MANAGEMENT CONTRACT
THIS AGREEMENT dated this day of , 1998 between Pioneer Growth Shares, a
Delaware business trust (the "Trust"), 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 and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objectives and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust'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 Trust, 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 Trust in the same manner
and with the same force and effect as the Trust 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 Trust and upon the Trust's request, furnish to the Trust
research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Trust 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
Trust's securities transactions required by subparagraphs (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 Trust's
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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 Trust.
(c) The Trust 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
securities agencies and foreign jurisdictions, including the preparation of
Prospectuses and Statements of Additional Information for filing with such
regulatory agencies; (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)
if applicable, any distribution fees paid by the
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Trust 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 Funds 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
shall pay all brokers' and underwriting commissions chargeable to the Trust in
connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee as set forth below.
Management fees payable hereunder shall be computed daily and paid monthly in
arrears.
(i) The fee payable hereunder shall be composed of the Basic Fee (defined
below) and a Performance Adjustment (defined below) to the Basic Fee based upon
the investment performance of the Trust in relation to the investment record of
a securities index determined by the Trustees of the Trust to be appropriate
over the same period. The Trustees have initially designated the Lipper Growth
Funds Index (the "Index") for this purpose. Prior to the completion of the
initial performance period described in subsection (iii) below the fee payable
hereunder shall consist of the Basic Fee without a Performance Adjustment.
(ii) From time to time, the Trustees may 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, determine 1) that another securities index is a more appropriate
benchmark than the Index for purposes of evaluating the performance of the
Trust; and/or 2) that a Class of shares of
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the Trust other than Class A is most appropriate for use in calculating the
Performance Adjustment. After ten days' written notice to the Manager, a
successor index (the "Successor Index") may be substituted for the Index in
prospectively calculating the Performance Adjustment; and/or a different Class
of Shares may be substituted in calculating the Performance Adjustment. However,
the calculation of that portion of the Performance Adjustment attributable to
any portion of the performance period prior to the adoption of the Successor
Index will still be based upon the Trust's performance compared to the Index.
The use of a different Class of shares for purposes of calculating the
Performance Adjustment shall apply to the entire performance period so long as
such Class was outstanding at the beginning of such period. In the event that
such Class of shares was not outstanding for all or a portion of the Performance
Period, it may only be used in calculating that portion of the Performance
Adjustment attributable to the period during which such Class was outstanding
and any prior portion of the Performance Period shall be calculated using Class
A shares.
(iii) The Basic Fee is payable at an annual rate of 0.70% of the Trust's
average daily net assets up to $1 billion, .675% of the next $4 billion of such
assets, 0.65% of the next $5 billion of such assets and 0.575% of the excess
over $10 billion.
(iv) The Performance Adjustment consists of an adjustment to the monthly
Basic Fee to be made by applying a performance adjustment rate to the average
net assets of the Trust over the performance period. The resulting dollar figure
will be added to or subtracted from the Basic Fee depending on whether the Trust
experienced better or worse performance than the Index.
The Performance Adjustment rate is 0.01% per annum for each percentage
point rounded to the nearer point (the higher point if exactly one-half point)
that the Trust's investment performance
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for the period was better or worse than the record of the Index as then
constituted. The maximum performance adjustment is 0.10% per annum. In addition,
as the Trust's average daily net assets over the performance period may differ
substantially from the Trust's average daily net assets during the current year,
the performance adjustment may be further adjusted to the extent necessary to
insure that the total adjustment to the Basic Fee on an annualized basis does
not exceed 0.10%.
The initial performance period will consist of the 12 month period
beginning , 1998 and ending , 1999. Each month thereafter, the performance
period shall consist of the current month plus the preceding months until a
period of 36 months is included in the performance period. In months subsequent
to a 36 month performance period having been reached, the performance period
will be a rolling 36 month period consisting of the most recently completed
month and the previous 35 months.
The Trust's investment performance will be measured by comparing the (i)
opening net asset value of one share of the Trust on the first business day of
the performance period with (ii) the closing net asset value of the one share of
the Trust as of the last business day of such period. In computing the
investment performance of the Trust and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Trust, and all cash distributions of the companies
whose stock comprise the Index, will be treated as reinvested in accordance with
Rule 205-1 or any other applicable rule under the Investment Advisers Act of
1940, as the same from time to time may be amended.
The computation of the performance adjustment will not be cumulative. A
positive fee adjustment will apply even though the performance of the Trust over
some period of time shorter than
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the performance period has been behind that of the Index, and, conversely,
a negative fee adjustment will apply for the month even though the performance
of the Trust over some period of time shorter than the performance period has
been ahead of that of the Index.
(v) An appropriate percentage (based on the number of days in the current
month) of the annual Performance Adjustment rate shall be multiplied by the
average of the net assets of the Trust (computed in the manner set forth in the
Declaration of Trust of the Trust adjusted as provided above, if applicable)
determined as of the close of business on each business day through out the
performance period. The resulting dollar amount is added to or deducted from the
Basic Fee.
(vi) In the event of termination of this Agreement, the Basic Fee then in
effect 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. The amount of any Performance Adjustment to the
Basic Fee will be computed on the basis of and applied to net assets averaged
over the 36 month period ending on the last business day on which this Agreement
is in effect, provided that if this Agreement has been in effect less than 36
months, the computation will be made on the basis of the period of time during
which it has been in effect.
(b) If the operating expenses of the Trust in any year exceed the limits
set by state securities laws or regulations in states in which shares of the
Trust 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
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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 Trust 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
Trust 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 Trust. The authority given to the Manager in
Sections1 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 Trust or the Trust'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.
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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, directors, 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
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by the 1940 Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Trust'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
Trust the most favorable execution and net price available except as described
herein. It is also understood that it is desirable for the Trust 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 Trust 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 Trust 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 Trust 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 Trust and to such clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until May, 1999 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
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the 1940 Act) 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 Trust,
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 Trust, 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.
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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 GROWTH SHARES
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
