FORM OF
MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of July, 1998 between Pioneer
Variable Contracts Trust, a Delaware business trust (the "Trust"), on behalf of
Emerging Markets Portfolio (the "Portfolio"), and Pioneering Management
Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust, on behalf of the Portfolio, and the Manager do
hereby agree as follows:
1. (a) The Manager will regularly provide the Portfolio with investment
research, advice and supervision and will furnish continuously an
investment program for the Portfolio, consistent with the investment
objectives and policies of the Portfolio. The Manager will determine
from time to time what securities shall be purchased for the Portfolio,
what securities shall be held or sold by the Portfolio and what portion
of the Portfolio's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement
and Declaration of Trust, By-Laws and its registration statements under
the 1940 Act and under the 1933 Act covering the Trust's shares, as
filed with the Securities and Exchange Commission, and to the
investment objectives, policies and restrictions of the Portfolio, as
each of the same shall be from time to time in effect, and subject,
further, to such policies and instructions as the Board of Trustees of
the Trust may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for
the Portfolio in the same manner and with the same force and effect as
the Portfolio itself might or could do with respect to purchases, sales
or other transactions, as well as with respect to all other things
necessary or incidental to the furtherance or conduct of such
purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Portfolio and upon the Trust's request, furnish
to the Portfolio research, statistical and advisory reports upon the
industries, businesses, corporations or securities as to which such
requests shall be made, whether or not the Portfolio shall at the time
have any investment in such industries, businesses, corporations or
securities. The Manager will use its best efforts in the preparation of
such reports and will endeavor to consult the persons and sources
believed by it to have information available with respect to such
industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Portfolio's securities transactions required by sub-paragraphs (b)(5),
(6), (9) and (10) and paragraph (f) of Rule 31a-1 under the 1940 Act
(other than those records being maintained by the custodian or transfer
agent appointed by the Trust) and preserve such records for the periods
prescribed therefor by Rule 31a-2 under the 1940 Act. The Manager will
also provide to the Board of Trustees such periodic and special reports
as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the
Manager or in such other place as may be agreed upon from time to time,
and all necessary office facilities, equipment and personnel for
managing the Portfolio's affairs and investments, and shall arrange, if
desired by the Trust, for members of the Manager's organization to
serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or
"interested persons" (as defined in the 0000 Xxx) of, the Manager and
all officers of the Trust as such; and (ii) all expenses not
hereinafter specifically assumed by the Trust where such expenses are
incurred by the Manager or by the Trust in connection with the
management of the affairs of, and the investment and reinvestment of
the assets of, the Portfolio.
(c) The Trust, on behalf of the Portfolio, shall assume and shall pay:
(i) charges and expenses for fund accounting, pricing and appraisal
services and related overhead, including, to the extent such services
are performed by personnel of the Manager, or its affiliates, office
space and facilities and personnel compensation, training and benefits;
(ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend
disbursing agent and registrar appointed by the Trust with respect to
the Trust; (iv) issue and transfer taxes chargeable to the Trust in
connection with securities transactions to which the Trust is a party;
(v) insurance premiums, interest charges, dues and fees for membership
in trade associations and all taxes and corporate fees payable by the
Trust to federal, state or other governmental agencies; (vi) fees and
expenses involved in registering and maintaining registrations of the
Trust and/or its shares with the Commission, state or blue sky
securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with
the Commission; (vii) all expenses of shareholders' and Trustees'
meetings and of preparing, printing and distributing prospectuses,
notices, proxy statements and all reports to shareholders and to
governmental agencies; (viii) charges and expenses of legal counsel to
the Trust and the Trustees; (ix) any distribution fees paid by the
Portfolio in accordance with Rule 12b-1 promulgated by the Commission
pursuant to the 1940 Act; (x) compensation of those Trustees of the
Trust who are not affiliated with or interested persons of the Manager,
the Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer
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, on behalf of the Portfolio, shall pay all brokers' and
underwriting commissions chargeable to the Trust in connection with
securities transactions to which the Portfolio is a party.
3. (a) The Trust, on behalf of the Portfolio, shall pay to the Manager, as
compensation for the Manager's services and expenses assumed hereunder,
a fee at the annual rate of 1.15% of the Portfolio's average daily net
assets. Management fees payable hereunder shall be computed daily and
paid monthly in arrears. In the event of termination of this Agreement,
the fee provided in this Section shall be computed on the basis of the
period ending on the last business day on which this Agreement is in
effect subject to a pro rata adjustment based on the number of days
elapsed in the current month as a percentage of the total number of
days in such month.
(b) If the operating expenses of the Portfolio in any year exceed the
limits set by state securities laws or regulations in states in which
shares of the Portfolio are sold, the amount payable to the Manager
under subsection (a) above will be reduced (but not below $0), and the
Manager shall make other arrangements concerning expenses but, in each
instance, only as and to the extent required by such laws or
regulations. If amounts have already been advanced to the Manager under
this Agreement, the Manager will return such amounts to the Trust to
the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable
hereunder (in advance of the time such fee or a portion thereof would
otherwise accrue) and/or undertake to pay or reimburse the Portfolio
for all or a portion of its expenses not otherwise required to be borne
or reimbursed by the Manager. Any such fee reduction or undertaking may
be discontinued or modified by the Manager at any time.
4. It is understood that the Manager may employ one or more sub-investment
advisers (each a "Subadviser") to provide investment advisory services to the
Portfolio by entering into a written agreement with each such Subadviser;
provided, that any such agreement first shall be approved by the vote of a
majority of the Trustees, including a majority of the Trustees who are not
"interested persons" (as defined in the 0000 Xxx) of the Trust, the Manager or
any such Subadviser, at a meeting of Trustees called for the purpose of voting
on such approval and by the affirmative vote of a "majority of the outstanding
voting securities" (as defined in the 0000 Xxx) of the Portfolio. The authority
given to the Manager in Sections 1 through 6 hereof may be delegated by it under
any such agreement; provided, that any Subadviser shall be subject to the same
restrictions and limitations on investments and brokerage discretion as the
Manager. The Trust agrees that the Manager shall not be accountable to the
Portfolio or the Portfolio's shareholders for any loss or other liability
relating to specific investments directed by any Subadviser, even though the
Manager retains the right to reverse any such investment, because, in the event
a Subadviser is retained, the Trust and the Manager will rely almost exclusively
on the expertise of such Subadviser for the selection and monitoring of specific
investments.
5. The Manager will not be liable for any error of judgment or mistake of
law or for any loss sustained by reason of the adoption of any investment policy
or the purchase, sale, or retention of any security on the recommendation of the
Manager, whether or not such recommendation shall have been based upon its own
investigation and research or upon investigation and research made by any other
individual, firm or corporation, but nothing contained herein will be construed
to protect the Manager against any liability to the Trust or its shareholders by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying,
selling or trading in any securities for its or their own accounts or
other accounts. The Manager may act as an investment advisor to any
other person, firm or corporation, and may perform management and any
other services for any other person, association, corporation, firm or
other entity pursuant to any contract or otherwise, and take any action
or do any thing in connection therewith or related thereto; and no such
performance of management or other services or taking of any such
action or doing of any such thing shall be in any manner restricted or
otherwise affected by any aspect of any relationship of the Manager to
or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by
law. The Trust recognizes that the Manager, in effecting transactions
for its various accounts, may not always be able to take or liquidate
investment positions in the same security at the same time and at the
same price.
(b) In connection with purchases or sales of securities for the account
of the Trust, neither the Manager nor any of its Trustees, officers or
employees will act as a principal or agent or receive any commission
except as permitted by the 1940 Act. The Manager shall arrange for the
placing of all orders for the purchase and sale of securities for the
Portfolio's account with brokers or dealers selected by the Manager. In
the selection of such brokers or dealers and the placing of such
orders, the Manager is directed at all times to seek for the Portfolio
the most favorable execution and net price available except as
described herein. It is also understood that it is desirable for the
Portfolio that the Manager have access to supplemental investment and
market research and security and economic analyses provided by brokers
who may execute brokerage transactions at a higher cost to the
Portfolio than may result when allocating brokerage to other brokers on
the basis of seeking the most favorable price and efficient execution.
Therefore, the Manager is authorized to place orders for the purchase
and sale of securities for the Portfolio with such brokers, subject to
review by the Trust's Trustees from time to time with respect to the
extent and continuation of this practice. It is understood that the
services provided by such brokers may be useful to the Manager in
connection with its or its affiliates' services to other clients.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
clients, the Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in
order to obtain the best execution and lower brokerage commissions, if
any. In such event, allocation of the securities so purchased or sold,
as well as the expenses incurred in the transaction, will be made by
the Manager in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Portfolio and to such
clients.
7. This Agreement shall become effective on the date hereof and shall
remain in force until June 30, 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 the 0000 Xxx) of any
such parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 0000 Xxx) of the Portfolio, subject to the right of the Trust and
the Manager to terminate this contract as provided in Section 8 hereof.
8. Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of its outstanding voting securities" (as defined in the 0000 Xxx) and
the giving of 60 days' written notice to the other party.
9. This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Portfolio, the name of the
Trust will be changed to one that does not contain the name "Pioneer" or
otherwise suggest an affiliation with the Manager.
11. The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.
12. This Agreement states the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
13. This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
14. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers and their seal to be hereto affixed as of the
day and year first above written.
ATTEST: PIONEER VARIABLE CONTRACTS TRUST
on behalf of Emerging Markets Portfolio
By:________________________ ________________________
Xxxxxx X. Xxxxx By:
Secretary Its:
ATTEST: PIONEERING MANAGEMENT
CORPORATION
By:________________________ ________________________
Xxxxxx X. Xxxxx By:
Secretary Its:
