File No. 33-84546
File No. 811-08786
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-12
Pioneer Variable Contracts Trust
--------------------------------
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
PIONEER OAK RIDGE LARGE CAP GROWTH VCT PORTFOLIO
( Pioneer Variable Contracts Trust)
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR DECEMBER 28, 2004
This is the formal agenda for the portfolio's special shareholder meeting
("Meeting"). It tells you the matters you will be asked to vote on and the time
and place of the meeting, in case you want to attend in person.
To the shareholders of Pioneer Oak Ridge Large Cap Growth VCT Portfolio:
A special meeting of shareholders of your portfolio will be held at the
offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, 26th
Floor, Boston, Massachusetts on December 28, 2004 at 2:00 p.m., Boston time,
to consider the following:
1. A proposal to approve a new subadvisory agreement between Pioneer, your
portfolio's investment adviser, and Oak Ridge, your portfolio's investment
subadviser. This new agreement will take effect only if the proposed
acquisition by Pioneer's parent company of an ownership interest in Oak
Ridge is consummated. Approval of the new subadvisory agreement shall also
constitute approval of an interim subadvisory agreement, if any, between
Pioneer and Oak Ridge;To consider any other business that may properly come
before the meeting.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSALS. APPROVAL OF THE
PROPOSALS WILL NOT INCREASE THE MANAGEMENT FEE RATES PAYABLE BY THE PORTFOLIO.
Shareholders of record as of the close of business on November 17, 2004 are
entitled to vote at the meeting and any related follow-up meetings.
By Order of the Board of Trustees,
Dorothy E. Bourassa, Secretary
Boston, Massachusetts
[ ], 2004
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN
ENCLOSED PROXY OR, IF YOU ARE A CONTRACT OWNER, THE ENCLOSED VOTING INSTRUCTION
CARD.
XXXX-XX-XXXX
PROXY STATEMENT OF
PIONEER OAK RIDGE LARGE CAP GROWTH VCT PORTFOLIO
(Pioneer Variable Contracts Trust)
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
SPECIAL MEETING OF SHAREHOLDERS
This proxy statement contains the information you should know before voting
on the proposals summarized below.
The portfolio will furnish without charge a copy of its most recent annual
report and semiannual report to any shareholder or contract cowner upon request.
Shareholders and contract owners who want to obtain a copy of these reports
should contact their insurance providers, direct all written requests to the
attention of the portfolio, at the address listed above, or should call Pioneer
Investment Management Shareholder Services, Inc., the portfolio's transfer
agent, at 1-800-622-3265.
INTRODUCTION
This proxy statement is being used by the board of trustees of Pioneer
Variable Contracts Trust (the "Trust") to solicit proxies on behalf of the
portfolio to be voted at a special meeting of shareholders. This meeting will be
held at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, 26th Floor, Boston, Massachusetts 02109 at 2:00 p.m., Boston time, on
December 28, 2004, and at any adjournments or postponements of the meeting to a
later date, for the purposes as set forth in the accompanying notice of special
meeting to shareholders.
This meeting is being called to consider the approval of new subadvisory
agreement between Pioneer and Oak Ridge with respect to the portfolio. Approval
of new subadvisory agreements is required because of the proposed acquisition by
Pioneer Investment Management USA Inc. ("PIMUSA") of a 49% ownership interest in
Oak Ridge (the "Acquisition"). Additionally, Pioneer has the option to further
increase its ownership to a majority of the outstanding interests in two years
and to acquire the remaining interests in Oak Ridge in 12 years. PIMUSA is the
direct parent of Pioneer.
If consummated, the Acquisition will cause the existing subadvisory
agreements to terminate, requiring shareholder approval of new subadvisory
agreement. In the event that the Acquisition closes prior to the meeting, the
board of trustees has approved interim subadvisory agreements between Pioneer
and Oak Ridge that will remain in effect from the date of such closing for a
period of up to 150 days. Approval of the subadvisory agreement also will
constitute approval of the interim subadvisory agreement.
The Acquisition is not expected to result in any change in the operations
or personnel of Oak Ridge, except as noted below under "Information concerning
Oak Ridge," or in the services Oak Ridge provides to the portfolio. In addition,
the Acquisition will not increase the management fee rates payable by the
portfolio.
This proxy statement and the enclosed proxy card are being mailed to
shareholders of the portfolio on or about November 23, 2004. The portfolio will
furnish without charge a copy of its most recent annual report and any more
recent semiannual report to any shareholder upon request. Shareholders who want
to obtain a copy of their portfolio's reports should direct all written requests
to the attention of their portfolio, at the address listed above, or
should call Pioneer Investment Management Shareholder Services, Inc. ("PIMSS"),
the portfolio's shareholder servicing agent, at 1-800-622-3265.
WHO IS ELIGIBLE TO VOTE
If you are the owner of a variable annuity or variable life insurance contract:
If you are the owner of a variable annuity or variable life insurance
contract (a "contract owner"), the insurance company that issued your contract
is the record owner of portfolio shares. By completing and returning the
enclosed voting instruction card, you will instruct the insurance company how to
vote the shares of the portfolio attributable to your contract.
If you hold shares of a portfolio directly:
Shareholders of record of the portfolio as of the close of business on
November 17, 2004 (the "record date") are entitled to vote on all of the
portfolio's business at the special shareholder meeting and any adjournments
thereof. Each share is entitled to one vote. Shares represented by properly
executed proxies, unless revoked before or at the meeting, will be voted
according to shareholders' instructions. If you sign a proxy, but do not fill
in a vote, your shares will be voted in favor of the proposal for your
portfolio. If any other business comes before the special shareholder meeting,
your shares will be voted at the discretion of the persons named as proxies.
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PROPOSAL 1
APPROVAL OF A NEW SUBADVISORY AGREEMENT
Summary
Pioneer has served as investment adviser and Oak Ridge as investment
subadviser to the portfolio since it commenced investment operations on March
15, 2004. Prior to that date, Oak Ridge served as investment adviser of the
predecessor to the portfolio.
PIMUSA, the parent company of Pioneer, intends to acquire a 49% ownership
interest in Oak Ridge (as defined above, the "Acquisition"). PIMUSA's
acquisition of a 49% interest in Oak Ridge will constitute an "assignment" (as
defined in the Investment Company Act of 1940 (the "1940 Act")) of the
portfolio's current subadvisory agreement with Oak Ridge (each, an "existing
subadvisory agreement"). As required by the 1940 Act, each existing subadvisory
agreement provides for its automatic termination in the event of an assignment.
Accordingly, the existing subadvisory agreement will terminate upon the
consummation of the Acquisition, and the new subadvisory agreement are being
proposed to enable Oak Ridge to continue to serve as subadviser to the
portfolio.
At a meeting of the board of trustees of the Trust held on July 8, 2004,
the trustees, including all of the trustees who are not "interested persons" (as
that term is defined in the 1940 Act) of the Trust, Pioneer or Oak Ridge
(collectively, the "independent trustees"), unanimously approved as in the best
interest of shareholders and voted to recommend that the shareholders of the
portfolio approve a proposal to adopt a new subadvisory agreement with Oak Ridge
(each, a "proposed subadvisory agreement") effective upon consummation of the
Acquisition.
Except as noted below under "Information concerning Oak Ridge," no change
in the operations or personnel of Oak Ridge, including the portfolio manager for
the portfolio, is expected to result from the Acquisition.
Information concerning PIMUSA and Pioneer
PIMUSA is a Delaware corporation with its principal place of business at 60
State Street, Boston, Massachusetts 02109. PIMUSA is a wholly owned subsidiary
of Pioneer Global Asset Management S.p.A., which is organized under the laws of
the Republic of Italy ("PGAM"). PGAM is a wholly owned subsidiary of Unicredito
Italiano S.p.A., which is organized under the laws of the Republic of Italy
("UniCredito"). UniCredito, one of the largest banking groups in Italy, oversees
an asset management group providing investment management and financial services
to mutual funds, institutional accounts and other clients. PGAM is the global
holding company of UniCredito's asset management businesses. As of October 31,
2004, assets under management were approximately $159 billion worldwide,
including over $36 billion in assets under management by Pioneer.
Pioneer serves as the investment adviser to the portfolio. Affiliates of
Pioneer, PIMSS and Pioneer Funds Distributor, Inc. ("PFD"), serve as the
shareholder servicing agent and principal underwriter, respectively, for the
portfolio. Each of Pioneer's, PIMSS's and PFD's principal place of business is
60 State Street, Boston, Massachusetts 02109.
Terms of the acquisition agreement
Upon consummation of the Acquisition, PIMUSA will acquire a 49% ownership
interest in Oak Ridge from the existing members of Oak Ridge. Certain of the
existing members and other employees of Oak Ridge will own the remaining 51% of
Oak Ridge. As part of the Acquisition, PIMUSA also will obtain the right to
purchase from the existing members of Oak Ridge (i) an additional 11% ownership
interest in Oak Ridge two years from the date on which the Acquisition is
consummated, and (ii) the remaining ownership interest 12 years from the date on
which the Acquisition is consummated. Consequently, the Acquisition provides
PIMUSA the right to own 100% of Oak Ridge over time.
The Acquisition is expected to occur on [ , 2004], provided that a number
of conditions set forth in the acquisition agreement between PIMUSA and Oak
Ridge (the "Acquisition Agreement") are met or waived. These conditions include
the approval by shareholders of the proposed subadvisory agreement for the
portfolio, consent from Oak Ridge's managed account clients (including the
portfolio) constituting, by market value, at least $1.2 billion in assets under
management, and obtaining any necessary regulatory approvals (including from the
Bank of Italy).
No change in the portfolio's portfolio managers is anticipated to occur as
a result of the Acquisition. In addition, no change in the operations of Oak
Ridge or in the services Oak Ridge provides to the portfolio is expected to
occur as a result of the Acquisition. Except as noted below under "Information
concerning Oak Ridge," no change in the personnel of Oak Ridge is expected to
occur in connection with the Acquisition. However, PIMUSA's purchase of 49% of
Oak Ridge is not conditioned upon the continued employment of any Oak Ridge
personnel, and there can be no assurance that any particular Oak Ridge employee
will choose to remain employed by Oak Ridge.
Anticipated benefits of the Acquisition
While no change in the management of the portfolio is currently planned,
the affiliation of Oak Ridge with a significantly larger asset management group
may benefit the portfolio by enhancing Oak Ridge's investment advisory
capabilities, including the subadvisory
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services provided to the portfolio. Oak Ridge will have access to UniCredito's
resources and the security of being part of a larger, financially stronger
company, which may enhance Oak Ridge's ability to attract and retain highly
qualified staff members.
Information concerning Oak Ridge
Oak Ridge is a growth investment management firm that serves as investment
adviser to individual and institutional clients. Oak Ridge, including its
affiliated broker-dealer, Oak Ridge Investments, Inc., has been in the
investment management business since September 1989. As of [ ,] 2004, assets
under management were approximately $[ ]. Oak Ridge is currently located at 10
South LaSalle Street, Suite 1250, Chicago, Illinois 60603. Oak Ridge is
controlled by its founders, David Klaskin and Samuel Wegbreit. Mr. Wegbreit will
not be affiliated with Oak Ridge following the Acquisition but will be available
to Oak Ridge for consulting during the first year following the Acquisition.
Information regarding Oak Ridge, its principal executive officer and directors,
its other investment company clients and brokerage policy is included in Exhibit
B to this proxy statement.
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Terms of the proposed and existing subadvisory agreements
The terms of the portfolio's proposed subadvisory agreement are
substantially identical to the terms of the portfolio's existing subadvisory
agreement, except for the dates of execution, effectiveness and termination, and
any provisions regarding interim subadvisory agreement discussed below. The
stated subadvisory fees to be paid by Pioneer to Oak Ridge are identical under
the proposed subadvisory agreement and the existing subadvisory agreement. All
the terms described below with respect to the portfolio's proposed subadvisory
agreement are contained in the portfolio's existing subadvisory agreement. The
following summary of the terms of the proposed subadvisory agreement is
qualified by reference to the representative form of proposed subadvisory
agreement attached to this proxy statement as Exhibit A. The existing
subadvisory agreement was most recently submitted to the initial shareholder of
each portfolio for approval on March 12, 2004, in connection with the
commencement of the portfolio's operations.
Services. Under the proposed subadvisory agreement, Oak Ridge will, subject to
the supervision of Pioneer and the board of trustees of the Trust, regularly
provide the portfolio with investment research, advice and supervision and shall
furnish continuously an investment program for the portfolio, consistent with
the investment objective and policies of the portfolio. Oak Ridge will also
provide assistance to Pioneer with respect to the voting of proxies for the
portfolio as Pioneer may request. Oak Ridge shall maintain certain books and
records with respect to the portfolio's securities transactions and will
cooperate with and provide reasonable assistance to Pioneer, the portfolio, and
the portfolio's other agents and representatives with respect to requests for
information and preparation of regulatory filings and reports. Oak Ridge will
bear its own costs of providing services under the subadvisory agreement. See
Exhibit B for information about the portfolios' brokerage practices.
Compensation. Pioneer will pay Oak Ridge a monthly fee equal on an annual basis
to the following percentages of the average daily net assets of the portfolio:
Pioneer Oak Ridge Large Cap Growth VCT Portfolio Assets Rate
- -------------------------------------------------------------------------------
First $250 Million..................................................... 0.45%
Greater than $250 Million and less than or equal to $500 Million ...... 0.40%
Greater than $500 Million and less than or equal to $750 Million ...... 0.35%
Greater than $750 Million.............................................. 0.30%
Limitation of Liability. The proposed subadvisory agreement provides that Oak
Ridge shall not be liable to Pioneer or the portfolio for any losses, claims,
damages, liabilities or litigation incurred or suffered by Pioneer or the
portfolio as a result of any error of judgment or mistake of law by Oak Ridge
with respect to the portfolio, except that Oak Ridge shall be liable for and
shall indemnify Pioneer and the portfolio against any loss arising out of or
based on (i) Oak Ridge being in violation of any applicable federal or state
law, rule or regulation or any investment policy or restriction set forth in the
portfolio's prospectus or statement of additional information or any written
guidelines or instructions provided in writing to Oak Ridge by the trustees of
the Trust or Pioneer, (ii) the portfolio's failure to satisfy the
diversification or source of income requirements of Subchapter L orM of the
Internal Revenue Code of 1986, as amended, by reason of an act or omission of
Oak Ridge, unless acting at the direction of Pioneer, (iii) Oak Ridge's willful
misfeasance, bad faith or gross negligence generally in the performance of its
duties under the proposed subadvisory agreement or its reckless disregard of its
obligations and duties under the proposed subadvisory agreement, or (iv) the
portfolio being in violation of any applicable federal or state law, rule or
regulation or any written guidelines or instructions provided in writing to Oak
Ridge by the trustees of the Trust or Pioneer by reason of any action or
inaction by Oak Ridge.
Term, Termination. The proposed subadvisory agreement shall remain in force
provided its continuance is approved prior to December 31, 2005 by a majority of
the independent trustees and by either (i) a majority vote of the board of
trustees or (ii) the affirmative vote of a majority of the outstanding voting
securities of the portfolio. The proposed subadvisory agreement may be
terminated at any time on not more than sixty (60) days' nor less than thirty
(30) days' written notice without penalty by (a) Pioneer, (b) the Trust's board
of trustees, (c) a majority of the portfolio's outstanding voting securities, as
defined in the 1940 Act, or (d) Oak Ridge. Each proposed subadvisory agreement
shall automatically terminate in the event of its assignment or upon termination
of the investment advisory agreement between the portfolio and Pioneer.
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Similar funds
Oak Ridge serves as the investment subadviser to the portfolios and to another
similar Pioneer fund, the Pioneer Oak Ridge Large Cap Growth Fund. The fund pays
Pioneer a fee for managing the fund and to cover the cost of providing certain
services to the fund. Pioneer's annual fee is equal to 0.75% of the fund's
average daily net assets up to $1 billion and 0.70% on assets over $1 billion
and, as of [ , 2004], had net assets of $[]. The fee is normally computed daily
and paid monthly. Pioneer, and not the fund, pays a portion of the fee it
receives from the fund to Oak Ridge as compensation for Oak Ridge's subadvisory
services to the fund. Pioneer has contractually agreed not to impose all or a
portion of its management fee and, if necessary, to limit other ordinary
operating expenses to the extent required to reduce Class A expenses to 1.50% of
the average daily net assets attributable to Class A shares; the portion of fund
expenses attributable to Class B and Class C shares will be reduced only to the
extent such expenses are reduced for Class A shares. Pioneer may subsequently
recover reimbursed expenses (within three years of being incurred) from the fund
if the expense ratio of the Class A shares is less than the expense limitation
of the Class A shares. Each class will reimburse Pioneer no more than the amount
by which that class' expenses were reduced. Any differences in the fee waiver
and expense limitation among classes result from rounding in the daily
calculation of a class' net assets and expense limitation, which may exceed
0.01% annually. There can be no assurance that Pioneer will extend the expense
limitation beyond February 13, 2005. See the statement of additional information
for details regarding the expense limitation agreement.
Factors considered by the trustees
The trustees of the portfolio determined that the terms of the proposed
subadvisory agreement is fair and reasonable and that approval of the proposed
subadvisory agreement on behalf of the portfolio is in the best interest of the
portfolio and its shareholders. In evaluating the proposed subadvisory
agreements the trustees reviewed materials furnished by Pioneer and Oak Ridge,
including information regarding Oak Ridge, its personnel, operations and
financial condition and the services to be provided by Pioneer and Oak Ridge.
The trustees specifically considered the following as relevant to
their recommendations:(1) the nature and quality of the services provided by
Oak Ridge to the portfolio to date; (2) the investment performance of the
portfolio and Oak Ridge including: the favorable history, reputation,
qualification and background of Oak Ridge, as well as the qualifications of
its personnel and its financial condition; (3) that no change in the
operations of Oak Ridge is expected as a result of the Acquisition,
including no change in the portfolio managers for the portfolio; (4) the fact
that Pioneer will pay the compensation of Oak Ridge and that the management
fee paid by the portfolio will not be affected by the Acquisition; (5) the
potential benefits to the portfolio that may be realized from Oak Ridge as a
result of its affiliation with PGAM; and (6) other factors deemed relevant
by the trustees. The trustees relied upon comparisons of the services to be
rendered and the amounts to be paid under the subadvisory agreement with those
under other investment advisory arrangements with Oak Ridge and other
investment advisers.
Due to Oak Ridge's capacity as a subadviser who services are supervised by
Pioneer and whose compensation is the responsibility of Pioneer, the trustees
either did not consider, or considered as less relevant to their analysis,
the following factors: (1) the costs of the services to be provided and
profits to be realized by Oak Ridge and its affiliates from the
relationship with the portfolio; (2) the extent to which economies of scale
would be realized as the portfolio grows; and (3) whether fee levels reflect
these economies of scale for the benefit of the portfolio
shareholders.
Interim subadvisory agreement
Under the 1940 Act, shareholders must approve any new investment adviser to
the portfolio. However, Rule 15a-4 under the 1940 Act permits your trustees to
appoint a subadviser on an interim basis without prior shareholder approval if
the subadviser agrees to provide such services on the same terms as the previous
subadvisory agreement and approval of the new advisory agreement is submitted to
shareholders within 150 days. If Oak Ridge is not approved as subadviser to a
portfolio, Oak Ridge will not receive the fee under the current subadvisory
agreement but instead would be paid a fee based upon Oak Ridge's cost in
providing subadvisory services to the portfolio. At the time of the mailing of
this proxy statement, Pioneer and Oak Ridge anticipate that the closing of the
Acquisition will occur after the portfolio's shareholder meeting. However, in
the event that Pioneer and Oak Ridge receive the necessary approvals to close
the Acquisition prior to the date of the meeting, the board of trustees
determine that it was appropriate to reappoint Oak Ridge on an interim basis.
Approval of the new subadvisory agreement shall also constitute approval of the
interim subadvisory agreement.
Trustees' recommendation
At a meeting of the board of trustees for the portfolio held on July 8,
2004, the trustees, including all of the independent trustees, unanimously
approved as in the best interest of shareholders and voted to recommend that the
shareholders of the portfolio approve, a proposal to adopt a subavisory
agreement with Oak Ridge. At such meeting, the trustees, including all of the
independent trustees also unanimously approved as in the best interest of
shareholders and voted to recommend that the shareholders of the portfolio
approve, an interim subadvisory agreement to take effect if the closing of the
Acquisition occurs prior to the shareholders meeting. Based on their evaluation
of the materials presented and assisted by the advice of independent counsel,
the trustees at the meeting, including all of the independent trustees, Oak
Ridge, Pioneer or UniCredito, unanimously concluded that the terms of each
proposed subadvisory agreement and interim subadvisory agreement are reasonable,
fair and in the best interest of the portfolio and its shareholders and that the
fees
5
provided therein are fair and reasonable in light of the usual and customary
charges made by others for services of the same nature and quality. The
trustees, by a unanimous vote cast at the meeting, approved and voted to
recommend to the shareholders of the portfolio that they approve the proposed
subadvisory agreement and the interim subadvisory agreement. The board of
trustees approved and recommended such actions with respect to both the initial
acquisition of a 49% interest in Oak Ridge and the rights to acquire, in two
years and twelve years, respectively, from the closing of the Acquisition, a
further 11% interest and all of the remaining interests in Oak Ridge.
If the shareholders of the portfolio do not approve the proposed
subadvisory agreement with respect to their portfolio and the Acquisition is
consummated, the trustees of the Trust would consider what further action to
take consistent with their fiduciary duties to the portfolio. Such actions may
include re-solicitation of shareholders with respect to this proposal or having
Pioneer manage the portfolio without the use of a subadviser.
Required vote
As provided under the 1940 Act, approval of each proposed subadvisory
agreement requires the vote of a majority of the outstanding voting securities
of the portfolio. In accordance with the 1940 Act, a "majority of the
outstanding voting securities" of a portfolio means the lesser of (1) 67% or
more of the shares of the portfolio present at a shareholder meeting if the
owners of more than 50% of the shares of the portfolio then outstanding are
present in person or by proxy, or (2) more than 50% of the outstanding shares of
the portfolio entitled to vote at the shareholder meeting.
However, in addition to the legal requirement under the 1940 Act, the
consummation of the Acquisition is conditioned upon the satisfaction or waiver
of several requirementsin addition to the approval by shareholders of the
proposed subadvisory agreement for the portfolio, including consent from Oak
Ridge's managed account clients (including the portfolios) constituting, by
market value, at least $1.2 billion in assets under management, and obtaining
any necessary regulatory approvals (including from the Bank of Italy).
Recommendation
For the reasons set forth above, the trustees unanimously recommend that
shareholders of the portfolio vote in favor of the proposals to approve the
proposed subadvisory agreements and the interim subadvisory agreements, if any.
INFORMATION CONCERNING THE MEETING
Outstanding shares and quorum
As of the record date, ____________ shares of beneficial interest of the
portfolio were outstanding. Only shareholders of record as of the record date
are entitled to notice of and to vote at the meeting. One-third of the
outstanding shares of the portfolio that are entitled to vote will be considered
a quorum for the transaction of business by the portfolio.
Ownership of shares of the portfolio
To the knowledge of the Trust, as of [ ], the following persons owned of
record or beneficially 5% or more of the outstanding Class II shares of the
portfolio:
No. and class of Percentage
---------------- ----------
Name and address shares owned of class (%)
---------------- ------------ ------------
[Note: Please update.]
Shareholder proposals
The portfolio is required to hold annual meetings of shareholders and does
not currently intend to hold an annual meeting of shareholders in 2004 or 2005.
Any shareholder proposal intended to be presented at the next meeting of
shareholders of the portfolio, whenever held, must be received at the Trust's
offices, 60 State Street, Boston, Massachusetts 02109, at a reasonable time
prior to the trustees' solicitation of proxies for the meeting. The submission
by a shareholder of a proposal for inclusion in a proxy statement does not
guarantee that it will be included. Shareholder proposals are subject to certain
regulations under the federal securities laws.
Shares held in retirement plans
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The trustee or custodian of certain retirement plans is required to vote
any unvoted portfolio shares held in such plans in proportion to the percentages
voted by shareholders in person or by proxy.
Proxies, quorum and voting at the meeting
Any shareholder who has given his or her proxy to someone has the power to
revoke that proxy at any time prior to its exercise by executing a superseding
proxy or by submitting a notice of revocation to the secretary of the Trust on
behalf of a portfolio. In addition, although mere attendance at the shareholder
meeting will not revoke a proxy, a shareholder present at the shareholder
meeting may withdraw his or her proxy and vote in person. All properly executed
and unrevoked proxies received in time for the shareholder meeting will be voted
in accordance with the instructions contained in the proxies. If no instruction
is given, the persons named as proxies will vote the shares represented thereby
in favor of the proposals described above and will use their best judgment in
connection with the transaction of such other business as may properly come
before the shareholder meeting or any adjournment or postponement thereof.
One-third of the outstanding shares of the portfolio that are entitled to
vote, present in person or represented by proxy, constitutes a quorum for the
transaction of business with respect to the proposal; however, since each
proposal must be approved by a "majority of the outstanding voting securities",
as defined in the 1940 Act, at least 50% of the outstanding shares must be
present in person or by proxy at the meeting to approve the proposals. In the
event that at the time any session of the shareholder meeting is called to
order, a quorum is not present in person or by proxy, the persons named as
proxies may vote those proxies that have been received to adjourn the
shareholder meeting to a later date. In the event that a quorum is present but
sufficient votes in favor of any of the proposals have not been received, the
persons named as proxies may propose one or more adjournments of the shareholder
meeting to permit further solicitation of proxies with respect to such proposal.
Any such adjournment will require the affirmative vote of more than one-half of
the shares of the portfolio present in person or by proxy at the session of the
shareholder meeting to be adjourned. The persons named as proxies will vote
those proxies that they are entitled to vote in favor of the proposal in favor
of such an adjournment and will vote those proxies required to be voted against
the proposal against any such adjournment. A shareholder vote may be taken on
any proposal in the proxy statement prior to such adjournment if sufficient
votes for its approval have been received and it is otherwise appropriate. Such
vote will be considered final regardless of whether the meeting is adjourned to
permit additional solicitation with respect to any other proposal.
Shares of the portfolio represented in person or by proxy, including shares
that abstain or do not vote with respect to the proposal, will be counted for
purposes of determining whether there is a quorum at the shareholder meeting.
Accordingly, an abstention from voting has the same effect as a vote against the
proposal. If a broker or nominee holding shares in "street name" indicates on
the proxy card that it does not have discretionary authority to vote on the
proposal, those shares will not be considered present and entitled to vote on
that proposal. Thus, a "broker non-vote" has no effect on the voting in
determining whether the proposal has been adopted by 67% or more of the
portfolio's shares present at the shareholder meeting, if more than 50% of the
outstanding shares (excluding the "broker non-votes") of the portfolio are
present or represented. For purposes of determining whether the proposal has
been adopted by more than 50% of the outstanding shares of the portfolio, a
"broker non-vote" has the same effect as a vote against that proposal because
shares represented by a "broker non-vote" are considered to be outstanding
shares.
Voting by contract owners
Because the insurance company that issued your variable annuity or variable
life insurance contract is the owner of record of shares of the portfolio, your
vote will instruct the insurance company how to vote the shares of the portfolio
attributable to your contract. The insurance company will vote all of the shares
of the portfolio which it holds that are not attributable to any contract in the
same proportion as the voting instructions received from its contract owners
with respect to the portfolio. The insurance company will also vote those shares
for which no timely voting instruction was received from the contract owner in
the same proportion as the voting instructions timely received from its other
contract owners with respect to the portfolio.
Householding
If you have previously given the portfolio permission to do so, the
portfolio may send a single proxy statement to your residence for you and any
other member of your household who has an account with the portfolio. If you
wish to revoke your consent to this practice, you may do so by notifying your
portfolio, by phone or in writing by using the telephone number and address on
page 1 of the proxy. The portfolio will begin mailing separate proxy statements,
prospectuses and shareholder reports to you within 30 days after receiving your
notice.
Other business
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While the shareholder meeting has been called to transact any business that
may properly come before it, the only matters that the trustees intend to
present are those matters stated in the attached notice of special meeting of
shareholders. However, if any additional matters properly come before the
shareholder meeting, and on all matters incidental to the conduct of the
meeting, the persons named in the enclosed proxy intend to vote the proxy in
accordance with their judgment on such matters unless instructed to the
contrary.
Method of solicitation and expenses
The cost of preparing, assembling and mailing this proxy statement, the
attached notice of special meeting of shareholders and the accompanying proxy
card will be borne by Pioneer. In addition to soliciting proxies by mail,
Pioneer may, at its expense, have one or more of the Trust's officers,
representatives or compensated third-party agents, including Pioneer, Oak Ridge,
PIMSS and PFD and, with respect to contract owners, one or more officers, agents
or representatives of the insurance companies issuing the contracts, aid in the
solicitation of proxies by personal interview or telephone and telegraph and may
request brokerage houses and other custodians, nominees and fiduciaries to
forward proxy soliciting material to the beneficial owners of the shares held of
record by such persons. The portfolio may also arrange to have votes recorded by
telephone, the Internet or other electronic means. The voting procedures used in
connection with such voting methods are designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares in
accordance with their instructions and to confirm that their instructions have
been properly recorded. If these procedures were subject to a successful legal
challenge, such votes would not be counted at the shareholder meeting. The
portfolio is not aware of any such challenge at this time. In the case of
telephone voting, shareholders would be called at the telephone number PIMSS has
in its records for their accounts, and would be asked for their Social Security
number or other identifying information. The shareholders would then be given an
opportunity to authorize proxies to vote their shares at the meeting in
accordance with their instructions. In the case of automated telephone and
Internet voting, shareholders would be required to provide their Social Security
number or other identifying information and would receive a confirmation of
their instructions.
Persons holding shares as nominees will be reimbursed by Pioneer, upon
request, for the reasonable expenses of mailing soliciting materials to the
principals of the accounts.
[ , 2004]
8
EXHIBIT A
SUB-ADVISORY AGREEMENT
SUB-ADVISER AGREEMENT made as of this 12th day of March, 2004 by and between
PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation and a member of the
UniCredito Italiano banking group, register of banking groups with its principal
place of business at 60 State Street, Boston, Massachusetts 02109 (the
"Adviser"), and OAK RIDGE INVESTMENTS, LLC, an Illinois limited liability
company with its principal place of business at 10 South LaSalle Street, Suite
1050, Chicago, Illinois 60603 ("Sub-Adviser").
WITNESSETH
WHEREAS, the Adviser serves as investment manager to Pioneer Oak Ridge Large Cap
Growth VCT Portfolio, a series of Pioneer Variable Contracts Trust (the "Fund"),
pursuant to the Management Agreement between the Fund and the Adviser dated
March 12, 2004 (the "Management Agreement");
WHEREAS, pursuant to authority granted to the Adviser by the Board of Trustees
of the Fund (the "Board") and pursuant to the provisions of the Management
Agreement, the Adviser has selected the Sub-Adviser to act as investment
sub-adviser of the Fund and to provide certain other services, as more fully set
forth below, and to perform such services under the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits set forth
herein, the Adviser and the Sub-Adviser do hereby agree as follows:
1. The Sub-Adviser's Services.
(a) Investment Services. The Sub-Adviser shall act as sub-investment
adviser with respect to the Fund. In such capacity, the Sub-Adviser shall,
subject to the supervision of the Adviser and the Board, regularly provide
the Fund with investment research, advice and supervision and shall furnish
continuously an investment program for the Fund, consistent with the
investment objectives and policies of the Fund. The Sub-Adviser shall
determine, from time to time, what securities shall be purchased for the
Fund, what securities shall be held or sold by the Fund and what portion of
the Fund's assets shall be held uninvested in cash, subject always to the
provisions of the Fund's Certificate of Trust, Agreement and Declaration of
Trust, By-Laws and its registration statement on Form N-1A (the
"Registration Statement") under the Investment Company Act of 1940, as
amended (the "1940 Act"), and under the Securities Act of 1933, as amended
(the "1933 Act"), covering the Fund's shares, as filed with the Securities
and Exchange Commission (the "Commission"), and to the investment
objectives, policies and restrictions of the Fund, as each of the same
shall be from time to time in effect. To carry out such obligations, the
Sub-Adviser shall exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund itself might or could
do with respect to purchases, sales or other transactions, as well as with
respect to all other such things necessary or incidental to the furtherance
or conduct of such purchases, sales or other transactions. Notwithstanding
the foregoing, the Sub-Adviser shall, upon written instructions from the
Adviser, effect such portfolio transactions for the Fund as the Adviser may
from time to time direct. No reference in this Agreement to the Sub-Adviser
having full discretionary authority over the Fund's investments shall in
any way limit the right of the Adviser, in its sole discretion, to
establish or revise policies in connection with the management of the
Fund's assets or to otherwise exercise its right to control the overall
management of this Fund's assets.
(b) Compliance. The Sub-Adviser agrees to comply with the requirements
of the 1940 Act, the Investment Advisers Act of 1940 (the "Advisers Act"),
the 1933 Act, the Securities Exchange Act of 1934, as amended (the "1934
Act"), the Commodity Exchange Act and the respective rules and regulations
thereunder, as applicable, as well as with all other applicable federal and
state laws, rules, regulations and case law that relate to the services and
relationships described hereunder and to the conduct of its business as a
registered investment adviser. The Sub-Adviser also agrees to comply with
the objectives, policies and restrictions
1
set forth in the Registration Statement, as amended or supplemented, of the
Fund, and with any policies, guidelines, instructions and procedures
approved by the Board or the Adviser and provided to the Sub-Adviser. In
selecting the Fund's portfolio securities and performing the Sub-Adviser's
obligations hereunder, the Sub-Adviser shall cause the Fund to comply with
the requirements of Subchapter L and M of the Internal Revenue Code of
1986, as amended (the "Code"), for qualification as a regulated investment
company. The Sub-Adviser shall maintain compliance procedures for the Fund
that it reasonably believes are adequate to ensure the Fund's compliance
with the foregoing. The Sub-Adviser shall also maintain compliance
procedures that it reasonably believes are adequate to ensure its
compliance with the Advisers Act. No supervisory activity undertaken by the
Adviser shall limit the Sub-Adviser's full responsibility for any of the
foregoing.
(c) Proxy Voting. The Board has the authority to determine how proxies
with respect to securities that are held by the Fund shall be voted, and
the Board has initially determined to delegate the authority and
responsibility to vote proxies for the Fund's securities to the Adviser. So
long as proxy voting authority for the Fund has been delegated to the
Adviser, the Sub-Adviser shall provide such assistance to the Adviser with
respect to the voting of proxies for the Fund as the Adviser may from time
to time reasonably request, and the Sub-Adviser shall promptly forward to
the Adviser any information or documents necessary for the Adviser to
exercise its proxy voting responsibilities. The Sub-Adviser shall not vote
proxies with respect to the securities held by the Fund unless and until
the Board or the Adviser delegates such authority and responsibility to the
Sub-Adviser or otherwise instructs the Sub-Adviser to do so in writing,
whereupon the Sub-Adviser shall carry out such responsibility in accordance
with the Fund's Proxy Voting Policies and any instructions that the Board
or the Adviser shall provide from time to time and shall provide such
reports and keep such records relating to proxy voting as the Board or the
Adviser may reasonably request or as may be necessary for the Fund to
comply with the 1940 Act and other applicable law. Any such delegation of
proxy voting responsibility to the Sub-Adviser may be revoked or modified
by the Board or the Adviser at any time.
(d) Recordkeeping. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Fund, except as otherwise provided herein or as may be necessary for the
Sub-Adviser to supply to the Adviser, the Fund or its Board the information
required to be supplied under this Agreement.
The Sub-Adviser shall maintain separate books and detailed records of
all matters pertaining to the Fund's assets advised by the Sub-Adviser
required by Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Adviser, custodian or transfer agent appointed by the
Fund) relating to its responsibilities provided hereunder with respect to
the Fund, and shall preserve such records for the periods and in a manner
prescribed therefore by Rule 31a-2 under the 1940 Act (the "Fund's Books
and Records"). The Fund's Books and Records shall be available to the
Adviser and the Board at any time upon request, shall be delivered to the
Fund upon the termination of this Agreement and shall be available for
telecopying without delay during any day the Fund is open for business.
(e) Holdings Information and Pricing. The Sub-Adviser shall keep the
Fund and the Adviser informed of developments materially affecting the
Fund's holdings, and shall, on its own initiative, furnish the Fund and the
Adviser from time to time with whatever information the Sub-Adviser
believes is appropriate for this purpose. The Sub-Adviser agrees to
immediately notify the Adviser if the Sub-Adviser believes that the market
value of any security held by the Fund is not an appropriate fair value and
provide pricing information to the Adviser and/or the Fund's pricing agent
as may be necessary to make determinations of the fair value of certain
portfolio securities when market quotations are not readily available or
such information is otherwise required in accordance with the 1940 Act and
the Fund's valuation procedures for the purpose of calculating the Fund's
net asset value in accordance with procedures and methods established by
the Board.
(f) Cooperation with Agents of the Adviser and the Fund. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to
the Adviser, the Fund, the Fund's custodian and foreign sub-custodians, the
Fund's pricing agents and all other agents and representatives of the Fund
and the Adviser, such information with respect to the Fund as they may
reasonably
2
request from time to time in the performance of their obligations, provide
prompt responses to reasonable requests made by such persons and establish
appropriate interfaces with each so as to promote the efficient exchange of
information and compliance with applicable laws and regulations.
2. Code of Ethics. The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule
17j-1 under the 1940 Act, which it will provide to the Adviser and the
Fund. The Sub-Adviser shall ensure that its Access Persons (as defined
in the Sub-Adviser's Code of Ethics) comply in all respects with the
Sub-Adviser's Code of Ethics, as in effect from time to time. Upon
request, the Sub-Adviser shall provide the Fund with a (i) a copy of
the Sub-Adviser's current Code of Ethics, as in effect from time to
time, and (ii) certification that it has adopted procedures reasonably
necessary to prevent Access Persons from engaging in any conduct
prohibited by the Sub-Adviser's Code of Ethics. Annually, the
Sub-Adviser shall furnish a written report, which complies with the
requirements of Rule 17j-1, concerning the Sub-Adviser's Code of
Ethics to the Fund and the Adviser. The Sub-Adviser shall respond to
requests for information from the Adviser as to violations of the Code
by Access Persons and the sanctions imposed by the Sub-Adviser. The
Sub-Adviser shall immediately notify the Adviser of any material
violation of the Code, whether or not such violation relates to any
security held by the Fund.
3. Information and Reporting. The Sub-Adviser shall keep the Fund and the
Adviser informed of developments relating to its duties as Sub-Adviser
of which the Sub-Adviser has, or should have, knowledge that
materially affect the Fund. In this regard, the Sub-Adviser shall
provide the Fund, the Adviser, and their respective officers with such
periodic reports concerning the obligations the Sub-Adviser has
assumed under this Agreement as the Fund and the Adviser may from time
to time reasonably request.
(a) Notification of Breach / Compliance Reports. The Sub-Adviser shall
notify the Adviser immediately upon detection of (i) any failure to manage
the Fund in accordance with its investment objectives and policies or any
applicable law; or (ii) any breach of any of the Fund's or the Adviser's
policies, guidelines or procedures. In addition, the Sub-Adviser shall
provide a monthly certification that the Fund is in compliance with its
investment objectives and policies, applicable law, including, but not
limited to the 1940 Act and Subchapters L and M of the Code, and the Fund's
and the Adviser's policies, guidelines or procedures. The Sub-Adviser
acknowledges and agrees that the Adviser may, in its discretion, provide
such monthly compliance certifications to the Board. The Sub-Adviser agrees
to correct any such failure promptly and to take any action that the
Adviser may reasonably request in connection with any such breach. The
Sub-Adviser shall also provide the officers of the Fund with supporting
certifications in connection with such certifications of the Fund's
financial statements and disclosure controls pursuant to the Sarbanes-Oxley
Act. The Sub-Adviser will promptly notify the Adviser if (i) the
Sub-Adviser is served or otherwise receives notice of any action, suit,
proceeding, inquiry or investigation, at law or in equity, before or by any
court, public board, or body, involving the affairs of the Fund (excluding
class action suits in which the Fund is a member of the plaintiff class by
reason of the Fund's ownership of shares in the defendant) or the
compliance by the Sub-Adviser with the federal or state securities laws or
(ii) the controlling stockholder or executive committee of the Sub-Adviser
changes, there is otherwise an actual change in control (whether through
sale of all or substantially all the assets of the Sub-Adviser or a
material change in management of the Sub-Adviser) or an "assignment" (as
defined in the 1940 Act) has or is proposed to occur.
(b) Inspection. Upon request, with at least 24 hours advance notice,
the Sub-Adviser agrees to make its records and premises (including the
availability of the Sub-Adviser's employees for interviews) to the extent
that they relate to the conduct of services provided to the Fund or the
Sub-Adviser's conduct of its business as an investment adviser available
for compliance audits by the Adviser or the Fund's employees, accountants
or counsel; in this regard, the Fund and the Adviser acknowledge that the
Sub-Adviser shall have no obligations to make available proprietary
information unrelated to the services provided to the Fund or any
information related to other clients of the Sub-Adviser, except to the
extent necessary for the Adviser to confirm the absence of any conflict of
interest and compliance with any laws, rules or regulations in the
management of the Fund.
3
(c) Board and Filings Information. The Sub-Adviser will also provide
the Adviser with any information reasonably requested regarding its
management of the Fund required for any meeting of the Board, or for any
shareholder report, amended registration statement, proxy statement, or
prospectus supplement to be filed by the Fund with the Commission. The
Sub-Adviser will make its officers and employees available to meet with the
Board from time to time on due notice to review the investments of the Fund
in light of current and prospective economic and market conditions and
shall furnish to the Board such information as may reasonably be necessary
in order for the Board to evaluate this Agreement or any proposed
amendments thereto.
(d) Transaction Information. The Sub-Adviser shall furnish to the
Adviser such information concerning portfolio transactions as may be
necessary to enable the Adviser to perform such compliance testing on the
Fund and the Sub-Adviser's services as the Adviser may, in its sole
discretion, determine to be appropriate. The provision of such information
by the Sub-Adviser in no way relieves the Sub-Adviser of its own
responsibilities for ensuring the Fund's compliance.
4. Brokerage.
(a) Principal and Agency Transactions. In connection with purchases or
sales of securities for the account of the Fund, neither the Sub-Adviser
nor any of its directors, officers, employees or affiliated persons will
act as a principal or agent or receive any commission except as permitted
by the 1940 Act.
(b) Placement of Orders. The Sub-Adviser shall arrange for the placing
of all orders for the purchase and sale of securities for the Fund's
account with brokers or dealers selected by the Sub-Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Sub-Adviser is directed at all times to seek for the Fund the most
favorable execution and net price available except as described herein. It
is also understood that it is desirable for the Fund that the Sub-Adviser
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 Fund than may result when allocating
brokerage to other brokers, as consistent with Section 28(e) of the 1934
Act and any Commission staff interpretations thereof.. Therefore, the
Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the Adviser
and the Board 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 Sub-Adviser in connection with its or its
affiliates' services to other clients. In addition, subject to the
Sub-Adviser's obligation to seek the most favorable execution and net price
available, the Sub-Adviser may consider the sale of the Fund's shares in
selecting brokers and dealers.
(c) Aggregated Transactions. On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of the Fund
as well as other clients of the Sub-Adviser, the Sub-Adviser may, to the
extent permitted by applicable law and regulations, aggregate the order for
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 or futures contracts so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Sub-Adviser in
the manner the Sub-Adviser considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to such other
clients.
(d) Affiliated Brokers. The Sub-Adviser or any of its affiliates may
act as broker in connection with the purchase or sale of securities or
other investments for the Fund, subject to: (a) the requirement that the
Sub-Adviser seek to obtain best execution and price within the policy
guidelines determined by the Board and set forth in the Fund's current
prospectus and SAI; (b) the provisions of the Investment Company Act, the
Advisers Act and the rules of the Commission under such Acts; (c) the
provisions of the 1934 Act; and (d) other provisions of applicable law.
These brokerage services are not within the scope of the duties of the
Sub-Adviser under this Agreement. Subject to the requirements of applicable
law and any procedures adopted by the Board, the Sub-Adviser or its
affiliates may receive brokerage commissions, fees or other remuneration
from the Fund for these services in addition to the Sub-Adviser's fees for
services under this Agreement.
4
(e) Alternative Trading Arrangements. From time to time the
Sub-Adviser and the Adviser may agree that the Sub-Advisor will place some
or all of the trades for the Fund through the Adviser's trading desk. In
such event, the Adviser shall have complete authority to determine the
brokers or dealers through which any trade by the Fund is placed through
the Advisers trading desk and as to the timing and manner of the execution
of any such trade, although the Sub-Adviser may give guidance. In such
event, the Adviser shall be responsible for obtaining best execution on
behalf of the Fund on trades placed by the Adviser and the Sub-Adviser
shall remain responsible for all other compliance issues in connection with
the Fund's portfolio transactions, including the appropriate and accurate
placement of orders on behalf of the Fund into the Adviser's trading system
and confirming the appropriate settlement of the transactions.
5. Custody. Nothing in this Agreement shall permit the Sub-Adviser to
take or receive physical possession of cash, securities or other
investments of the Fund.
6. Allocation of Charges and Expenses. The Sub-Adviser will bear its own
costs of providing services hereunder. Other than as herein
specifically indicated, the Sub-Adviser shall not be responsible for
the Fund's or the Adviser's expenses, including brokerage and other
expenses incurred in placing orders for the purchase and sale of
securities and other investment instruments. Specifically, the
Sub-Adviser will not be responsible for expenses of the Fund or the
Adviser, as the case may be, including, but not limited to, the
following: (i) charges and expenses for accounting, pricing and
appraisal services and related overhead, including, to the extent such
services are performed by personnel of the Sub-Adviser 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 Fund;
(iv) underwriting commissions and issue and transfer taxes chargeable
to the Fund in connection with securities transactions to which the
Fund 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 Fund to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Fund's shares with federal regulatory
agencies, state or blue sky securities agencies and foreign
jurisdictions, including the preparation of prospectuses and
statements of additional information for filing with such regulatory
authorities; (vii) all expenses of shareholders' and Board 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 Fund and
the Board; (ix) any distribution fees paid by the Fund in accordance
with Rule 12b-1 promulgated by the Commission pursuant to the 1940
Act; (x) compensation and expenses of the Board; (xi) the cost of
preparing and printing share certificates; (xii) interest on borrowed
money, if any; and (xiii) any other expense that the Fund, the Adviser
or any other agent of the Fund may incur (A) as a result of a change
in the law or regulations, (B) as a result of a mandate from the Board
with associated costs of a character generally assumed by similarly
structured investment companies or (C) that is similar to the expenses
listed above, and that is approved by the Board (including a majority
of the Independent Trustees) as being an appropriate expense of the
Fund. The Fund or the Adviser, as the case may be, shall reimburse the
Sub-Adviser for any such expenses or other expenses of the Fund or the
Adviser, as may be reasonably incurred by such Sub-Adviser on behalf
of the Fund or the Adviser. The Sub-Adviser shall keep and supply to
the Fund and the Adviser adequate records of all such expenses.
7. Representations, Warranties and Covenants.
(a) Properly Licensed. The Sub-Adviser is registered as an investment
adviser under the Advisers Act, and will remain so registered for the
duration of this Agreement. The Sub-Adviser agrees to promptly notify the
Adviser of the occurrence of any event that would disqualify the
Sub-Adviser from serving as an investment adviser to an investment company.
The Sub-Adviser is in compliance in all material respects with all
applicable federal and state law in connection with its investment
management operations.
5
(b) ADV Disclosure. The Sub-Adviser has provided the Adviser with a
copy of its Form ADV as most recently filed with the SEC and will, promptly
after filing any amendment to its Form ADV with the SEC, furnish a copy of
such amendments to the Adviser. The information contained in the
Sub-Adviser's Form ADV is accurate and complete in all material respects
and does not omit to state any material fact necessary in order to make the
statements made, in light of the circumstances under which they were made,
not misleading.
(c) Fund Disclosure Documents. The Sub-Adviser has reviewed and will
in the future review, the Registration Statement, and any amendments or
supplements thereto, the annual or semi-annual reports to shareholders,
other reports filed with the Commission and any marketing material of the
Fund (collectively the "Disclosure Documents") and represents and warrants
that with respect to disclosure about the Sub-Adviser, the manner in which
the Fund is managed or information relating directly or indirectly to the
Sub-Adviser, such Disclosure Documents contain or will contain, as of the
date thereof, no untrue statement of any material fact and does not omit
any statement of material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading.
(d) No Statutory Disqualification As An Investment Adviser. The
Sub-Adviser is not prohibited by the Advisers Act or the 1940 Act from
performing the services contemplated by this Agreement, and to the best
knowledge of the Sub-Adviser, there is no proceeding or investigation that
is reasonably likely to result in the Sub-Adviser being prohibited from
performing the services contemplated by this Agreement.
(e) Use Of The Name "Oak Ridge". The Sub-Adviser has the right to use
the name "Oak Ridge" in connection with its services to the Fund and that
the Adviser and the Fund shall have the right to use the name "Oak Ridge"
in connection with the management and operation of the Fund and its assets,
and that there are no threatened or existing actions, claims, litigation or
proceedings that would adversely effect or prejudice the rights of the
Sub-Adviser, Adviser or Fund to use the name "Oak Ridge".
(f) Insurance. The Sub-Adviser shall maintain errors and omissions and
fidelity insurance coverage in an amount agreed upon from time to time by
the Adviser and the Sub-adviser and from an insurance provider that is in
the business of regularly providing insurance coverage to investment
advisers. The Sub-Adviser shall provide prior written notice to the Adviser
(i) of any material changes in its insurance policies or insurance
coverage; or (ii) if any material claims will be made on its insurance
policies. Furthermore, it shall upon request provide to the Adviser any
information it may reasonably require concerning the amount of or scope of
such insurance. The Sub-Adviser's insurance shall, at a minimum, cover
errors and omissions of the Sub-Adviser.
(g) Competent Staff. The Sub-Adviser shall ensure that sufficient and
competent investment management, administrative and compliance staff
experienced in managing accounts similar to the Fund shall have charge at
all times of the conduct of, and shall maintain close supervision of, the
investment and management of the Fund. For the avoidance of doubt, the
Sub-Adviser shall ensure that any affiliate or third party to whom its
duties have been delegated, shall comply with the foregoing.
(h) No Detrimental Agreement. The Sub-Adviser represents and warrants
that it has no arrangement or understanding with any party, other than the
Fund, that would influence the decision of the Sub-Adviser with respect to
its selection of securities for the Fund, and that all selections shall be
done in accordance with what is in the best interest of the Fund.
(i) Conflicts. The Sub-Adviser shall act honestly, in good faith and
in the best interests of the Fund including requiring any of its personnel
with knowledge of the Fund's activities to place the interest of the Fund
first, ahead of their own interests, in all personal trading scenarios that
may involve a conflict of interest with the Account.
6
(j) Representations. The representations and warranties in this
Section 7 shall be deemed to be made on the date this Agreement is executed
and at the time of delivery of the monthly compliance report required by
Section 3(a), whether or not specifically referenced in such certificate.
8. The Name "Oak Ridge". The Sub-Adviser consents to the use by the Fund
of the name "Oak Ridge " as part of the name of the Fund. The
foregoing authorization by the Sub-Adviser to the Fund to use said
name as part of the name of the Fund is not exclusive of the right of
the Sub-Adviser itself to use, or to authorize others to use, the
same; the Fund acknowledges and agrees that as between the Fund and
the Sub-Adviser, the Sub-Adviser has the exclusive right so to use, or
authorize others to use, said name and the Fund agrees to take such
action as may reasonably be requested by the Sub-Adviser to give full
effect to the provisions of this section. Without limiting the
generality of the foregoing, the Fund agrees that, upon any
termination of this Agreement, the Fund will, at the request of the
Sub-Adviser, use its best efforts to change the name of the Fund
within three months of its receipt of the Sub-Adviser's request so as
to eliminate all reference, if any, to the name "Oak Ridge" and will
not thereafter transact any business using the name "Oak Ridge" in the
name of the Fund; provided, however, that the Fund and the Adviser may
continue to use beyond such date any supplies of prospectuses,
marketing materials and similar documents that the Adviser or its
affiliates had on hand at the date of such name change.
9. Sub-Adviser's Compensation. The Adviser shall pay to the Sub-Adviser,
as compensation for the Sub-Adviser's services hereunder, a fee,
determined as described in Schedule A that is attached hereto and made
a part hereof. Such fee shall be computed daily and paid monthly in
arrears by the Adviser. The Fund shall have no responsibility for any
fee payable to the Sub-Adviser. In the event that the fee paid to the
Adviser for managing the Fund is reduced by regulatory authorities or
the Board for any reason whatsoever, the fee hereunder shall be
subject to the same percentage reduction.
The method for determining net assets of the Fund for purposes hereof shall
be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described
in the Fund's prospectus. 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.
10. Independent Contractor. In the performance of its duties hereunder,
the Sub-Adviser is and shall be an independent contractor and, unless
otherwise expressly provided herein or otherwise authorized in
writing, shall have no authority to act for or represent the Fund or
the Adviser in any way or otherwise be deemed to be an agent of the
Fund or the Adviser. If any occasion should arise in which the
Sub-Adviser gives any advice to its clients concerning the shares of
the Fund, the Sub-Adviser will act solely as investment counsel for
such clients and not in any way on behalf of the Fund.
11. Assignment and Amendments. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change in control of the Adviser or the
Sub-Adviser, as defined in the 1940 Act, or (ii) in the event of the
termination of the Management Agreement; provided that such
termination shall not relieve the Adviser or the Sub-Adviser of any
liability incurred hereunder.
This Agreement 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.
12. Duration and Termination.
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(a) This Agreement shall become effective as of the date executed and
shall remain in full force and effect continually thereafter, subject to
renewal as provided in Section 12(d) and unless terminated automatically as
set forth in Section 11 hereof or until terminated as follows:
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the
Sub-Adviser. In addition, the Fund may cause this Agreement to terminate
either (i) by vote of its Board or (ii) upon the affirmative vote of a
majority of the outstanding voting securities of the Fund; or
(c) The Sub-Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser; or
(d) This Agreement shall automatically terminate on December 31st of
any year, beginning on December 31, 2005, in which its terms and renewal
shall not have been approved by (A) (i) a majority vote of the Board or
(ii) the affirmative vote of a majority of the outstanding voting
securities of the Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for their approval
and such shareholders fail to approve such continuance of this Agreement as
provided herein, the Sub-Adviser may continue to serve hereunder as to the
Fund in a manner consistent with the 1940 Act and the rules and regulations
thereunder; and (B) a majority vote of the Trustees who are not "interested
persons" (as set forth in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission under the 1940 Act) of the
Fund, the Adviser or the Sub-Adviser, at a meeting called for the purpose
of voting on such approval.
(e) For the purposes of this Agreement, "Affirmative vote of a
majority of the outstanding voting securities of the Fund" shall have the
meaning set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations
of the staff of the Commission.
13. Liability of the Sub-Adviser. The Sub-Adviser shall not be liable to
the Adviser Indemnitees (as defined below) for any losses, claims,
damages, liabilities or litigation (including legal and other
expenses) incurred or suffered by an Adviser Indemnitee as a result of
any error of judgment or mistake of law by the Sub-Adviser with
respect to a Fund, except that nothing in this Agreement shall operate
or purport to operate in any way to exculpate, waive or limit the
liability of the Sub-Adviser for, and the Sub-Adviser shall indemnify
and hold harmless the Adviser, the Fund and all affiliated persons
thereof (within the meaning of Section 2(a)(3) of the 1940 Act) and
all controlling persons (as described in Section 15 of the 1933 Act)
(collectively, the "Adviser Indemnitees") against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal
and other expenses) by reason of or arising out of: (a) the
Sub-Adviser being in violation of any applicable federal or state law,
rule or regulation or any investment policy or restriction set forth
in the Fund's Registration Statement or any written guidelines or
instruction provided in writing by the Board or the Adviser, (b) the
Fund's failure to satisfy the diversification or source of income
requirements of Subchapter L or M of the Code by reason of any action
or omission of the Sub-Adviser, unless acting at the direction of the
Adviser, (c) the Sub-Adviser's willful misfeasance, bad faith or gross
negligence generally in the performance of its duties hereunder or its
reckless disregard of its obligations and duties under this Agreement
or (d) the Fund being in violation of any applicable federal or state
law, rule or regulation or any investment policy or restriction set
forth in the Fund's Registration Statement or any written guidelines
or instruction provided in writing by the Board or the Adviser, by
reason of any action or omission of the Sub-Adviser.
14. Enforceability. Any term or provision of this Agreement which is
invalid or
8
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. Limitation of Liability. The parties to this Agreement acknowledge and
agree that all litigation arising hereunder, whether direct or
indirect, and of any and every nature whatsoever shall be satisfied
solely out of the assets of the Fund and that no Trustee, officer or
holder of shares of beneficial interest of the Fund shall be
personally liable for any of the foregoing liabilities. The Fund's
Certificate of Trust, as amended from time to time, is on file in the
Office of the Secretary of State of the State of Delaware. Such
Certificate of Trust and the Fund's Agreement and Declaration of Trust
describe in detail the respective responsibilities and limitations on
liability of the Trustees, officers, and holders of shares of
beneficial interest.
16. Jurisdiction. This Agreement shall be governed by and construed in
accordance with the substantive laws of The Commonwealth of
Massachusetts and the Sub-Adviser consents to the jurisdiction of
courts, both state or federal, in Boston, Massachusetts, with respect
to any dispute under this Agreement.
17. Paragraph Headings. The headings of paragraphs contained in this
Agreement are provided for convenience only. The form no part of this
Agreement and shall not affect its construction.
18. Counterparts. 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.
9
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
on their behalf by their duly authorized officers as of the date first above
written.
ATTEST: PIONEER INVESTMENT MANAGEMENT, INC.
_______________________________ By:________________________________
Name: Mark D. Goodwin
Title: Chief Financial Officer
ATTEST: OAK RIDGE INVESTMENTS, LLC
_______________________________ By:________________________________
Alan E Moly Name: David Klaskin
Title: Chairman
Accepted and agreed to as of the day and year first above written.
10
11
schedule a
----------
The Adviser will pay to the Sub-Adviser as compensation for the Sub-Adviser's
services rendered, a fee, computed daily and payable at the end of each month at
an annual rate based on the average daily net assets of the Fund under the
following fee schedule:
Assets Rate
------ ----
First $250 Million 0.45%
Greater than $250 Million and less than or equal to $500 Million 0.40%
Greater than $500 Million and less than or equal to $750 Million 0.35%
Greater than $750 Million 0.30%
EXHIBIT B
Additional information pertaining to Oak Ridge
Oak Ridge is a limited liability company organized under the laws of
Delaware. David Klaskin, Samuel Wegbreit, Richard O. Klaskin, Mary Edman, John
and Bonnie Vainder, Robert G. McVicker, III, Susan McVicker Collins, Alan E.
Molotsky, and John Peter collectively own 100% of the interests in Oak Ridge,
with David Klaskin and Samuel Wegbreit owning controlling interests. Oak Ridge
is located at 10 South LaSalle Street, Suite 1250, Chicago, Illinois 60603,
which is also the address for Oak Ridge's owners, directors and officers.
Directors and officers of Oak Ridge:
Name Title Principal Occupation
- ---- ----- --------------------
Samuel Wegbreit Director, Chairman and Same
Secretary
David Klaskin Director, Chief Executive Same
Officer and Treasurer
John Peter President Same
None of the trustees or officers of the Trust is also an officer, employee
or director of Oak Ridge.
12
None of the officers or trustees of the Trust have had any material direct
or indirect interest in Oak Ridge or any other person controlling, controlled by
or under common control with Oak Ridge. In addition, no trustee has had any
direct or indirect material interest in any transaction (or proposed
transaction) since the inception of the portfolio to which Oak Ridge or its
affiliates are parties.
Similar funds managed by Oak Ridge
Oak Ridge serves as the investment adviser to the following funds with
investment objectives similar to your fund's objective.
Management fee rate for
-----------------------
Net assets of similar similar fund as a percentage
--------------------- ----------------------------
Similar fund fund as of [, 2004] of average daily net assets
------------ ------------------- ---------------------------
Pioneer Oak Ridge $ 0.75% up to $1 billion and
Large Cap Growth 0.70% on assets over $1
VCT Portfolio billion
(Class II)
[expense limit in effect util March 15, 2005 discussion?]
The Trust's portfolio transaction policy
All orders for the purchase or sale of portfolio securities are placed on
behalf of the portfolio by Oak Ridge pursuant to authority contained in the
subadvisory agreement. Oak Ridge seeks to obtain the best execution on portfolio
trades. The price of securities and any commission rate paid are always factors,
but frequently not the only factors, in judging best execution. In selecting
brokers or dealers, Oak Ridge considers various relevant factors, including, but
not limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability and financial condition of the dealer; the
dealer's execution services rendered on a continuing basis; and the
reasonableness of any dealer spreads. Transactions in non-U.S. equity securities
may be executed by broker-dealers in non-U.S. countries in which commission
rates may not be negotiable (as such rates are in the U.S.).
Section 28(e) of the Securities Exchange Act of 1934, as amended, permits
an investment advisor, under certain circumstances, to cause an account to pay a
broker or dealer who supplies brokerage and research services a commission for
effecting a transaction in excess of the amount of commission another broker or
dealer would have charged for effecting the transaction. Brokerage and research
services include (i) furnishing advice as to the value of securities, the
advisability of investing, purchasing or selling securities and the availability
of securities or purchasers or sellers of securities; (ii) furnishing analyses
and reports concerning issuers, industries, securities, economic factors and
trends, portfolio strategy and the performance of accounts; and (iii) effecting
securities transactions and performing functions incidental thereto (such as
clearance, settlement and custody). These transactions with broker-dealers are
often referred to as "soft-dollar" transactions; and the commissions paid for
execution and services are often referred to as "soft-dollar" commissions.
In selecting brokers or dealers, Oak Ridge considers investment and market
information and other research, such as economic, securities and performance
measurement research provided by such brokers or dealers and the quality and
reliability of brokerage services,
13
including execution capability, performance and financial responsibility.
Accordingly, the commissions charged by any such broker or dealer may be greater
than the amount another firm might charge if Oak Ridge determines in good faith
that the amount of such commissions is reasonable in relation to the value of
the research information and brokerage services provided by such broker or
dealer to the portfolio. Oak Ridge believes that the research information
received in this manner provides the portfolio with benefits by supplementing
the research otherwise available to it. Such higher commissions will not,
however, be paid by the portfolio unless (i) Oak Ridge determines in good faith
that the amount is reasonable in relation to the services in terms of the
particular transaction or in terms of Oak Ridge's overall responsibilities with
respect to the accounts, including the portfolio, as to which it exercises
investment discretion; (ii) such payment is made in compliance with the
provisions of Section 28(e) and other applicable state and federal laws; and
(iii) in the opinion of Oak Ridge, the total commissions paid by the applicable
portfolio is reasonable in relation to the benefits to the portfolio over the
long-term. In addition, such higher commissions will not be paid by the
portfolio with respect to portfolio transactions in which any broker affiliated
with Oak Ridge is serving as broker to the portfolio.
Oak Ridge places portfolio transactions for other advisory accounts in
addition to the portfolio. Research services furnished by firms through which
the portfolio effect securities transactions may be used by Oak Ridge in
servicing all of its accounts; that is, not all of such services may be used by
Oak Ridge in connection with the portfolio. Oak Ridge believes it is not
possible to measure separately the benefits from research services to each of
the accounts (including the portfolio) managed by it. Because the volume and
nature of the trading activities of the accounts are not uniform, the amount of
commissions in excess of those charged by another broker or dealer paid by each
account for brokerage and research services will vary. However, Oak Ridge
believes such costs to the portfolio will not be disproportionate to the
benefits received by the portfolio on a continuing basis. Oak Ridge seeks to
allocate portfolio transactions equitably whenever concurrent decisions are made
to purchase or sell securities by the portfolio and another advisory account. In
some cases, this procedure could have an adverse effect on the price or the
amount of securities available to the portfolio. There can be no assurance that
a particular purchase or sale opportunity will be allocated to the portfolio. In
making such allocations between the portfolio and other advisory accounts, the
main factors considered by Oak Ridge are the respective investment objectives,
the relative size of portfolio holdings of the same or comparable securities,
the availability of cash for investment and the size of investment commitments
generally held.
In circumstances where two or more broker-dealers offer comparable prices
and executions, preference may be given to a broker-dealer which has sold shares
of the portfolio as well as shares of other investment companies managed by
Pioneer. This policy does not imply a commitment to execute all portfolio
transactions through all broker-dealers that sell shares of the portfolio. The
Pioneer portfolios have entered into third-party brokerage and/or expense offset
arrangements to reduce the portfolio's total operating expenses. Pursuant to
third-party brokerage arrangements, certain of the portfolio that invest
primarily in U.S. equity securities may incur lower custody fees by directing
brokerage to third-party broker-dealers. Pursuant to expense offset
arrangements, the portfolio incur lower transfer agency expenses by maintaining
their cash balances with the custodian.
Affiliated brokerage
No brokerage commissions have been paid by the portfolio since their inception
to any broker affiliated with Oak Ridge.
14
- ----------------------------------------------------------------------------------------------------
[logo] Pioneer Investments PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
PIONEER VARIABLE CONTRACTS TRUST
Pioneer Oak Ridge Large Cap Growth VCT Portfolio
- ----------------------------------------------------------------------------------------------------
P.O. Box 18011 To be held [ ], 2004
Hauppauge, NY 11788-8811 PLEASE RETURN YOUR SIGNED PROXY CARD IN THE
ENCLOSED ENVELOPE
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
[CONTROL NUMBER]
[triangle] Please fold and detach at perforation before mailing [triangle]
PIONEER REAL ESTATE SHARES
I (we), having received notice of the meeting and management's proxy statement
therefor, and revoking all prior proxies, hereby appoint John F. Cogan, Jr.,
Dorothy E. Bourassa, John A. Carey and David C. Phelan, and each of them, my
(our) attorneys (with full power of substitution in them and each of them) for
and in my (our) name(s) to attend the Annual Meeting of Shareholders of my (our)
fund to be held on December 28, 2004, at 2:00 p.m., (Boston time) at the
offices of Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the fund, 60
State Street, 26th Floor, Boston, Massachusetts 02109, and any adjourned
session or sessions thereof, and thereto vote and act upon the following
matters (as more fully described in the accompanying proxy statement) in
respect of all shares of the fund which I (we) will be entitled to vote or act
upon, with all the powers I (we) would possess if personally present.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
PROPOSAL.
Date _______________________, 2004
NOTE: In signing, please write
name(s) exactly as appearing
hereon. When signing as attorney,
15
executor, administrator or other
fiduciary, please give your full
title as such. Joint owners should
each sign personally.
___________________________________
Signature(s)
16
Please sign, date and return this proxy card
in the enclosed envelope.
[triangle] Please fold and detach at perforation before mailing [triangle]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF YOUR FUND AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED. THE BOARD
RECOMMENDS THAT YOU VOTE IN FAVOR OF THE FOLLOWING:
Please vote by filling in the boxes below.
FOR WITHHOLD ALL FOR ALL EXCEPT (AS
MARKED BELOW)
1. For shareholders of Pioneer Oak Ridge Large
Cap Growth VCT Portfolio
[ ] [ ] [ ]
To approve a subadvisory agreement between
Pioneer Investment Management, Inc. and Oak
Ridge Investments, LLC.
Please sign, date and return this proxy card.
17