf of the Portfolio, and the Manager do
hereby agree as follows:
1. (a) The Manager will regularly provide the Portfolio with
investment research,advice and supervision and will furnish continuously an
investment program for the Portfolio, consistent with the investment
objectives and policies of the Portfolio. The Manager will determine from
time to time what securities shall be purchased for the Portfolio, what
securities shall be held or sold by the Portfolio and what portion of the
Portfolio's assets shall be held uninvested as cash, subject always to the
provisions of the Trust's Certificate of Trust, Agreement and Declaration
of Trust, By-Laws and its registration statements under the 1940 Act and
under the 1933 Act covering the Trust's shares, as filed with the
Securities and Exchange Commission, and to the investment objectives,
policies and restrictions of the Portfolio, as each of the same shall be
from time to time in effect, and subject, further, to such policies and
instructions as the Board of Trustees of the Trust may from time to time
establish. To carry out such determinations, the Manager will exercise full
discretion and act for the Portfolio in the same manner and with the same
force and effect as the Portfolio itself might or could do with respect to
purchases, sales or other transactions, as well as with respect to all
other things necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Portfolio and upon the Trust's request, furnish to
the Portfolio research, statistical and advisory reports upon the
industries, businesses, corporations or securities as to which such
requests shall be made, whether or not the Portfolio shall at the time have
any investment in such industries, businesses, corporations or securities.
The Manager will use its best efforts in the preparation of such reports
and will endeavor to consult the persons and sources believed by it to have
information available with respect to such industries, businesses,
corporations or entities.
(c) The Manager will maintain all books and records with respect to
the Portfolio's securities transactions required by sub-paragraphs (b)(5),
(6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other
than those records being maintained by the custodian or transfer agent
appointed by the Trust) and preserve such records for the periods
prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will also
provide to the Board of Trustees such periodic and special reports as the
Board may reasonably request.
2.(a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the
Manager or in such other place as may be agreed upon from time to time, and
all necessary office facilities, equipment and personnel for managing the
Portfolio's affairs and investments, and shall arrange, if desired by the
Trust, for members of the Manager's organization to serve as officers or
agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or
"interested persons" (as defined in the 0000 Xxx) of, the Manager and all
officers of the Trust as such; and (ii) all expenses not hereinafter
specifically assumed by the Trust where such expenses are incurred by the
Manager or by the Trust in connection with the management of the affairs
of, and the investment and reinvestment of the assets of, the Portfolio.
(c) The Trust, on behalf of the Portfolio, shall assume and shall pay:
(i) charges and expenses for fund accounting, pricing and appraisal
services and related overhead, including, to the extent such services are
performed by personnel of the Manager, or its affiliates, office space and
facilities and personnel compensation, training and benefits; (ii) the
charges and expenses of auditors; (iii) the charges and expenses of any
custodian, transfer agent, plan agent, dividend disbursing agent and
registrar appointed by the Trust with respect to the Trust; (iv) issue and
transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums,
interest charges, dues and fees for membership in trade associations and
all taxes and corporate fees payable by the Trust to federal, state or
other governmental agencies; (vi) fees and expenses involved in registering
and maintaining registrations of the Trust and/or its shares with the
Commission, state or blue sky securities agencies and foreign countries,
including the preparation of Prospectuses and Statements of Additional
Information for filing with the Commission; (vii) all expenses of
shareholders' and Trustees' meetings and of preparing, printing and
distributing prospectuses, notices, proxy statements and all reports to
shareholders and to governmental agencies; (viii) charges and expenses of
legal counsel to the Trust and the Trustees; (ix) any distribution fees
paid by the Portfolio in accordance with Rule 12b-1 promulgated by the
Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Trust who are not affiliated with or interested persons of the Manager,
the Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer
Trusts Distributor, Inc.; (xi) the cost of preparing and printing share
certificates; and (xii) interest on borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) above, the
Trust, on behalf of the Portfolio, shall pay all brokers' and underwriting
commissions chargeable to the Trust in connection with securities
transactions to which the Portfolio is a party.
3. (a) The Trust, on behalf of the Portfolio, shall pay to the
Manager, as compensation for the Manager's services and expenses assumed
hereunder, a fee at the annual rate of 0.65% of the Portfolio's average
daily net assets. Management fees payable hereunder shall be computed daily
and paid monthly in arrears. In the event of termination of this Agreement,
the fee provided in this Section shall be computed on the basis of the
period ending on the last business day on which this Agreement is in effect
subject to a pro rata adjustment based on the number of days elapsed in the
current month as a percentage of the total number of days in such month.
(b) If the operating expenses of the Portfolio in any year exceed the
limits set by state securities laws or regulations in states in which
shares of the Portfolio are sold, the amount payable to the Manager under
subsection (a) above will be reduced (but not below $0), and the Manager
shall make other arrangements concerning expenses but, in each instance,
only as and to the extent required by such laws or regulations. If amounts
have already been advanced to the Manager under this Agreement, the Manager
will return such amounts to the Trust to the extent required by the
preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder
(in advance of the time such fee or a portion thereof would otherwise
accrue) and/or undertake to pay or reimburse the Portfolio for all or a
portion of its expenses not otherwise required to be borne or reimbursed by
the Manager. Any such fee reduction or undertaking may be discontinued or
modified by the Manager at any time.
4. It is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") to provide investment
advisory services to the Portfolio by entering into a written agreement
with each such Subadviser; provided, that any such agreement first shall be
approved by the vote of a majority of the Trustees, including a majority of
the Trustees who are not "interested persons" (as defined in the 0000 Xxx)
of the Trust, the Manager or any such Subadviser, at a meeting of Trustees
called for the purpose of voting on such approval and by the affirmative
vote of a "majority of the outstanding voting securities" (as defined in
the 0000 Xxx) of the Portfolio. The authority given to the Manager in
Sections 1 through 6 hereof may be delegated by it under any such
agreement; provided, that any Subadviser shall be subject to the same
restrictions and limitations on investments and brokerage discretion as the
Manager. The Trust agrees that the Manager shall not be accountable to the
Portfolio or the Portfolio's shareholders for any loss or other liability
relating to specific investments directed by any Subadviser, even though
the Manager retains the right to reverse any such investment, because, in
the event a Subadviser is retained, the Trust and the Manager will rely
almost exclusively on the expertise of such Subadviser for the selection
and monitoring of specific investments.
5. The Manager will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any
investment policy or the purchase, sale, or retention of any security on
the recommendation of the Manager, whether or not such recommendation shall
have been based upon its own investigation and research or upon
investigation and research made by any other individual, firm or
corporation, but nothing contained herein will be construed to protect the
Manager against any liability to the Trust or its shareholders by reason of
willful misfeasance, bad faith or gross negligence in the performance of
its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling
or trading in any securities for its or their own accounts or other
accounts. The Manager may act as an investment advisor to any other person,
firm or corporation, and may perform management and any other services for
any other person, association, corporation, firm or other entity pursuant
to any contract or otherwise, and take any action or do any thing in
connection therewith or related thereto; and no such performance of
management or other services or taking of any such action or doing of any
such thing shall be in any manner restricted or otherwise affected by any
aspect of any relationship of the Manager to or with the Trust or deemed to
violate or give rise to any duty or obligation of the Manager to the Trust
except as otherwise imposed by law. The Trust recognizes that the Manager,
in effecting transactions for its various accounts, may not always be able
to take or liquidate investment positions in the same security at the same
time and at the same price.
(b) In connection with purchases or sales of securities for the
account of the Trust, neither the Manager nor any of its Trustees, officers
or employees will act as a principal or agent or receive any commission
except as permitted by the 1940 Act. The Manager shall arrange for the
placing of all orders for the purchase and sale of securities for the
Portfolio's account with brokers or dealers selected by the Manager. In the
selection of such brokers or dealers and the placing of such orders, the
Manager is directed at all times to seek for the Portfolio the most
favorable execution and net price available except as described herein. It
is also understood that it is desirable for the Portfolio that the Manager
have access to supplemental investment and market research and security and
economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Manager is
authorized to place orders for the purchase and sale of securities for the
Portfolio with such brokers, subject to review by the Trust's Trustees from
time to time with respect to the extent and continuation of this practice.
It is understood that the services provided by such brokers may be useful
to the Manager in connection with its or its affiliates' services to other
clients.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
clients, the Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in order
to obtain the best execution and lower brokerage commissions, if any. In
such event, allocation of the securities so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Manager in
the manner it considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio and to such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until May 31, 1998 and from year to year thereafter, but
only so long as its continuance is approved annually by a vote of the
Trustees of the Trust voting in person, including a majority of its
Trustees who are not parties to this Agreement or "interested persons" (as
defined in the 0000 Xxx) of any such parties, at a meeting of Trustees
called for the purpose of voting on such approval or by a vote of a
"majority of the outstanding voting securities" (as defined in the 0000
Xxx) of the Portfolio, subject to the right of the Trust and the Manager to
terminate this contract as provided in Section 8 hereof.
8. Either party hereto may, without penalty, terminate this Agreement
by vote of its Board of Trustees or Directors, as the case may be, or by
vote of a "majority of its outstanding voting securities" (as defined in
the 0000 Xxx) and the giving of 60 days' written notice to the other party.
9. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall
have the meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor
any of its affiliates acts as an investment adviser to the Portfolio, the
name of the Trust will be changed to one that does not contain the name
"Pioneer" or otherwise suggest an affiliation with the Manager.
11. The Manager is an independent contractor and not an employee of
the Trust for any purpose. If any occasion should arise in which the
Manager gives any advice to its clients concerning the shares of the Trust,
the Manager will act solely as investment counsel for such clients and not
in any way on behalf of the Trust or any series thereof.
12. This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms
hereof. It may not be added to or changed orally, and may not be modified
or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
13. This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of
Massachusetts.
14. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of
this Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER VARIABLE CONTRACTS TRUST
on behalf of
Growth and Income Portfolio
By:
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Xx.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT CORPORATION
By:
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Secretary President
