As filed with the Securities and Exchange Commission on May 11, 2005
File No. 333-119868
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___1___
Post-Effective Amendment No. ______
(Check appropriate box or boxes)
PIONEER EUROPE FUND
(Exact Name of Registrant as Specified in Charter)
(617) 742-7825
(Area Code and Telephone Number)
60 State Street, Boston, Massachusetts 02109
(Address of Principal Executive Offices:
Number, Street, City, State, Zip Code)
Dorothy E. Bourassa, Esq.
Pioneer Investment Management, Inc.
60 State Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copies to: David C. Phelan, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is due because of reliance on Section 24(f) of the Investment Company Act of
1940, which permits registration of an indefinite number of securities.
Title of Securities Being Registered: Shares of beneficial interest of the
Registrant.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment, which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall be effective
on such date as the Commission, acting pursuant to Section 8(a), may determine.
IMPORTANT INFORMATION
Dear Shareholder:
I am writing to ask that you vote in favor of an important proposal that
will affect your investment in Pioneer Europe Select Fund ("your fund" or
"Europe Select Fund"). Your fund's investment adviser, Pioneer Investment
Management, Inc., manages two mutual funds that focus on European equity
securities, your fund and Pioneer Europe Fund ("Europe Fund"). The enclosed
combined prospectus/proxy statement contains information about a proposal to
reorganize your fund into Europe Fund. If approved, you would become a
shareholder of Europe Fund and would receive shares of Europe Fund equal in
value to the value of your shares in Europe Select Fund. In connection with the
reorganization, Europe Fund will be renamed "Pioneer Europe Select Equity Fund"
and adopt investment policies that are identical to your fund's investment
policies. The result will be that you become a shareholder of a fund the
investment goals and focus of which are the same as your fund, but which is
substantially larger in size. Our hope is that a larger asset base will enable
the combined fund to invest more efficiently and to have the potential to
realize expense savings in the future, including savings as a result of
breakpoints in the management fee. Your fund is selling its assets to Europe
Fund and, consequently, Europe Fund will be the legal entity that continues
after the reorganization. However, because the surviving fund will have the
same investment policies, management team and contractual expense limitations
as your fund, the surviving fund will adopt the historical financial results
and performance of your fund after the reorganization.
WHY IS THE REORGANIZATION BEING PROPOSED?
The trustees of your fund believe that reorganizing your fund into Europe
Fund offers you potential benefits, including the opportunity to be part of a
fund with a larger asset size that may be better positioned in the market to
increase asset size and achieve economies of scale. The larger portfolio of the
combined funds may enable the fund to hold larger positions in individual
securities and, consequently, achieve better net prices on securities trades.
In addition, each fund incurs substantial operating costs for insurance,
accounting, legal, and custodial services. The combination of the funds is not
expected to reduce expenses immediately but should increase the potential for
cost savings in the future if the net assets of the fund exceed the initial
breakpoint in the management fee and the fixed expenses are spread over a
larger pool of assets, reducing expenses on a per share basis.
FUND'S FEES AND EXPENSES
No increase in management fees will result from the reorganization.
Pioneer currently limits your fund's ordinary operating expense attributable to
Class A shares to 1.75% of average daily net assets pursuant to an agreement
with your fund. After the reorganization, Pioneer will contractually agree
until December 31, 2008 to limit the combined fund's ordinary operating
expenses attributable to Class A shares to 1.75% of average daily net assets.
Expenses attributable to the Class B and Class C shares will be limited to
2.65% through December 31, 2006. This expense limitation agreement for the
combined fund may be eliminated as to Class A shares in December 2008 and as to
Class B and Class C shares in December 2006, and thereafter, at any time in the
future. In conjunction with the reorganization, a voluntary expense limitation
applicable to your fund's Class A shares to 1.25% of average daily net assets
attributable to Class A shares will be discontinued. The elimination of this
voluntary limitation will result in the net expenses of Class A, Class B and
Class C shares, after giving effect to both voluntary and contractual expense
limitations, being higher after the reorganization than the historical net
expense ratios of Europe Select Fund. However, the decision to eliminate the
voluntary limitation will be implemented regardless of whether the
reorganization is approved. Because the combined fund will be larger, its gross
expenses per share are anticipated to be much lower than your fund's gross
expenses. In the case of the Class C shres, the expenses, net of the contractual
limitation, are estimated to be higher after the reorganization than the
historical net expenses attributable to Class C shares
YOUR VOTE MATTERS
After careful consideration, your fund's trustees have unanimously
approved the reorganization of Europe Select Fund into Europe Fund. The
enclosed combined prospectus/ proxy statement contains further explanation and
important details about the reorganization, which I strongly encourage you to
read before voting. If approved by the shareholders, the reorganization is
scheduled to take place at the close of business on June 24, 2005.
Your vote makes a difference, no matter what the size of your investment.
Please review the enclosed proxy materials and submit your vote promptly to
help us avoid the need for additional mailings. For your convenience, you may
vote one of three ways: via telephone; via mail by returning the enclosed voting
card; or via the Internet. Please refer to the enclosed proxy card and
instruction letter for information about voting by telephone or via the
Internet. If you have any questions or need additional information, please
contact a Pioneer Customer Service Representative at 1-800-622-3265 between
9:00 A.M. and 5:00 P.M. Boston time. I thank you for your prompt vote on this
matter.
Sincerely,
/s/ Osbert Hood
Osbert Hood
President and Chief Executive Officer
Pioneer Investment Management, Inc.
PIONEER EUROPE SELECT FUND
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
SCHEDULED FOR JUNE 21, 2005
This is the formal agenda for your fund's shareholder meeting (the
"meeting"). It tells you what matters will be voted on and the time and place
of the meeting, in case you want to attend in person.
A special shareholder meeting for the fund will be held at the offices of
Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, 26th Floor, Boston,
Massachusetts on June 21, 2005, at 2:00 p.m., Boston time, to consider the
following:
1. A proposal to approve an Agreement and Plan of Reorganization between
Pioneer Europe Select Fund ("your fund" or "Europe Select Fund") and
Pioneer Europe Fund ("Europe Fund"). Under this agreement, your fund
would transfer all of its assets to Europe Fund in exchange for Class
A, B and C shares of Europe Fund. Class A, B and C shares of Europe
Fund will be distributed to your fund's shareholders in proportion to
their Class A, B and C holdings on the reorganization date. Your fund
would also assume Europe Fund's liabilities. In conjunction with the
reorganization, Europe Fund would be renamed "Pioneer Europe Select
Equity Fund" and would change its investment policies to make them
identical to your fund's current policies. Although Europe Fund would
be the legal successor of the reorganization, the combined fund would
retain the historical investment performance of your fund. Your fund
will then be dissolved.
2. Any other business that may properly come before the meeting.
YOUR TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSAL.
Shareholders of record as of the close of business on March 24, 2005 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
May 13, 2005
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
ENCLOSED PROXY.
PROXY STATEMENT OF
PIONEER EUROPE SELECT FUND
PROSPECTUS FOR
CLASS A, CLASS B AND CLASS C SHARES OF
PIONEER EUROPE FUND
60 State Street
Boston, Massachusetts 02109
1-800-622-3265
This combined prospectus/proxy statement contains the information you
should know before voting on the proposed reorganization of your fund into
Europe Fund. Please read it carefully and retain it for future reference.
How the Reorganization Will Work
o Your fund will transfer all of its assets to Europe Fund. Europe Fund
will assume your fund's liabilities.
o Europe Fund will issue Class A, Class B and Class C shares to your
fund in amounts equal to the value of your fund's net assets
attributable to its Class A, Class B and Class C shares, respectively.
These shares will be distributed to each shareholder of your fund in
proportion to their holdings of the respective class of shares on the
reorganization date.
o Your fund will be dissolved following the closing of the
reorganization.
o The reorganization is intended to result in no income, gain or loss
for federal income tax purposes to Europe Fund, your fund or the
shareholders of your fund.
o In conjunction with the reorganization, Europe Fund will revise its
investment policies with the result that its investment objective and
policies are substantially the same as your fund's investment
objective and policies, and the portfolio management team will be the
same as your fund's. As a result, although Europe Fund will legally be
the surviving entity in the reorganization, your fund will be the
accounting survivor and the continuing fund will inherit your fund's
financial and performance record. Following the adoption of the same
investment policies as your fund, Europe Fund will be repositioning
its portfolio and is likely to dispose of a significant portion of
current portfolio positions reflecting both the different portfolio
manager and the change from a diversified to more focused portfolio.
Europe Fund will dispose of those portfolio positions that it
determines are not in accordance with your fund's investment
objectives, policies and strategies.
Why Your Fund's Trustees Recommend the Reorganization
The trustees of your fund believe that reorganizing your fund into another
fund that will have substantially similar investment policies and greater
assets offer you potential benefits. These potential benefits and
considerations include:
o The opportunity to be part of a fund with substantially greater assets
that may be better positioned in the market to further increase asset
size and achieve economies of scale. Economies of scale have potential
benefits to the combined fund in two ways. First, a larger fund, which
trades in larger blocks of stock, will be able to hold larger
positions in individual securities and, consequently, have an enhanced
ability to achieve better net prices on securities trades. Each fund
has a breakpoint in its management fee at an asset level of $300
million and above. The trustees concluded that a combined fund is more
likely to attain asset levels that benefit from these breakpoints. In
addition, each fund incurs substantial operating costs for insurance,
accounting, legal, and custodial services. The combination of the
funds resulting from the reorganization may spread fixed expenses over
a larger asset base, potentially contributing to a lower expense ratio
in the long term than your fund would achieve separately; and
o Continuity of portfolio management, investment policies and historical
investment performance, and a substantially similar portfolio
composition.
Therefore, your fund's trustees recommend that you vote FOR the
reorganization.
Shares of Europe Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other depository institution. These shares are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency.
1
Shares of Europe Fund have not been approved or disapproved by the
Securities and Exchange Commission (the "SEC"). The SEC has not passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
EUROPE FUND/EUROPE SELECT FUND
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Where to Get More Information
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Europe Fund's annual report to shareholders dated October 31, 2004. Each of the documents listed to the left are on file
with the SEC and available at no charge by calling our
toll-free number: 1-800-622-3265.
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Your fund's annual report to shareholders dated August 31, 2004 and
semiannual report to shareholders dated February 28, 2005.
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Europe Fund's most recent prospectus dated March 1, 2005 and any
applicable supplements.
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Your fund's most recent prospectus dated December 3, 2004 and any
applicable supplements.
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Europe Fund's multiclass statement of additional information dated
March 1, 2005. It contains additional information about Europe Fund.
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Your fund's multiclass statement of additional information dated
December 3, 2004. It contains additional information about your fund.
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To ask questions about this combined prospectus/proxy statement. Call our toll-free telephone number: 1-800-622-3265
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The date of this combined prospectus/proxy statement is May 13, 2005.
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TABLE OF CONTENTS
Page
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INTRODUCTION ............................................................................. 4
SUMMARY .................................................................................. 4
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION ............................. 15
CAPITALIZATION ........................................................................... 18
BOARD'S EVALUATION AND RECOMMENDATION .................................................... 18
VOTING RIGHTS AND REQUIRED VOTE COMPARISON OF DELAWARE STATUTORY TRUST AND MASSACHUSETTS
BUSINESS TRUST .......................................................................... 18
INFORMATION CONCERNING THE MEETING ....................................................... 31
OWNERSHIP OF SHARES OF THE FUNDS ......................................................... 32
EXPERTS .................................................................................. 33
AVAILABLE INFORMATION .................................................................... 33
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION ................................ A-1
EXHIBIT B -- TAX REPRESENTATION CERTIFICATE OF PIONEER EUROPE FUND ....................... B-1
EXHIBIT C -- TAX REPRESENTATION CERTIFICATE OF PIONEER EUROPE SELECT FUND ................ C-1
EXHIBIT D -- PORTFOLIO MANAGEMENT DISCUSSION OF PERFORMANCE .............................. D-1
3
INTRODUCTION
This combined prospectus/proxy statement is being used by the board of
trustees of your fund to solicit proxies to be voted at a special meeting of
shareholders (the "meeting") of your fund. This meeting will be held at the
offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, 26th
Floor, Boston, Massachusetts 02109 on June 21, 2005 at 2:00 p.m., Boston time.
The purpose of the meeting is to consider a proposal to approve an Agreement
and Plan of Reorganization (the "Agreement"), a form of which is attached here
to as Exhibit A, providing for the reorganization of your fund into Europe
Fund. This combined prospectus/proxy statement is being mailed to your fund's
shareholders on or about May 13, 2005.
This combined prospectus/proxy statement includes information about the
proposal, including a comparison summary. You should read the entire proxy
statement carefully, including Exhibit A, because it contains details that are
not in the summary. A Statement of Additional Information, dated May 13, 2005,
includes additional information regarding the Europe Fund and Europe Select
Fund and is incorporated herein by reference. You may obtain a copy of the
Statement of Additional Information by calling 1-800-622-3265.
Who is Eligible to Vote?
Shareholders of record on March 24, 2005 are entitled to attend and vote
at the meeting or any adjourned meeting. 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 to approve the
Agreement. If any other business comes before the meeting, your shares will be
voted at the discretion of the persons named as proxies.
SUMMARY
The following is a summary of more complete information appearing later in
this combined prospectus/proxy statement and prospectus or incorporated herein.
You should read carefully the entire proxy statement, including the Agreement
attached as Exhibit A. The trustees of Europe Fund have approved certain
changes in Europe Fund's investment policies to be substantially identical with
your fund's investment policies. The following table assumes those changes to
policy have not been implemented.
In the table below, if a row extends across the entire table, the policy
disclosed applies to both your fund and Europe Fund.
Comparison of Europe Select Fund to Europe Fund
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Europe Select Fund Europe Fund
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Business A diversified open-end management investment A diversified open-end management
company organized as a Delaware statutory investment company organized as a
trust. Massachusetts business trust.
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Net assets, as of $13,471,645 $191,319,555
March 31, 2005
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Investment adviser and Pioneer Investment Management, Inc. ("Pioneer"), the funds' investment adviser,
portfolio managers selects the funds' investments and oversees the funds' operations.
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4
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Europe Select Fund Europe Fund
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Day-to-day management of the fund's portfolio Day-to-day management of the fund's
is the responsibility Andrew Arbuthnott. portfolio is the responsibility of Stan Pearson.
Mr. Arbuthnott is supported by a team of Mr. Pearson is supported by a team of
portfolio managers and analysts. Members of portfolio managers and analysts. Members
this team, which is based in Dublin, manage of this team manage other Pioneer funds
other Pioneer funds investing primarily in investing primarily in European securities. The
European securities. The portfolio manager and portfolio manager and the team, which are
the team also may draw upon the research and based in Dublin, also may draw upon the
investment management expertise of the global research and investment management
research team, which provides fundamental expertise of the global research team, which
research on companies and buy and sell provides fundamental research on companies
recommendations on equity securities, and and buy and sell recommendations on equity
includes members from Pioneer's affiliate, securities, and includes members from
Pioneer Investment Management Limited Pioneer's affiliate, Pioneer Investment
(PIML). Mr. Arbuthnott, a vice president, joined Management Limited (PIML). Mr. Pearson,
PIML (formerly known as Europlus Investment Head of Equity (Dublin), joined PIML (formerly
Management & Research Ltd.) as a portfolio known as Europlus Investment Management
manager in 1999. & Research Ltd.) as a portfolio manager
in 1998.
Mr. Arbuthnott, the current portfolio
manager of Europe Select Fund, will serve
as portfolio manager of Europe Fund after
the reorganization.
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Investment objective Capital growth. Long-term growth of capital.
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This objective is fundamental. Following the reorganization, Europe Fund would retain the
objective of long-term growth of capital.
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Primary investments Normally, each fund invests at least 80% of its total assets in equity securities of European
issuers.
A European issuer:
o Is organized and has a principal business office in a European country; or
o Derives at least 50% of its total revenue from business transacted in Europe
Each fund may purchase and sell forward foreign currency exchange contracts in connection with
its investments.
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Europe Select Fund Europe Fund
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The fund's principal focus is on European For purposes of the fund's investment
companies that exhibit strong growth policies, equity investments include common
characteristics and are considered to be leaders stocks, convertible debt and securities with
in their sector or industry. The fund generally common stock characteristics such as
focuses on mid- and large-capitalization preferred stocks, rights, depositary receipts
European issuers. Equity securities include and warrants.
common stocks, convertible debt and other
equity instruments, such as depositary receipts, The fund may invest in the securities of
warrants, rights and preferred stocks. companies domiciled in any European country,
including but not limited to Austria, Belgium,
The fund may invest in the securities of Denmark, Finland, France, Germany, Italy,
companies domiciled in any European country. Ireland, the Netherlands, Norway, Portugal,
European countries are those countries located Spain, Sweden, Switzerland and the
west of the Urals, including but not limited to United Kingdom.
Austria, Belgium, Bulgaria, the Czech Republic,
Denmark, Finland, France, Germany, Greece,
Hungary, Ireland, Italy, the Netherlands,
Norway, Poland, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
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Investment strategies The fund uses a "growth" style of management The fund uses a "growth at a reasonable
and seeks to invest in companies with above price" style of management. The fund seeks
average potential for earnings and revenue to invest in companies with above average
growth. The fund invests in a relatively focused potential for earnings and revenue growth
portfolio and normally holds fewer than that are also trading at attractive market
40 positions. valuations.
To select stocks, Pioneer employs due The fund invests in a diversified portfolio and
diligence and fundamental research, an normally holds approximately 70 portfolio
evaluation of the issuer based on its financial positions. However, if the reorganization is
statements and operations. Pioneer relies on completed the fund will adopt Europe Select
the knowledge, experience and judgment of Fund's focused approach.
its staff and the staff of its affiliates who have
access to a wide variety of research. Pioneer To select stocks, Pioneer employs due
focuses on the quality and price of individual diligence and fundamental research, an
issuers and economic sector analysis, not on evaluation of the issuer based on its financial
market-timing strategies. Factors Pioneer looks statements and operations, employing a
for in selecting investments include: bottom-up analytic style. Pioneer relies on the
o Market leadership in a company's primary knowledge, experience and judgment of its
products or services staff who have access to a wide variety of
o Issuer has strong growth characteristics research. Factors Pioneer looks for in
relative to its competitors selecting investments include:
o Favorable expected returns relative to o Favorable expected returns relative to
perceived risk perceived risk
o Low market valuations relative to earnings
forecast, book value, cash flow and sales
o Issuer's industry has strong fundamentals,
such as increasing or sustainable demand
and barriers to entry Increasing earnings
forecast
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Pioneer generally sells a portfolio security when it believes that the issuer no longer offers the
potential for above average earnings and revenue growth. Pioneer makes that determination
based upon the same criteria it uses to select portfolio securities.
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6
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Europe Select Fund Europe Fund
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Other investments The fund may invest up to 20% of its total The fund may invest up to 10% of its total
assets in securities of European issuers assets in securities of European issuers
domiciled in Eastern European nations or domiciled in Eastern European nations or
emerging European markets. emerging European markets, and which trade
on recognized European exchanges.
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Temporary defensive Normally, each fund invests substantially all of its assets to meet its investment objective. Each
strategies fund may invest the remainder of its assets in securities with remaining maturities of less than
one year, cash equivalents or may hold cash. For temporary defensive purposes, including
during periods of unusual cash flows, the fund may depart from its principal investment
strategies and invest part or all of its assets in these securities or may hold cash. Each fund
intends to adopt a defensive strategy when Pioneer believes securities in which the fund
normally invests have extraordinary risks due to political or economic factors and in other
extraordinary circumstances.
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Diversification Each fund is diversified, which means that, with respect to 75% of total assets, the fund cannot
invest (i) more than 5% of total assets in securities of a single issuer or (ii) in securities
representing more than 10% of the outstanding voting securities of an issuer.
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Debt securities The fund may invest up to 20% of its total The fund may invest up to 20% of its total
assets in debt securities of U.S. or non-U.S. assets in debt securities of corporate and
corporate and government issuers. Generally government issuers with less than 12 months
the fund acquires debt securities that are to maturity. Generally the fund acquires debt
investment grade, but the fund may invest up securities that are investment grade, but the
to 5% of its net assets in below investment fund may invest up to 5% of its net assets in
grade debt securities, including convertible below investment grade convertible debt
debt. The fund invests in debt securities when securities issued by both European and non
Pioneer believes they are consistent with the European issuers. The fund invests in debt
fund's investment objective by offering the securities when Pioneer believes they are
potential for capital appreciation or for consistent with the fund's investment objective
greater liquidity. of long-term capital growth, to diversify the
portfolio or for greater liquidity.
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Short-term trading Neither fund usually trades for short-term profits. A fund will sell an investment, however, even
if it has only been held for a short time, if it no longer meets the fund's investment criteria.
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Derivatives Each fund may use futures and options on securities, indices and currencies, forward foreign
currency exchange contracts and other derivatives. A derivative is a security or instrument
whose value is determined by reference to the value or the change in value of one or more
securities, currencies, indices or other financial instruments. The fund does not use derivatives
as a primary investment technique and generally limits their use to hedging. However, the fund
may use derivatives for a variety of non-principal purposes, including:
o As a hedge against adverse changes in stock market prices, interest rates or currency
exchange rates
o As a substitute for purchasing or selling securities
o To increase the fund's return as a non-hedging strategy that may be considered speculative
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7
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Classes of Shares
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Europe Select Fund Europe Fund
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Class A sales charges and The Class A shares of both funds have the same characteristics and fee structure.
12b-1 fees o Class A shares are offered with initial sales charges up to 5.75% of the offering price, which
is reduced or waived for large purchases and certain types of investors. At the time of your
purchase, your investment firm may receive a commission from Pioneer Funds Distributor, Inc.
("PFD"), the funds' distributor, of up to 5% declining as the size of your investment
increases.
o There are no contingent deferred sales charges, except in certain circumstances when the
initial sales charge is waived.
o Class A shares are subject to distribution and service (12b-1) fees of up to 0.25% of average
daily net assets.
o Ordinary operating expenses of the combined fund are limited to 1.75% until December 31, 2008.
Ordinary operating expenses attributable to Class A shares for your fund's most recent fiscal
year were limited to 1.25%
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Class B sales charges and The Class B shares of both funds have the same characteristics and fee structure.
12b-1 fees o Class B shares are offered without an initial sales charge, but are subject to contingent
deferred sales charges of up to 4% if you sell your shares. The charge is reduced over time and
is not charged after five years. Your investment firm may receive a commission from PFD, the
funds' distributor, at the time of your purchase of up to 4%.
o Class B shares are subject to distribution and service (12b-1) fees of up to 1% of average
daily net assets.
o Ordinary operating expenses of the combined fund are limited to 2.65% until December 31, 2006.
Ordinary operating expenses attributable to Class B shares for your fund's most recent fiscal
year were limited to 2.17%
Shares purchased prior to December 1, 2004 remain subject to the contingent deferred sales
charge in effect at the time you purchased those shares.
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Class C sales charges and The Class C shares of both funds have the same characteristics and fee structure.
12b-1 fees o Class C shares are offered without an initial sales charge.
o Class C shares are subject to a contingent deferred sales charge of 1% if you
sell your shares within one year of purchase. Your investment firm may receive a
commission from PFD at the time of your purchase of up to 1%.
o Ordinary operating expenses of the combined fund are limited to 2.65% until December 31, 2006.
Ordinary operating expenses attributable to Class C shares for your fund's most recent fiscal
year were limited to 1.72%
o Class C shares are subject to distribution and service (12b-1) fees of up to
1% of average daily net assets.
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Distribution and service o These fees are paid out of a fund's assets on an ongoing basis. Over time these fees will
(12b-1) fees increase the cost of investments and may cost more than other types of sales charges.
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Buying, Selling and Exchanging Shares
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Europe Select Fund Europe Fund
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Buying shares You may buy shares from any investment firm that has a sales agreement with PFD, the fund's
distributor. You can buy shares at the offering price. You may use securities you own to
purchase shares of the fund provided that Pioneer, in its sole discretion, determines that the
securities are consistent with the fund's objective and policies and their acquisition is in
the best interests of the fund.
If you have an existing non-retirement account, you may purchase shares of the fund by
telephone or online. Certain IRAs also may use the telephone purchase privilege.
8
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Buying, Selling and Exchanging Shares
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Minimum initial Your initial investment must be at least $1,000. Additional investments must be at least $100
investment for Class A shares and $500 for Class B or Class C shares. You may qualify for lower initial or
subsequent investment minimums if you are opening a retirement plan account, establishing an
automatic investment plan or placing your trade through your investment firm.
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Exchanging shares You may exchange your shares for shares of the same class of another Pioneer mutual fund. Your
exchange request must be for at least $1,000. The fund allows you to exchange your shares at
net asset value without charging you either an initial or contingent deferred shares charge at
the time of the exchange. Shares you acquire as part of an exchange will continue to be subject
to any contingent deferred sales charge that applies to the shares you originally purchased.
When you ultimately sell your shares, the date of your original purchase will determine your
contingent deferred sales charge. An exchange generally is treated as a sale and a new purchase
of shares for federal income tax purposes.
You will be assessed a redemption fee (payable to the fund) of 2% if you redeem fund shares
within 30 days of investing in the fund.
After you establish an eligible fund account, you can exchange fund shares by telephone or
online.
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Selling shares Your shares will be sold at net asset value per share next calculated after the fund receives
your request in good order. If the shares you are selling are subject to a deferred sales
charge, it will be deducted from the sale proceeds.
You will be assessed a redemption fee (payable to the fund) of 2% if you redeem fund shares
within 30 days of investing in the fund.
If you have an eligible non-retirement account, you may sell up to $100,000 per account per day
by telephone or online. You may sell fund shares held in a retirement plan account by telephone
only if your account is an eligible IRA (tax penalties may apply).
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Net asset value Each fund's net asset value is the value of its portfolio of securities plus any other assets
minus its operating expenses and any other liabilities. The funds calculate a net asset value
for each class of shares every day the New York Stock Exchange is open when regular trading
closes (normally 4:00 p.m. Eastern time).
------------------------------------------------------------------------------------------------------
You buy or sell shares at the share price. When you buy Class A shares, you pay an initial
sales charge unless you qualify for a waiver or reduced sales charge. When you sell Class B or
Class C shares, you may pay a contingent deferred sales charge depending on how long you have
owned your shares.
- -----------------------------------------------------------------------------------------------------------------------------------
Comparison of Principal Risks of Investing in the Funds
Because each fund has substantially similar investment objective,
investment policies and strategies, the funds are subject to the same principal
risks. The combined fund would have a portfolio management team, investment
objective, investment policies and strategies identical to those of your fund.
You could lose money on your investment in the funds or not make as much as if
you invested elsewhere if:
o European stock markets go down or perform poorly relative to U.S.
markets (this risk may be greater in the short term);
o Securities of European issuers or growth stocks fall out of favor with
investors;
o Mid- to large-capitalization stocks fall out of favor with investors;
or
o The fund's investments do not have the growth potential originally
expected.
Investing in developed European issuers involves unique risks compared to
investing in securities of U.S. issuers. These risks are more pronounced to the
extent that the fund invests a significant portion of its investments in one
European region. These risks may include:
o Less information about some European issuers or markets may be
available due to less rigorous disclosure or accounting standards or
regulatory practices;
9
o Many European markets are smaller, less liquid and more volatile. In a
changing market, Pioneer may not be able to sell the fund's portfolio
securities at times, in amounts and at prices it considers reasonable;
o Adverse effect of currency exchange rates or controls on the value of
the fund's investments;
o The economies of European countries may grow at slower rates than
expected or may experience a downturn or recession; and
o Economic and Monetary Union (EMU) and the single European currency may
increase the volatility of European markets.
At times, more than 25% of the fund's assets may be invested in the same
market segment, such as financials or technology. To the extent the fund
emphasizes investments in a market segment, the fund will be subject to a
greater degree to the risks particular to the industries in that segment, and
may experience greater market fluctuation, than a fund without the same focus.
For example, industries in the financial segment, such as banks, insurance
companies, broker-dealers and REITs, may be sensitive to changes in interest
rates and general economic activity and are subject to extensive government
regulation. Industries in the technology segment, such as information
technology, communications equipment, computer hardware and software, and
office and scientific equipment, are subject to risks of rapidly evolving
technology, short product lives, rates of corporate expenditures, falling
prices and profits, competition from new market entrants, and general economic
conditions.
Investments in the funds are not bank deposits and are not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. You could lose money by investing in either fund. Europe Select Fund
generally invests in fewer than 40 securities and, as a result, the fund's
performance may be more volatile than the performance of funds holding more
securities.
Other Consequences of the Reorganization
The Funds' Fees and Expenses
Shareholders of both funds pay various fees and expenses, either directly
or indirectly. Your fund and Europe Fund each pay monthly management fees equal
to the following annual percentages of average daily net assets:
- -------------------------------------------------------------------------------
Fund Asset Breakpoints Management Fee
- -------------------------------------------------------------------------------
Up to $300 million 1.00%
- -------------------------------------------------------------------------------
Next $200 million 0.85%
- -------------------------------------------------------------------------------
Over $500 million 0.75%
- -------------------------------------------------------------------------------
The annual management fee rate payable by Europe Fund is the same as the
rate paid by your fund. Both funds also pay Rule 12b-1 fees at the same rate
for each share class. As discussed below, the estimated ("pro forma") expenses
attributable to Class A shares of the combined fund after the contractual
expense limitation would be 1.75% of average daily net assets, which is your
fund's current contractual expense limitation for Class A shares (with the
Class B and Class C shares' expenses reduced to the extent of any Class A
shares reduction of management fee or other fund-wide expenses pursuant to the
Class A shares limitation). Since June 2003, Pioneer has been voluntarily
limiting your fund expenses further, to 1.25% for Class A shares. Pioneer has
discontinued the voluntary 1.25% limitation but would continue the contractual
1.75% limitation (Class A shares) after the Reorganization until December 31,
2008. The pro forma gross expenses of the combined fund would be substantially
lower than your fund's current gross expenses.
10
The tables below show the fees and expenses that you would pay if you were
to buy and hold shares of each fund. The expenses in the tables appearing below
are based on (i) for your fund, the expenses of your fund for the twelve-month
period ended February 28, 2005 and (ii) for Europe Fund, the expenses of Europe
Fund for the twelve-month period ended October 31, 2004. Future expenses for
all share classes may be greater or less. The tables also show the pro forma
expenses of the combined fund assuming the reorganization occurred on February
28, 2005.
Europe Combined
Select Europe Fund Europe Select
Fund Fund (Pro Forma Fund
(for the (for the for the (for the
12 months 12 months 12 months 12 months
ended ended ended ended
2/28/05) 10/31/04) 2/28/05) 2/28/05)
---------- --------- ---------- -------------
Shareholder transaction fees (paid
directly from your investment) Class A Class A Class A Class B
Maximum sales charge (load) when
you buy shares as a percentage of
offering price 5.75% 5.75% 5.75% None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you
sell shares, whichever is less None(1) None(1) None(1) 4%
Redemption fee as a percentage of
amount redeemed, if applicable 2%(2) 2%(2) 2%(2) 2%(2)
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets Class A Class A Class A Class B
Management Fee 1.00% 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fee 0.25% 0.25% 0.25% 1.00%
Other Expenses(5) 4.63% 0.58% 0.58% 5.00%
Total Annual Fund Operating Expenses* 5.88% 1.83% 1.83% 7.00%
- ------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense
Limitation 4.13% N/A 0.08% 4.18%
Net Expenses 1.75%(4) 1.83% 1.75%(3) 2.82%(4)
Combined Europe Combined
Europe Fund Select Europe Fund
Fund (Pro Forma Fund Fund (Pro Forma
(for the for the (for the (for the for the
12 months 12 months 12 months 12 months 12 months
ended ended ended ended ended
10/31/04) 2/28/05) 2/28/05) 10/31/04) 2/28/05)
---------- ---------- ---------- ---------- ----------
Shareholder transaction fees (paid
directly from your investment) Class B Class B Class C Class C Class C
Maximum sales charge (load) when
you buy shares as a percentage of
offering price None None None None None
Maximum deferred sales charge (load)
as a percentage of offering price or
the amount you receive when you
sell shares, whichever is less 4% 4% 1% 1% 1%
Redemption fee as a percentage of
amount redeemed, if applicable 2%(2) 2%(2) 2%(2) 2%(2) 2%(2)
Annual fund operating expenses
(deducted from fund assets) as a
% of average daily net assets Class B Class B Class C Class C Class C
Management Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Distribution and Service (12b-1) Fee 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses(5) 0.82% 0.80% 4.68% 0.77% 0.71%
Total Annual Fund Operating Expenses* 2.82% 2.80% 6.68% 2.77% 2.71%
- ------------------------------------------------------------------------------------------------------
Less: Fee Waiver and Expense
Limitation N/A 0.15% 4.15%(2) N/A 0.06%
Net Expenses 2.82% 2.65%(3) 2.53%(4) 2.77% 2.65%(3)
(1) Purchases of $1 million or more and purchases by participants in certain
group plans are not subject to an initial sales charge but may be subject
to a contingent deferred sales charge of 1%.
(2) You will be assessed a redemption fee (payable to the fund) of 2% if you
redeem fund shares within 30 days of investing in the fund.
(3) The expenses in the table above reflect the expense limitation in effect
through December 31, 2008, in the case of Class A shares, and December 31,
2006, in the case of Class B and Class C shares, under which 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 1.75% of the average daily net
assets attributable to Class A shares. Expenses attributable to Class B
shares and Class C shares will be limited to 2.65% and 2.65%, respectively.
There can be no assurance that Pioneer will extend the expense limitations
in the future.
(4) In addition to the 1.75% contractual limitation applicable to Class A
shares, since June 2003, Pioneer has voluntarily further limited the
expenses attributable to Class A shares to 1.25% of average daily net
assets. In conjunction with the reorganization, this voluntary expense
limitation to 1.25% of average daily net assets attributable to Class A
shares will be discontinued. The elimination of this voluntary limitation
will result in the net expenses of Class A, Class B and Class C shares,
after giving effect to both voluntary and contractual expense limitations,
being higher after the reorganization than the historical expense ratios of
Europe Select Fund. However, the decision to eliminate the voluntary
limitation will be implemented regardless of whether the reorganization is
approved. Based upon contractual and voluntary limitations alone, the net
expenses of Europe Select Fund would be 1.25% of net assets attributable to
Class A shares, 2.23% of net assets attributable to Class B shares, 1.92%
of net assets attributable to Class C shares.
(5) Other expenses for Europe Fund are based upon the expenses for the most
recent fiscal year. If the above table was based upon information as of
February 28, 2005, other expenses for Europe Fund are estimated to be lower
than reflected above.
* Total annual operating expenses in the table have not been reduced by any
expense offset arrangements.
11
The hypothetical examples below help you compare the cost of investing in
each fund. It assumes that: (a) you invest $10,000 in each fund for the time
periods shown, (b) you reinvest all dividends and distributions, (c) your
investment has a 5% return each year, (d) each fund's gross operating expenses
remain the same and (e) the expense limitation for your fund is in effect for
year one. Pro forma expenses are included assuming a reorganization with your
fund and Europe Fund. The examples are for comparison purposes only and are not
a representation of either fund's actual expenses or returns, either past or
future.
- --------------------------------------------------------------------------------
Number of years Combined Fund
you own your shares Europe Select Fund Europe Fund (Pro Forma)
- --------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------
Year 1 $ 743 $ 750 $ 743
- --------------------------------------------------------------------------------
Year 3 $1,877 $1,117 $1,110
- --------------------------------------------------------------------------------
Year 5 $2,991 $1,508 $1,501
- --------------------------------------------------------------------------------
Year 10 $5,693 $2,599 $2,593
- --------------------------------------------------------------------------------
Class B -- assuming redemption at end of period
- --------------------------------------------------------------------------------
Year 1 $ 685 $ 685 $ 668
- --------------------------------------------------------------------------------
Year 3 $1,982 $1,174 $1,154
- --------------------------------------------------------------------------------
Year 5 $3,128 $1,589 $1,560
- --------------------------------------------------------------------------------
Year 10 $5,988 $2,911 $2,885
- --------------------------------------------------------------------------------
Class B -- assuming no redemption
- --------------------------------------------------------------------------------
Year 1 $ 285 $ 285 $ 268
- --------------------------------------------------------------------------------
Year 3 $1,687 $ 874 $ 854
- --------------------------------------------------------------------------------
Year 5 $3,034 $1,489 $1,466
- --------------------------------------------------------------------------------
Year 10 $5,988 $2,911 $2,885
- --------------------------------------------------------------------------------
Class C -- assuming redemption at end of period
- --------------------------------------------------------------------------------
Year 1 $ 356 $ 380 $ 368
- --------------------------------------------------------------------------------
Year 3 $1,602 $ 859 $ 836
- --------------------------------------------------------------------------------
Year 5 $2,903 $1,464 $1,429
- --------------------------------------------------------------------------------
Year 10 $5,970 $3,099 $3,037
- --------------------------------------------------------------------------------
Class C -- assuming no redemption
- --------------------------------------------------------------------------------
Year 1 $ 256 $ 280 $ 268
- --------------------------------------------------------------------------------
Year 3 $1,602 $ 859 $ 836
- --------------------------------------------------------------------------------
Year 5 $2,903 $1,464 $1,429
- --------------------------------------------------------------------------------
Year 10 $5,970 $3,099 $3,037
- --------------------------------------------------------------------------------
12
Comparison of Fund Performance
Set forth below is performance information for each fund. The following
performance information indicates some of the risks of investing in each fund.
The bar charts show how each fund's total return (not including any deduction
for sales charges) has varied from year to year for each full calendar year.
The tables show average annual total return (before and after sales taxes) for
each fund over time for each class of shares (including deductions for sales
charges) compared with a broad-based securities market index. Past performance
before and after taxes does not indicate future results. You should note that
the investment policies and management team of the combined fund after the
reorganization will be the same as your fund's investment policies and
management team. Consequently, the historical performance of your fund relative
to its benchmark may be more indicative of how the combined fund will perform
in the future than Europe Fund's historical performance.
Europe Fund's Annual Return Class A shares
(Year ended December 31)
[DATA BELOW REPRESENTS BAR CHART IN ORIGINAL DOCUMENT]
'94 6.04
'95 21.48
'96 26.97
'97 21.37
'98 20.82
'99 25.16
'00 -18.43
'01 -22.02
'02 -19.71
'03 32.26
'04 18.17
Europe Fund's year-to-date return as of December 31, 2004 for Class A
shares was 18.17%. During the period shown in the bar chart, the fund's
highest quarterly return was 29.06% for the quarter ended 12/31/1999 and the
lowest quarterly return was -23.69% for the quarter ended 9/30/2002.
Europe Select Fund's Annual Return Class A shares
(Year ended December 31)
[DATA BELOW REPRESENTS BAR CHART IN ORIGINAL DOCUMENT]
'01 -15.89
'02 -6.50
'03 38.02
'04 22.41
Europe Select Fund's year-to-date return as of December 31, 2004 for Class
A shares was 22.41%. During the period shown in the bar chart, the fund's
highest quarterly return was 21.18% for the quarter ended 12/31/2003 and the
lowest quarterly return was -21.28% for the quarter ended 9/30/02. The Fund
commenced operations on December 29, 2000.
13
Average Annual Total Return (as of December 31, 2004)
- --------------------------------------------------------------------------------------------------------------------
10 Years
(or life of
1 Year 5 Years Class/Fund*)
- --------------------------------------------------------------------------------------------------------------------
Europe Fund
- --------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes(2) 11.37% -5.54% 7.84%
- --------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions(1) 11.33% -5.56% 7.07%
- --------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and Sale of Fund Shares(1) 7.39% -4.63% 6.50%
- --------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes 12.99% -5.36% 7.54%
- --------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes 17.16% -5.30% 6.01%*
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital International (MSCI) Europe Index
(reflects no deduction for taxes)(3) 21.39% 0.42% 10.93%
- --------------------------------------------------------------------------------------------------------------------
Europe Select Fund
- --------------------------------------------------------------------------------------------------------------------
Class A -- Before Taxes(2) 15.34% N/A 5.78%*
- --------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distribution(1) 14.68% N/A 5.46%*
- --------------------------------------------------------------------------------------------------------------------
Class A -- After Taxes on Distributions and
Sale of Fund Shares(1) 10.42% N/A 4.83%*
- --------------------------------------------------------------------------------------------------------------------
Class B -- Before Taxes 17.36% N/A 6.24%*
- --------------------------------------------------------------------------------------------------------------------
Class C -- Before Taxes 21.81% N/A 6.81%*
- --------------------------------------------------------------------------------------------------------------------
Morgan Stanley Capital International (MSCI) Europe Index
(reflects no deduction for taxes)(3) 21.39% 0.42% 11.18%
- --------------------------------------------------------------------------------------------------------------------
(1) After-tax returns are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state
and local taxes. Actual after-tax returns depend on the investor's tax
situation and may differ from those shown, and the after-tax returns shown
are not relevant to shareholders who hold fund shares through tax-deferred
arrangements such as 401(k) plans or individual retirement accounts.
After-tax returns for Class B and Class C shares will vary from the
after-tax returns presented for Class A shares.
(2) "Class A -- Before Taxes" reflects the performance of Class A shares not
including any deduction for taxes or sales charges.
(3) The MSCI Europe Index is the Morgan Stanley Capital International Europe
Index, which is a capitalization-weighted index of the 15 European country
indices included in the MSCI EAFE (Europe, Australasia, Far East) Index.
Unlike the funds, the index is not managed and does not incur expenses.
* Europe Fund Class C shares' inception was on January 31, 1996. Europe
Select Fund's inception was on December 29, 2000. The corresponding MSCI
return for periods since these dates were 9.76% and 11.18%, respectively.
The most recent portfolio manager's discussion of each Fund's performance is
attached as Exhibit D.
14
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
The Reorganization
o The reorganization is scheduled to occur on the close of business at
5:00 P.M. on June 24, 2005, but may occur on such later date as the
parties may agree in writing. Your fund will transfer all of its
assets to Europe Fund and Europe Fund will assume all of your fund's
liabilities. This will result in the addition of your fund's assets to
Europe Fund's portfolio. The net asset value of both funds will be
computed as of the close of regular trading on the New York Stock
Exchange on the reorganization date.
o Europe Fund will issue to your fund Class A shares in an amount equal
to the net assets attributable to your fund's Class A shares. As part
of the liquidation of your fund, these shares will immediately be
distributed to Class A shareholders of record of your fund in
proportion to their holdings on the reorganization date. As a result,
Class A shareholders of your fund will become Class A shareholders of
Europe Fund.
o Europe Fund will issue to your fund Class B shares in an amount equal
to the net assets attributable to your fund's Class B shares. As part
of the liquidation of your fund, these shares will immediately be
distributed to Class B shareholders of record of your fund in
proportion to their holdings on the reorganization date. As a result,
Class B shareholders of your fund will become Class B shareholders of
Europe Fund.
o Europe Fund will issue to your fund Class C shares in an amount equal
to the net assets attributable to your fund's Class C shares. As part
of the liquidation of your fund, these shares will immediately be
distributed to Class C shareholders of record of your fund in
proportion to their holdings on the reorganization date. As a result,
Class C shareholders of your fund will become Class C shareholders of
Europe Fund.
o Europe Fund's Class Y shares will continue to be offered after the
reorganization.
o After the shares are issued, your fund will be dissolved.
o In conjunction with the reorganization, Europe Fund will revise its
investment policies with the result that its investment policies are
substantially the same as your fund's investment policies and the
portfolio management team will be the same as your fund's. As a
result, although Europe Fund will legally be the surviving entity in
the reorganization, your fund will be the accounting survivor and the
continuing fund will inherit your fund's financial and performance
record. Following the adoption of the same investment policies as your
fund, Europe Fund will be repositioning its portfolio and is likely to
dispose of a significant portion of current portfolio positions
reflecting both the different portfolio manager and the change from a
diversified to a focused portfolio. Europe Fund will dispose of those
portfolio positions that it determines are not in accordance with your
fund's investment policies. Europe Fund is likely to incur a
significant amount of transaction costs in connection with the
repositioning of its portfolio and realize unrealized appreciation,
which will reduce in part Europe Fund's capital loss carryforwards.
However, because of these capital loss carryforwards, shareholders of
Europe Fund are not expected to receive a taxable distribution as a
result of the repositioning. However, no guarantee can be provided
that the repositioning will not result in some taxable gain to your
fund's shareholders. The cost of disposing those portfolio positions
is estimated to be $130,000 ($0.019 per share) of the surviving fund.
Agreement and Plan of Reorganization
The shareholders of your fund are being asked to approve the Agreement,
the form of which is attached to this proxy statement as Exhibit A and
incorporated herein by this reference. The material provisions of the Agreement
are described below. The description of the Agreement contained herein,
including all the material provisions of the Agreement, is qualified in its
entirety by the attached copy.
Reasons for the Proposed Reorganization
The trustees of your fund believe that the proposed reorganization will be
advantageous to the shareholders of your fund for several reasons. The trustees
considered the following matters, among others, in approving the proposal.
First, after the reorganization, the combined fund will have an asset size
substantially larger than that of your fund, which may allow the combined fund
to achieve significant economies of scale in investments or expenses.
Second, the combined fund will be named "Pioneer Europe Select Equity
Fund" and will have the same investment policies and strategies as your fund,
the same portfolio management team, and a substantially similar portfolio
composition to that of your fund.
15
Third, your fund will be the accounting successor of the reorganization,
which means that the combined fund will inherit your fund's performance record,
which is better, although briefer, than that of Europe Fund. This record is as
a result of your fund's investment approach and portfolio management team. Of
course, past performance does not predict future results.
Fourth, no increase in management fee (as a percentage of average daily
net assets) is expected as a result of the reorganization. Since June 2003,
Pioneer has voluntarily reduced the expenses paid by your fund from the
contractual limitation of 1.75% to 1.25% of average daily net assets
attributable to Class A shares. After the reorganization, Pioneer will
discontinue the voluntary 1.25% expense limitation but will continue the
limitation of 1.75% attributable to Class A shares for the combined fund
through December 2008. Expenses attributable to Class B and Class C shares will
be limited to 2.65% and 2.65% of their average daily net assets, respectively,
through December 2006. Any contingent deferred sales charges applicable to
shares of your fund outstanding at the time of the reorganization will continue
to apply to Europe Fund shares received by shareholders of your fund in the
reorganization.
Fifth, the pro forma gross expenses of the combined fund will be
substantially lower than your fund's current gross expenses. However, the
elimination of the 1.25% voluntary limitation applicable to Europe Select
Fund's Class A shares will result in the net expenses of Class A, Class B and
Class C shares of the fund continuing after the reorganization, after giving
effect to both voluntary and contractual expense limitations, being estimated
to be higher than the historical expense ratios of Europe Select Fund. However,
the decision to eliminate the voluntary limitation will be implemented
regardless of whether the reorganization is approved. The expenses, net of the
contractual limitation, attributable to Class C shares are estimated to be
higher after the reorganization (2.65%) than the historical net expenses
attributable to Class C shares (2.53%). The expenses, net of the contractual
limitation, attributable to Class A and Class B shares after the reorganization
are estimated to be the same or lower than the historical net expenses
attributable to Class A and Class B shares.
Fifth, the pro forma gross expenses of the combined fund will be
substantially lower than your fund's current gross expenses. However, the
elimination of the 1.25% voluntary limitation applicable to Europe Select
Fund's Class A shares will result in the net expenses of Class A, Class B and
Class C shares of the fund continuing after the reorganization, after giving
effect to both voluntary and contractual expense limitations, being estimated
to be higher than the historical expense ratios of Europe Select Fund. However,
the decision to eliminate the voluntary limitation will be implemented
regardless of whether the reorganization is approved.
Sixth, shareholders of your fund have the potential to benefit from
capital loss carryforwards of Europe Fund. As of March 31, 2005, your fund did
not have any capital loss carryforwards, Europe Fund had estimated capital loss
carry-forwards of $45,570,925. On that same date, the portfolio positions that
are currently anticipated to be sold in restructuring the Fund's portfolio
represented unrealized gains of approximately $17,202,704. To the extent that
Europe Fund uses these capital loss carryforwards to offset gain after the
reorganization, shareholders of your fund will share in that benefit with other
shareholders of Europe Fund.
Seventh, the board of your fund was advised that the closing of the
reorganization would be conditioned upon the delivery of an opinion of counsel
to your fund described below under "Tax Status of the Reorganization."
The boards of both funds considered that Pioneer will pay all of the
expenses of the funds associated with the preparation, printing and mailing of
any shareholder communications, including this combined prospectus/proxy
statement, and any filings with the SEC and other governmental agencies in
connection with the reorganization.
The boards of both funds considered that the funds' investment adviser and
principal distributor will benefit from the reorganization. Because your fund
will be the accounting successor of the reorganization and the combined fund
will assume your fund's performance record, Pioneer expects to be able to
increase the combined fund's assets at a faster rate than would otherwise be
possible if it continued to offer Europe Fund and your fund separately. Such a
growth in asset size will benefit Pioneer by increasing its management fees and
accelerating the point at which management of the combined fund is profitable
to Pioneer.
The boards of both funds also considered that the reorganization presents
an excellent opportunity for the shareholders of each fund to become investors
in a combined fund that has a larger asset size than either fund alone without
the obligation to pay commissions or other transaction costs that a fund
normally incurs when purchasing securities. This opportunity provides an
economic benefit to both funds and their shareholders.
Tax Status of the Reorganization
The reorganization is not intended to result in income, gain or loss for
U.S. federal income tax purposes and will not take place unless the funds
receive a satisfactory opinion from Wilmer Cutler Pickering Hale and Dorr LLP,
counsel to the funds, that the Reorganization will be a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended
(the "Code").
As a result, for federal income tax purposes:
o No gain or loss will be recognized by your fund upon (1) the transfer
of all of its assets to Europe Fund as described above or (2) the
distribution by your fund of Europe Fund shares to your fund's
shareholders;
o No gain or loss will be recognized by Europe Fund upon the receipt of
your fund's assets solely in exchange for the issuance of Europe Fund
shares to your fund and the assumption of your fund's liabilities by
Europe Fund;
16
o The basis of the assets of your fund acquired by Europe Fund will be
the same as the basis of those assets in the hands of your fund
immediately before the transfer;
o The tax holding period of the assets of your fund in the hands of
Europe Fund will include your fund's tax holding period for those
assets;
o You will not recognize gain or loss upon the exchange of shares of
your fund solely for Europe Fund shares as part of the reorganization;
o The basis of Europe Fund shares received by you in the reorganization
will be the same as the basis of the shares of your fund you surrender
in exchange; and
o The tax holding period of Europe Fund shares you receive will include
the tax holding period of the shares of your fund that you surrender
in exchange, provided that the shares of your fund were held by you as
capital assets on the date of the exchange.
In rendering such opinions, counsel shall rely upon, among other things,
reasonable assumptions as well as representations of Europe Fund and your fund.
These representations are attached hereto as Exhibit B and Exhibit C.
No tax ruling has been or will be received from the Internal Revenue
Service ("IRS") in connection with the reorganization. An opinion of counsel is
not binding on the IRS or a court, and no assurance can be given that the IRS
would not assert, or a court would not sustain, a contrary position.
You should consult your tax adviser for the particular tax consequences to
you of the transaction, including the applicability of any state, local or
foreign tax laws.
Additional Terms of the Agreement and Plan of Reorganization
Cancellation of Share Certificates. If your shares are represented by one
or more share certificates before the reorganization date, on the
reorganization date all certificates will be canceled, will no longer evidence
ownership of your fund's shares and will evidence ownership of Europe Fund
shares. Europe Fund will not issue share certificates in the reorganization.
Conditions to Closing the Reorganization. The obligation of your fund to
consummate the reorganization is subject to the satisfaction of certain
conditions, including the performance by Europe Fund of all its obligations
under the Agreement and the receipt of all consents, orders and permits
necessary to consummate the reorganization (see Agreement, paragraph 7).
The obligation of Europe Fund to consummate the reorganization is subject
to the satisfaction of certain conditions, including your fund's performance of
all of its obligations under the Agreement, the receipt of certain documents
and financial statements from your fund and the receipt of all consents, orders
and permits necessary to consummate the reorganization (see Agreement,
paragraph 8).
The obligations of your fund and Europe Fund are subject to approval of
the Agreement by the necessary vote of the outstanding shares of your fund in
accordance with the provisions of your fund's declaration of trust and by-laws.
The funds' obligations are also subject to the receipt of a favorable opinion
of Wilmer Cutler Pickering Hale and Dorr LLP that the Reorganization will
constitute a "reorganization" within the meaning of Section 368(a) of the Code
(see Agreement, Section 9.5).
Termination of Agreement. The board of trustees of your fund or Europe
Fund may terminate the Agreement (even if the shareholders of your fund have
already approved it) by their mutual agreement at any time before the
reorganization date, if the boards believed that proceeding with the
reorganization would no longer be advisable.
Expenses of the Reorganization. Pioneer will pay the expenses of both
funds in connection with the reorganization, including the costs of printing,
mailing, legal fees, audit fees and solicitation expenses.
17
CAPITALIZATION
The following table sets forth the capitalization of each fund as of March
31, 2005 and the pro forma combined capitalization of both funds as if the
reorganization had occurred on that date. If the reorganization is consummated,
the actual exchange ratios on the reorganization date may vary from the
exchange ratios indicated. This is due to changes in the market value of the
portfolio securities of both funds between March 31, 2005 and the
reorganization date, changes in the amount of undistributed net investment
income and net realized capital gains of both funds during that period
resulting from income and distributions, and changes in the accrued liabilities
of both funds during the same period.
Europe Select Europe Pro
Fund Fund Forma
--------------- ------------- -------------
Net Assets (millions) ......... $14 $191 $205
Net Asset Value Per Share
Class A ..................... $12.78 $30.36 $30.36
Class B ..................... $12.55 $27.67 $27.67
Class C ..................... $12.64 $27.64 $27.64
Class R ..................... N/A $30.13 $30.13
Class Y ..................... N/A $31.23 $31.23
Shares Outstanding
Class A ..................... 571,010 4,258,909 4,499,275
Class B ..................... 230,333 1,666,014 1,770,484
Class C ..................... 259,733 487,943 606,721
Class R ..................... N/A 1,565 1,565
Class Y ..................... N/A 77,186 77,186
It is impossible to predict how many shares of Europe Fund will actually
be received and distributed by your fund on the reorganization date. The table
should not be relied upon to determine the amount of Europe Fund shares that
will actually be received and distributed.
BOARD'S EVALUATION AND RECOMMENDATION
For the reasons described above, the board of trustees of your fund,
including the trustees who are not "interested persons" of your fund or the
investment adviser ("independent trustees"), approved the reorganization. In
particular, the trustees determined that the reorganization is in the best
interests of your fund and that the interests of your fund's shareholders would
not be diluted as a result of the reorganization. Similarly, the board of
trustees of Europe Fund, including the independent trustees, approved the
reorganization. They also determined that the reorganization is in the best
interests of Europe Fund and that the interests of Europe Fund's shareholders
would not be diluted as a result of the reorganization.
The trustees of your fund recommend that shareholders of your fund vote
FOR the proposal to approve the Agreement and Plan of Reorganization.
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote. A quorum is required to
conduct business at the meeting. With respect to each fund, the presence in
person or by proxy of a majority of shareholders entitled to cast votes at the
meeting will constitute a quorum. Approval of the proposal described above
requires the affirmative vote of a majority of the shares of your fund
outstanding and entitled to vote. For this purpose, a majority of the
outstanding shares of your fund means the vote of the lesser of:
(1) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the fund are present or represented by proxy,
or
(2) more than 50% of the outstanding shares of the fund.
18
The table below shows how shares will be treated for the purposes of quorum and
voting requirements.
- -----------------------------------------------------------------------------------------------------------------------------------
Shares Quorum Voting
- -----------------------------------------------------------------------------------------------------------------------------------
In General All shares "present" in person or by proxy are Shares "present" in person will be voted in
counted toward a quorum. person at the meeting. Shares present by
proxy will be voted in accordance with
instructions.
- -----------------------------------------------------------------------------------------------------------------------------------
Signed Proxy with no Considered "present" at meeting for purposes Voted "for" the proposal.
Voting Instruction (other of quorum.
than Broker Non-Vote)
- -----------------------------------------------------------------------------------------------------------------------------------
Broker Non-Vote (where the Considered "present" at meeting for purposes Broker non-votes do not count as a vote "for"
underlying holder had not of quorum. the proposal and effectively result in a vote
voted and the broker does not "against" the proposal.
have discretionary authority to
vote the shares)
- -----------------------------------------------------------------------------------------------------------------------------------
Vote to Abstain Considered "present" at meeting for purposes Abstentions do not constitute a vote "for"
of quorum. the proposal and effectively result in a vote
"against" the proposal.
- -----------------------------------------------------------------------------------------------------------------------------------
If the required approval of shareholders is not obtained, the meeting may
be adjourned as more fully described in this combined prospectus/proxy
statement, and your fund will continue to engage in business as a separate
mutual fund and the board of trustees will consider what further action may be
appropriate.
COMPARISON OF DELAWARE STATUTORY TRUST
AND MASSACHUSETTS BUSINESS TRUST
Limitation of Shareholders' and Series' Liability
Delaware law provides that the shareholders of a Delaware statutory trust
shall not be subject to liability for the debts or obligations of the trust.
Under Massachusetts law, shareholders of a Massachusetts business trust (such
as the shareholders of Europe Fund) may, under certain circumstances, be liable
for the debts and obligations of that trust. Although the risk of liability of
shareholders of a Massachusetts business trust who do not participate in the
management of the trust may be remote, Delaware law affords greater protection
against potential shareholder liability. Similarly, Delaware law provides that,
to the extent that a Delaware statutory trust issues multiple series of shares,
each series shall not be liable for the debts or obligations of any other
series, another potential, although remote, risk in the case of a Massachusetts
business trust. While the trustees believe that a series of a Massachusetts
business trust will only be liable for its own obligations, there is no direct
statutory or judicial support for that position.
Limitation of Trustee Liability
Delaware law provides that, except to the extent otherwise provided in a
trust's declaration of trust or by-laws, trustees will not be personally liable
to any person (other than the statutory trust or a shareholder thereof) for any
act, omission or obligation of the statutory trust or any trustee thereof.
Delaware law also provides that a trustee's actions under a Delaware statutory
trust's declaration of trust or by-laws will not subject the trustee to
liability to the statutory trust or its shareholders if the trustee takes such
action in good faith reliance on the provisions of the statutory trust's
declaration of trust or bylaws. The declaration of trust of a Massachusetts
business trust may limit the liability of a trustee, who is not also an officer
of the corporation, for breach of fiduciary duty except for, among other
things, any act or omission not in good faith which involves intentional
misconduct or a knowing violation of law or any transaction from which such
trustee derives an improper direct or indirect financial benefit. The trustees
believe that such limitations on liability under Delaware law and under Europe
Fund's declaration of trust are consistent with those applicable to directors
of a corporation under Delaware law and will be beneficial in attracting and
retaining in the future qualified persons to act as trustees.
19
Shareholder Voting
Delaware law provides that a Delaware statutory trust's declaration of
trust or by-laws may set forth provisions related to voting in any manner. This
provision appears to permit trustee and shareholder voting through computer or
electronic media. For an investment company with a significant number of
institutional shareholders, all with access to computer or electronic networks,
the use of such voting methods could significantly reduce the costs of
shareholder voting. However, the advantage of such methods may not be
realizable unless the SEC modifies its proxy rules. Also, as required by the
Investment Company Act of 1940, as amended (the "1940 Act"), votes on certain
matters by trustees would still need to be taken at actual in-person meetings.
Board Composition
Delaware law explicitly provides that separate boards of trustees may be
authorized for each series of a Delaware statutory trust. Whether separate
boards of trustees can be authorized for series of a Massachusetts business
trust is unclear under Massachusetts law. As always, the establishment of any
board of trustees of a registered investment company must comply with
applicable securities laws, including the provision of the 1940 Act regarding
the election of trustees by shareholders. Establishing separate boards of
trustees would, among other things, enable the series of a Delaware statutory
trust to be governed by individuals who are more familiar with such series'
particular operations.
ADDITIONAL INFORMATION ABOUT THE PIONEER FUNDS
Investment Adviser
Pioneer serves as the investment adviser to the Europe Fund. Pioneer is an
indirect, wholly owned subsidiary of UniCredito Italiano S.p.A., one of the
largest banking groups in Italy. Pioneer is part of the global asset management
group providing investment management and financial services to mutual funds,
institutional and other clients. As of December 31, 2004, assets under
management were approximately $175 billion worldwide, including over $47
billion in assets under management by Pioneer. Pioneer's main office is at 60
State Street, Boston, Massachusetts 02109. Pioneer's U.S. mutual fund
investment history includes creating one of the first mutual funds in 1928.
The board of trustees of the Pioneer funds is responsible for overseeing
the performance of each of Pioneer funds' investment adviser and subadviser and
determining whether to approve and renew the fund's investment management
agreement and the sub-advisory agreements.
Disclosure of Portfolio Holdings
The Europe Fund's Board of Trustees has adopted policies and procedures
relating to disclosure of the fund's portfolio securities. These policies and
procedures are designed to provide a framework for disclosing information
regarding portfolio holdings, portfolio composition or other portfolio
characteristics consistent with applicable regulations of the federal
securities laws and general principles of fiduciary duty relating to fund
shareholders. While Pioneer may manage other funds and accounts that have
substantially similar investment strategies, these policies and procedures only
relate to the disclosure of portfolio information of registered management
investment companies.
Generally, Pioneer will make the Europe Fund's portfolio information
available to the public on a monthly basis with an appropriate delay based upon
the nature of the information disclosed. Pioneer normally will publish the
Europe Fund's full portfolio holdings thirty (30) days after the end of each
month. Such information shall be made available on the fund's website
(www.pioneerfunds.com) and may be sent to rating agencies, reporting/news
services and financial intermediaries, upon request. In addition, Pioneer
generally makes publicly available information regarding the Europe Fund's top
ten holdings (including the percentage of the Europe Fund's assets represented
by each security), the percentage breakdown of the Europe Fund's investments by
country, sector and industry, various volatility measures (such as beta,
standard deviation, etc.), market capitalization ranges and other portfolio
characteristics (such as alpha, average P/E ratio, etc.) three (3) business
days after the end of each month.
Pioneer may provide the Europe Fund's full portfolio holdings or other
information to certain entities prior to the date such information is made
public, provided that certain conditions are met. The entities to which such
disclosure may be made as of the date of this Registration Statement are rating
agencies, plan sponsors, prospective separate account clients and other
financial intermediaries (i.e., organizations evaluating the fund for purposes
of investment by their clients, such as broker-dealers, investment advisers,
banks, insurance companies, financial planning firms, plan sponsors, plan
administrators, shareholder servicing organizations and pension consultants).
As of the date of this Registration Statement, Pioneer has not provided the
Europe Fund's portfolio holdings information to any entity prior to the date
20
such information was made public. The third party must agree to a limited use
of that information which does not conflict with the interests of the Europe
Fund's shareholders, to use the information only for that authorized purpose,
to keep such information confidential, and not to trade on such information.
The Europe Fund's Board of Trustees considered the disclosure of portfolio
holdings information to these categories of entities to be consistent with the
best interests of shareholders in light of the agreement to maintain the
confidentiality of such information and only to use such information for the
limited and approved purposes. Pioneer's compliance department, the local head
of investment management and the global chief investment officer may, but only
acting jointly, grant exemptions to this policy. Exemptions may be granted only
if these persons determine that providing such information is consistent with
the interests of shareholders and the third party agrees to limit the use of
such information only for the authorized purpose, to keep such information
confidential, and not to trade on such information. Although the Board will
periodically be informed of exemptions granted, granting exemptions entails the
risk that portfolio holdings information may be provided to entities that use
the information in a manner inconsistent with their obligations and the best
interests of the Europe Fund.
Compliance with the Europe Fund's portfolio holdings disclosure policy is
subject to periodic review by the Board of Trustees, including a review of any
potential conflicts of interest in the disclosures made by Pioneer in
accordance with the policy or the exceptions permitted under the policy. Any
change to the policy to expand the categories of entities to which portfolio
holdings may be disclosed or an increase in the purposes for which such
disclosure may be made would be subject to approval by the Europe Fund's Board
of Trustees and, reflected, if material, in a supplement to the fund's
Statement of Additional Information.
The fund's portfolio holdings disclosure policy is not intended to prevent
the disclosure of any and all portfolio information to the fund's service
providers who generally need access to such information in the performance of
their contractual duties and responsibilities, such as Pioneer, the fund's
custodian, fund accounting agent, principal underwriter, investment
sub-adviser, if any, auditors or counsel. In approving the policy, the Board of
Trustees considered that the service providers are subject to duties of
confidentiality arising under law or contract that provide an adequate
safeguard for such information. None of Pioneer, the fund, or any other party
receive any compensation or other consideration from any arrangement pertaining
to the release of the fund's portfolio holdings information.
In addition, the fund makes its portfolio holdings available semi-annually
in shareholder reports filed on Form N-CSR and after the first and third fiscal
quarters in regulatory filings on Form N-Q. These shareholder reports and
regulatory filings are filed with the SEC, as required by the federal
securities laws, and are generally available within seventy (70) days after the
end of the fund's fiscal quarter.
Additional Information About the Portfolio Managers
Other Accounts Managed by the Portfolio Managers. The table below
indicates, for each portfolio manager of the Europe Fund, information about the
accounts other than the Europe Fund over which the portfolio manager has
day-to-day investment responsibility. All information on the number of accounts
and total assets in the table is as of December 31, 2004. For purposes of the
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts. Certain funds and other accounts managed by the portfolio manager may
have substantially similar investment strategies.
- ---------------------------------------------------------------------------------------------------------------------------------
Number of
Accounts Assets
Managed Managed
for which for which
Advisory Advisory
Number of Total Fee is Fee is
Name of Portfolio Accounts Assets Performance- Performance-
Manager Type of Account Managed Managed Based Based
- ---------------------------------------------------------------------------------------------------------------------------------
Stan Pearson Other Registered Investment Companies 0 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Other Pooled Investment Vehicles 1 $3.240 billion N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Other Accounts 1 $645,000 N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Other Accounts Managed by the Portfolio Managers. The table below
indicates, for each portfolio manager of the Europe Select Fund, information
about the accounts other than the Europe Select Fund over which the portfolio
manager has day-to-day investment responsibility. All information on the number
of accounts and total assets in the table is as of December 31, 2004. For
purposes of the
21
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts. Certain funds and other accounts managed by the portfolio manager may
have substantially similar investment strategies.
- ---------------------------------------------------------------------------------------------------------------------------------
Number of
Accounts Assets
Managed Managed
for which for which
Advisory Advisory
Number of Total Fee is Fee is
Name of Portfolio Accounts Assets Performance- Performance-
Manager Type of Account Managed Managed Based Based
- ---------------------------------------------------------------------------------------------------------------------------------
Andrew Arbuthnott Other Registered Investment Companies 0 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Other Pooled Investment Vehicles 3 $4.548 billion N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Other Accounts 0 N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------------
Potential Conflicts of Interest. When a portfolio manager is responsible
for the management of more than one account, the potential arises for the
portfolio manager to favor one account over another. The principal types of
potential conflicts of interest that may arise are discussed below. For the
reasons outlined below, Pioneer does not believe that any material conflicts
are likely to arise out of a portfolio manager's responsibility for the
management of the fund as well as one or more other accounts. Although Pioneer
has adopted procedures that it believes are reasonably designed to detect and
prevent violations of the federal securities laws and to mitigate the potential
for conflicts of interest to affect its portfolio management decisions, there
can be no assurance that all conflicts will be identified or that all
procedures will be effective in mitigating the potential for such risks.
Generally, the risks of such conflicts of interests are increased to the extent
that a portfolio manager has a financial incentive to favor one account over
another. Pioneer has structured its compensation arrangements in a manner that
is intended to limit such potential for conflicts of interests. See
"Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating
new investment opportunities that have limited supply, such as initial
public offerings and private placements. If, for example, an initial
public offering that was expected to appreciate in value significantly
shortly after the offering was allocated to a single account, that
account may be expected to have better investment performance than
other accounts that did not receive an allocation of the initial
public offering.
o A portfolio manager could favor one account over another in the order
in which trades for the accounts are placed. If a portfolio manager
determines to purchase a security for more than one account in an
aggregate amount that may influence the market price of the security,
accounts that purchased or sold the security first may receive a more
favorable price than accounts that made subsequent transactions. The
less liquid the market for the security or the greater the percentage
that the proposed aggregate purchases or sales represent of average
daily trading volume, the greater the potential for accounts that make
subsequent purchases or sales to receive a less favorable price. When
a portfolio manager intends to trade the same security on the same day
for more than one account, the trades typically are "bunched," which
means that the trades for the individual accounts are aggregated and
each account receives the same price. There are some types of accounts
as to which bunching may not be possible for contractual reasons (such
as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in
the best possible price. Where those accounts or circumstances are
involved, Pioneer will place the order in a manner intended to result
in as favorable a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater
degree than other accounts managed by the portfolio manager. If, for
example, the portfolio manager receives a bonus based upon the
performance of certain accounts relative to a benchmark while other
accounts are disregarded for this purpose, the portfolio manager will
have a financial incentive to seek to have the accounts that determine
the portfolio manager's bonus achieve the best possible performance to
the possible detriment of other accounts. Similarly, if Pioneer
receives a performance-based advisory fee, the portfolio manager may
favor that account, whether or not the performance of that account
directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager
has a beneficial interest in the account, in order to benefit a large
client or to compensate a client that had poor returns. For example,
if the portfolio manager held an interest in an investment
22
partnership that was one of the accounts managed by the portfolio
manager, the portfolio manager would have an economic incentive to
favor the account in which the portfolio manager held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could
arise. For example, if a portfolio manager purchases a security for
one account and sells the same security for another account, such
trading pattern may disadvantage either the account that is long or
short. In making portfolio manager assignments, Pioneer seeks to avoid
such potentially conflicting situations. However, where a portfolio
manager is responsible for accounts with differing investment
objectives and policies, it is possible that the portfolio manager
will conclude that it is in the best interest of one account to sell a
portfolio security while another account continues to hold or increase
the holding in such security.
Compensation of Portfolio Managers. Pioneer has adopted a system of
compensation for portfolio managers and seeks to align the financial interests
of the portfolio managers with both those of shareholders of the accounts the
portfolio managers manage, through incentive payments based in part on the
relative investment performance of those funds, and also Pioneer through
incentive payments based in part on Pioneer's financial performance. Pioneer's
compensation arrangements with its portfolio managers are determined on the
basis of the portfolio manager's overall services to Pioneer and its affiliates
and not on the basis of specific funds or accounts managed by the portfolio
manager. The compensation program for all Pioneer portfolio managers includes a
base salary (determined by the rank and tenure of the employee) and an annual
bonus program, as well as customary benefits that are offered generally to all
full-time employees. Base compensation is fixed and normally reevaluated on an
annual basis. Pioneer seeks to set base compensation at market rates, taking
into account the experience and responsibilities of the portfolio manager. The
bonus plan is intended to provide a competitive level of annual bonus
compensation that is tied to the portfolio manager achieving superior
investment performance and aligns the financial incentives of Pioneer and the
investment professional. Any bonus under the plan is completely discretionary,
with a maximum annual bonus that may be in excess of base salary. The annual
bonus is based upon a combination of the following factors:
o Quantitative Investment Performance. The quantitative investment
performance calculation is based on pre-tax performance of all of the
accounts managed by the portfolio manager (which includes the fund and
any other accounts managed by the portfolio manager) over a one-year
period (20% weighting) and four-year period (80% weighting), measured
for periods ending on December 31. The account is ranked against its
peer group universe (60%) and a broad-based securities market index
(40%).
o Qualitative Performance. The qualitative performance component
includes specific objectives that are mutually established and
evaluated by each portfolio manager and management.
o Company Results and Business Line Results. Company results and
business/division line results affect a portfolio manager's actual
bonus by a leverage factor of plus or minus (-) a predetermined
percentage.
Certain portfolio managers participate in an incentive plan whereby senior
executives or other key employees are granted options in stock of Pioneer
Global Asset Management S.p.A., an affiliate of Pioneer, at the then fair value
of the underlying stock. These options are generally exercisable within three
years.
Share Ownership by Portfolio Managers. The following table indicates as of
December 31, 2004 the value, within the indicated range, of shares beneficially
owned by the portfolio managers of the Europe Fund and Europe Select Fund.
- ------------------------------------------------------------------------------------------------
Name of Portfolio Manager Name of Fund Beneficial Ownership of the Fund*
- ------------------------------------------------------------------------------------------------
Stan Pearson Europe Fund A
- ------------------------------------------------------------------------------------------------
Andrew Arbuthnott Europe Select Fund A
- ------------------------------------------------------------------------------------------------
* Key to Dollar Ranges
A. None
B. $1-$10,000
C. $10,001-$50,000
D. $50,001-$100,000
E. $00,001-$500,000
F. $500,001-$1,000,000
G. Over $1,000,000
23
Buying, Exchanging and Selling Shares of the Pioneer Funds
Net Asset Value. The Europe Fund's net asset value is the value of its
portfolio of securities plus any other assets minus its operating expenses and
any other liabilities. The Europe Fund calculates a net asset value for each
class of shares every day the New York Stock Exchange is open when regular
trading closes (normally 4:00 p.m. Eastern time).
The Europe Fund generally values its portfolio securities using closing
market prices or readily available market quotations. When closing market
prices or market quotations are not available or are considered by Pioneer to
be unreliable, the fund uses a security's fair value. All methods of
determining the value of a security used by the fund, including those discussed
below, on a basis other than market value, are forms of fair value. All
valuations of securities on a fair value basis are made pursuant to procedures
adopted by the board of trustees. The use of fair value pricing by the fund may
cause the net asset value of its shares to differ from the net asset value that
would be calculated only using market prices. For market prices and quotations,
as well as for some fair value methods, the fund relies upon securities prices
provided by pricing services.
The Europe Fund primarily invests in securities of non-U.S. issuers and
the markets for these securities generally close prior to the time the fund
determines its net asset value. However, the value of these securities
continues to be influenced by changes in the global markets. Consequently, the
fund's trustees have determined to use the fair value of these securities as of
the time the fund determines its net asset value, based upon data from a
pricing service. On a daily basis, the pricing service recommends changes,
based upon a proprietary model, to the closing market prices of each non-U.S.
security held by the fund to reflect the security's fair value at the time the
fund determines its net asset value. The fund applies these recommendations in
accordance with procedures approved by the trustees. A security's fair value
determined in this manner may differ from the security's closing market price
on the date the fund determines its net asset value or the opening price of the
security on the next business day. The fund's use of this method may
significantly affect its net asset value compared to the net asset value that
would have been determined using closing market prices. The fund also may take
other factors influencing specific markets or issuers into consideration in
determining the fair value of a non-U.S. security. The use of this method is
intended to reduce the opportunities for market timers who seek to take
advantage of time zone differences between the U.S. and non-U.S. markets.
International securities markets may be open on days when the U.S. markets are
closed. For this reason, the value of any international securities owned by the
fund could change on a day you cannot buy or sell shares of the fund.
Certain types of securities, including those discussed in this paragraph,
are priced using fair value rather than market prices. The Europe Fund uses a
pricing matrix to determine the value of fixed income securities that do not
trade daily. A pricing matrix is a means of valuing a debt security on the
basis of current market prices for other debt securities and historical trading
patterns in the market for fixed income securities. The fund values debt
securities with remaining maturities of 60 days or less at amortized cost. To
the extent that the fund invests in the shares of other registered open-end
investment companies that are not traded on an exchange (mutual funds), such
shares are valued at their published net asset values per share as reported by
the funds. The prospectuses of these funds explain the circumstances under
which the funds will use fair value pricing and the effects of using fair value
pricing.
Opening Your Account. If your shares are held in your investment firm's
name, the options and services available to you may be different from those
described herein or in the Europe Fund's prospectus. Ask your investment
professional for more information.
If you invest in Europe Fund through investment professionals or other
financial intermediaries, including wrap programs and fund supermarkets,
additional conditions may apply to your investment in a Pioneer fund, and the
investment professional or intermediary may charge you a transaction-based or
other fee for its services. These conditions and fees are in addition to those
imposed by the Pioneer fund and its affiliates. You should ask your investment
professional or financial intermediary about its services and any applicable
fees.
Account Options. Use your account application to select options and
privileges for your account. You can change your selections at any time by
sending a completed account options form to the transfer agent. You may be
required to obtain a signature guarantee to make certain changes to an existing
account.
Call or write to the Pioneer funds' transfer agent for account
applications, account options forms and other account information:
PIONEER INVESTMENT MANAGEMENT SHAREHOLDER SERVICES, INC.
P.O. Box 55014
Boston, Massachusetts 02205-5014
Telephone 1-800-225-6292
Telephone Transaction Privileges. If your account is registered in your
name, you can buy, exchange or sell shares of the Pioneer funds by telephone.
If you do not want your account to have telephone transaction privileges, you
must indicate that choice on your account application or by writing to the
transfer agent.
24
When you request a telephone transaction the transfer agent will try to
confirm that the request is genuine. The transfer agent records the call,
requires the caller to provide the personal identification number for the
account and sends you a written confirmation. Each Pioneer fund may implement
other confirmation procedures from time to time. Different procedures may apply
if you have a non-U.S. account or if your account is registered in the name of
an institution, broker-dealer or other third party.
Online Transaction Privileges. If your account is registered in your name,
you may be able to buy, exchange or sell fund shares online. Your investment
firm may also be able to buy, exchange or sell your fund shares online.
To establish online transaction privileges complete an account options
form, write to the transfer agent or complete the online authorization screen
on (www.pioneerfunds.com).
To use online transactions, you must read and agree to the terms of an
online transaction agreement available on the Pioneer website. When you or your
investment firm requests an online transaction the transfer agent
electronically records the transaction, requires an authorizing password and
sends a written confirmation. Each Pioneer fund may implement other procedures
from time to time. Different procedures may apply if you have a non-U.S.
account or if your account is registered in the name of an institution,
broker-dealer or other third party. You may not be able to use the online
transaction privilege for certain types of accounts, including most retirement
accounts.
Share Price. If you place an order with your investment firm before the
New York Stock Exchange closes and your investment firm submits the order to
PFD prior to PFD's close of business (usually 5:30 p.m. Eastern time), your
share price will be calculated that day. Otherwise, your price per share will
be calculated at the close of the New York Stock Exchange after the distributor
receives your order. Your investment firm is responsible for submitting your
order to the distributor.
Buying Pioneer Fund Shares. You may buy shares of a Pioneer fund from any
investment firm that has a sales agreement with PFD. If you do not have an
investment firm, please call 1-800-225-6292 for information on how to locate an
investment professional in your area.
You can buy shares of the Pioneer funds at the offering price. The
distributor may reject any order until it has confirmed the order in writing
and received payment. The fund reserves the right to stop offering any class of
shares.
Minimum Investment Amounts. Your initial investment must be at least
$1,000. Additional investments must be at least $100 for Class A shares and
$500 for Class B and Class C shares. You may qualify for lower initial or
subsequent investment minimums if you are opening a retirement plan account,
establishing an automatic investment plan or placing your trade through your
investment firm. The minimum investment amount does not apply for purposes of
the reorganization.
Exchanging Pioneer Fund Shares. You may exchange your shares in a Pioneer
fund for shares of the same class of another Pioneer mutual fund. Your exchange
request must be for at least $1,000 unless the fund you are exchanging into has
a different minimum. You may make up to four exchange redemptions of $25,000 or
more per account per calendar year. Each Pioneer fund allows you to exchange
your shares at net asset value without charging you either an initial or
contingent deferred sales charge at the time of the exchange. An exchange
generally is treated as a sale and a new purchase of shares for federal income
tax purposes. Shares you acquire as part of an exchange will continue to be
subject to any contingent deferred sales charge that applies to the shares you
originally purchased. When you ultimately sell your shares, the date of your
original purchase will determine your contingent deferred sales charge. You
will not be charged any sales loads for exchanging Class A shares of the Europe
Fund you receive as a result of the reorganization with Class A shares of
another Pioneer fund.
Selling Pioneer Fund Shares. Your shares will be sold at net asset value
per share next calculated after the Europe Fund receives your request in good
order. If the shares you are selling are subject to a deferred sales charge, it
will be deducted from the sale proceeds. The Europe Fund generally will send
your sale proceeds by check, bank wire or electronic funds transfer. Normally
you will be paid within seven days. If you are selling shares from a
non-retirement account or certain IRAs, you may use any of the methods
described below. If you are selling shares from a retirement account other than
an IRA, you must make your request in writing.
You may have to pay federal income taxes on a sale or an exchange or any
distributions received in cash or additional shares.
Good Order means that:
o You have provided adequate instructions
o There are no outstanding claims against your account
o There are no transaction limitations on your account
o If you have any Pioneer fund share certificates, you submit them and
they are signed by each record owner exactly as the shares are
registered
25
o Your request includes a signature guarantee if you:
-- Are selling over $100,000 or exchanging over $500,000 worth of
shares
-- Changed your account registration or address within the last 30
days
-- Instruct the transfer agent to mail the check to an address
different from the one on your account
-- Want the check paid to someone other than the account owner(s)
-- Are transferring the sale proceeds to a Pioneer mutual fund
account with a different registration
Excessive Trading. Frequent trading into and out of the fund can disrupt
portfolio management strategies, harm fund performance by forcing the fund to
hold excess cash or to liquidate certain portfolio securities prematurely and
increase expenses for all investors, including long-term investors who do not
generate these costs. An investor may use short-term trading as a strategy, for
example, if the investor believes that the valuation of the fund's portfolio
securities for purposes of calculating its net asset value does not fully
reflect the then current fair market value of those holdings. The fund
discourages, and does not take any intentional action to accommodate, excessive
and short-term trading practices, such as market timing. Although there is no
generally applied standard in the marketplace as to what level of trading
activity is excessive, we may consider trading in the fund's shares to be
excessive for a variety of reasons, such as if:
o You sell shares within a short period of time after the shares were
purchased;
o You make two or more purchases and redemptions within a short period
of time;
o You enter into a series of transactions that is indicative of a timing
pattern or strategy; or
o We reasonably believe that you have engaged in such practices in
connection with other mutual funds.
The fund's board of trustees has adopted policies and procedures with
respect to frequent purchases and redemptions of fund shares by fund investors.
Pursuant to these policies and procedures, we monitor selected trades on a
daily basis in an effort to detect excessive short-term trading. If we
determine that an investor or a client of a broker has engaged in excessive
short-term trading that we believe may be harmful to the fund, we will ask the
investor or broker to cease such activity and we will refuse to process
purchase orders (including purchases by exchange) of such investor, broker or
accounts that we believe are under their control. In determining whether to
take such actions, we seek to act in a manner that is consistent with the best
interests of the fund's shareholders.
While we use our reasonable efforts to detect excessive trading activity,
there can be no assurance that our efforts will be successful or that market
timers will not employ tactics designed to evade detection. Frequently, fund
shares are held through omnibus accounts maintained by financial intermediaries
such as brokers and retirement plan administrators, where the holdings of
multiple shareholders, such as all the clients of a particular broker, are
aggregated. Our ability to monitor trading practices by investors purchasing
shares through omnibus accounts is limited and dependent upon the cooperation
of the financial intermediary in observing the fund's policies.
In addition to monitoring trades, the policies and procedures provide
that:
o The fund imposes limitations on the number of exchanges out of an
account holding the fund's Class A, Class B or Class C shares that may
occur in any calendar year.
o Certain funds managed by Pioneer, including your fund and Europe Fund,
have adopted redemption fees that are incurred if you redeem shares
within a short period after purchase, including exchanges. These
redemption fees are described below.
o Since the fund invests primarily in non-U.S. securities, the fund uses
a fair value pricing service as described under "Net Asset Value."
The fund may reject a purchase or exchange order before its acceptance or
an order prior to issuance of shares. The fund may also restrict additional
purchases or exchanges in an account. Each of these steps may be taken, for any
reason, without prior notice, including transactions that the fund believes are
requested on behalf of market timers. The fund reserves the right to reject any
purchase request by any investor or financial institution if the fund believes
that any combination of trading activity in the account or related accounts is
potentially disruptive to the fund. A prospective investor whose purchase or
exchange order is rejected will not achieve the investment results, whether
gain or loss, that would have been realized if the order were accepted and an
investment made in the fund. The fund and its shareholders do not incur any
gain or loss as a result of a rejected order. The fund may impose further
restrictions on trading activities by market timers in the future. The fund's
prospectus will be amended or supplemented to reflect any material additional
restrictions on trading activities intended to prevent excessive trading.
26
Redemption Fee. The fund has adopted a redemption fee on short term
holdings of the fund's shares. If you sell or exchange shares within 30 days of
any purchase of fund shares, the fund will apply a 2% fee to the entire amount
of your sales proceeds. The fund's redemption fee is intended to discourage
short-term trading in fund shares. Short-term trading can increase the expenses
incurred by the fund and make portfolio management less efficient.
27
FINANCIAL HIGHLIGHTS
The following tables show the financial performance of Europe Fund for the
past five years. Certain information reflects financial results for a single
fund share. The total returns in the table represent the rate that your
investment in Europe Fund would have increased or decreased during each period
(assuming reinvestment of all dividends and distributions).
The information below for the fiscal years ended October 31, 2002 through
2004 has been audited by Ernst & Young LLP, the fund's independent registered
public accounting firm, whose report is included in the fund's annual report
along with the fund's financial statements. The information below for the
fiscal years ended October 31, 2000 and 2001 has been audited by Arthur
Andersen LLP, the fund's previous independent accountants. Arthur Andersen
ceased operations in 2002. The annual report is available upon request.
Pioneer Europe Fund Class A Shares
For the Year Ended October 31
-----------------------------------------------------------
2004 2003 2002 2001 2000
-------- -------- -------- -------- --------
Net asset value, beginning of period ......................... $ 22.66 $ 19.40 $ 22.85 $ 32.75 $ 31.71
-------- -------- -------- -------- --------
Increase (decrease) from investment operations:
Net investment income (loss) ................................ $ 0.14 $ 0.17 $ 0.06 $ 0.07 $ (0.15)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions .......................... 4.65 3.09 (3.51) (9.97) 2.30
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations .......... $ 4.79 $ 3.26 $ (3.45) $ (9.90) $ 2.15
-------- -------- -------- -------- --------
Distributions to shareowners:
Net investment income ....................................... (0.09) -- -- -- (0.00)(a)
Net realized gain ........................................... -- -- -- -- (1.11)
Net increase (decrease) in net asset value ................... $ 4.70 $ 3.26 $ (3.45) $ (9.90) $ 1.04
-------- -------- -------- -------- --------
Net asset value, end of period ............................... $ 27.36 $ 22.66 $ 19.40 $ 22.85 $ 32.75
======== ======== ======== ======== ========
Total return* ................................................ 21.19% 16.80% (15.10)% (30.23)% 6.83%
======== ======== ======== ======== ========
Ratio of net expenses to average net assets+ ................. 1.83% 1.98% 1.89% 1.76% 1.54%
Ratio of net investment income (loss) to average net assets+ . 0.52% 0.76% 0.14% (0.07)% (0.39)%
Portfolio turnover rate ...................................... 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) ..................... $119,216 $112,160 $116,051 $167,568 $314,781
Ratio with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses ................................................ 1.83% 1.98% 1.89% 1.76% 1.54%
Net investment income (loss) ................................ 0.52% 0.76% 0.14% (0.07)% (0.39)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses ................................................ 1.83% 1.98% 1.89% 1.74% 1.52%
Net investment income (loss) ................................ 0.52% 0.76% 0.14% (0.05)% (0.37)%
(a) Amount rounds to less than one cent per share.
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
28
Pioneer Europe Fund
Class B Shares
For the Year Ended October 31
--------------------------------------------------------
2004 2003 2002 2001 2000
------- ------- ------- ------- --------
Net asset value, beginning of period ...................... $ 20.85 $ 18.04 $ 21.45 $ 31.06 $ 30.38
------- ------- ------- ------- --------
Increase (decrease) from investment operations:
Net investment loss ...................................... $ (0.11) $ (0.06) $ (0.40) $ (0.38) $ (0.40)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions ........................... 4.28 2.87 (3.01) (9.23) 2.19
------- ------- ------- ------- --------
Net increase (decrease) from investment operations ........ $ 4.17 $ 2.81 $ (3.41) $ (9.61) $ 1.79
------- ------- ------- ------- --------
Distributions to shareowners:
Net realized gain ........................................ -- -- -- -- (1.11)
------- ------- ------- ------- --------
Net increase (decrease) in net asset value ............... $ 4.17 $ 2.81 $ (3.41) $ (9.61) $ 0.68
------- ------- ------- ------- --------
Net asset value, end of period ............................ $ 25.02 $ 20.85 $ 18.04 $ 21.45 $ 31.06
======= ======= ======= ======= ========
Total return* ............................................. 20.00% 15.58% (15.90)% (30.94)% 5.90%
======= ======= ======= ======= ========
Ratio of net expenses to average net assets+ .............. 2.82% 3.02% 2.81% 2.64% 2.37%
Ratio of net investment loss to average net assets+ ....... (0.47)% (0.31)% (0.78)% (0.94)% (1.21)%
Portfolio turnover rate ................................... 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) .................. $44,515 $46,358 $52,009 $83,075 $150,436
Ratio with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses ............................................. 2.82% 3.02% 2.81% 2.64% 2.37%
Net investment loss ...................................... (0.47)% (0.31)% (0.78)% (0.94)% (1.21)%
Ratios with waiver of management fees by PIM and reduction
for fees paid indirectly:
Net expenses ............................................. 2.82% 3.01% 2.81% 2.63% 2.36%
Net investment loss ...................................... (0.47)% (0.30)% (0.78)% (0.93)% (1.20)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Ratios with no reduction for fees paid indirectly.
29
Pioneer Europe Fund
Class C Shares
For the Year Ended October 31
-------------------------------------------------------
2004 2003 2002 2001 2000
------- ------- ------- ------- -------
Net asset value, beginning of period ......................... $ 20.79 $ 17.98 $ 21.39 $ 30.95 $ 30.27
------- ------- ------- ------- -------
Increase (decrease) from investment operations:
Net investment loss ......................................... $ (0.10) $ (0.05) $ (0.45) $ (0.44) $ (0.39)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .............................. 4.28 2.86 (2.96) (9.12) 2.18
------- ------- ------- ------- -------
Net increase (decrease) from investment operations .......... $ 4.18 $ 2.81 $ (3.41) $ (9.56) $ 1.79
------- ------- ------- ------- -------
Distributions to shareowners:
Net realized gain ........................................... -- -- -- -- (1.11)
------- ------- ------- ------- -------
Net increase (decrease) in net asset value ................... $ 4.18 $ 2.81 $ (3.41) $ (9.56) $ 0.68
------- ------- ------- ------- -------
Net asset value, end of period ............................... $ 24.97 $ 20.79 $ 17.98 $ 21.39 $ 30.95
======= ======= ======= ======= =======
Total return* ................................................ 20.11% 15.63% (15.94)% (30.89)% 5.93%
======= ======= ======= ======= =======
Ratio of net expenses to average net assets+ ................. 2.77% 2.97% 2.82% 2.60% 2.34%
Ratio of net investment loss to average net assets+ .......... (0.44)% (0.24)% (0.80)% (0.93)% (1.19)%
Portfolio turnover rate ...................................... 47% 53% 38% 116% 46%
Net assets, end of period (in thousands) ..................... $12,023 $11,801 $12,391 $21,503 $46,544
Ratio with no waiver of management fees by PIM and no
reduction for fees paid indirectly:
Net expenses ................................................ 2.77% 2.97% 2.82% 2.60% 2.34%
Net investment loss ......................................... (0.44)% (0.24)% (0.80)% (0.93)% (1.19)%
Ratios with waiver of management fees by PIM and reduction for
fees paid indirectly:
Net expenses ................................................ 2.76% 2.96% 2.82% 2.58% 2.33%
Net investment loss ......................................... (0.43)% (0.23)% (0.80)% (0.91)% (1.18)%
* Assumes initial investment at net asset value at the beginning of each
period, reinvestment of all distributions, the complete redemption of the
investment at net asset value at the end of each period, and no sales
charges. Total return would be reduced if sales charges were taken into
account.
+ Rations with no reduction for fees paid indirectly.
30
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be
solicited by telephone, by fax or in person by the trustees, officers and
employees of your fund; by personnel of your fund's investment adviser, Pioneer
and its transfer agent, Pioneer Investment Management Shareholder Services,
Inc. ("PIMSS"); or by broker-dealer firms. Computershare Fund Services, 280
Oser Ave, Hauppauge, NY 11788 has been retained to provide proxy solicitation
services to your fund at a cost of approximately $30,000. Pioneer will bear the
cost of such solicitation.
Revoking Proxies
Each shareholder of your fund signing and returning a proxy has the power
to revoke it at any time before it is exercised:
o By filing a written notice of revocation with your fund's transfer agent,
Pioneer Investment Management Shareholder Services, Inc., 60 State Street,
Boston, Massachusetts 02109, or
o By returning a duly executed proxy with a later date before the time of the
meeting, or
o If a shareholder has executed a proxy but is present at the meeting and
wishes to vote in person, by notifying the secretary of your fund (without
complying with any formalities) at any time before it is voted.
Being present at the meeting alone does not revoke a previously executed
and returned proxy.
Outstanding Shares and Quorum
As of March 24, 2005 (the "record date"), 564,239.730 Class A shares of
beneficial interest of your fund were outstanding, 227,510.467 Class B shares
of beneficial interest of your fund were outstanding, and 251,445.378 Class C
shares of beneficial interest of your fund were outstanding. Only shareholders
of record on the record date are entitled to notice of and to vote at the
meeting. The presence in person or by proxy of the majority of shareholders of
your fund entitled to cast votes at the meeting will constitute a quorum.
Other Business
Your fund's board of trustees knows of no business to be presented for
consideration at the meeting other than the reorganization proposal. If other
business is properly brought before the meeting, proxies will be voted
according to the best judgment of the persons named as proxies.
Adjournments
If, by the time scheduled for the meeting, a quorum of shareholders is not
present but sufficient votes "for" the proposal have not been received, the
persons named as proxies may propose an adjournment of the meeting to another
date and time, and the meeting may be held as adjourned within a reasonable
time after the date set for the original meeting without further notice. Any
such adjournment will require the affirmative vote of a majority of the votes
cast in person or by proxy at the session of the meeting to be adjourned. The
persons named as proxies will vote all proxies in favor of the adjournment that
voted in favor of the proposal or that abstained. They will vote against such
adjournment those proxies required to be voted against the proposal. Broker
non-votes will be disregarded in the vote for adjournment. If the adjournment
requires setting a new record date or the adjournment is for more than 120 days
of the original meeting (in which case the board of trustees of your fund will
set a new record date), your fund will give notice of the adjourned meeting to
its shareholders.
Telephone and Internet Voting
In addition to soliciting proxies by mail, by fax or in person, your fund
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 funds are
unaware of any such challenge at this time. In the case of telephone voting,
shareholders would be called at the phone 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
31
at the meeting in accordance with their instructions. In the case of automated
telephone and Internet voting, shareholders would be required to provide their
identifying information and will receive a confirmation of their instructions.
Shareholders' Proposals
Your fund is not required, and does not intend, to hold meetings of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting for shareholders must submit the proposal in writing, so that
it is received by your fund at 60 State Street, Boston, Massachusetts 02109
within a reasonable time before the meeting.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of each fund, as of April 30, 2005, the following persons
owned of record or beneficially 5% or more of the outstanding shares of a class
of each fund, respectively.
As of April 30, 2005, the trustees and officers of each fund owned in the
aggregate less than 1% of the outstanding shares of their respective funds.
- --------------------------------------------------------------------------------------------------------------------
Shareholder Name and Address Actual Percentage owned
- --------------------------------------------------------------------------------------------------------------------
Europe Fund Class B Citigroup Global Markets Inc. 6.48%
333 W 34th St., 7th fl.
New York, NY 10001-2402
- --------------------------------------------------------------------------------------------------------------------
MLPF&S 5.19%
Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
Europe Fund Class C MLPF&S 11.04%
Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
Europe Fund Class R MCB Trust Services 98.24%
FBO Industrial Emp. Int. Union
700 17th St. Ste 300
Denver, CO 80202
- --------------------------------------------------------------------------------------------------------------------
Europe Fund Class Y MLPF&S 61.74%
Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
John F. Cogan Jr. 6.34%
Wilmer Cutler Pickering Hale and Dorr, LLP,
60 State Street, Boston, MA 02109-1800
- --------------------------------------------------------------------------------------------------------------------
John F. Cogan Jr., Mary Cornille, Pamela Cogan 18.44%
Riddle & Gregory Cogan Foundation, c/o Wilmer Cutler Pickering
Hale and Dorr, LLP Trust Dept., P.O. Box 1711,
Boston, MA 02105-1700
- --------------------------------------------------------------------------------------------------------------------
32
- --------------------------------------------------------------------------------------------------------------------
Shareholder Name and Address Actual Percentage owned
- --------------------------------------------------------------------------------------------------------------------
Europe Select Fund MLPF&S 19.94%
Class A Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
Europe Select Fund MLPF&S 6.78%
Class B FBO its customers
Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
Europe Select Fund MLPF&S 11.56%
Class C FBO its customers
Mutual Fund Administration
4800 Deer Lake Dr. E., fl2
Jacksonville, FL 32246-6484
- --------------------------------------------------------------------------------------------------------------------
First Clearing, LLC 8.85%
Irrv. Family Trust
1750 Walton Road
Blue Bell, PA 19422-2303
- --------------------------------------------------------------------------------------------------------------------
A G Edwards & Sons Inc. 8.23%
FBO its Customer
One North Jefferson
St. Louis, MO 63103-2205
- --------------------------------------------------------------------------------------------------------------------
EXPERTS
The financial highlights and financial statements of Europe Fund and
Europe Select Fund for the fiscal years ended October 31, 2004 and August 31,
2004, respectively, are incorporated by reference into this registration
statement. The financial statements and financial highlights for Europe Fund's
and Europe Select Fund's most recent fiscal year ended October 31, 2004 and
August 31, 2004, respectively, have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their reports
thereon incorporated by reference in the statement of additional information.
Such financial statements and financial highlights are incorporated by
reference herein in reliance upon such reports given on the authority of such
firm as experts in accounting and auditing.
AVAILABLE INFORMATION
Each fund is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended and the 1940 Act and files reports, proxy
statements and other information with the SEC. These reports, proxy statements
and other information filed by the funds can be inspected and copied (for a
duplication fee) at the public reference facilities of the SEC at 450 Fifth
Street, N.W., Washington, D.C., and at the Midwest Regional Office (500 West
Madison Street, Suite 1400, Chicago, Illinois). Copies of these materials can
also be obtained by mail from the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
copies of these documents may be viewed on-screen or downloaded from the SEC's
Internet site at http://www.sec.gov.
33
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 13th day of May, 2005, between Pioneer Europe Fund (the "Acquiring Fund"),
a business trust organized under the laws of the Commonwealth of Massachusetts
with its principal place of business at 60 State Street, Boston, Massachusetts
02109, and Pioneer Europe Select Fund, a statutory trust organized under the
laws of the State of Delaware with its principal place of business at 60 State
Street, Boston, Massachusetts 02109 (the "Acquired Fund").
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization (the
"Reorganization") will consist of (a) the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund solely in exchange for (i) the issuance of
shares of beneficial interest of each Class of shares of the Acquiring Fund
that corresponds to the Classes of shares of the Acquired Fund equal to the net
asset value represented by such shares (collectively, the "Acquiring Fund
Shares" and each, an "Acquiring Fund Share") to the Acquired Fund, and (ii) the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund
(the "Assumed Liabilities"), on the closing date set forth below (the "Closing
Date"), and (b) the distribution by the Acquired Fund, on the Closing Date, or
as soon thereafter as practicable, of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in liquidation and termination of the
Acquired Fund, all upon the terms and conditions hereinafter set forth in this
Agreement.
WHEREAS, Acquiring Fund and the Acquired Fund are each registered
investment companies classified as management companies of the open-end type,
and the Acquired Fund owns securities that generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, the Acquiring Fund is authorized to issue shares of beneficial
interest;
WHEREAS, the Board of Trustees of the Acquiring Fund has determined that
the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of the Assumed Liabilities of the Acquired Fund by
the Acquiring Fund are in the best interests of the Acquiring Fund
shareholders;
WHEREAS, the Board of Trustees of the Acquired Fund has determined that
the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of the Assumed Liabilities of the Acquired Fund by
the Acquiring Fund are in the best interests of the Acquired Fund shareholders.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE ACQUIRING
FUND SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES AND LIQUIDATION
AND TERMINATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions set forth in this Agreement and on
the basis of the representations and warranties contained in this Agreement,
the Acquired Fund agrees to transfer its assets as set forth in paragraph 1.2
to the Acquiring Fund free and clear of all liens and encumbrances (other than
those arising under the Securities Act of 1933, as amended (the "Securities
Act"), liens for taxes not yet due and payable or being contested in good faith
and contractual restrictions on the transfer of the acquired assets), and the
Acquiring Fund agrees in exchange therefore: (a) to issue to the Acquired Fund
the number of Acquiring Fund Shares of each Class, including fractional
Acquiring Fund Shares, determined (to at least two decimal places) by dividing
the value of the Acquired Fund's net assets attributable to a Class of shares
and transferred to the Acquiring Fund, computed in the manner and as of the
time and date set forth in paragraph 2.1, by the NAV of one Acquiring Fund
Share of the applicable Class, computed in the manner and as of the time and
date set forth in paragraph 2.2; and (b) to assume the Assumed Liabilities, as
set forth in paragraph 1.3. Such transactions shall take place at the closing
provided for in paragraph 3.1 (the "Closing").
1.2(a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all of the Acquired Fund's property, including, without
limitation, all portfolio securities and instruments, dividends and interest
receivables, cash, goodwill, contractual rights of the Acquired Fund all other
intangible property owned by the Acquired Fund and originals or copies of all
books and records of the Acquired Fund.
(b) The Acquired Fund has provided the Acquiring Fund with a list of all
of the Acquired Fund's securities and other assets as of the date of this
Agreement. The Acquired Fund reserves the right to sell any of these securities
(except to the extent sales may be limited by representations of the Acquired
Fund made in connection with the issuance of the tax opinion provided for in
paragraph 9.5 hereof) but will not, without the prior approval of the Acquiring
Fund, acquire any additional securities other than securities of the type in
which the Acquiring Fund is permitted to invest and shall not acquire, without
the consent of the Acquiring Fund, any securities that are valued at "fair
value" under the valuation procedures of either the Acquired Fund or the
Acquiring Fund.
A-1
1.3 The Acquired Fund will endeavor to discharge all the Acquired Fund's
known liabilities and obligations that are or will become due prior to the
Closing Date. The Acquired Fund shall prepare an unaudited statement of assets
and liabilities (the "Closing Statement"), as of the Valuation Date (as defined
in paragraph 2.1), in accordance with GAAP consistently applied from the prior
audited period, including a calculation of the net assets of the Acquired Fund
as of the close of business on the Closing Date. The Acquiring Fund shall
assume the Assumed Liabilities.
1.4 On the Closing Date or as soon thereafter as is practicable, the
Acquired Fund shall liquidate and distribute pro rata to the Acquired Fund's
shareholders of record determined as of the close of business on the Closing
Date (the "Acquired Fund Shareholders") the Acquiring Fund Shares it receives
pursuant to paragraph 1.1. Such liquidation and distribution will be
accomplished by the Acquired Fund instructing the Acquiring Fund to transfer
the Acquiring Fund Shares then credited to the account of the Acquired Fund on
the books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders (as provided to
the Acquiring Fund by the Acquired Fund) and representing the respective pro
rata number of the Acquiring Fund Shares due such shareholders. The Acquired
Fund shall promptly provide the Acquiring Fund with evidence of such
liquidation and distribution. All issued and outstanding shares of the Acquired
Fund will simultaneously be cancelled on the books of the Acquired Fund,
although share certificates representing interests in the Acquired Fund will
represent a number of Acquiring Fund Shares after the Closing Date as
determined in accordance with paragraph 1.1. The Acquiring Fund shall not issue
certificates representing the Acquiring Fund Shares in connection with such
exchange.
1.5 Ownership of Acquiring Fund Shares will be shown on the books of the
Acquiring Fund's transfer agent. Acquiring Fund Shares will be issued in the
manner described in the Acquiring Fund's Registration Statement on Form N-14 in
the form attached to this Agreement as Annex A.
1.6 Any transfer taxes payable upon issuance of the Acquiring Fund Shares
in a name other than the registered holder of the Acquired Fund shares on the
books of the Acquired Fund as of the time of issuance shall, as a condition of
such issuance and transfer, be paid by the person to whom such Acquiring Fund
Shares are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Fund with respect to the
Acquired Fund is and shall remain the responsibility of the Acquired Fund up to
and including the Closing Date and such later date on which the Acquired Fund
is terminated.
1.8 The Acquired Fund shall, following the Closing Date and the making of
all distributions pursuant to paragraph 1.4, be terminated under the laws of
the State of Delaware and in accordance with the Declaration of Trust and
By-Laws of the Acquired Fund.
2. VALUATION
2.1 The value of the assets of the Acquired Fund to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as of the
close of regular trading on the New York Stock Exchange, Inc. on the Closing
Date (such time and date being hereinafter called the "Valuation Date"), using
the valuation procedures set forth in the prospectus or statement of additional
information of the Acquired Fund as in effect on the date hereof.
2.2 The NAV of the Acquiring Fund Shares shall be calculated in accordance
with the valuation procedures described in paragraph 2.1.
2.3 All computations of value shall be made by Pioneer Investment
Management, Inc., or its agent, in accordance with its regular practice as
pricing agent for the Acquired Fund.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be , 2005, or such later date as the parties
may agree to in writing. All acts taking place at the Closing shall be deemed
to take place simultaneously as of the close of business on the Closing Date
unless otherwise provided. The Closing shall be held as of 5:00 p.m. (Eastern
time) at the offices of Wilmer Cutler Pickering Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts, or at such other time and/or place as the
parties may agree.
3.2 Portfolio securities shall be presented by the Acquired Fund to Brown
Brothers Harriman & Co. ("BBH") as custodian for the Acquiring Fund for
examination no later than three business days preceding the Valuation Date. The
Acquiring Fund may, in its sole discretion, reject any securities if it
reasonably believes that the ownership of such securities by the Acquired Fund
or the acquisition of such securities by the Acquiring Fund would violate the
investment policies and restrictions of the Acquired Fund and the Acquiring
Fund. The portfolio securities, cash and due bills shall be delivered by the
Acquired Fund to BBH as custodian for the Acquiring Fund for the account of the
Acquiring Fund at the Closing duly endorsed in proper form for transfer in such
condition as to constitute good delivery thereof in accordance with the custom
of brokers. The cash shall be delivered by wire in federal funds to an account
of the Acquiring Fund specified by the Acquiring Fund.
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3.3 BBH, custodian for the Acquired Fund, shall deliver at or as soon as
possible after the Closing a certificate of an authorized officer stating that:
(a) the Acquired Fund's assets have been delivered in proper form to the
Acquiring Fund on the Closing Date and (b) all necessary transfer taxes
including all applicable federal and state stock transfer stamps, if any, have
been paid, or provision for payment shall have been made, in conjunction with
the delivery of portfolio securities.
3.4 In the event that on the Valuation Date (a) the primary trading market
for portfolio securities of the Acquired Fund shall be closed to trading or
trading thereon shall be restricted or (b) trading or the reporting of trading
on such market shall be disrupted so that accurate calculation based upon
available market prices of the value of the net assets of the parties hereto is
impracticable, the Closing Date shall be postponed until the first business day
after the day when trading shall have been fully resumed and reporting shall
have been restored, provided that unless the parties otherwise agree, if the
transactions contemplated by this Agreement shall not have occurred on or prior
to December 31, 2005, each party's obligations under this Agreement shall
terminate without liability to the other party, except for any liability that
may arise out of a party's breach of its obligations under this Agreement prior
to such termination.
3.5 The Acquired Fund shall deliver to the Acquiring Fund at the Closing
(or, if not reasonably available at the Closing, as soon as practicable
thereafter) a list of the names, addresses, taxpayer identification numbers and
backup withholding and nonresident alien withholding status of the Acquired
Fund Shareholders and the number and percentage ownership of outstanding shares
owned by each such shareholder immediately prior to the Closing, certified by
the President, Executive Vice President or Treasurer of the Acquired Fund as
being an accurate record of the information (i) provided by Acquired Fund
Shareholders or (ii) derived from the Acquired Fund's records by such officers
or one of the Acquired Fund's service providers.
3.6 The Acquiring Fund shall issue and deliver a confirmation evidencing
the Acquiring Fund Shares to be credited to the Acquired Fund's account on the
Closing Date to the Secretary of the Acquired Fund, or provide evidence
satisfactory to the Acquired Fund that such Acquiring Fund Shares have been
credited to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, if any, receipts or other documents as such
other party or its counsel may reasonably request.
4. LIQUIDATION AND TERMINATION OF ACQUIRED FUND
4.1 As soon as practicable after the Closing, the Acquired Fund shall
liquidate the Acquired Fund and distribute pro rata to the Acquired Fund
Shareholders the Acquiring Fund Shares received pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares credited to the account of the Acquired Fund to open
accounts on the share records in the names of Acquired Fund Shareholders as
delivered to the Acquiring Fund prior to the Closing Date in accordance with
paragraph 3.5 and representing the respective pro rata entitlement of each
Acquired Fund Shareholder in the Acquiring Fund Shares of the corresponding
Class held by the Acquired Fund Shareholder at the time of the Closing.
4.2 In connection with such liquidating distributions, (a) the Acquiring
Fund shall not deliver certificates representing its shares and (b) the share
transfer books of the Acquired Fund shall be permanently closed as of the
Closing Date and arrangements satisfactory to the Acquiring Fund, acting
reasonably, shall be made to restrict the further transfer of the Acquired
Fund's shares.
4.3 As soon as practicable after the liquidation of the Acquired Fund, the
Acquired Fund shall terminate its existence as a business trust under the laws
of the State of Delaware and in accordance with the Declaration of Trust and
By-Laws of the Acquired Fund.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Acquired Fund represents and warrants to the Acquiring Fund, which
representations and warranties will be true and correct on the date hereof and
on the Closing Date as though made on and as of the Closing Date, as follows:
(a) The Acquired Fund is a statutory trust validly existing and in good
standing under the laws of the State of Delaware and has the power to own
all of its properties and assets and, subject to approval by the Acquired
Fund Shareholders, to perform its obligations under this Agreement. The
Acquired Fund is not required to qualify to do business in any jurisdiction
in which it is not so qualified or where failure to qualify would not
subject it to any material liability or disability. The Acquired Fund has
all necessary federal, state and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted;
(b) The Acquired Fund is a registered investment company classified as a
management company of the open-end type, and its registration with the
Securities and Exchange Commission (the "Commission") under the Investment
Company Act of 1940 (the "Investment Company Act") is in full force and
effect;
(c) The Acquired Fund is not, and the execution, delivery and performance
of this Agreement in respect of the Acquired Fund will not result, in a
material violation of its Declaration of Trust or By-Laws or of any material
agreement, indenture, instrument, contract,
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lease or other undertaking with respect to the Acquired Fund to which the
Acquired Fund is a party or by which the Acquired Fund or its assets are
bound;
(d) Except as specifically disclosed on Schedule 5.1(d) or included in the
calculation of NAV on the Valuation Date, the Acquired Fund has no material
contracts or other commitments (other than this Agreement) with respect to
the Acquired Fund which will be terminated with liability to either the
Acquired Fund or to the Acquired Fund on or prior to the Closing Date;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any of the Acquired Fund's
properties or assets, except as previously disclosed in writing to, and
acknowledged in writing by, the Acquiring Fund. The Acquired Fund is not a
party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects the
Acquired Fund's business or the Acquired Fund's ability to consummate the
transactions herein contemplated;
(f) The statement of assets and liabilities of the Acquired Fund as of and
for the fiscal year ended August 31, 2004 has been audited by Ernst & Young
LLP, independent registered public accounting firm; and has been prepared in
accordance with GAAP consistently applied and fairly reflects the financial
condition of the Acquired Fund as of such date. Except for the Assumed
Liabilities, the Acquired Fund will not have any known or contingent
liabilities on the Closing Date;
(g) Since August 31, 2004 except as disclosed on a schedule to this
Agreement or specifically disclosed in the Acquired Fund's prospectus or
statement of additional information as in effect on the date of this
Agreement, there has not been any material adverse change in the Acquired
Fund's financial condition, assets, liabilities, business or prospects, or
any incurrence by the Acquired Fund of indebtedness, except for normal
contractual obligations incurred in the ordinary course of business or in
connection with the settlement of purchases and sales of portfolio
securities. For the purposes of this subparagraph (g), a decline in NAV per
share of the Acquired Fund arising out of its normal investment operations
or a decline in net assets of the Acquired Fund as a result of redemptions
shall not constitute a material adverse change;
(h) For each taxable year of its operation, the Acquired Fund has met the
requirements of Subchapter M of the Code for qualification and favorable tax
treatment as a regulated investment company and will qualify as such as of
the Closing Date with respect to its taxable year ending on the Closing
Date. The Acquired Fund has not taken any action, or failed to take any
action, which has caused or will cause the Acquired Fund to fail to qualify
for such favorable tax treatment as a regulated investment company under the
Code. The Acquired Fund has not been notified that any tax return or other
filing of the Acquired Fund has been reviewed or audited by any federal,
state, local or foreign taxing authority. Except as set forth on Schedule
5.1:
(A) The Acquired Fund shall have filed all federal, state and local tax
returns required by law to be filed, including all information returns and
payee statements, and all tax returns for foreign countries, provinces and
other governing bodies that have jurisdiction to levy taxes upon;
(B) The Acquired Fund shall have paid all taxes, interest, penalties,
assessments and deficiencies which have become due or which have been
claimed to be due or provision shall have been made for the payment
thereof;
(C) All tax returns filed or to be filed by the Acquired Fund shall
constitute complete and accurate reports of the respective tax liabilities
of the Acquired Fund or, in the case of information returns and payee
statements, the amounts required to be reported accurately set forth all
material items required to be included or reflected in such returns;
(D) The Acquired Fund has not and will not have waived or extended any
applicable statute of limitations relating to the assessment of federal,
state, local or foreign taxes; and
(E) The Acquired Fund has not been notified that any examinations of
the federal, state, local or foreign tax returns of the Acquired Fund are
currently in progress or threatened and no deficiencies have been asserted
or assessed against the Acquired Fund as a result of any audit by the
Internal Revenue Service or any state, local or foreign taxing authority,
and no such deficiency has been proposed or threatened;
(i) All issued and outstanding shares of the Acquired Fund are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable. To the Acquired Fund's knowledge, all of the issued and
outstanding shares of the Acquired Fund will, at the time of Closing, be
held of record by the persons and in the amounts set forth in the records of
the transfer agent as provided in paragraph 3.5. The Acquired Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any shares of the Acquired Fund, nor is there outstanding any
security convertible into any shares of the Acquired Fund;
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(j) At the Closing Date, the Acquired Fund will have good and marketable
title to the assets to be transferred to the Acquiring Fund pursuant to
paragraph 1.1 and full right, power and authority to sell, assign, transfer
and deliver such assets hereunder, and, upon delivery and payment for such
assets, the Acquiring Fund will acquire good and marketable title thereto,
subject to no restrictions on the full transfer thereof, except such
restrictions as might arise under the Securities Act, other than as
disclosed in writing to, and acknowledged in writing by, the Acquiring Fund;
(k) The Acquired Fund has the power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
action on the part of the Acquired Fund's Board of Trustees, and, subject to
the approval of the Acquired Fund Shareholders, assuming due authorization,
execution and delivery by the Acquiring Fund, this Agreement will constitute
a valid and binding obligation of the Acquired Fund, enforceable in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(l) Any information furnished by the Acquired Fund for use in registration
statements, proxy materials and any information necessary to compute the
total return of the Acquired Fund shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the
requirements of any form for which its use is intended;
(m) The proxy statement to be included in the Acquiring Fund's
Registration Statement on Form N-14 attached hereto as Annex A (other than
information therein that relates to Pioneer Investment Management, Inc., the
Acquiring Fund or their affiliates) will, on the effective date of that
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
(n) Except as set forth on Schedule 5.1 and as will be obtained on or
prior to the Closing Date, no consent, approval, authorization or order of
any court or governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this Agreement;
(o) To the Acquired Fund's knowledge, all of the issued and outstanding
shares of beneficial interest of the Acquired Fund have been offered for
sale and sold in conformity with all applicable federal and state securities
laws;
(p) The Acquired Fund currently complies in all material respects with and
since its organization has complied in all material respects with the
requirements of, and the rules and regulations under, the Investment Company
Act, the Securities Act, the Securities Exchange Act of 1934 (the "Exchange
Act"), state "Blue Sky" laws and all other applicable federal and state laws
or regulations. The Acquired Fund currently complies in all material
respects with, and since its organization has complied in all material
respects with, all investment objectives, policies, guidelines and
restrictions and any compliance procedures established by the Acquired Fund
with respect to the Acquired Fund. All advertising and sales material used
by the Acquired Fund complies in all material respects with and has complied
in all material respects with the applicable requirements of the Securities
Act, the rules and regulations of the Commission, and, to the extent
applicable, the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD") and any applicable state regulatory authority.
All registration statements, prospectuses, reports, proxy materials or other
filings required to be made or filed with the Commission, the NASD or any
state securities authorities by the Acquired Fund have been duly filed and
have been approved or declared effective, if such approval or declaration of
effectiveness is required by law. Such registration statements,
prospectuses, reports, proxy materials and other filings under the
Securities Act, the Exchange Act and the Investment Company Act (i) are or
were in compliance in all material respects with the requirements of all
applicable statutes and the rules and regulations thereunder and (ii) do not
or did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made,
not false or misleading;
(q) The Acquired Fund has previously provided to the Acquiring Fund (and
will at the Closing provide an update through the Closing Date of such
information) with data which supports a calculation of the Acquired Fund's
total return and yield for all periods since the organization of the
Acquired Fund. Such data has been prepared in accordance in all material
respects with the requirements of the Investment Company Act and the
regulations thereunder and the rules of the NASD; and
(r) The prospectus of the Acquired Fund dated December 3, 2004, and any
amendments or supplements thereto, previously furnished to the Acquiring
Fund, did not as of their dates or the dates of their distribution to the
public contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such
statements were made, not misleading.
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(s) The Acquired Fund Tax Representation Certificate to be delivered by
the Acquired Fund to the Acquiring Fund and Wilmer Cutler Pickering Hale and
Dorr LLP at the Closing pursuant to paragraph 8.4 (the "Acquired Fund Tax
Representation Certificate") will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading.
5.2 The Acquiring Fund represents and warrants to the Acquired Fund, which
representations and warranties will be true and correct on the date hereof and
on the Closing Date as though made on and as of the Closing Date, as follows:
(a) The Acquiring Fund is a business trust, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has the
power to own all of its properties and assets and to perform its obligations
under this Agreement. The Acquiring Fund is not required to qualify to do
business in any jurisdiction in which it is not so qualified or where
failure to qualify would not subject it to any material liability or
disability. The Acquiring Fund has all necessary federal, state and local
authorizations to own all of its properties and assets and to carry on its
business as now being conducted;
(b) The Acquiring Fund is a registered investment company classified as a
management company of the open-end type, and its registration with the
Commission as an investment company under the Investment Company Act is in
full force and effect;
(c) The prospectus and statement of additional information of the
Acquiring Fund included in the Acquiring Fund's registration statement that
will be in effect on the Closing Date will conform in all material respects
with the applicable requirements of the Securities Act and the Investment
Company Act and the rules and regulations of the Commission thereunder and
will not as of its date and as of the Closing Date contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading;
(d) The Acquiring Fund is not, and its execution, delivery and performance
of this Agreement will not result, in violation of its Agreement and
Declaration of Trust or By-Laws or in material violation of any agreement,
indenture, instrument, contract, lease or other undertaking with respect to
the Acquiring Fund to which it is a party or by which it is bound;
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or threatened
against the Acquiring Fund or any of the Acquiring Fund's properties or
assets, except as previously disclosed in writing to, and acknowledged in
writing by, the Acquired Fund. The Acquiring Fund knows of no facts which
might form the basis for the institution of such proceedings, and the
Acquiring Fund is not a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body which materially and
adversely affects the Acquiring Fund's business or its ability to consummate
the transactions contemplated herein;
(f) The Acquiring Fund has the power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement has been duly authorized by all necessary
action, if any, on the part of the Acquiring Fund's Board of Trustees, and,
assuming due authorization, execution and delivery by the Acquired Fund,
this Agreement will constitute a valid and binding obligation of the
Acquiring Fund, enforceable in accordance with its terms, subject as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights and to general equity
principles;
(g) The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund, for the account of the Acquired Fund Shareholders, pursuant to the
terms of this Agreement, will at the Closing Date have been duly authorized
and, when so issued and delivered, will be duly and validly issued Acquiring
Fund Shares and will be fully paid and non-assessable; the Acquiring Fund
does not have outstanding any options, warrants or other rights to subscribe
for or purchase any Acquiring Fund Shares, nor is there outstanding any
security convertible into any of the Acquiring Fund Shares;
(h) The information to be furnished by the Acquiring Fund for use in proxy
materials and other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations applicable thereto or the
requirements of any form for which its use is intended;
(i) For each taxable year of its operation, the Acquiring Fund has met the
requirements of Subchapter M of the Code for qualification and treatment as
a regulated investment company and has elected to be treated as such and
will qualify as such as of the Closing Date. The Acquiring Fund has not
taken any action which has caused or will cause the Acquiring Fund to fail
to qualify as a regulated investment company under the Code. The Acquiring
Fund has not been notified that any tax return or other filing of the
Acquiring Fund has been reviewed or audited by any federal, state, local or
foreign taxing authority. Except as set forth on Schedule 5.1:
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(A) The Acquiring Fund shall have filed all federal, state and local
tax returns required to be filed, including all information returns and
payee statements, and all tax returns for foreign countries, provinces and
other governing bodies that have jurisdiction to levy taxes upon it;
(B) The Acquiring Fund shall have paid all taxes, interest, penalties,
assessments and deficiencies which have become due or which have been
claimed to be due or provision shall have been made for the payment
thereof;
(C) All tax returns filed or to be filed by the Acquiring Fund shall
constitute complete and accurate reports of the respective tax liabilities
of the Acquiring Fund or, in the case of information returns and payee
statements, the amounts required to be reported accurately set forth all
material items required to be included or reflected in such returns;
(D) The Acquiring Fund has not and will not have waived or extended any
applicable statute of limitations relating to the assessment of federal,
state, local or foreign taxes; and
(E) The Acquiring Fund has not been notified that any examinations of
the federal, state, local or foreign tax returns of the Acquiring Fund are
currently in progress or threatened and no deficiencies have been asserted
or assessed against the Acquiring Fund as a result of any audit by the
Internal Revenue Service or any state, local or foreign taxing authority,
and no such deficiency has been proposed or threatened;
(j) Immediately prior to the Closing, the Acquiring Fund will be in
compliance in all material respects with all applicable laws, rules and
regulations, including, without limitation, the Investment Company Act, the
Securities Act, the Exchange Act and all applicable state securities laws.
Immediately prior to the Closing, the Acquiring Fund will be in compliance
in all material respects with the applicable investment policies and
restrictions set forth in its registration statement currently in effect and
will have calculated its NAV in accordance with the Acquiring Fund's
registration statement;
(k) The Acquiring Fund Shares to be issued pursuant to this Agreement
shall on the Closing Date be duly registered under the Securities Act by a
Registration Statement on Form N-14 of the Acquiring Fund then in effect and
qualified for sale under the applicable state securities laws; and
(l) The Acquiring Fund Shares to be issued pursuant to this Agreement are
duly authorized and on the Closing Date will be validly issued and fully
paid and non-assessable and will conform in all material respects to the
description thereof contained in the Acquiring Fund's Registration Statement
on Form N-14. On the Closing Date, the Acquiring Fund shall not, except as
provided herein, have outstanding any warrants, options, convertible
securities or any other type of right pursuant to which any person could
acquire Acquiring Fund Shares.
(m) The Acquiring Fund Tax Representation Certificate to be delivered by
the Acquiring Fund to the Acquired Fund and Wilmer Cutler Pickering Hale and
Dorr LLP at Closing pursuant to paragraph 7.3 (the "Acquiring Fund Tax
Representation Certificate") will not on the Closing Date contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein not misleading.
6. COVENANTS OF EACH OF THE PARTIES
6.1 The Acquired Fund will operate its business in the ordinary course
between the date hereof and the Closing Date. It is understood that such
ordinary course of business will include the declaration and payment of
customary dividends and distributions and any other dividends and distributions
necessary or advisable (except to the extent distributions that are not
customary may be limited by representations made in connection with the
issuance of the tax opinion described in paragraph 9.5 hereof), in each case
payable either in cash or in additional shares.
6.2 The Acquired Fund will call a meeting of the Acquired Fund
Shareholders to consider and act upon the matters set forth in the proxy
statement. Each of the Acquired Fund and the Acquiring Fund will use reasonable
efforts to promptly prepare and file with the Commission a Registration
Statement on Form N-14 relating to the transactions contemplated by this
Agreement.
6.3 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
6.4 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's shares.
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6.5 Subject to the provisions of this Agreement, each of the Acquired Fund
and the Acquiring Fund will take, or cause to be taken, all actions, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
6.6 The Acquired Fund shall furnish to the Acquiring Fund on the Closing
Date the Closing Statement, which statement shall be prepared in accordance
with GAAP consistently applied and shall be certified by the Acquired Fund's
Treasurer or Assistant Treasurer. As promptly as practicable, but in any case
within 90 days after the Closing Date, the Acquired Fund shall furnish to the
Acquiring Fund, in such form as is reasonably satisfactory to the Acquiring
Fund, a statement of the earnings and profits of the Acquired Fund for federal
income tax purposes, and of any capital loss carryovers and other items that
will be carried over to the Acquiring Fund as a result of Section 381 of the
Code, and which statement will be certified by the Treasurer of the Acquired
Fund.
6.7 The Acquired Fund shall provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus, which will include
the proxy statement, referred to in paragraph 5.1(m), all to be included in the
Acquiring Fund's Registration Statement on Form N-14, in compliance with the
Securities Act, the Exchange Act and the Investment Company Act in connection
with the meeting of the Acquired Fund Shareholders to consider approval of this
Agreement and the transactions contemplated herein.
6.8 The Acquired Fund shall maintain errors and omissions insurance
covering management of the Acquired Fund prior to and including the Closing
Date.
6.9 Neither the Acquired Fund not the Acquiring Fund shall take any action
that is inconsistent with the representations set forth in, with respect to the
Acquired Fund, the Acquired Fund Tax Representation Certificate, and with
respect to the Acquiring Fund, the Acquiring Fund Tax Representation
Certificate, to the extent such action would prevent the reorganization from
qualifying as a "reorganization" under Section 368(a) of the Code.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
the Acquiring Fund of all of the obligations to be performed by it hereunder on
or before the Closing Date and, in addition thereto, the following further
conditions, unless waived by the Acquired Fund in writing:
7.1 All representations and warranties made in this Agreement by the
Acquiring Fund shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date;
7.2 The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its President, Executive Vice President,
Treasurer or Assistant Treasurer, in form and substance reasonably satisfactory
to the Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties made in this Agreement by the Acquiring Fund are
true and correct in all material respects at and as of the Closing Date, except
as they may be affected by the transactions contemplated by this Agreement; and
7.3 The Acquiring Fund shall have delivered to the Acquired Fund and
Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Fund Tax Representation
Certificate, satisfactory to the Acquired Fund and Wilmer Cutler Pickering Hale
and Dorr LLP, substantially in the form attached to this Agreement as Annex B,
concerning certain tax-related maters with respect to the Acquiring Fund.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND
The obligations of the Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
the Acquired Fund of all of the its obligations hereunder on or before the
Closing Date and, in addition thereto, the following further conditions:
8.1 All representations and warranties made in this Agreement by the
Acquired Fund shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if
made on and as of the Closing Date;
8.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities showing the federal tax
bases and holding periods as of the Closing Date, certified by the Acquired
Fund's Treasurer or Assistant Treasurer;
8.3 The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its President, Executive
Vice President, Treasurer or Assistant Treasurer, in form and substance
reasonably satisfactory to the Acquiring Fund and dated as of the Closing Date,
to the effect that the representations and warranties made in this Agreement
are true and correct in all material respects at and as of the Closing Date,
except as they may be affected by the transactions contemplated by this
Agreement; and
A-8
8.4 The Acquired Fund shall have delivered to the Acquiring Fund and
Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Fund Tax Representation
Certificate, satisfactory to the Acquiring Fund and Wilmer Cutler Pickering
Hale and Dorr LLP, substantially in the form attached to this Agreement as
Annex C, concerning certain tax-related matters with respect to the Acquired
Fund.
9. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE PARTIES
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to either party hereto, the other party to this
Agreement shall, at its option, not be required to consummate the transactions
contemplated by this Agreement:
9.1 This Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of each of the Acquired
Fund's Declaration of Trust and By-Laws, and certified copies of the votes
evidencing such approval shall have been delivered to the Acquiring Fund.
Notwithstanding anything herein to the contrary, neither party hereto may waive
the conditions set forth in this paragraph 9.1;
9.2 On the Closing Date, no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with,
this Agreement or the transactions contemplated herein;
9.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state Blue Sky and securities authorities) deemed
necessary by either party hereto to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order or permit would not
involve a risk of a material adverse effect on the assets or properties of
either party hereto, provided that either party may for itself waive any of
such conditions;
9.4 The Acquiring Fund's Registration Statement on Form N-14 shall have
become effective under the Securities Act and no stop orders suspending the
effectiveness thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the Securities Act;
9.5 The parties shall have received a favorable opinion of Wilmer Cutler
Pickering Hale and Dorr LLP, addressed to the Acquiring Fund and the Acquired
Fund and satisfactory to the Acquiring Fund and the Acquired Fund,
substantially to the effect that for federal income tax purposes, on the basis
of the facts, representations and assumptions set forth in such opinion, the
acquisition by the Acquiring Fund of all of the assets of the Acquired Fund
solely in exchange for the issuance of Acquiring Fund Shares to the Acquired
Fund and the assumption of all of the Assumed Liabilities by the Acquiring
Fund, followed by the distribution by the Acquired Fund, in liquidation of the
Acquired Fund, of Acquiring Fund Shares to the Acquired Fund Shareholders in
exchange for their Acquired Fund shares of beneficial interest and the
termination of the Acquired Fund, will constitute a reorganization within the
meaning of Section 368(a) of the Code. Notwithstanding anything herein to the
contrary, neither Acquiring Fund nor Acquired Fund may waive the conditions set
forth in this paragraph 9.5; and
9.6 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends paid
under Section 561 of the Code, all of its investment company taxable income (as
defined in Section 852(b)(2) of the Code determined without regard to Section
852(b)(2)(D) of the Code) for its taxable year ending on the Closing Date, all
of the excess of (i) its interest income excludable from gross income under
Section 103(a) of the Code over (ii) its deductions disallowed under Sections
265 and 171(a)(2) of the Code for its taxable year ending on the Closing Date,
and all of its net capital gain (as such term is used in Sections 852(b)(3)(A)
and (C) of the Code), after reduction by any available capital loss
carryforward, for its taxable year ending on the Closing Date.
10. BROKERAGE FEES AND EXPENSES
10.1 Each party hereto represents and warrants to the other party hereto
that there are no brokers or finders entitled to receive any payments in
connection with the transactions provided for herein.
10.2 The parties have been informed by Pioneer Investment Management, Inc.
that it will pay all expenses incurred in connection with the Reorganization
(including, but not limited to, the preparation of the proxy statement and
solicitation expenses).
11. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
11.1 The parties hereto agree that no party has made any representation,
warranty or covenant not set forth herein or referred to in paragraph 9.6
hereof and that this Agreement constitutes the entire agreement between the
parties.
A-9
11.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated
hereunder.
12. TERMINATION
12.1 This Agreement may be terminated at any time prior to the Closing
Date by: (a) the mutual agreement of the Acquired Fund and the Acquiring Fund;
(b) any party in the event that the other party hereto shall breach any
material representation, warranty or agreement contained herein to be performed
at or prior to the Closing Date and has not cured such breach within 10 days of
notice thereof; or (c) a condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
12.2 In the event of any such termination, there shall be no liability for
damages on the part of any party hereto or their respective Trustees or
officers to the other party, but, except as provided in Section 10, each shall
bear the expenses incurred by it incidental to the preparation and carrying out
of this Agreement.
13. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Fund and the Acquiring Fund; provided, however, that following the
meeting of the Acquired Fund Shareholders called by the Acquired Fund pursuant
to paragraph 6.2 of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Acquired Fund Shareholders under this Agreement to the
detriment of the Acquired Fund Shareholders without their further approval.
14. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to the Acquired Fund and the
Acquiring Fund at 60 State Street, Boston, Massachusetts 02109.
15. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
15.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
15.3 This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts.
15.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by
either party without the written consent of the other party hereto. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, corporation or other entity, other than the parties
hereto and their respective successors and assigns, any rights or remedies
under or by reason of this Agreement.
15.5 It is expressly agreed that the obligations of the Acquiring Fund and
the Acquired Fund shall not be binding upon any of their respective Trustees,
shareholders, nominees, officers, agents or employees personally, but bind only
the property of the Acquiring Fund or the Acquired Fund, as the case may be, as
provided in the Declaration of Trust of the Acquiring Fund and the Acquired
Fund, respectively. The execution and delivery of this Agreement have been
authorized by the Acquired Trustees of each of the Acquiring Fund and the
Acquired Fund and this Agreement has been executed by authorized officers of
the Acquiring Fund and the Acquired Fund acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such officers
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the property of the
Acquiring Fund and the Acquired Fund, as the case may be, as provided in the
Declaration of Trust of the Acquiring Fund and the Acquired Fund, respectively.
[Remainder of page left blank intentionally.]
A-10
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed by its President or Vice President and attested by its Secretary
or Assistant Secretary.
Attest: PIONEER EUROPE FUND
By: --------------------------------- By: -----------------------------------
Name: Name:
Title: Title:
Attest: PIONEER EUROPE SELECT FUND
By: --------------------------------- By: -----------------------------------
Name: Name:
Title: Title:
A-11
Exhibit B
ANNEX B
TAX REPRESENTATION CERTIFICATE OF
PIONEER EUROPE FUND
This certificate is being delivered in connection with the transaction to
be effected pursuant to the Agreement and Plan of Reorganization (the
"Agreement") made as of May 13, 2005 between Pioneer Europe Fund ("Acquiring
Fund"), and Pioneer Europe Select Fund ("Acquired Fund"). Pursuant to the
Agreement, Acquiring Fund will acquire all of the assets of Acquired Fund in
exchange solely for (i) the assumption by Acquiring Fund of all of the
liabilities of Acquired Fund (the "Acquired Fund Liabilities") and (ii) the
issuance of Class A shares, Class B shares, and Class C shares of beneficial
interest of Acquiring Fund (the "Acquiring Fund Shares") to Acquired Fund,
followed by the distribution by Acquired Fund, in liquidation of Acquired Fund,
of the Acquiring Fund Shares to the shareholders of Acquired Fund and the
termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Acquiring Fund, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations, on behalf of Acquiring Fund, hereby
certifies and represents that the following statements are true, complete and
correct and will be true, complete and correct on the date of the transaction
and thereafter as relevant. Unless otherwise indicated, all capitalized terms
used but not defined herein shall have the meaning ascribed to them in the
Agreement.
1. Acquiring Fund is a business trust established under the laws of the
Commonwealth of Massachusetts, and Acquiring Fund is, and has been at
all times, treated as a separate corporation for federal income tax
purposes.
2. Neither Acquiring Fund nor any person "related" to Acquiring Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)), nor any
partnership of which Acquiring Fund or any such related person is a
partner, has any plan or intention to redeem or otherwise acquire any
of the Acquiring Fund Shares received by shareholders of Acquired Fund
in the transaction except in the ordinary course of Acquiring Fund's
business in connection with its legal obligation under Section 22(e)
of the Investment Company Act of 1940, as amended (the "1940 Act"), as
a registered open-end investment company to redeem its own shares.
3. After the transaction, Acquiring Fund will continue the historic
business (as defined in Treasury Regulation Section 1.368-1(d)(2)) of
Acquired Fund or will use a significant portion of the historic
business assets (as defined in Treasury Regulation Section
1.368-1(d)(3)) acquired from Acquired Fund in a business.
4. Acquiring Fund has no plan or intention to sell or otherwise dispose
of any assets of Acquired Fund acquired in the transaction, except for
dispositions made in the ordinary course of its business or to
maintain its qualification as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
5. Any expenses of Acquired Fund incurred in connection with the
transaction which are paid or assumed by Acquiring Fund will be
expenses of Acquired Fund solely and directly related to the
transaction in accordance with Rev. Rul. 73-54, 1973-1 C.B. 187.
Acquiring Fund will not pay or assume the expenses, if any, of
Acquired Fund shareholders in connection with the transaction.
6. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
7. Acquiring Fund has properly elected to be treated as a regulated
investment company under Subchapter M of the Code, has qualified for
the special tax treatment afforded regulated investment companies
under the Code for each taxable year since inception, qualifies for
such treatment as of the date of the Closing, and intends to qualify
for such treatment after the transaction.
8. Acquiring Fund meets the requirements of an "investment company" as
defined in Section 368(a)(2)(F) of the Code.
9. Acquiring Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
10. Acquiring Fund does not now own and has never owned, directly or
indirectly, any shares of Acquired Fund.
11. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in the transaction will
be approximately equal to the fair market value of the assets of
Acquired Fund received by Acquiring Fund, minus the Acquired Fund
Liabilities assumed by Acquiring Fund. Acquiring Fund will not furnish
any consideration in connection with the acquisition of Acquired
Fund's assets other than the assumption of such Acquired Fund
Liabilities and the issuance of such Acquiring Fund Shares.
B-1
12. Acquired Fund shareholders will not be in control (within the meaning
of Sections 368(a)(2)(H)(i) and 304(c)(1) of the Code, which generally
provide that control means the ownership of shares possessing at least
50% of the total combined voting power of all classes of stock that
are entitled to vote or at least 50% of the total value of shares of
all classes of stock) of Acquiring Fund after the transaction.
13. The transaction is being undertaken for valid and substantial business
purposes, including capitalizing on potential economies of scale in
expenses, including the costs of accounting, legal, transfer agency,
insurance, custodial, and administrative services, and increasing
diversification.
14. No Acquired Fund shareholder is acting as agent for Acquiring Fund in
connection with the transaction or approval thereof. Acquiring Fund
will not reimburse any Acquired Fund shareholder for Acquired Fund
shares such shareholder may have purchased or for other obligations
such shareholder may have incurred.
The undersigned officer of Acquiring Fund is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquiring Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 9.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP immediately a written
notice to that effect.
PIONEER EUROPE FUND
By: ------------------------------------
Name: --------------------------------
Title: -------------------------------
Dated: ______________ , 2005
B-2
Exhibit C
ANNEX C
TAX REPRESENTATION CERTIFICATE OF
PIONEER EUROPE SELECT FUND
This certificate is being delivered in connection with the transaction to
be effective pursuant to the Agreement and Plan of Reorganization (the
"Agreement") made as of May 13, 2005 between Pioneer Europe Fund ("Acquiring
Fund"), and Pioneer Europe Select Fund ("Acquired Fund"). Pursuant to the
Agreement, Acquiring Fund will acquire all of the assets of Acquired Fund in
exchange solely for (i) the assumption by Acquiring Fund of all of the
liabilities of Acquired Fund (the "Acquired Fund Liabilities") and (ii) the
issuance of Class A shares, Class B shares, and Class C shares of beneficial
interest of Acquiring Fund (the "Acquiring Fund Shares") to Acquired Fund,
followed by the distribution by Acquired Fund, in liquidation of Acquired Fund,
of the Acquiring Fund Shares to the shareholders of Acquired Fund and the
termination of Acquired Fund (the foregoing together constituting the
"transaction").
The undersigned officer of Acquired Fund, after consulting with its
counsel, auditors and tax advisers regarding the meaning of and factual support
for the following representations, on behalf of Acquired Fund, hereby certifies
and represents that the following statements are true, complete and correct and
will be true, complete and correct on the date of the transaction and
thereafter as relevant. Unless otherwise indicated, all capitalized terms used
but not defined herein shall have the meaning ascribed to them in the
Agreement.
1. Acquired Fund is a statutory trust established under the laws of the
State of Delaware, and Acquired Fund is, and has been at all times,
treated as a separate corporation for federal income tax purposes.
2. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares received by each shareholder that holds shares
of Acquired Fund (the "Acquired Fund Shares") will be approximately
equal to the fair market value of the Acquired Fund Shares with
respect to which such Acquiring Fund Shares are received, and the
aggregate consideration received by Acquired Fund shareholders in
exchange for their Acquired Fund Shares will be approximately equal to
the fair market value of all of the outstanding Acquired Fund Shares
immediately prior to the transaction. No property other than Acquiring
Fund Shares will be distributed to shareholders of Acquired Fund in
exchange for their Acquired Fund Shares, nor will any such shareholder
receive cash or other property as part of the transaction.
3. Neither Acquired Fund nor any person "related" to Acquired Fund (as
defined in Treasury Regulation Section 1.368-1(e)(3)) nor any
partnership in which Acquired Fund or any such related person is a
partner has redeemed, acquired or otherwise made any distributions
with respect to any shares of the Acquired Fund as part of the
transaction, or otherwise pursuant to a plan of which the transaction
is a part, other than redemptions and distributions made in the
ordinary course of Acquired Fund's business as an open-end regulated
investment company. There is no plan or intention on the part of any
shareholder of Acquired Fund that owns beneficially 5% or more of the
Acquired Fund Shares and, to the best knowledge of management of
Acquired Fund, there is no plan or intention on the part of the
remaining shareholders of Acquired Fund, in connection with the
transaction, to engage in any transaction with Acquired Fund,
Acquiring Fund, or any person treated as related to Acquired Fund or
Acquiring Fund under Treasury Regulation Section 1.368-1(e)(3) or any
partnership in which Acquired Fund, Acquiring Fund, or any person
treated as related to Acquired Fund or Acquiring Fund under Treasury
Regulation Section 1.368-1(e)(3) is a partner involving the sale,
redemption or exchange of any of the Acquired Fund Shares or any of
the Acquiring Fund Shares to be received in the transaction, as the
case may be.
4. Acquired Fund assets transferred to Acquiring Fund will comprise at
least ninety percent (90%) of the fair market value of the net assets
and at least seventy percent (70%) of the fair market value of the
gross assets held by Acquired Fund immediately prior to the
transaction. For purposes of this representation, amounts used by
Acquired Fund to pay expenses of the transaction and all redemptions
and distributions (except for redemptions in the ordinary course of
business upon demand of a shareholder that Acquired Fund is required
to make as an open-end investment company pursuant to Section 22(e) of
the Investment Company Act of 1940, as amended, and regular, normal
dividends) made by Acquired Fund immediately preceding the transaction
are taken into account as assets of Acquired Fund held immediately
prior to the transaction.
5. As of the date of the transaction, the fair market value of the
Acquiring Fund Shares issued to Acquired Fund in the transaction will
be approximately equal to the fair market value of the assets of
Acquired Fund received by Acquiring Fund, minus the Acquired Fund
Liabilities assumed by Acquiring Fund. Acquired Fund will not receive
any consideration from the Acquiring Fund in connection with the
acquisition of Acquired Fund's assets other than the assumption of
such Acquired Fund Liabilities and the issuance of such Acquiring Fund
Shares.
C-1
6. The Acquired Fund Liabilities assumed by Acquiring Fund plus the
liabilities, if any, to which the transferred assets are subject were
incurred by Acquired Fund in the ordinary course of its business.
7. The fair market value of the Acquired Fund assets transferred to
Acquiring Fund will equal or exceed the sum of the Acquired Fund
Liabilities assumed by Acquiring Fund for the purposes of Section
357(d) of the Internal Revenue Code of 1986, as amended (the "Code").
8. Acquired Fund currently conducts its historic business within the
meaning of Treasury Regulation Section 1.368-1(d)(2), which provides
that, in general, a corporation's historic business is the business it
has conducted most recently, but does not include a business that the
corporation enters into as part of a plan of reorganization. The
Acquired Fund assets transferred to Acquiring Fund will be Acquired
Fund's historic business assets within the meaning of Treasury
Regulation Section 1.368-1(d)(3), which provides that a corporation's
historic business assets are the assets used in its historic business.
9. Acquired Fund will distribute to its shareholders the Acquiring Fund
Shares it receives pursuant to the transaction, and its other
properties, if any, and will be liquidated promptly thereafter.
10. The expenses of Acquired Fund incurred by it in connection with the
transaction will be only such expenses that are solely and directly
related to the transaction in accordance with Rev. Rul. 73-54, 1973-1
C.B. 187. Acquired Fund will not pay any expenses incurred by its
shareholders in connection with the transaction.
11. There is no, and never has been any, indebtedness between Acquiring
Fund and Acquired Fund.
12. Acquired Fund has properly elected to be treated as a regulated
investment company under Subchapter M of the Code, has qualified for
the special tax treatment afforded regulated investment companies
under Subchapter M of the Code for each taxable year since inception,
and qualifies for such treatment for its taxable year ending on the
closing date of the transaction.
13. Acquired Fund meets the requirements of an "investment company" as
defined in Section 368(a)(2)(F) of the Code.
14. Acquired Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
15. Acquired Fund shareholders will not be in control (within the meaning
of Sections 368(a)(2)(H)(i) and 304(c)(1) of the Code, which generally
provide that control means the ownership of shares possessing at least
50% of the total combined voting power of all classes of stock that
are entitled to vote or at least 50% of the total value of shares of
all classes of stock) Acquiring Fund after the transaction.
16. Acquired Fund shareholders will not have dissenters' or appraisal
rights in the transaction.
17. The transaction is being undertaken for valid and substantial business
purposes, including capitalizing on potential economies of scale in
expenses, including the costs of accounting, legal, transfer agency,
insurance, custodial, and administrative services, and increasing
diversification.
The undersigned officer of Acquired Fund is authorized to make all of the
representations set forth herein, and the undersigned is authorized to execute
this certificate on behalf of Acquired Fund. The undersigned recognizes that
Wilmer Cutler Pickering Hale and Dorr LLP will rely upon the foregoing
representations in evaluating the United States federal income tax consequences
of the transaction and rendering its opinion pursuant to Section 9.5 of the
Agreement. If, prior to the date of the transaction, any of the representations
set forth herein ceases to be accurate, the undersigned agrees to deliver
immediately to Wilmer Cutler Pickering Hale and Dorr LLP a written notice to
that effect.
PIONEER EUROPE SELECT FUND
By: ----------------------------------
Name: ------------------------------
Title: -------------------------------
Dated: ______________ , 2005
C-2
Exhibit D
PIONEER EUROPE FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
10/31/04 10/31/03
Net Asset Value per Share $27.36 $22.66
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03-10/31/04) Income Capital Gains Capital Gains
$ 0.0927 $ -- $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund at public offering price, compared to
that of the Morgan Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2004)
Net Asset Public Offering
Period Value Price (POP)
- ------------------------------------------
10 Years 6.88% 6.25%
5 Years -2.18 -3.33
1 Year 21.19 14.23
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Europe
Fund Index
10/94 9425 10000
10852 11321
10/96 12784 13298
16402 16754
10/98 18781 20616
20616 23201
10/00 21871 23419
15260 18069
10/02 12956 15559
15133 19317
10/04 18340 23549
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of taxes that a
shareowner would pay on Fund distributions or the redemption of Fund shares.
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 European country indexes included in
the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Index.
D-1
PIONEER EUROPE FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
10/31/04 10/31/03
Net Asset Value per Share $25.02 $ 20.85
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03-10/31/04) Income Capital Gains Capital Gains
$ -- $ -- $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2004)
If If
Period Held Redeemed
- -----------------------------------
10 Years 6.62% 6.62%
5 Years -3.13 -3.32
1 Year 20.00 16.00
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Europe
Fund Index
10/94 10000 10000
11443 11321
10/96 13369 13298
17026 16754
10/98 19325 20618
20895 23201
10/00 22129 23419
15282 18069
10/02 12853 15559
14855 19317
10/04 17826 23549
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If redeemed" returns reflect deduction of applicable contingent deferred sales
charge (CDSC). The maximum CDSC is 4% and declines over six years. All results
are historical and assume the reinvestment of dividends and capital gains.
Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI Europe Index is a capitalization-weighted index of the 15 European
country indexes included in the MSCI EAFE (Europe, Australasia, Far East)
Index. These countries are: Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in the Index.
D-2
PIONEER EUROPE FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
10/31/04 10/31/03
Net Asset Value per Share $24.97 $20.79
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03-10/31/04) Income Capital Gains Capital Gains
$ -- $ -- $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
If If
Period Held Redeemed
- --------------------------------------------------
Life-of-Class (1/31/96) 4.95% 4.95%
5 Years -3.09 -3.09
1 Year 20.11 20.11
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Europe
Fund Index
1/96 10000 10000
11391 11232
14520 14151
10/98 16509 17414
17862 19596
10/00 18921 19780
13077 15262
10/02 10992 13141
12710 16316
10/04 15265 19890
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The MSCI Europe Index is a capitalization-weighted index of the 15 European
country indexes included in the MSCI EAFE (Europe, Australasia, Far East)
Index. These countries are: Austria, Belgium, Denmark, Finland, France,
Germany, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom. Index returns are calculated monthly,
assume reinvestment of dividends and, unlike Fund returns, do not reflect any
fees, expenses or sales charges. You cannot invest directly in the Index.
D-3
PIONEER EUROPE FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS R SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
10/31/04 10/31/03
Net Asset Value per Share $27.20 $22.67
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03-10/31/04) Income Capital Gains Capital Gains
$ 0.2025 $ -- $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2004)
If If
Period Held Redeemed
- -----------------------------------
10 Years 6.42% 6.42%
5 Years -2.54 -2.54
1 Year 20.95 20.95
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Europe
Fund Index
10/94 10000 10000
11454 11321
10/96 13438 13298
17147 16754
10/98 19531 20618
21189 23201
10/00 22520 23419
15632 18069
10/02 13207 15559
15401 19317
10/04 18629 23549
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
The performance of Class R shares for the period prior to the commencement of
operations of Class R shares on 4/1/03 is based on the performance of Class A
shares, reduced to reflect the higher distribution and service fees of Class R
shares. For the period after April 1, 2003, the actual performance of Class R
shares is reflected, which performance may be influenced by the smaller asset
size of Class R shares compared to Class A shares. All results are historical
and assume the reinvestment of dividends and capital gains. Other share classes
are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index is a
capitalization-weighted index of the 15 European country indexes included in
the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Index.
D-4
PIONEER EUROPE FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 10/31/04 CLASS Y SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
10/31/04 10/31/03
Net Asset Value per Share $28.25 $23.40
Net
Distributions per Share Investment Short-Term Long-Term
(11/1/03-10/31/04) Income Capital Gains Capital Gains
$ 0.2739 $ -- $ --
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Fund, compared to that of the Morgan Stanley
Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of October 31, 2004)
If If
Period Held Redeemed
- -------------------------------------------------
Life-of-Class (7/2/98) 7.95% 7.95%
5 Year -1.58 -1.58
1 Year 22.02 22.02
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Europe
Fund Index
7/98 10000 10000
8458 9064
9269 10199
10/00 9950 10295
6973 7943
10/02 5960 6840
7015 8492
10/04 8560 10353
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Performance for periods prior to the inception of Y shares reflects the NAV
performance of the Fund's A shares. The performance does not reflect
differences in expenses, including the Rule 12b-1 fees applicable to A shares.
Since fees for A shares are generally higher than those of Y shares, the
performance shown for Y shares prior to their inception would have been higher.
Class Y shares are not subject to sales charges and are available for limited
groups of eligible investors, including institutional investors. All results
are historical and assume the reinvestment of dividends and capital gains.
Other share classes are available for which performance and expenses will
differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers fund performance would be lower. Waivers
may not be in effect for all funds and can be rescinded at any time. See the
prospectus and financial statements for complete details.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
Index comparison begins July 31, 1998. The MSCI Europe Index is a
capitalization-weighted index of the 15 European country indexes included in
the MSCI EAFE (Europe, Australasia, Far East) Index. These countries are:
Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy,
Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United
Kingdom. Index returns are calculated monthly, assume reinvestment of dividends
and, unlike Fund returns, do not reflect any fees, expenses or sales charges.
You cannot invest directly in the Index.
D-5
PIONEER EUROPE FUND
PORTFOLIO MANAGEMENT DISCUSSION 10/31/04
The 12 months ended October 31, 2004, was a favorable period for European
stocks. In spite of high energy prices, attractive stock price levels, high
dividend yields and receding fears of inflation have contributed to strong
returns for Pioneer Europe Fund, as Stan Pearson, who is responsible for the
day-to-day management of the Fund, discusses in the following interview.
Q: How did the Fund perform during its fiscal year?
A: For the 12 months ended October 31, 2004, the Fund's Class A, B and C shares
returned 21.19%, 20.00% and 20.11% at net asset value, respectively. These
results lagged the Fund's benchmark, the Morgan Stanley Capital
International (MSCI) Europe Index, which posted a return of 21.89% for the
same period. The Fund's returns at net asset value surpassed the average
8.56% return of its Lipper category of 124 European funds.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: Which stocks contributed to the Fund's performance?
A: Many of the Fund's holdings that had been punished by investors early in the
fiscal year recovered nicely during the reporting period, when investors
reassessed their tolerance for risk. Sanofi-Aventis (France), the world's
largest pharmaceutical firm following the merger of the two French giants,
began trading at extremely low valuations as investors doubted the firm's
ability to generate enough cash to repay the debt amassed as a result of
the transaction. As the market's skepticism dissipated, the stock rose
nicely. Pharmaceutical giants Roche Holdings (Switzerland) and Astrazeneca
(United Kingdom) also made a notable contribution to performance.
In the telecommunication services industry, we've focused on operators with a
high level of exposure to the European market, which continues to generate
attractive growth. Vodafone (United Kingdom), a long-time holding, was one of
the Fund's best performing stocks for the 12 months.
The Fund also enjoyed strong performance from its emphasis on energy stocks,
which are benefiting from high oil prices. BP (United Kingdom), Total
(France) and ENI (Italy) represented some of the portfolio's best performers
for the year. Similarly, strong stock selection and an overweight position in
the capital goods sector generated strong returns. Sandvik (Sweden),
Schneider Electric (France), ACS (Spain) and Saint Gobain (France) are
profiting from the cyclical upturn and increased capital expenditures. We are
emphasizing large-capitalization stocks, but, more importantly, high-quality
companies with sound balance sheets and the ability to grow their business
and return some of the growth in the form of dividends. In the materials
sector, another cyclical industry, we think rising demand for cement and
solution chemicals offer strong growth opportunities for Italcementi (Italy)
and Lafarge (France), respectively.
Zurich Financial Services (Switzerland), AXA (France) and Assicurazioni
Generali (Italy) led the portfolio's insurance holdings and contributed
nicely. During the year, underlying fundamentals in the sector improved on
the back of the strong equity markets, and rising investor demand helped push
stock prices higher. Finally, our decision not to invest in the semiconductor
industry helped performance because it struggled throughout the fiscal year
as growth forecasts proved to be overly optimistic.
Q: What holdings proved most disappointing?
A: While information technology represents a small portion of the Fund's
assets, this sector turned in the most disappointing performance for the 12
months. Both software and services as well as technology hardware and
equipment were hard hit. Global jitters about the outlook for technology
demand held back the sector. We've been underweighting technology stocks
for some time out of concern for their valuations and low demand.
Communications equipment provider Nokia (Finland) struggled due to concerns
about the company's ability to meet earnings targets, and we reduced the
Fund's exposure as a result. Nokia's sharp underperformance explains a
significant portion of the Fund's underperformance relative to its
benchmark, the MSCI Europe Index.
D-6
Q: Any notable sales or purchases to mention?
A: Yes. We sold positions in building materials company Wolseley (United
Kingdom) and food, beverage and tobacco retailer Diageo (United Kingdom)
because they had reached their price targets. We added new positions in
retailer Boots (United Kingdom), Italcementi (Italy) and media company
Lagardere (France). We also purchased telecommunications company Belgacom
(Belgium) during its initial public offering.
Q: What is your outlook?
A: After the strong appreciation of the past year, we think global equity
markets are entering a period of unspectacular but steady returns. European
companies have the capacity to expand margins and profits, but earnings
growth is likely to be modest. In a climate where equity appreciation is
driven by modest earnings growth, we consider high dividend yields and
strong cash flow to be important sources of stock price support. Therefore,
we are placing a premium on stocks with the stability and predictability of
robust dividend yields.
At present levels, European equities are appropriately discounting an
environment characterized by moderate, albeit gently, accelerating
macroeconomic growth, low inflation and low volatility. We believe such a
global equity environment is likely to result in moderate expectations for
equity returns across Europe for the foreseeable future.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
The portfolio may invest a substantial amount of its assets in issuers located
in a limited number of countries and therefore is susceptible to adverse
economic, political or regulatory developments affecting those countries.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
D-7
PIONEER EUROPE SELECT FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/05 CLASS A SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
2/28/05 8/31/04
Net Asset Value per Share $13.11 $11.05
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/04-2/28/05) Income Capital Gains Capital Gains
$0.0388 $0.0539 $0.2613
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
Average Annual Total Returns
(As of February 28, 2005)
Net Asset Public Offering
Period Value Price (POP)
- -----------------------------------------------------------
Life-of-Class (12/29/00) 8.02% 6.50%
1-Year 23.91 16.83
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Select Europe
Fund Index
12/00 9425 10000
7681 8084
7546 6789
8/03 8281 7375
10646 9082
2/05 13000 11282
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
POP returns reflect deduction of maximum 5.75% sales charge. All results are
historical and assume the reinvestment of dividends and capital gains. Other
share classes are available for which performance and expenses will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
D-8
PIONEER EUROPE SELECT FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/05 CLASS B SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
2/28/05 8/31/04
Net Asset Value per Share $12.88 $10.90
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/04-2/28/05) Income Capital Gains Capital Gains
$0.0196 $0.0539 $0.2613
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund, compared to that of the Morgan
Stanley Capital International (MSCI) Europe Index.
Average Annual Total Returns
(As of February 28, 2005)
If If
Period Held Redeemed
- ---------------------------------------------------
Life-of-Class (12/29/00) 7.10% 6.90%
1-Year 22.73 18.73
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Select Europe
Fund Index
12/00 10000 10000
7805 8084
7622 6789
8/03 8361 7375
10653 9082
2/05 13207 11282
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
"If redeemed" returns reflect the deduction of applicable contingent deferred
sales charge (CSDC). Effective December 1, 2004, the period during which a CDSC
is applied to withdrawals was shortened to 5 years. The maximum CDSC for class
B shares continues to be 4%. For more complete information, please see the
prospectus for details. Note: Shares purchased prior to December 1, 2004 remain
subject to the CDSC in effect at the time you purchased those shares. For
performance information for shares purchased prior to December 1, 2004, please
visit www.pioneerfunds.com/bshares.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
D-9
PIONEER EUROPE SELECT FUND
- --------------------------------------------------------------------------------
PERFORMANCE UPDATE 2/28/05 CLASS C SHARES
- --------------------------------------------------------------------------------
Share Prices and Distributions
2/28/05 8/31/04
Net Asset Value per Share $ 12.98 $10.98
Net
Distributions per Share Investment Short-Term Long-Term
(9/1/04-2/28/05) Income Capital Gains Capital Gains
$0.0375 $0.0539 $0.2613
Investment Returns
The mountain chart on the right shows the change in value of a $10,000
investment made in Pioneer Europe Select Fund at public offering price,
compared to that of the Morgan Stanley Capital International (MSCI) Europe
Index.
Average Annual Total Returns
(As of February 28, 2005)
If If
Period Held Redeemed
- ----------------------------------------------------
Life-of-Class (12/29/00) 7.47% 7.47%
1-Year 23.15 23.15
Value of $10,000 Investment
[DATA BELOW REPRESENTS MOUNTAIN CHART IN ORIGINAL DOCUMENT]
Pioneer MSCI
Europe Select Europe
Fund Index
12/00 10000 10000
8059 8084
7960 6789
8/03 8690 7375
11094 9082
2/05 13500 11282
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent month-end
performance results. Current performance may be lower or higher than the
performance data quoted.
The performance data quoted represents past performance, which is no guarantee
of future results. Investment return and principal value will fluctuate, and
shares, when redeemed, may be worth more or less than their original cost.
Class C shares held for less than one year are also subject to a 1% contingent
deferred sales charge (CDSC). The performance of Class C shares does not
reflect the 1% front-end sales charge in effect prior to February 1, 2004. If
you paid a 1% sales charge, your returns would be lower than those shown above.
All results are historical and assume the reinvestment of dividends and capital
gains. Other share classes are available for which performance and expenses
will differ.
Performance results reflect any applicable expense waivers in effect during the
periods shown. Without such waivers Fund performance would be lower. Waivers
may not be in effect for all funds. Certain fee waivers are contractual through
a specified period. Otherwise, fee waivers can be rescinded at any time. See
the prospectus and financial statements for more information.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Fund distributions or the redemption of Fund
shares.
The Morgan Stanley Capital International (MSCI) Europe Index measures the
performance of stocks in European developed markets. Index returns are
calculated monthly, assume reinvestment of dividends and, unlike Fund returns,
do not reflect any fees, expenses or sales charges. You cannot invest directly
in an Index.
D-10
PIONEER EUROPE SELECT FUND
PORTFOLIO MANAGEMENT DISCUSSION 2/28/05
European equity markets rose during the six months ended February 28, 2005, led
by the companies in the telecommunications and financials sectors. The
continued slide in the value of the U.S. dollar on international exchange
markets also tended to add to the performance results of U.S.-based investors,
although some concerns grew on the Continent that the strength of the euro
could impede the ability of European-based exporters to compete. In the
following interview, Andrew Arbuthnott discusses the events and factors that
affected your Fund's performance during the six months. Mr. Arbuthnott is a
member of the team at Pioneer Investment Management in Dublin, Ireland that is
responsible for the Fund's day-to-day management.
Q: How did the Pioneer Europe Select Fund perform during the six months that
ended on February 28, 2005?
A: The Fund had very strong performance in absolute terms, although it trailed
its benchmark for European equities. Pioneer Europe Select Fund's Class A
shares had a total return of 22.11%, all at net asset value. During the
same six-month period, the MSCI Europe Index returned 24.25%, while the
average return of the 120 funds in Lipper's European Regional Fund category
was 25.56%.
Call 1-800-225-6292 or visit www.pioneerfunds.com for the most recent
month-end performance results. Current performance may be lower or higher
than the performance data quoted.
The performance data quoted represents past performance, which is no
guarantee of future results. Investment return and principal value will
fluctuate, and shares, when redeemed, may be worth more or less than their
original cost.
Q: What was the investment environment like during the six months?
A: European stocks rose briskly during the six months ended February 28, 2005.
Sectors such as telecommunications services and financial services produced
the strongest results in the final months of 2004, although the
industrials, materials and energy sectors outperformed early in 2005.
Reasonable valuations and the relatively high dividend yields offered by many
European stocks helped contribute to the favorable environment, which was
supported by an economic backdrop of moderate economic and supportive
monetary policies by central banks that kept interest rates low. However, as
the period progressed, investors grew increasingly concerned that economic
growth in Europe was beginning to slow and that the continued appreciation of
the euro and other linked currencies could have a negative impact on the
earnings of European exporters facing tougher competition from countries,
most notably from the United States, with weakening currencies.
Q: What were some of the investments that most significantly contributed to
performance?
A: Our holdings in energy companies helped support performance over the six
months, as the prices of oil and natural gas generally moved higher,
despite some easing late in 2004. Oil producers such as BP and Eni
contributed substantially. Shares of BP, a major force on the international
market, gained as the company benefited from a broad international
portfolio, strong management, healthy cash flow and a reasonable stock
valuation. Eni, a long-term holding, is an Italy-based company that has
emerged as a highly efficient global oil producer. Our investments in the
industrials and materials sectors also helped support performance during
the period.
Several pharmaceutical holdings also helped performance, including
Astrazeneca, whose stock price recovered strongly after faltering late in
2004, and GlaxoSmithKline. Individual holdings that helped included Barclays,
the broadly diversified British financial company that offered investors a
high dividend yield and a low valuation, and BASF, a diversified chemicals
company that benefited from a strong pricing environment.
France Telecom turned in strong performance during 2004, helped by its low
stock valuation early in the year and strong cash flow. However, France
Telecom and another telecommunications holding, Vodafone, held back
performance early in 2005.
Investments in the automobile industry produced disappointing results for the
period. The stock price of long-time holding Porsche came under pressure
because of currency concerns, even though the company actually benefited from
its decision to hedge its U.S. dollar exposure. Peugeot also declined,
principally because of volatility in the market rather than any deterioration
in company fundamentals, we believe. We remain confident in the prospects for
both companies, however, and think they are well prepared for the possibility
of continued strength in the euro.
D-11
Q: What is your investment outlook?
A: We remain optimistic about European equities, as stock valuations tend to be
well supported by high dividend yields and the supportive policies of the
European Central Bank. In addition, many European-based companies are
restructuring themselves to become more efficient and competitive. The
effects of these positive factors may be muted, however, by modest growth
in economic output and the effects of the weaker U.S. dollar on exporting
companies.
In this environment, we believe stock market averages have a reasonable
opportunity to produce positive results and individual stock selection will
be an important factor in performance.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
The portfolio may invest a substantial amount of its assets in issuers located
in a limited number of countries and therefore is susceptible to adverse
economic, political or regulatory developments affecting those countries. The
Fund invests in a limited number of securities and, as a result, the Fund's
performance may be more volatile than the performance of funds holding more
securities.
Any information in this shareholder report regarding market or economic trends
or the factors influencing the Fund's historical or future performance are
statements of the opinion of Fund management as of the date of this report.
These statements should not be relied upon for any other purposes. Past
performance is no guarantee of future results, and there is no guarantee that
market forecasts discussed will be realized.
D-12
PIONEER EUROPE FUND
STATEMENT OF ADDITIONAL INFORMATION
May 13, 2005
This Statement of Additional Information is not a Prospectus. It should be
read in conjunction with the related Combined Prospectus/Proxy Statement (also
dated May 13, 2005) which covers Pioneer Europe Fund, to be issued in
exchange for shares of Pioneer Europe Select Fund. Please retain this Statement
of Additional Information for further reference.
The Prospectus is available to you free of charge (please call
1-800-407-7298).
INTRODUCTION...................................................................2
EXHIBITS.......................................................................2
ADDITIONAL INFORMATION ABOUT PIONEER EUROPE FUND...............................2
FUND HISTORY..........................................................2
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS......................2
MANAGEMENT OF THE FUND................................................2
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES...................3
INVESTMENT ADVISORY AND OTHER SERVICES................................3
BROKERAGE ALLOCATION AND OTHER PRACTICES..............................3
CAPITAL STOCK AND OTHER SECURITIES....................................3
PURCHASE, REDEMPTION AND PRICING OF SHARES............................3
TAXATION OF THE FUND..................................................3
UNDERWRITERS..........................................................3
CALCULATION OF PERFORMANCE DATA.......................................3
FINANCIAL STATEMENTS..................................................3
INTRODUCTION
This Statement of Additional Information is intended to supplement the
information provided in the Combined Prospectus/Proxy Statement dated May 13,
2005 (the "Statement") relating to the proposed reorganization of Pioneer Europe
Select Fund, into Pioneer Europe Fund, and in connection with the solicitation
by the management of Pioneer Europe Select Fund of proxies to be voted at the
Special Meeting of Shareholders of Pioneer Europe Select Fund to be held on
June 21, 2005.
EXHIBITS AND DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference, unless
otherwise indicated. Shareholders will receive a copy of each document that is
incorporated by reference upon any request to receive a copy of this Statement
of Additional Information.
1. Statement of additional information of Pioneer Europe Fund, dated March
1, 2005 (the "SAI") (File No. 33-36265), as filed with the Securities
and Exchange Commission on February 25, 2005 (Accession No.
0001016964-05-000080) is incorporated herein by reference.
2. Pioneer Europe Select Fund's statement of additional information, dated
December 3, 2004 (File No. 333-45136), as filed with the Securities and
Exchange Commission on December 6, 2004 (Accession No.
000101694-04-000482) is incorporated herein by reference.
3. Pioneer Europe Select Fund's Annual Report for the fiscal year ended
August 31, 2004 (File No. 811-10111), as filed with the Securities and
Exchange Commission on October 29, 2004 (Accession No.
0001286364-04-000012) is incorporated herein by reference.
4. Pioneer Europe Select Fund's Semiannual Report for the period ended
February 28, 2005 (File No. 811-10111), as filed with the Securities
and Exchange Commission on April 27, 2005 (Accession
No.0001286364-05-000003) is incorporated herein by reference.
5. Pioneer Europe Fund's Annual Report for the fiscal year ended October
31, 2004 (File No.811-06151), as filed with the Securities and Exchange
Commission on December 30, 2004 (Accession No. 000866707-04-000013) is
incorporated herein by reference.
6. Pioneer Europe Fund's Semiannual Report for the period ended April 30,
2004 (File No. 811-06151), as filed with the Securities and Exchange
Commission on July 1, 2004 (Accession No. 0001016964-04-000271) is
incorporated herein by reference.
ADDITIONAL INFORMATION ABOUT
PIONEER EUROPE FUND
FUND HISTORY
For additional information about Pioneer Europe Fund generally, see
"Fund History" in the SAI.
DESCRIPTION OF THE FUND AND ITS INVESTMENT RISKS
For additional information about Pioneer Europe Fund's investment
objective, policies, risks and restrictions, see "Investment Policies, Risks and
Restrictions" in the SAI.
MANAGEMENT OF THE FUND
For additional information about Pioneer Europe Fund's Board of
Trustees and officers, see "Trustees and Officers" in the SAI.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
Not Applicable.
INVESTMENT ADVISORY AND OTHER SERVICES
For additional information, see "Investment Adviser," "Shareholder
Servicing/Transfer Agent," "Custodian" and "Independent Auditors" in Pioneer
Europe Fund's SAI.
BROKERAGE ALLOCATION AND OTHER PRACTICES
For additional information about the Pioneer Europe Fund's brokerage
allocation practices, see "Portfolio Transactions" in the SAI.
CAPITAL STOCK AND OTHER SECURITIES
For additional information about the voting rights and other
characteristics of shares of beneficial interest of Pioneer Europe Fund, see
"Description of Shares" in the SAI.
PURCHASE, REDEMPTION AND PRICING OF SHARES
For additional information about purchase, redemption and pricing of
shares of Pioneer Europe Fund, see "Sales Charges," "Redeeming Shares,"
"Telephone and Online Transactions" and "Pricing of Shares" in the SAI.
TAXATION OF THE FUND
For additional information about tax matters related to an investment
in Pioneer Europe Fund, see "Tax Status" in the SAI.
UNDERWRITERS
For additional information about the Pioneer Europe Fund's principal
underwriter and distribution plans, see "Principal Underwriter and Distribution
Plans" and "Sales Charges" in the SAI.
CALCULATION OF PERFORMANCE DATA
For additional information about the investment performance of Pioneer
Europe Fund, see "Investment Results" in the SAI.
FINANCIAL STATEMENTS
Pioneer Europe Fund
31-Mar-05
Market % of
Value Portfolio
Description
ATLAS COPCO AB 816,204 0.43%
SKF AB SER B 1,995,605 1.04%
ACS ACTIVIDADES CON 1,911,616 1.00%
ACTELION LTD 1,905,303 1.00%
ADIDAS-SALOMON AG 2,926,513 1.53%
ALLIED IRISH BANKS 894,321 0.47%
ASTRAZENECA PLC 4,002,766 2.09%
ATOS ORIGIN 1,962,881 1.03%
AXA 3,981,084 2.08%
BANCO BILBAO VIZCAY 1,504,031 0.79%
BARCLAYS PLC 3,346,901 1.75%
BASF AG 3,352,387 1.75%
BELGACOM SA 1,488,281 0.78%
BNP PARIBAS 5,289,110 2.76%
BOOTS COMPANY PLC 1,559,743 0.82%
BP AMOCO PLC 3,718,645 1.94%
BRITISH AMERICAN TO 1,958,013 1.02%
BUHRMANN NV 2,321,259 1.21%
CENTRICA PLC 2,337,829 1.22%
COMPAGNIE DE SAINT 4,003,688 2.09%
COMPASS GROUP PLC 1,913,020 1.00%
CONTINENTAL AG 2,071,179 1.08%
CREDIT AGRICOLE S.A 2,314,259 1.21%
CRH PLC 3,310,684 1.73%
CS GROUP 5,612,714 2.93%
DEUTSCHE BOERSE AG 1,148,738 0.60%
DIXONS GROUP PLC 905,070 0.47%
E.ON AG 4,924,108 2.57%
ENI SPA 4,920,538 2.57%
ERICSSON LM TEL SUR 1,437,759 0.75%
FRANCE TELECOM 4,381,994 2.29%
FRESENIUS AG PFD 1,784,123 0.93%
GLAXOSMITHKLINE 3,237,257 1.69%
GUS PLC 1,063,544 0.56%
HANNOVER RUECKVERSI 919,765 0.48%
HMV GROUP PLC 1,501,937 0.79%
HOLCIM LTD. 2,013,327 1.05%
ING GROEP NV CVA 1,949,308 1.02%
ITALCEMENTI 1,942,200 1.02%
LAFARGE BR 3,540,094 1.85%
LAGARDERE S.C.A. 882,842 0.46%
MAN GROUP PLC 832,640 0.44%
MICHELIN (CGDE) -B 2,790,016 1.46%
NESTLE REG 3,737,367 1.95%
NET SPENDABLE CASH 212,006 0.11%
NOKIA OYJ 1,439,264 0.75%
PHILIPS ELECTRONICS 2,940,452 1.54%
PORSCHE AG 1,936,787 1.01%
PUBLICIS SA 1,107,947 0.58%
REED ELSEVIER NV 967,871 0.51%
REPSOL SA REGD 4,905,181 2.56%
RIO TINTO PLC. 2,798,233 1.46%
ROCHE HOLDINGS 2,029,149 1.06%
ROYAL BANK OF SCOTL 6,192,064 3.24%
SANOFI-AVENTIS 2,402,742 1.26%
SCHERING AG 871,517 0.46%
SCHNEIDER ELECTRIC 2,354,051 1.23%
SIEMENS 2,239,038 1.17%
SOCIETE GENERALE - 5,821,519 3.04%
SWISS RE REG 2,370,474 1.24%
SYNTHES INC. 1,369,467 0.72%
TECHNIP 928,629 0.49%
TELECOM ITALIA SPA 1,342,797 0.70%
TELEFONICA SA 2,529,168 1.32%
TELEKOM AUSTRIA AG 1,460,889 0.76%
TESCO PLC 2,526,576 1.32%
TNT POST GROUP N.V. 2,808,038 1.47%
TOTAL SA 6,800,858 3.55%
UBS AG 5,818,958 3.04%
UNCONFIRMED CASH 112,492 0.06%
VINCI S.A. 1,883,662 0.98%
VIVENDI UNIVERSAL 927,878 0.48%
VODAFONE GROUP PLC 8,811,412 4.60%
ZURICH FINANCIAL SE 3,000,923 1.57%
191,320,704
100.00%
Pioneer Europe Select Fund
31-Mar-05
Market % of
Value Portfolio
Description
ACS ACTIVIDADES CON 412,508 3.06%
ADIDAS-SALOMON AG 413,338 3.07%
ALLIED IRISH BANKS 436,204 3.24%
ASTRAZENECA PLC 441,452 3.28%
BARCLAYS PLC 457,182 3.39%
BASF AG 374,070 2.78%
BRITISH AMERICAN TO 308,607 2.29%
BELGACOM SA 197,068 1.46%
BAYERISCHE MOTOREN 204,073 1.51%
BNP PARIBAS 582,500 4.32%
BOOTS COMPANY PLC 281,542 2.09%
BP AMOCO PLC 655,970 4.87%
NET SPENDABLE CASH 347,670 2.58%
UNCONFIRMED CASH -24,988 -0.19%
CRH PLC 388,389 2.88%
CS GROUP 420,733 3.12%
DIXONS GROUP PLC 214,233 1.59%
ENI SPA 559,144 4.15%
EUROPEAN DOLLAR 44,145 0.33%
FRANCE TELECOM 459,559 3.41%
SOCIETE GENERALE - 447,801 3.32%
GLAXOSMITHKLINE 464,221 3.45%
LAFARGE BR 385,611 2.86%
MICHELIN (CGDE) -B 382,637 2.84%
PEUGEOT SA 326,886 2.43%
PORSCHE AG 352,671 2.62%
ROYAL BANK OF SCOTL 558,784 4.15%
REPSOL SA REGD 320,245 2.38%
SCHERING AG 162,428 1.21%
VINCI S.A. 440,977 3.27%
COMPAGNIE DE SAINT 415,947 3.09%
SCHNEIDER ELECTRIC 348,569 2.59%
TNT POST GROUP N.V. 462,905 3.44%
UBS AG 571,810 4.24%
VODAFONE GROUP PLC 657,491 4.88%
13,472,378
100.00%
Pioneer Europe Select Value Combined Holdings
As of March 31, 2005
% of Market
Security Name Portfolio Value
ACS ACTIVIDADES CONS Y SERV 3.06% 6,266,668
ADIDAS-SALOMON AG 3.07% 6,287,148
ALLIED IRISH BANKS PLC 3.24% 6,635,296
ASTRAZENECA PLC 3.28% 6,717,213
BARCLAYS PLC 3.39% 6,942,485
BASF AG 2.78% 5,693,248
BRITISH AMERICAN TOBACCO PLC. 2.29% 4,689,762
BELGACOM SA 1.46% 2,989,979
BAYERISCHE MOTOREN WERKE A.G. 1.51% 3,092,376
BNP PARIBAS 4.32% 8,847,061
BOOTS COMPANY PLC 2.09% 4,280,175
BP AMOCO PLC 4.87% 9,973,423
CRH PLC 2.88% 5,898,041
CS GROUP 3.12% 6,389,544
DIXONS GROUP PLC 1.59% 3,256,210
ENI SPA 4.15% 8,498,913
EUROPEAN DOLLAR 0.33% 675,817
FRANCE TELECOM 3.41% 6,983,444
SOCIETE GENERALE - A 3.32% 6,799,130
GLAXOSMITHKLINE 3.45% 7,065,361
LAFARGE BR 2.86% 5,857,082
MICHELIN (CGDE) -B 2.84% 5,816,124
PEUGEOT SA 2.43% 4,976,472
PORSCHE AG 2.62% 5,365,579
ROYAL BANK OF SCOTLAND GROUP 4.15% 8,498,913
REPSOL SA REGD 2.38% 4,874,075
SCHERING AG 1.21% 2,477,996
VINCI S.A. 3.27% 6,696,734
COMPAGNIE DE SAINT GOBAIN 3.09% 6,328,106
SCHNEIDER ELECTRIC SA 2.59% 5,304,141
TNT POST GROUP N.V. 3.44% 7,044,882
UBS AG 4.24% 8,683,227
VODAFONE GROUP PLC 4.88% 9,993,902
CASH 2.39% 4,894,555
204,793,082
Pioneer Europe Fund Securites to be Sold
Market Value as of
Shares 3/31/05
ATLAS COPCO AB A SHARES 17,054 816,204
ACTELION LTD 18,842 1,905,303
ATOS ORIGIN 29,041 1,962,881
AXA 149,272 3,981,084
BANCO BILBAO VIZCAYA ARGENTA 92,442 1,504,031
BUHRMANN NV 228,921 2,321,259
CREDIT AGRICOLE S.A. 85,177 2,314,259
CENTRICA PLC 533,751 2,337,829
CONTINENTAL AG 26,718 2,071,179
COMPASS GROUP PLC 418,604 1,913,020
DEUTSCHE BOERSE AG 15,290 1,148,738
VIVENDI UNIVERSAL 30,303 927,878
REED ELSEVIER NV 64,225 967,871
MAN GROUP PLC 32,000 832,640
E.ON AG 57,424 4,924,108
ERICSSON LM TEL SUR B 511,658 1,437,759
FRESENIUS AG PFD 15,387 1,784,123
GUS PLC 61,619 1,063,544
HMV GROUP PLC 318,207 1,501,937
HANNOVER RUECKVERSICHERU 23,244 919,765
HOLCIM LTD. 32,753 2,013,327
ING GROEP NV CVA 64,568 1,949,308
ITALCEMENTI 115,676 1,942,200
LAGARDERE S.C.A. 11,667 882,842
NESTLE REG 13,647 3,737,367
NOKIA OYJ 93,277 1,439,264
PHILIPS ELECTRONICS 106,809 2,940,452
PUBLICIS SA 36,113 1,107,947
RIO TINTO PLC. 86,579 2,798,233
ROCHE HOLDINGS 18,941 2,029,149
SANOFI-AVENTIS 28,418 2,402,742
SWISS RE REG 33,061 2,370,474
SIEMENS 28,310 2,239,038
SKF AB SER B 42,705 1,995,605
SYNTHES INC. 12,322 1,369,467
TECHNIP 5,555 928,629
TELEFONICA SA 145,271 2,529,168
TELEKOM AUSTRIA AG 74,764 1,460,889
TELECOM ITALIA SPA 354,300 1,342,797
TOTAL SA 29,030 6,800,858
TESCO PLC 421,096 2,526,576
ZURICH FINANCIAL SERVICES 17,110 3,000,923
86,442,668
The pro forma financial statements required by Rule 11-01 of Regulation
S-X were not prepared because the net asset value of Pioneer Europe Select Fund
does not exceed 10 percent of Pioneer Europe Fund's net asst value, both of
which are measured as of a specified date within 30 days prior to the date of
filing of this registration statement.
For additional information, see "Financial Statements" in Pioneer
Europe Fund's SAI.
PART C
OTHER INFORMATION
PIONEER EUROPE FUND
ITEM 15. INDEMNIFICATION
Except for the Agreement and Declaration of Trust, dated June 22, 1990, as
amended from time to time, the "Declaration"), establishing the Fund as a
statutory trust under Massachusetts law, there is no contract, arrangement or
statute under which any Trustee, officer, underwriter or affiliated person of
the Fund is insured or indemnified. The Declaration provides that every person
who is, or has been, a Trustee or an officer, employee or agent of the Fund
shall be indemnified by the Fund or the appropriate Fund series to the fullest
extent permitted by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or preceeding
in which he becomes involved as party or otherwise by virtue of his being or
having been a Trustee, officer, employee or agent and against amounts paid or
incurred by him in the settlement thereof.
Insofar as indemnification for liability arising under the Securities Act of
1933, as amended (the "1933 Act"), may be abailable to Trustees, officers and
controlling persons of the Fund pursuant to the foregoing provisions, or
otherwise, the Fund has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the 1933 Act and is
therefore, unenforcable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Fund or expenses incurred or
paid by a Trustee, officer or controlling person of the Fund in the successful
defense of any action, suit or preceeding) is asseted by such Trustt, officer or
controlling person in connection with the securities being registered, the Fund
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.
ITEM 16. EXHIBITS
(1)(a) Amended and Restated Agreement and Declaration of Trust (1)
(1)(b) Establishment of Designation of Classes (1)
(1)(c ) Establishment of Designation of Classes (2)
(1)(d) Establishment of Designation of Class R Shares (5)
(2) Amended and Restated By-Laws (1)
(3) Not applicable
(4) Form of Agreement and Plan of Reorganization (7)
(5) Reference is made to Exhibits (1) and (2) hereof
(6) Management Contract between the Fund and Pioneer Investment
Management, Inc. (4)
(7) Underwriting Agreement with Pioneer Funds Distributor, Inc. (4)
(8) Not applicable
(9) Custodian Agreement dated January 14, 1992 between the Fund
and Brown (6)
Brothers Harriman & Co.
(10)(a) Multiple Class Plan pursuant to rule 18f-3 (5)
(10)(b) Distribution Plan relating to Class A (3)
(10)(c) Distribution Plan relating to Class B (4)
(10)(d) Distribution Plan relating to Class C (1)
(10)(e) Distribution Plan relating to Class R (5)
(10)(f) Service Plan relating to Class R Shares (5)
(10)(g) Dealer Sales Agreement (6)
(10)(h) Expense Limit Agreement. (*)
(11) Opinion of Counsel (legality of securities being offered) (*)
(12) Form of opinion as to tax matters and consent (*)
(13)(a) Investment Company Service Agreement (6)
(13)(b) Administration Agreement Between the Fund and Pioneer Investment
Management, (6) Inc. (formerly Pioneering Management Corporation)
(14) Consent of Independent Registered Public Accounting Firm (*)
(15) Not Applicable
(16) Power of Attorney (6)
(17)(a) Code of Ethics (6)
(17)(b) Form of Proxy Card (7)
N/A Power of Attorney (*)
(1) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No. 5 to the
Registration Statement (File Nos. 33-36265; 811-06151) as filed
with the Securities and Exchange Commission (the "SEC") on
February 28, 1996 (Accession No. 0000866707-96-000002).
(2) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No. 8 to the
Registration Statement (File Nos. 33-36265; 811-06151)as filed
with the SEC on July 1, 1998(Accession No. 0000866707-98-000012).
(3) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No.13 to the
Registration Statement (File Nos. 33-36265; 811-06151) as filed
with the SEC on March 1, 2001(Accession No.
0000866707-01-000004).
(4) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No.15 to the
Registration Statement (File Nos. 33-36265; 811-06151) as filed
with the SEC on March 1, 2002 (Accession No.
0000866707-02-000004).
(5) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No.16 to the
Registration Statement (File Nos. 33-36265; 811-06151) as filed
with the SEC on January 10, 2003 (Accession No.
0000866707-03-000003).
(6) Previously filed. Incorporated herein by reference from the
exhibits filed with Post-Effective Amendment No. 18 to the
Registration Statement (File Nos. 33-36265; 811-06151) as filed
with the SEC on March 1, 2004 (Accession No.
0000869356-04-000010).
(7) Previously filed. Incorporated herein by reference from the
exhibits filed with the Registrant's initial Registration
Statement on Form N-14 (File No. 333-119868) as filed
with the SEC on October 21, 2004 (Accession No.
0001016964-04-000412).
(*) Filed herewith.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is part of this
Registration Statement by any person or party which is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the
reoffering prospectus will contain the information called for by the applicable
registration form for the reofferings by persons who may be deemed underwriters,
in addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
(3) The undersigned Registrant agrees to file a post-effective amendment at the
closing of the reorganization, for the purpose of filing the final tax opinion
by Wilmer Cutler Pickering Hale and Dorr LLP, and consent of counsel pursuant
to Rule 436 of the Secuties Act of 1933.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement on Form N-14 has been signed on behalf of the
Registrant, in the City of Boston and the Commonwealth of Massachusetts, on the
11th day of May, 2005.
Pioneer Europe Fund
By: /s/ Osbert M. Hood
------------------------------------
Osbert M. Hood
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
* Chairman of the Board, Trustee, May 11, 2005
- --------------------------- and President
John F. Cogan, Jr. (Principal Executive Officer)
* Chief Financial Officer and May 11, 2005
- --------------------------- Treasurer (Principal
Vincent Nave Financial and Accounting
Officer
*
- ----------
Trustees:
Davide R. Bock Trustee May 11, 2005
*
- ----------
Mary K. Bush Trustee May 11, 2005
*
- ----------
Margaret B.W. Graham Trustee May 11, 2005
*
- ----------
/s/ Osbert M. Hood
Osbert M. Hood Trustee May 11, 2005
*
- ----------
Marguerite A. Piret Trustee May 11, 2005
*
- ----------
Steven K. West Trustee May 11, 2005
*
- ----------
John Winthrop Trustee May 11, 2005
*
- ----------
* By: /s/ Osbert M. Hood May 11, 2005
--------------------------------------------
Osbert M. Hood, Attorney-in-Fact
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement:
Exhibit No. Description
(10)(h) Expense Limit Agreement
(11) Opinion of Counsel (legality of securities being offered)
(12) Form of opinion as to tax matters and consent
(14) Consent of Independent Registered Public Accounting Firm
N/A Power of Attorney