CUSTODIAN AGREEMENT
BETWEEN
PIONEER FUNDS DISTRIBUTOR, INC.
AND
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
I. PIONEER INDEPENDENCE PLANS AND CUSTODIANSHIP..............................2
A. PIONEER INDEPENDENCE PLANS.......................................2
1. NATURE OF PIONEER INDEPENDENCE PLANS..................2
2. CHANGES IN PIONEER INDEPENDENCE PLANS.................2
B. CUSTODIAN......................................................3
1. QUALIFICATION.........................................3
2. CUSTODIANSHIP.........................................5
3. TERMINATION OF CUSTODIANSHIP..........................6
C. SPONSOR........................................................6
1. TERMINATION OF OBLIGATIONS............................6
II. CUSTODIAN'S FUNCTIONS...................................................9
A. PROCESSING OF PLAN INVESTMENTS.................................9
1. ISSUANCE OF NEW PLANS.................................9
2. APPLICATION OF INVESTMENTS UNDER ISSUED AND
OUTSTANDING PLANS....................................10
3. ADDITIONAL NOTICES...................................12
4. REINVESTMENT OF DIVIDENDS............................13
5. ACCELERATION OF INVESTMENTS..........................14
6. EXTENDED INVESTMENT OPTION...........................15
7. CHANGES IN FACE AMOUNT...............................15
8. RIGHTS OF ACCUMULATION...............................17
9. PLAN REINSTATEMENT PRIVILEGE........................18
10. TAX-QUALIFIED RETIREMENT ACCOUNTS....................18
11. RECORDKEEPING........................................18
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS,
LIQUIDATIONS, TRANSFERS, ASSIGNMENTS, TERMINATIONS
AND COMPLETIONS...............................................19
1. GENERAL..............................................19
2. REFUND...............................................20
3. EIGHTEEN MONTH SURRENDER.............................20
4. PARTIAL WITHDRAWAL AND LIQUIDATION...................22
5. SYSTEMATIC WITHDRAWAL PROGRAM........................23
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6. TRANSFER OR ASSIGNMENT...............................24
7. TERMINATION OF PLANS.................................24
8. COMPLETION...........................................26
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION
OF FUND SHARES................................................28
1. PURCHASE AND SALE OF FUND SHARES.....................28
2. MAINTENANCE..........................................31
3. STATEMENTS...........................................32
4. VOTING OF FUND SHARES................................33
5. SUBSTITUTION.........................................33
6. FURNISHING OF INFORMATION............................34
D. DUTIES........................................................34
1. DUTIES...............................................34
E. FEES AND CHARGES..............................................36
1. REMUNERATION.........................................36
2. PAYMENTS TO SPONSOR..................................37
III. SPONSOR'S FUNCTION....................................................37
A. ADMINISTRATION OF PIONEER INDEPENDENCE PLANS..................37
1. GENERAL..............................................37
2. OPERATIONS...........................................37
3. INITIAL INVESTMENT...................................43
4. CREATION AND SALES CHARGES...........................38
5. PLANS IN DEFAULT....................................39
6. PLAN CANCELLATIONS..................................39
B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION................39
C. SUBSTITUTION OF THE UNDERLYING INVESTMENT.....................41
1. PROCEDURE............................................41
IV. FUNCTIONS OF SPONSOR AND CUSTODIAN.....................................43
A. PLANHOLDER INQUIRIES..........................................43
V. MISCELLANEOUS...........................................................44
A. ASSIGNMENT....................................................44
B. INDEMNIFICATION BY THE SPONSOR................................44
C. INDEMNIFICATION BY THE CUSTODIAN..............................44
D. COUNTERPARTS..................................................45
E. INSPECTION....................................................46
F. SCHEDULES.....................................................46
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G. AMENDMENT.....................................................46
H. CONSTRUCTION..................................................46
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CUSTODIAN AGREEMENT
AGREEMENT made this 17th day of February, 1998, between Pioneer Funds
Distributor, Inc., a Massachusetts corporation with its office at 00 Xxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (hereinafter called the "Sponsor") and State
Street Bank and Trust Company, a Massachusetts trust company having an office at
000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxxxxx (hereinafter called the "Custodian").
WITNESSETH:
WHEREAS, the Sponsor is registered as a broker-dealer with the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(hereinafter, the "1934 Act"), is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD") and was formed to sell
investment company products to other registered broker-dealers; and
WHEREAS, Pioneer Independence Plans is a unit investment trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), providing
for the accumulation of shares of Pioneer Independence Fund (the "Fund"); and
WHEREAS, the Fund is a Delaware business trust registered as an open-end
management investment company under the 1940 Act; and
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WHEREAS, the Sponsor desires to obtain the services of the Custodian in
connection with the administration of Pioneer Independence Plans providing for
investment in shares of the Fund or shares of other open-end management
investment companies as herein provided;
NOW, THEREFORE, in consideration of their mutual covenants herein set
forth, the parties hereto agree as follows:
I. PIONEER INDEPENDENCE PLANS AND CUSTODIANSHIP
A. PIONEER INDEPENDENCE PLANS.
1. NATURE OF PIONEER INDEPENDENCE PLANS. The Sponsor intends to offer
Pioneer Independence Plans for the accumulation of shares of the Fund (all such
shares being hereinafter called the "Fund Shares"), or any other shares
substituted therefor, under the terms of Pioneer Independence Plans. Holders of
each Pioneer Independence Plan (a "Plan") issued under Pioneer Independence
Plans are hereinafter called "Planholders." Issuance and transfer of the Plans
will be by book entry only.
2. CHANGES IN PIONEER INDEPENDENCE PLANS. Each Plan shall be governed by
the terms and conditions set forth in the prospectus for such Plan in effect at
the time such Plan was issued (the "Prospectus"). Pioneer Independence Plans are
subject to such changes in form and content as the Sponsor may effect from time
to time. No changes in the terms and conditions of any previously issued and
outstanding Plan which will adversely affect any material right of a Planholder
thereof may be made without notice to, and consent of, the Planholder. Any such
2
changes in Pioneer Independence Plans affecting the implementation of the
provisions of this Agreement shall be acknowledged by the Sponsor and the
Custodian. The Sponsor or Custodian may substitute other shares for Fund Shares
on the conditions provided in Sections II(C)(5) and III(C) below.
B. CUSTODIAN.
1. QUALIFICATION.
a. The Custodian and any successor Custodian shall be a bank
or trust company, as defined under the 1940 Act, having at all times an
aggregate capital, surplus and undivided profits in excess of
$2,000,000. The Custodian covenants that it has now, and agrees that so
long as it acts as Custodian under any Plan it shall continue to have,
such qualifications.
b. All monies received by the Custodian under or pursuant to
any provision of this Agreement or any Plan or other instrument
referred to herein shall be held by the Custodian as a deposit for the
purposes for which they were paid or are held, and the Custodian shall
not be under any liability for interest on any such monies, except such
as it may agree to pay thereon.
c. The Custodian shall be obligated to perform such duties and
only such duties as are specifically set forth in this Agreement and
the Prospectus, and no implied obligations shall be read into this
Agreement or the Prospectus against the Custodian, and
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in the absence of bad faith on its part, the Custodian may conclusively
rely, as to the truth of the statements and the correctness of the
representations made therein, upon any instruments, certificates,
opinions or other writings furnished to the Custodian and conforming to
the requirements hereof. The Custodian shall not be responsible in any
manner whatsoever for the correctness of the covenants of the Custodian
herein, or recitals in the Prospectus made solely by the Sponsor. The
Custodian makes no representations as to the Prospectus or the
securities issued in connection therewith, or the validity thereof, and
the Custodian shall incur no liability or responsibility with respect
to any such matters. The Custodian shall not be responsible for any
actions or inactions of, and may rely on information, records,
documents or services (including functions performed by the Sponsor
under Section II. (D)(1)(h) of this Agreement) that have been taken or
have failed to be taken, prepared, maintained or performed by, the
Sponsor or any other person authorized by the Sponsor on behalf of the
Custodian, the Sponsor or Pioneer Independence Plans.
d. The Custodian may, at the same time it acts hereunder, act
in any one or more of the following capacities: as registrar, transfer
agent and custodian for the issuer of Fund Shares, as agent for the
parties or for the Planholders or the Sponsor, or the issuer of Fund
Shares, and in other capacities customary for banks on behalf of these
persons and of others dealing with them.
e. The Custodian may consult with legal counsel to be selected
with reasonable care by the Custodian (who may be counsel to the
Sponsor) and the Custodian shall not be liable for any action taken,
omitted or suffered by it in good faith in accordance
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with the advice of such counsel. Whenever in the performance of its
duties hereunder the Custodian shall deem it necessary or desirable, a
matter may be proved or established by a certificate signed by any two
officers of the Sponsor and delivered to the Custodian, and such
certificate shall be fully warranted to the Custodian for any action
taken, suffered or omitted by or in reliance thereon. The Custodian
may, in the absence of bad faith on its part, rely and shall be
protected in acting upon any request , letter or transmittal ,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, Plan or other paper or document reasonably believed by
it to be genuine and to have been signed or presented by the proper
party or parties. The Custodian shall be liable for its willful
misconduct or negligence.
2. CUSTODIANSHIP. The Custodian accepts the custodianship hereunder with
respect to Plans issued after the date of this Agreement and shall continue
custodianship on the terms and conditions set forth in this Agreement and in the
Prospectus applicable to such Plans, provided that the Custodian may require the
Sponsor to furnish the following items to the Custodian as a condition to
accepting custodianship with respect to a Plan:
a. Evidence satisfactory to the Custodian that the Sponsor has
taken all necessary action to satisfy the requirements of the
Securities Act of 1933, as amended (the "1933 Act") and the 1940 Act in
connection with the offer and issuance of the Plans; that the Sponsor
is registered as a broker-dealer under the 1934 Act and is a member in
good standing of the NASD; that the Fund Shares are the subject of a
currently effective
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registration statement under the 1933 Act; and that the Sponsor has
complied with all other federal and state regulatory requirements
respecting the offer and issuance of the Plans.
b. Such additional documents, certificates and opinions as the
Custodian may reasonably require.
3. TERMINATION OF CUSTODIANSHIP.
a. Replacement of Custodian by Sponsor; Assumption of
Administrative Functions by Sponsor (Existing Plans and/or New Plans).
The Sponsor shall have the right, upon at least 90 days' written notice
to the Custodian, to substitute, as custodian, both under Pioneer
Independence Plans issued and still in force and/or under any Pioneer
Independence Plans issued thereafter, whether such Pioneer Independence
Plans are otherwise identical with that issued under this Agreement or
not, any other bank or trust company having the qualifications
prescribed in Section I(B)(1)(a) above. The Sponsor shall further have
the right, by giving written notice to the Custodian 90 days prior to
the event, to assume such administrative functions with respect to
Pioneer Independence Plans as may be mutually agreed by the Sponsor and
the Custodian.
Upon such termination, the Sponsor shall bear the cost of all
reasonable out - of - pocket expenses associated with the movement of
materials and records. Additionally, the Custodian reserves the right
to charge for any other reasonable expenses associated with
6
such termination, provided that the Custodian advises the Sponsor of
such additional charges in advance.
b. RESIGNATION BY CUSTODIAN (EXISTING PLANS AND/OR NEW PLANS).
The Custodian shall have the right to resign as custodian under any
existing Plan at any time but only if either: (a) the securities and
other property in which the funds of the Planholders are invested have
been completely liquidated and the proceeds of such liquidation have
been distributed to the Planholders; or (b) a successor custodian,
meeting with the approval of the Sponsor and having the qualifications
prescribed in Section I(B)(1)(a) above, has been designated by the
resigning Custodian or the Sponsor and the successor custodian has
accepted such custodianship.
Notwithstanding the above, the Custodian shall have the right,
upon at least 90 days' written notice to the Sponsor, to terminate its
obligation to accept any new Pioneer Independence Plans for
custodianship hereunder.
In addition, the obligation of the Custodian to accept any new
Pioneer Independence Plans for custodianship hereunder shall terminate
if the Sponsor: (1) fails to maintain an effective registration
statement under the 1933 Act covering the issuance of Pioneer
Independence Plans; (2) fails to cause the requirements of the 1940 Act
to remain satisfied in connection with the issuance of Pioneer
Independence Plans; (3) has its membership in the NASD or its
registration as a broker-dealer under the 1934 Act canceled, revoked or
suspended for more than 120 days for any cause involving failure on
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the part of an executive officer or director of the Sponsor to follow
ethical standards or serious neglect of his or her duty to require
representatives to follow such standards; or (4) defaults in the
performance of any other duty, covenant or agreement contained in this
Agreement and such default shall remain unremedied for 30 days after
written notice thereof shall have been given to the Sponsor by the
Custodian (except with respect to item (3), for which such remedy
period shall be 120 days).
c. RECORDS. In connection with any termination of
custodianship, the Custodian shall furnish such records and other
information as the Sponsor and any successor custodian reasonably
believe to be necessary or appropriate to effect the termination.
C. SPONSOR.
1. TERMINATION OF OBLIGATIONS.
The Sponsor may terminate its obligations under the Plans
under certain circumstances including, but not limited to,
circumstances where: the underlying fund (or any successor) ceases
operations or is subject to a merger or acquisition; or the
shareholders of the underlying fund have approved the cessation of
operations or merger or acquisition; or the obligations of the Sponsor
as described in the Prospectus and this Agreement will be assumed by
another entity that the Sponsor believes at the time of
8
assignment is capable of fulfilling its obligations as described in the
Prospectus and under this Agreement.
II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDER INVESTMENTS.
1. ISSUANCE OF NEW PLANS. Upon receipt by the Custodian or its agent of:
(1) an application for a Plan (a "Plan Application") in a form designated by the
Sponsor, and (2) a check or other order for the payment of money representing
the initial investment under a Plan by the Planholder thereof, the Custodian
shall:
a. Establish a Plan account ("Plan Account") for such
Planholder that reflects the face amount of the new Plan;
b. Forward for collection such check or other order for the
payment of money as hereinafter provided in Section
(II)(A)(2)(a); and
c. Forward to the Planholder by first - class mail, the
Custodian's letter of transmittal and notice conforming to
the requirements of Section 27(f) of the 1940 Act, Rule
27f-1 thereunder (or any successor rule) and as described
in the Prospectus, such other explanatory information or
communication to the Planholders as may be furnished by the
Sponsor, and forward to the Planholder or, if requested by
the Sponsor, to the Sponsor for forwarding to the
Planholder, by first-class mail any notice of the right of
refund or
9
surrender, as provided in Sections II(B)(2), (3) and (4)
below. Such forms of notice shall be approved in writing by
the Sponsor.
2. APPLICATION OF INVESTMENTS UNDER ISSUED AND OUTSTANDING PLANS. Upon
receipt by the Custodian or its agent of any Plan investment that is made in
accordance with the applicable Prospectus, including any investment being made
pursuant to an extended investment option, the Custodian shall:
a. Forward for collection any check or other order for the
payment of money representing such investment. In the event that any
check or other order for the payment of money received by the Custodian
from a Planholder is returned unpaid for any reason, the Sponsor agrees
that the amount thereof shall be forthwith charged by the Custodian to
the Plan Account of the Planholder with the Custodian. The Custodian
shall forthwith place a stop order against the Fund Shares purchased
with the amount so charged and held in the Plan Account of the
Planholder, and such Fund Shares shall thereafter be held by the
Custodian for the account of the Sponsor and subject to its
instructions including, but not limited to, any instructions by the
Sponsor to redeem the Fund Shares purchased with such check or other
order for payment of money. The Custodian shall notify the Planholder
of any such returned check and send a copy of such notice together with
the returned check to the Sponsor (if the returned item is an order for
payment of money, the Custodian shall send the notification of the
unpaid order). The Custodian shall, in accordance with the terms of the
Plan Prospectus, impose a fee for any such returned checks or orders or
hold
10
redemption proceeds pending the receipt of payment with respect to
the Fund Shares redeemed of any check (or order for the payment of
money) from the payor bank thereon.
b. Deduct from the payment the amount of any applicable
original issue, stock transfer, sales or other taxes and apply such
amounts to the purchase of the necessary tax stamps or to payments to
the proper taxing authorities, as the case may be.
c. Deduct therefrom the applicable fees of the Sponsor and the
Custodian as set forth in Schedule A to this Agreement applicable to
such Plan. Such deductions shall be credited to the Sponsor or the
Custodian, as the case may be.
d. Apply, within two business days unless impracticable, the
balance of the investment to the purchase of Fund Shares, at net asset
value next determined ( to be computed to two decimal places) after
receipt of the investment in good order, and credit the Plan Account
with the number of Fund Shares so purchased.
e. Prepare and mail to the Planholder a receipt in a form to
be approved by the Sponsor, and which complies as to form and delivery
with the requirements of Rule 10b-10 of the 1934 Act (or any successor
rule), and which receipt shall show the following: the Plan account
number; the amount of the investment received; the date of receipt; the
front - end sales load (the "Creation and Sales Charge") deducted, if
applicable; the price paid per Fund Share; the number of full and
fractional Fund Shares purchased after the deductions; the total number
of Fund Shares then held by the Custodian for the Planholder; and the
due date of the Planholder's next investment. The receipt of the
purchase of Fund Shares shall
11
be mailed promptly by the Custodian to the Planholder, and to the
Planholder's investment dealer.
3. ADDITIONAL NOTICES.
a. REMINDER NOTICES. The Custodian shall mail to each
Planholder who has not elected an automatic investment option prior to
the Planholder's investment date a remittance form and, unless
otherwise agreed to, a return envelope to be used with the Planholder's
next investment. Such form of notice shall be approved in writing by
the Sponsor.
b. PAST DUE INVESTMENT NOTICES. On a periodic basis as agreed
to from time to time by the Custodian and the Sponsor, the Custodian
shall prepare and mail to the Planholder a notice of past due
investment in accordance with the Prospectus and applicable law. Such
form shall be approved in writing by the Sponsor. The Custodian shall
provide to the selling broker-dealer, or in the absence of such, the
Sponsor, a duplicate of each such notice sent to any Planholder.
c. REFUND NOTICES. The Custodian shall also mail to each
Planholder any notice(s) required by Section 27(e) of the 1940 Act and
Rule 27e-1 thereunder (or any successor rule) and shall be in
accordance with the terms and conditions of the Prospectus. Such form
of notice shall be approved in writing by the Sponsor.
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d. TERMINATION NOTICES. In the event that a Plan is being
terminated by the Sponsor or the Custodian in accordance with the terms
of the Prospectus and this Agreement, the Custodian shall also mail or
deliver to the affected Planholder a notice of termination. The
Custodian will provide the selling broker-dealer or, in the absence of
such, the Sponsor with a duplicate of each such notice sent to any
Planholder. Such form of notice shall be approved in writing by the
Sponsor.
e. OTHER NOTICES. The Custodian shall also mail or deliver to
each Planholder any other notices required by any applicable federal or
state law, rule or regulation, in such form and by such means as are
required under such law, rule or regulation. The form of any such
notice shall be approved in writing by the Sponsor.
4. REINVESTMENT OF DIVIDENDS. The Custodian shall reinvest all dividends
and capital gain distributions received on the Fund Shares held by it as
Custodian for each Planholder, after deduction therefrom the applicable fees set
forth in the attached Schedule and/or specified in the Prospectus, and any
applicable taxes required by law or elected by a Planholder to be withheld, in
accordance with the terms of the Prospectus, in Fund Shares on the dividend
payment date, at the net asset value, determined on that date, as provided in
Section II(C)(1) below, unless the Planholder has instructed the Custodian, in
writing, at least seven days prior to the record date, to pay the dividends or
distributions in cash directly to the Planholder.
5. ADVANCE INVESTMENTS. A Planholder may complete his or her Plan ahead of
schedule by making one or more Plan investments in advance of their due dates,
but only
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in accordance with the terms and conditions of the applicable Prospectus.
Advance investments shall be first applied to satisfy the obligation of the
Planholder to pay for his or her next succeeding Plan investment or investments.
Thereafter, the Custodian shall, unless timely advised to the contrary by the
Sponsor, invest the balance of any advance investment, after authorized
deductions, in additional Fund Shares as of the close of business on the
business day that such accelerated investment is received. The Custodian shall,
if so instructed by the Sponsor, redeem all or a portion of the Fund Shares
purchased with such advance investment and remit the proceeds of such redemption
to the Planholder. There is no reduction in the Creation and Sales Charges for
advance investments. Advance investments do not accelerate in any way the due
dates of unpaid Plan investments; such unpaid investments will be considered to
be due on that date on which they would have originally been required if all
prior Plan investments (whether or not in fact made in advance) had been made
when respectively due. Upon receipt by the Custodian of a permissible advance
investment by any Planholder, the Custodian shall:
a. Process the investment as provided in Section II (A) (2)
above.
b. Apply the balance of the investment to the next succeeding
monthly Plan investment or investments in the order due under the Plan.
6. EXTENDED INVESTMENT OPTION. A Planholder who owns any completed Plan may
make additional investments, without completing a new Plan Application, thereby
activating the extended investment option, subject to deductions in accordance
with the terms and conditions of the applicable Prospectus. The Planholder must
make the 181st investment within the six-month
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period, unless such limitation has been waived by the Sponsor, after the
180th investment date in order to activate the extended investment option;
failure of a Planholder to make the 181st investment within such six-month
period after being credited for any advance investments made under the option
will result in the Planholder's forfeiture of his or her right to make
additional investments under the extended investment option, and the Plan will
be considered to have been completed. In addition, failure of a Planholder,
during the extended investment option period, to make any investment during any
six-month period (after any credit for any accelerated investment) may result in
the Planholder's forfeiture of his or her right to make any investments under
the extended investment option, and the Plan will be considered to have been
completed.
All Plans exercising the extended investment option shall terminate after
the 300th investment made under the Plan.
7. CHANGES IN FACE AMOUNT. A Planholder may change the Plan face amount
initially selected upon issuance of a Plan to a new Plan face amount offered by
the Sponsor, but only in accordance with the terms and conditions of the
applicable Prospectus. Plans are only available in face amounts offered by the
Sponsor, as set forth in the Prospectus. If such a change in the Plan face
amount is approved by the Sponsor, the Custodian shall make appropriate changes
to the Planholder's Account. Changes in the face amount of a Plan shall be
implemented by the Custodian only upon receipt of:
a. written instructions from the Planholder, Sponsor or
selling broker-dealer, as applicable, as to the increase or decrease in
Plan face amount, which instructions shall
15
set forth the Plan Account number and registration, the face amount of
the new Plan, the amount of each monthly investment under the new Plan,
the number of Plan investments which are to be credited to the new
Plan, and the amount, if any, of the adjustment in Creation and Sales
Charges resulting from the change in Plan face amount, which adjustment
shall be effected at the time of the issuance of the new Plan, and such
other information as may be reasonably requested by the Custodian. Such
adjustment shall be in accordance with the terms of the applicable
Prospectus and shall be effective concurrently with the change in Plan
face amount, I.E., at the time the Plan is adjusted to reflect the new
face amount;
b. in the case of an increase in a Plan face amount, payment
by check or other order for the payment of money in the amount of the
first Plan investment to be made under the increased face amount for
the Plan, as specified in the applicable Prospectus, unless such
investment is reduced or waived by the Sponsor;
c. if the total investments made on the original Plan are not
an integral multiple of the monthly Plan investments required on the
amended Plan, a check or other order for the payment of money in the
sum that is required by the Sponsor to enable the remaining monthly
investments (after giving credit for investments already made) to equal
the face amount of the amended Plan.
8. RIGHTS OF ACCUMULATION. A Planholder may accumulate Plans for reduced
Creation and Sales Charges, but only in accordance with the terms and conditions
of the applicable
16
Prospectus. The face amounts of two or more Plans purchased at one time by
"any person," as defined in the applicable Prospectus may be combined to take
advantage of the lower Creation and Sales Charges available on larger purchases.
In addition, a Planholder purchasing any new Plan or increasing the face amount
of any existing Plan(s) may qualify for a reduced Creation and Sales Charge on
the new Plan by combining the face amount of the new Plan with the face amounts
of existing Plans on which Plan investments due are current and/or with the
current value of assets held in accounts in other Pioneer mutual funds for which
Pioneering Management Corporation or one of its affiliates serves as investment
adviser. To qualify for the reduced Creation and Sales Charges, all of the Plan
Applications for the new Plans involved must be submitted to the Sponsor at the
same time together with a request in writing that the face amounts of such Plans
and/or asset values of such Pioneer mutual fund accounts be cumulated for the
purpose of determining the applicable Creation and Sales Charge for the new
Plan. If such a reduction in the Creation and Sales charge is approved by the
Sponsor, the Custodian shall make appropriate changes to the Planholder's
Account. In the event investments in one or more of such Plans are discontinued,
the remaining Creation and Sales Charge will be changed to reflect the charges
applicable to the Plan that is still in effect.
The face amounts of any Plans which have been completed (and not
liquidated) or on which investments are current may be aggregated with the face
amount of a Plan being purchased by "any person" to ascertain the Creation and
Sales Charge applicable to the Plan being purchased. To qualify for a reduced
17
Creation and Sales Charge, the Sponsor must be notified by the dealer or the
Planholder at the time of placing the order that the Planholder qualifies for
the reduced Creation and Sales Charge. If such a reduction in the Creation and
Sales Charge is approved by the Sponsor, the Custodian shall make appropriate
changes to the Planholder's Account.
9. PLAN REINSTATEMENT PRIVILEGE. A Planholder who has terminated his or her
Plan may exercise a Plan reinstatement or replacement provision, which provides
for reinvestment of a specified amount in the Plan, but only in accordance with
the terms and conditions of the applicable Prospectus. If the Plan reinstatement
privilege is exercised, neither the total number of monthly Plan investments to
be made nor the unpaid balance of monthly Plan investments due under the Plan
will be affected. Any such reinstatement or replacement order received by the
Custodian or its agent shall be processed by the Custodian and credited for the
Plan Account of such Planholder in accordance with the terms and conditions of
the applicable Prospectus, this Agreement and the 1940 Act.
10. TAX-QUALIFIED RETIREMENT ACCOUNTS. A Plan may be used by qualified
individuals who wish to establish Plan Accounts for tax-qualified retirement
plans or by an individual who wishes to register a Plan as an Individual
Retirement Account (an "XXX").
11. RECORDKEEPING.
The Custodian will prepare and maintain complete up-to-date records of the
performance of its duties hereunder, on magnetic media or otherwise, including
records showing a separate Plan Account for each Planholder, and the name and
address of the Planholder; the number, date and amount of each investment made
by the Planholder; the date and amount of all dividends and distributions
received by the Custodian on Fund Shares held for the account of the Planholder;
18
any amounts withheld from withdrawals under a Plan in accordance with the
Internal Revenue Code of 1986, as amended, and any regulations thereunder (or
successor regulations); and all deductions made and the number of Fund Shares
acquired and held by the Custodian for the account of the Planholder. These
records shall be maintained and preserved in accordance with applicable
requirements of Section 31 of the 1940 Act and rules thereunder (or any
successor rule), and in accordance with state securities laws ("Blue Sky laws")
applicable to records kept with regard to the Plans. Such records shall be made
available to the Sponsor for inspection or audit via magnetic media or at the
office of the Custodian at all reasonable times.
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS, TRANSFERS,
ASSIGNMENTS, TERMINATIONS AND COMPLETIONS.
1. GENERAL. The Custodian shall liquidate Fund Shares in a Planholder's
Plan Account, as provided in Section II(C)(1) below, and pay the proceeds, plus
additional amounts, if any, to the Planholder within the time set forth in the
applicable Prospectus. The Sponsor shall not suspend redemption or postpone
payment of redemption proceeds more than seven days after such date of receipt,
except during any period when: (a) the New York Stock Exchange, Inc. (the
"Exchange") is closed, other than for customary weekends and holidays; (b)
trading on the Exchange is restricted; (c) an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund to fairly determine
the value of the net assets of its portfolio; or (d) the Securities and Exchange
Commission, by order, so permits.
19
2. REFUND. A Planholder has the right for 45 days to surrender his or her
Plan in accordance with Section 27 of the 1940 Act and the terms and conditions
of the applicable Prospectus. Upon surrender the Custodian will accept the
return of the Plan and the Planholder will receive a refund of all charges
deducted from his or her Plan investments and the net asset value of the Fund
Shares held in his or her Plan Account at the time. The 45-day period shall run
from the date on which the Planholder is mailed a notice (described in Section
II(A)(1)(c) above) of his or her refund rights, a statement of charges to be
deducted from projected investments, and a form for exercising the refund right,
which information shall be mailed by the Custodian within 60 days after the
issuance of the Plan, to the date of receipt of the Plan by the Sponsor. The
Custodian shall inform the selling broker-dealer or, in the absence of such, the
Sponsor in the event such refund procedures are initiated with respect to any
Plan Account.
3. EIGHTEEN MONTH SURRENDER. A Planholder has the privilege for 18 months
to surrender his or her Plan, but only in accordance with Section 27 of the 1940
Act and the terms and conditions of the applicable Prospectus. Upon surrender,
the Planholder will receive a payment in an amount that is the sum of: (1) the
net asset value of the Fund Shares held in his or her Plan Account at the time;
and (2) a refund of the amount by which the Creation and Sales Charges deducted
from Plan investments exceed 15% of the Plan investments made up to the date of
the surrender of the Plan. In the event the Plan is surrendered, the Custodian
shall liquidate Fund Shares and pay the proceeds to the Planholder who has
exercised the foregoing privilege. Any excess Creation and Sales Charge amount
due the Planholder shall be paid to the Custodian by the Sponsor for refund to
the Planholder. The Planholder shall not be entitled to be refunded
20
any Custodian fees previously paid. The 18-month period shall run from the
date on which the Plan is issued. The Planholder must request a refund in
writing. The request must be signed by the Planholder and be addressed to the
Custodian. A cancellation request involving a Plan Account with a current asset
value of $100,000 or more (or any other amount specified in the applicable Plan
Prospectus) will require a signature guarantee for all Planholders by an
acceptable guarantor as described in the Prospectus or as shall otherwise be
approved by the Custodian and Sponsor (hereinafter referred to as an "Approved
Guarantor"). The Custodian will send to the Planholder a notice (described in
Section II(A)(1)(c) above) within 30 days following the expiration of 15 months
after the date of the issuance of a Plan if the Planholder has missed three Plan
investments or more. The Custodian will also send to the Planholder a notice
prior to the expiration of the 18-month period described above if the Planholder
has missed one Plan investment or more after the expiration of the 15-month
period but prior to the expiration of the 18-month period. (If the Custodian has
already sent a notice at 15 months, a second notice will not be required even if
additional investments are missed.) These notices will inform the Planholder of
the Planholder's rights of cancellation as set forth above, of the value of the
Plan at the time the notice is sent and of the amount to which the Planholder is
entitled. The Custodian shall inform the selling broker-dealer or, in the
absence of such, the Sponsor, in the event such refund procedures are initiated
with respect to any Plan Account.
4. PARTIAL WITHDRAWAL AND LIQUIDATION. A Planholder may make a partial cash
withdrawal from his or her Plan Account, but only in accordance with the terms
and conditions of the applicable Prospectus. The holder of a Plan which has been
established for at least 45 days
21
may withdraw or liquidate part of the Fund Shares held in his or her Plan
Account without terminating the Plan, subject to the following:
a. The Planholder making a partial withdrawal of his or her
Fund Shares may direct the Custodian to transfer the Fund Shares held
in the Plan Account registered in his or her name to an identically
registered Pioneer Independence Fund account. Following a partial
withdrawal, the Planholder may, at any time prior to the termination of
the Plan under which his or her Plan Account was established, redeposit
the same number of Fund Shares.
b. A Planholder may also partially liquidate by directing the
Custodian, as Planholder's agent, to sell or redeem part of the Fund
Shares held in his or her Plan Account and to forward the net proceeds
to the Planholder. Following a partial liquidation, the Planholder may,
at any time prior to the termination of the Plan under which his or her
Plan Account was established, redeposit an amount equal to the net
proceeds withdrawn and have the Custodian purchase Fund Shares at net
asset value for his or her Plan Account as provided in Section II(C)(1)
below. Cash must be redeposited for cash received on liquidation.
Any such request for a withdrawal received by the Custodian or
its agent shall be processed by the Custodian, and proceeds shall be
payable by the Custodian to such Planholder, in accordance with the
terms and conditions of the applicable Prospectus and the 1940 Act.
Following a partial cash withdrawal, a Planholder is permitted to
exercise a
22
restoration or replacement privilege with respect to such
withdrawal if and to the extent such restoration or replacement is
provided for in the applicable Prospectus. Upon receipt by the
Custodian or its agent of any investment identified by the Planholder
as being a replacement or restoration of a partial withdrawal for the
account of a Planholder and that is made in accordance with the
applicable Prospectus, the Custodian will process and credit such
payment to the Plan Account in accordance with this Agreement, the
applicable Prospectus, and the 1940 Act.
5. SYSTEMATIC WITHDRAWAL PROGRAM. A Planholder may elect to establish a
systematic withdrawal program, after the Planholder has completed all regularly
scheduled Plan investments or from an incomplete Plan if the withdrawals are to
be taken from a Plan that is part of an XXX and the Planholder has reached age
59 1/2, but only in accordance with the terms and conditions of the applicable
Prospectus. Under a systematic withdrawal program, the Planholder can elect to
receive monthly or quarterly payments in any amount of $50 or more. To provide
funds for payments to be made under a systematic withdrawal program, the
Custodian, as agent for the Planholder, will redeem Fund Shares held in the
Planholder's Plan Account at the net asset value in effect at the time of each
such redemption. All systematic withdrawal program transactions will be made as
of the end of the day specified for the withdrawal by the Planholder (or, if
such day is not a business day, the first business day after that date). The
Planholder may change the amount of payments under a systematic withdrawal
program or discontinue the program at any time.
23
While a systematic withdrawal program is in effect, the Planholder may not
elect to receive dividends and distributions on Fund Shares held in his or her
Plan Account in cash.
6. TRANSFER OR ASSIGNMENT. A Planholder may make a transfer or assignment
of his or her right, title, and interest in the entire Plan, but only in
accordance with the terms and conditions of the applicable Prospectus. Any such
request for a transfer or assignment received by the Custodian or its agent
shall be recorded by the Custodian in accordance with the terms and conditions
of the applicable Prospectus until the assignee shall have notified the
Custodian that the transfer or assignment has terminated. The terms of any such
transfer or assignment shall be subject to the applicable Prospectus. During the
term of the transfer or assignment, such Planholder shall retain those rights
specified in the applicable Prospectus.
7. TERMINATION OF PLANS. Plans may be terminated only in accordance with
the terms and conditions of the applicable Prospectus. Plans may be terminated
under the following circumstances:
a. TERMINATION BY PLANHOLDER. A Planholder may at any time
terminate his or her Plan by surrendering the Plan to the Custodian,
but only in accordance with the terms and conditions of the applicable
Prospectus.
b. TERMINATION BY SPONSOR OR CUSTODIAN. Neither the Sponsor
nor the Custodian may terminate a Plan until such time as is specified
in the applicable Prospectus, unless and to the extent that conditions
specified in the Prospectus applicable to such Plan and permitting such
termination have been satisfied. If a Plan is in a state of default
24
or delinquency, as defined in the applicable Prospectus, either the
Sponsor or the Custodian may terminate such Plan in the manner provided
in such Prospectus.
c. TERMINATION UNDER OTHER CIRCUMSTANCES. Pioneer Independence
Plans shall be terminated if Fund Shares cannot be purchased for more
than 120 days, and neither the Sponsor nor the Custodian substitutes
another investment medium as provided in Sections II(C)(5) and III(C),
below. If a Planholder fails to consent to a substitution by the
Custodian pursuant to Section II(C)(5)(b), below, the Custodian may
consider the Plan terminated.
d. PLAN TERMINATION PROCEDURES. In connection with the
termination of any Plan in accordance with the provisions of the
applicable Prospectus and this Agreement, the Custodian will furnish
the Planholder and the Sponsor with a notice of termination showing all
changes in such Planholder's Plan Account since the date of the last
previous statement issued by the Custodian, and the Planholder shall
thereafter have no further claim against the Custodian, except as may
be set forth in such statement, and shall not be entitled to any
further accounting. In the event of termination of a Plan, liquidation
of the Plan Account and final payment to the Planholder shall be
effected by the Custodian in accordance with the applicable Prospectus.
8. COMPLETION. The options described below are available for the
disposition of the Fund Shares from a completed Plan. If the disposition of Fund
Shares is such that all of the Fund
25
Shares held in a Plan are transferred or liquidated, the Planholder shall
be deemed to have no further rights under the Plan, except in accordance with
the terms of the applicable Prospectus.
a. The Planholder may elect to have the Custodian hold the
Fund Shares for 15 years from the date of issuance of the Plan, plus an
additional 10 years, and neither the Custodian nor the Sponsor may
terminate the custodianship except in accordance with the terms of the
applicable Prospectus;
b. The Planholder may elect to have the Fund Shares held in
his or her Plan Account transferred to a Pioneer Independence Fund
account registered in the Planholder's name, at which time the
Planholder will be deemed to have no further rights under the Plan
except as described in the applicable Prospectus;
c. The Planholder may elect to have the Fund Shares in his or
her Plan Account redeemed and the cash proceeds paid to the Planholder
directly; or
d. The Planholder may elect to have the Fund Shares in his or
her Plan Account redeemed in accordance with the systematic withdrawal
program established in connection with the Plan on a monthly or
quarterly basis in amounts of $50 or more and have the cash proceeds
paid to the Planholder directly.
The Custodian and the Sponsor agree that no Plan may be terminated by the
Sponsor or the Custodian for a period of 15 years from the date of issue so long
as the Planholder continues to make investments in accordance with the terms of
the applicable Prospectus. After expiration of
26
15 years from the date of issue of the Plan, or after the 300th investment
if the Planholder has exercised the option to extend the custodianship, the
Custodian shall include with the next to last confirmation statement a notice to
the Planholder advising the Planholder to exercise the privilege of complete
withdrawal within 60 days.
In the event of the Planholder's failure to exercise the privilege of
complete withdrawal, the Custodian in its discretion may, as agent for the
Planholder, (a) surrender for liquidation all Fund Shares in the Planholder's
Plan Account or (b) redeem sufficient Fund Shares to pay all authorized
deductions. The remaining Fund Shares and/or cash (after payment of all
authorized deductions), will be held by the Custodian for delivery to the
Planholder. Upon surrender of the Plan to the Custodian, the Custodian will
deliver to the Planholder a confirmation statement for his or her full Fund
Shares after transferring such Fund Shares to a Pioneer Independence Fund
account registered in the name of the Planholder and any balance of cash, or if
all Fund Shares have been sold, the net redemption proceeds less any additional
authorized deductions. No interest shall be payable upon any funds held by the
Custodian pending the surrender of the Plan.
If the Planholder fails to surrender the Plan for a period of 60 days after
the sending of the termination notice, the Custodian in its discretion, acting
as agent for the Planholder, may mail to the Planholder a check for all cash
standing to the Planholder's credit and surrender for liquidation such Fund
Shares, if any, held in the Planholder's Plan Account, and the Planholder will
be deemed to have no further rights under the Plan.
27
In the event a check and/or a confirmation statement for Fund Shares cannot
be delivered to the Planholder as described above, the Custodian shall hold the
cash or the Fund Shares in trust subject only to the escheatment laws.
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES.
1. PURCHASE AND SALE OF FUND SHARES.
a. Purchases and sales of Fund Shares by the Custodian
pursuant to this Agreement shall be made in accordance with applicable
law, the Prospectus, the Fund's Prospectus and the Sponsor's
Distribution Agreement with the Fund.
b. All purchases of Fund Shares by the Custodian pursuant to
the provisions of this Agreement shall be made from the Fund, or its
issuing agent (or any underwriter of Fund Shares with which the Sponsor
may contract for such purpose) at the net asset value of the Fund next
determined after the time of purchase as calculated by Pioneering
Management Corporation (or any successor thereto) in accordance with
the terms of the Fund's then current Prospectus. The Custodian shall be
entitled to presume conclusively that the price so set with respect to
any Fund Shares purchased by the Custodian is said net asset value.
c. Funds received by the Custodian to be applied to the
purchase of Fund Shares at the net asset value per share determined as
described in Section II(C)(1)(a) shall, unless
28
impracticable, be applied to such purchase within two business days
after the receipt by the Custodian of said investments payments,
dividends or distributions.
d. All sales of Fund Shares by the Custodian, as agent,
pursuant to the provisions of this Agreement, shall be made by deposit
of the Fund Shares with the Fund or its duly authorized agent together
with a request that the Fund Shares be repurchased at the net asset
value of the Fund next determined after receipt of a proper redemption
request as calculated by Pioneering Management Corporation (or any
successor thereto) in accordance with the terms of the Fund's then
current Prospectus, so long as the privilege of redemption at net asset
value is available to holders of Fund Shares as set forth in the Fund's
then current Prospectus. Whenever, pursuant to the provisions of this
Agreement, Fund Shares are to be sold or redeemed, the Custodian shall
first withdraw the Fund Shares from the custodianship hereunder and, as
agent for the Planholder, shall sell or redeem said Fund Shares by
depositing them for repurchase as set forth above. Anything herein to
the contrary notwithstanding, (i) the Custodian, as agent for the
Planholders, is authorized to offset sales and purchases for all of the
Planholders on a business day and, accordingly, to place with the Fund
or its agent a net purchase order for the excess of purchases over
sales, or a net sale order for the excess of sales over purchases; and
(ii) any such sales of Fund Shares in connection with a Plan
termination, a withdrawal of Fund Shares by a Planholder, or an
exercise of an exchange privilege by a Planholder, shall be effected by
the Custodian in accordance with the terms and conditions of the
applicable Prospectus.
29
e. Issuance and transfer of Fund Shares will be by book entry
only.
f. The Fund shall make the net asset value per share for Fund
Shares available to the Custodian as soon as reasonably practicable
after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 7 p.m.
Boston time each Business Day. For the purposes of this section of the
Agreement, "Business Day" shall mean any day on which the Exchange is
open for regular trading and on which the Fund calculates its net asset
value pursuant to the rules of the Securities and Exchange Commission.
g. The Fund shall furnish notice as soon as reasonably
practicable (by wire or telephone, followed by written confirmation) to
the Custodian of any income, dividends, or capital gain distributions
payable on Fund Shares.
Consistent with the foregoing, the Custodian shall enter a gross purchase
and sale order for full and fractional Fund Shares (in two decimal places) at
the net asset value next determined for all Planholder requests to invest in,
transfer or redeem Fund Shares under Pioneer Independence Plans which, pursuant
to the terms and conditions of the Prospectus, the Custodian received in good
order prior to the close of trading on the Exchange, normally 4 p.m. Boston
time. Such orders shall be forwarded to the Fund by 11 a.m. Boston time on the
next following Business Day (such orders will be deemed to have been received by
the Fund as of the close of trading on the Exchange on the day of receipt by the
Custodian of the Planholders' requests). The Custodian shall pay for Fund Shares
on the same Business Day an order to purchase Fund Shares is
30
transmitted to the Fund. Payment shall be in federal funds transmitted by
wire to the Fund to be received by 11:00 a.m. Boston time of the Business Day
the Fund is notified of the purchase order for Fund Shares. If payment in
federal funds for any purpose is not received or is received by the Fund after
11:00 a.m. Boston time on such Business Day, the Custodian shall promptly, upon
the Fund's request, reimburse the Fund for any charges, costs, fees, interest or
other expenses incurred by the Fund in connection with any advances to, or
borrowings or overdrafts by, the Fund, or any similar expenses incurred by the
Fund, as a result of portfolio transactions effected by the Fund based on such
purchase request. For purposes of this section, upon receipt by the Fund of the
federal funds so wired, such funds cease to be the responsibility of the
Custodian and shall become the responsibility of the Fund.
2. MAINTENANCE. The Custodian shall have possession of and shall segregate
and hold in trust, or shall hold in book share form, where applicable, all
securities and other properties in which the funds of the Planholders are
invested on behalf of the Planholders, all monies held for such Plan
investments, any redemption to the Planholders or other special funds for
payments to the Planholders, and all income and distributions upon, accretions
to and proceeds of such securities and funds, subject only to the deductions
specified in this Agreement or in the Prospectus, until distribution thereof to
the Planholders in accordance with the terms and conditions of the applicable
Prospectus. The Custodian also will effect partial or complete liquidation of
Plans in connection with withdrawals or terminations. The Custodian is
authorized to commingle payments and dividends for all Fund Shares held by it
hereunder and to direct all Fund Shares to be registered in its name or the
names of its nominees. Nothing herein shall be
31
construed to allow the Custodian to commingle the Fund Shares, funds, or
securities with those of any plans other than the Pioneer Independence Plans
specifically covered herein. The Custodian shall maintain a separate record for
each Plan established by a Planholder, showing the number of Fund Shares (to two
decimal places) and the amount of cash, if any, to the credit of each Plan
Account. Such records shall be maintained separate and apart from the
Custodian's corporate records.
All monies deposited with or received by the Custodian hereunder shall be
held by it without interest as part of the custodianship until required to be
disbursed in accordance with the provisions of this Agreement or of Pioneer
Independence Plans.
3. STATEMENTS. The Custodian shall render statements to the Sponsor at such
time and in such form as may be agreed upon by the parties hereto showing, for
each Plan Account in which transactions were effected during the specified
period, the Plan number, the amount and date of the Plan investment(s) received,
the number of such investment(s), the deductions made, the balance applied to
the purchase of Fund Shares for each Plan Account and the number of Fund Shares
purchased.
4. VOTING OF FUND SHARES. The Custodian will provide notice to Planholders
of all Pioneer Independence Fund shareholder meetings, together with proxy
statements. The Custodian shall vote Fund Shares held under any Plan in
accordance with the Planholder's instructions contained in a voting instruction
card provided with the proxy statement or in accordance with the terms of the
applicable Prospectus.
32
5. SUBSTITUTION.
a. BY SPONSOR. The Sponsor may effect substitution of Fund
Shares as provided in Section III(C), below.
b. BY CUSTODIAN. If Fund Shares cannot be purchased by the
Custodian for more than 120 days, and the Sponsor fails to substitute
shares, the Custodian may select another investment medium which it
deems to be comparable to the Fund Shares and, to the extent required,
subject to prior approval of the Securities and Exchange Commission to
the extent required by the 1940 Act. The Custodian shall notify each
Planholder in writing that the substitution will be made if the
Planholder, within 30 days, gives written consent to the Custodian and
agrees to bear his or her reasonable pro-rata share of the Custodian's
related expenses, including tax liability sustained by the Custodian.
The Planholder's failure to give such written consent within the 30 day
period shall give the Custodian authority to terminate the Plan
Account.
If the Fund Shares are not available for purchase for a period
of 120 days or longer, and neither the Sponsor nor the Custodian
substitutes other shares, the Custodian shall have the authority,
without further action on its part, to terminate the Plan.
c. NOTICE. The Custodian or the Sponsor shall, within five
days after any substitution, deliver or mail to each Planholder a
notice of substitution, including an
33
identification of the Fund Shares eliminated and the securities
substituted, and a specification of the Fund Shares of such Planholders
affected by the substitution.
6. FURNISHING OF INFORMATION. The Custodian shall furnish such records and
other information regarding Pioneer Independence Plans and the custodianship as
the Sponsor may reasonably believe necessary or appropriate for the
administration of the Plans, as provided in Section III below.
D. DUTIES.
1. DUTIES. The Custodian shall:
a. Mail to each Planholder a confirmation of Fund Shares
purchased, stating the purchase price per Fund Share, number of Fund
Shares purchased after applicable deductions, and the total number of
Fund Shares held for the Planholder's Plan Account;
b. Mail to each Planholder a notice of the next investment
due;
c. Upon the instruction of the Sponsor or the Fund, mail to
each Planholder such prospectuses, periodic financial reports, dividend
statements, tax notices and notices of meetings and other proxy
soliciting materials as are required by law or regulation; the cost of
such mailings shall be reimbursed to the Custodian by the Sponsor or
the Fund;
d. Cause periodic audits of the books of the Custodian
relating to the custodianship of Pioneer Independence Plans to be made
at least annually by independent
34
certified public accountants selected by the Sponsor and reasonably
satisfactory to the Custodian, and more frequently, if required by law
or regulation;
e. Prepare and file such reports and returns as are required
by law or regulation to permit the custodianship to continue in
operation;
f. Answer all inquires from Planholders concerning their
Plans;
g. Furnish to the Internal Revenue Service and to
each Planholder all required returns relating to dividends or other
distributions to such Planholder's Plan Account(s) for federal income
tax reporting purposes; and
h. Any and all duties of the Custodian enumerated in
the foregoing provisions of Section II for which the Custodian assumes
primary responsibility may be delegated by the Custodian to the
Sponsor. Upon the written request of the Sponsor, the Custodian will
delegate any of its functions described in this Section II or in
Section III below, provided that such delegation is consistent with
Sections 26 and 27 of the 1940 Act. In addition, the Custodian may
delegate its duties under this Agreement to its affiliate, Boston
Financial Data Services, Inc. ("BFDS"), a transfer agent registered
under Section 17A(c)(2) of the 1933 Act, provided that such delegation
is not inconsistent with Sections 26 or 27 of the 1940 Act. No other
delegation of the Custodian's duties may be made without the written
agreement of the Sponsor. In the event the Custodian delegates one or
more of its duties hereunder with the consent of the Sponsor or to
BFDS, the Custodian shall remain
35
responsible for all acts and omissions relative to the performance of
such duties as if any related acts and/or omissions are its own.
E. FEES AND CHARGES.
1. REMUNERATION. As remuneration for the services to be performed by the
Custodian under this Agreement, the Custodian shall receive the fees, charges,
and reimbursements for expenses as listed in the attached Schedule A to this
Agreement and the applicable Prospectus which charges shall be deducted from
Plan investments or Planholders' Plan Accounts, as specified in the applicable
Prospectus, unless the Custodian is otherwise reimbursed by the Sponsor.
In the event of a default by the Sponsor in the performance of any
administrative service relating to the custodianship described in this
Agreement, the Custodian will perform such service for a consideration payable
by or from the account of the Planholders. Such consideration shall not be in
excess of the amount provided for in this Agreement, including Schedules hereto.
Any deductions under the terms of this provision shall be made in accordance
with the terms of Section 26(a)(2) of the 1940 Act and any rules thereunder (or
any successor rules).
2. PAYMENTS TO SPONSOR. No payment to the Sponsor, or to any
affiliated person or agent of the Sponsor, shall be allowed the Custodian as an
expense except for payment to the Sponsor of a delegated duty fee described in
the attached Schedule A.
36
III. SPONSOR'S FUNCTION
A. ADMINISTRATION OF PIONEER INDEPENDENCE PLANS.
1. GENERAL. The Sponsor agrees to perform the functions required of it by
the terms of this Agreement and the applicable Prospectus.
2. OPERATIONS. The Sponsor will use its best efforts to distribute Pioneer
Independence Plans by entering into sales agreements with other registered
broker-dealers, maintain adequate office facilities and management staff and
keep current records.
3. COMPLIANCE. The Sponsor assumes full responsibility for the preparation,
contents and distribution of the Prospectus, for complying with all applicable
requirements of the 1933 Act and of the 1940 Act and for the preparation and
filing of such other reports or documents as are required by law or regulation,
and covenants and agrees to take all action, and not to omit any action,
necessary to carry out such responsibilities. The Custodian is not responsible
for the preparation, contents and distribution of the Fund Prospectus, or for
any related compliance. With respect to any duties for which the Custodian
assumes primary responsibility but which it delegates to the Sponsor, the
Sponsor covenants and agrees that the Sponsor will take or cause its affiliates
to take all action, and not to omit any action, necessary to carry out such
duties, and agrees to furnish to the Custodian, upon request, evidence thereof
satisfactory to the Custodian and its counsel. The Sponsor will use its best
efforts to make Fund Shares available for purchase to the Custodian at net asset
value.
37
4. INITIAL PAYMENT. Upon the sale of each Plan, the Sponsor will require
each selling broker-dealer, not later than the time for the first Plan
investment for the purchase of Fund Shares, to forward to the Custodian: (i) the
Plan Application and (ii) a check payable to the Custodian representing the
initial Plan investment or copies of forms appropriate for the election of an
automatic investment option authorizing the payment of money by wire, by
Automatic Clearinghouse ("ACH"), by Electronic Funds Transfer ("EFT") or
transfer or in some other form acceptable to the Custodian.
4. CREATION AND SALES CHARGES. The Sponsor receives a Creation and Sales
Charge to compensate it for its services and costs in creating the Plans and
arranging for their administration, for making the Fund Shares available to
Planholders at net asset value and for selling expenses and commissions with
respect to the Pioneer Independence Plans. This charge is deducted from the
first 12 investments under a Plan as set forth in the applicable Prospectus.
5. PLANS IN DEFAULT. Upon receipt from the Custodian of a monthly statement
of Planholders specifying those Plans in current default on Plan investments,
the Sponsor will request that the selling broker-dealer endeavor promptly to
have said Planholders remedy their defaults.
6. PLAN CANCELLATIONS. In the event that the Sponsor receives from the
Custodian a notice of Plan cancellation by a Planholder, and such cancellation
is subject under applicable law and the Prospectus to a refund of a portion of
the Creation and Sales Charges previously imposed under the Plan, the Sponsor
shall transmit funds to the order of the Custodian in an amount equal
38
to the refundable amount calculated in accordance with applicable law and
the Prospectus. The Custodian shall then refund the appropriate amount to the
Planholder.
B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION.
1. The Sponsor shall furnish to the Custodian and file to the extent
required by law on behalf of the Custodian:
a. FINANCIAL STATEMENTS. As soon as available, a copy of each
audit report and other financial statements relating to the
custodianship of the Pioneer Independence Plans and sufficient reports
and other documents required to be mailed to Planholders under Section
II.
b. TAX RETURNS. Not less than 20 calendar days prior to the
due date thereof, all federal and state income tax returns, and all
other tax returns, if any, required by law to be filed by the Custodian
with respect to its custodianship hereunder, prepared in form for
execution and filing, together with advice concerning the proper
allocation of expenses and other items among the Planholders. Such tax
returns shall be filed by the Sponsor on behalf of the Custodian.
c. DISTRIBUTION AGREEMENT. Promptly after the execution
thereof, a copy of any amendment to the Distribution Agreement between
the Sponsor and the Fund and a copy of any new or additional agreement
entered into in lieu thereof.
39
d. PIONEER INDEPENDENCE PLANS MATERIALS. Draft copies of all
literature, prospectuses, printed matter and other material which
contain any references to the Custodian, except material which is
merely circulated among or sent to employees, stockholders or
representatives of the employees, stockholders or representatives of
the Sponsor and correspondence in the ordinary course of business which
refers in accurate terms to the Custodian's functions with respect to
Pioneer Independence Plans. The Sponsor agrees that none of the
documents specified in this clause shall be reproduced in final form or
distributed until a draft of such documents have been provided to the
Custodian. In the event the Custodian has comments on such drafts, the
Custodian shall comment in writing and transmit such comments to the
Sponsor within 48 hours of receipt of the draft material.
e. DISTRIBUTION REPORTS. Not later than the time specified by
Treasury Regulations for advising Planholders of income and capital
gains distributions of regulated investment companies and within such
time requirements as may be specified by the Securities and Exchange
Commission or other regulatory agency, printed forms for reporting
distribution to Planholders for income tax purposes.
C. SUBSTITUTION OF THE UNDERLYING INVESTMENT.
1. PROCEDURE. In the event that the Sponsor substitutes shares of another
investment medium for Fund Shares in accordance with the procedures set forth in
the applicable Prospectus and as required by law, all required notices shall be
prepared by the Sponsor. In connection
40
with such substitution, the Custodian is authorized to charge against the
Plan Account of a Planholder such Planholder's pro rata share of the expenses
(including tax liability) incurred by the Custodian or the Sponsor, and to pay
to the Custodian or to the Sponsor the amount of such charge attributable to
expenses incurred by the Custodian or the Sponsor, respectively, in connection
with the substitution. The Custodian and the Sponsor shall furnish one another,
and make available to Planholders upon request, a detailed statement itemizing
their respective expenses.
The Sponsor may effect substitution of Fund Shares whenever it deems such
substitution to be in the best interests of the Planholders, subject to the
following:
a. SECURITIES AND EXCHANGE COMMISSION. To the extent required,
the Sponsor shall receive prior approval by the Securities and Exchange
Commission for any substitution under the provisions of Section 26(b)
of the 1940 Act.
b. SHARES. The Sponsor may substitute for Fund Shares then
held and yet to be purchased or both. Substituted shares must be
generally comparable in character and quality to Fund Shares and must
be registered under the 1933 Act. In the event of a substitution of
Fund Shares, the terms "Fund" and "Fund Shares" as used herein shall be
deemed to include the substituted open-end management company and the
substituted shares of such open-end management company.
c. CUSTODIAN. The Sponsor shall satisfy the Custodian that the
substitute shares may be purchased and redeemed on generally favorable
terms and arrange for the Custodian to acquire substitute shares having
an aggregate value at least equal to that of the
41
Fund Shares replaced. In addition, the Sponsor shall provide the
Custodian with a signed certificate stating that any appropriate notice
of the proposed substitution has been given to each Planholder
according to the terms of the Prospectus.
d. PLANHOLDERS. The Sponsor shall notify each Planholder in
writing that, unless the Planholder surrenders the Plan to the
Custodian within 30 days of the date of mailing of such notice, the
Planholder will be deemed to have authorized the substitution and
agreed to bear his or her pro rata share of actual related expenses, if
any.
IV. FUNCTIONS OF SPONSOR AND CUSTODIAN
A. PLANHOLDER INQUIRIES.
The Sponsor and the Custodian will respond promptly to each Planholder
inquiry received by the Sponsor and Custodian, respectively, to the extent that
the Sponsor or Custodian, as applicable, can respond to such inquiry. In the
event that any such inquiry cannot be responded to, the party receiving such
inquiry will refer the inquiry to the other party to this Agreement.
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V. MISCELLANEOUS
A. ASSIGNMENT.
This Agreement shall not be assigned by either of the parties hereto
without the prior written consent of the other party.
B. INDEMNIFICATION BY THE SPONSOR.
The Sponsor, its successors and assigns, shall at all times fully indemnify
and hold harmless the Custodian, its successors and assigns, from any and all
liability, claims, demands, actions, suits, cost or expense of any nature as the
same may arise or be made against or be incurred by the Custodian from the
failure of the Sponsor to comply with any law, rule, regulation or order of the
United States, any state or any other jurisdiction, governmental authority, body
or board having jurisdiction, relating to the sale, registration or
qualification of the Plans or any of them, or the securities sold in connection
therewith. The Fund also agrees to indemnify the Custodian for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Custodian, arising out of or in connection with the
acceptance hereof or the performance of its duties hereunder, as well as the
costs and expenses of defending against any claim or liability in the premises,
provided that no claim against the Custodian which might be subject to the
foregoing indemnification provisions shall be confessed, settled or compromised
by the Custodian without the Custodian first having given 15 days'
43
notice in writing to the Sponsor of the material facts, and provided
further that the Sponsor shall have the right upon written demand delivered to
the Custodian within 15 days following the date of such notice to contest or
defend such claim in the name of the Custodian.
C. COMMUNICATIONS.
All communications provided for hereunder shall be in writing sent by first
class mail or delivered to the respective parties as follows:
PIONEER FUNDS DISTRIBUTOR, INC.
Attention: Xxxxxx X. Xxxxx, General Counsel
00 Xxxxx Xxxxxx
Xxxxxx, XX 02109
STATE STREET BANK AND TRUST COMPANY
Attention: President, Boston Financial Data Services, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
provided that either party may, by written notice duly given in accordance
herewith, specify a different address for the purpose hereof.
E. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original and all of which shall be deemed one and the same
instrument.
44
F. INSPECTION.
An executed copy of this Agreement and all amendments thereto shall be kept
on file by the Custodian and shall be open to inspection by any Planholder at
any time during the business hours of the Custodian.
G. SCHEDULES.
All references herein to Schedules shall be deemed to refer to Schedule A
attached to this Agreement which is hereby expressly made a part hereof.
H. AMENDMENT.
This Agreement, including but not limited to Schedule A hereto, may be
amended from time to time as mutually agreed by the parties hereto in writing.
Notwithstanding the foregoing, this Agreement shall not be amended in such a
manner as to adversely affect the rights and privileges of any Planholder
without first obtaining the Planholder's written consent.
I. CONSTRUCTION.
This Agreement shall be subject to and construed under the laws of the
Commonwealth of Massachusetts.
45
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PIONEER FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxxx X. Xxxxxx
[Xxxxxx X. Xxxxxx
President]
(Seal)
Attest:
----------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxx
[Xxxxxx X. Xxxxx
Executive Vice President]
(Seal)
Attest:
g:/funds/custogr8.doc
46
SCHEDULE A
FEES SCHEUDLE FOR
STATE STREET BANK AND TRUST COMPANY
FOR SERVICES AS PLAN CUSTODIAN
(DATED FEBRUARY 5, 1998)
The following fees and charges will be deducted from the Plans or from
Planholder accounts and paid to the Custodian in accordance with the terms of
the Prospectus. An asterisk (*) denotes fees that the Fund has voluntarily
elected to pay to the Custodian on behalf of the Plans.
GENERAL
Fees are based on an annual per shareholder account charge for account
maintenance plus transaction and out-of-pocket expenses. There is a minimum
charge of $3,500 per month applicable to each fund in the complex. Fees are
billable on a monthly basis at the rate of 1/12 of the annual fee. A charge is
made for an account in the month that an account opens or closes.
ANNUAL ACCOUNT SERVICE FEES
Open Account 12.00/year *
ACTIVITY BASED FEES
New Account Kits $3.00/each *
Telephone Calls $2.50/each *
Correspondence $3.00/each *
PLANHOLDER FEES
XXX Annual Maintenance $10.00/year1
Bounced Checks $5.00/each
Transcripts $5.00/each year researched
Terminations of Incomplete Plans $2.50/each
Inactive Accounts 2 $12.00/year
1 The Custodian will receive $6; The Pioneer Group, Inc. will
receive $4.
2 A Plan that is not current and to which no investments have been
made for a 12-month period.
OUT OF POCKET EXPENSES
Out-of-pocket expenses include, but are not limited to: confirmation
statements, checks, postage, forms, telephone, microfilm, microfiche, year-end
forms and expenses incurred at the specific direction of Pioneer Funds
Distributor, Inc.
