MANAGEMENT CONTRACT
THIS AGREEMENT dated this 1st day of February, 1996 between Pioneer
Mid-Cap Fund, a Delaware business trust (the "Trust"), and Pioneering Management
Corporation, a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (the "Registration
Statement") for the purpose of registering its shares for public offering under
the Securities Act of 1933, as amended (the "1933 Act"),
WHEREAS, the parties hereto deem it mutually advantageous that the
Manager should be engaged, subject to the supervision of the Trust's Board of
Trustees and officers, to manage the Trust.
NOW, THEREFORE, in consideration of the mutual covenants and benefits
set forth herein, the Trust and the Manager do hereby agree as follows:
1. (a) The Manager will regularly provide the Trust with investment
research, advice and supervision and will furnish continuously an investment
program for the Trust, consistent with the investment objectives and policies of
the Trust. The Manager will determine from time to time what securities shall be
purchased for the Trust, what securities shall be held or sold by the Trust and
what portion of the Trust's assets shall be held uninvested as cash, subject
always to the provisions of the Trust's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statements under the 1940 Act
and under the 1933 Act covering the Trust's shares, as filed with the Securities
and Exchange Commission, and to the investment objectives, policies and
restrictions of the Trust, as each of the same shall be from time to time in
effect, and subject, further, to such policies and instructions as the Board of
Trustees of the Trust may from time to time establish. To carry out such
determinations, the Manager will exercise full discretion and act for the Trust
in the same manner and with the same force and effect as the Trust itself might
or could do with respect to purchases, sales or other transactions, as well as
with respect to all other things necessary or incidental to the furtherance or
conduct of such purchases, sales or other transactions.
(b) The Manager will, to the extent reasonably required in the conduct
of the business of the Trust and upon the Trust's
request, furnish to the Trust research, statistical and advisory reports upon
the industries, businesses, corporations or securities as to which such requests
shall be made, whether or not the Trust shall at the time have any investment in
such industries, businesses, corporations or securities. The Manager will use
its best efforts in the preparation of such reports and will endeavor to consult
the persons and sources believed by it to have information available with
respect to such industries, businesses, corporations or entities.
(c) The Manager will maintain all books and records with respect to the
Trust's securities transactions required by sub-paragraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust) and preserve such records for the periods prescribed therefor by Rule
31a-2 under the 1940 Act. The Manager will also provide to the Board of Trustees
such periodic and special reports as the Board may reasonably request.
2. (a) Except as otherwise provided herein, the Manager, at its own
expense, shall furnish to the Trust office space in the offices of the Manager
or in such other place as may be agreed upon from time to time, and all
necessary office facilities, equipment and personnel for managing the Trust's
affairs and investments, and shall arrange, if desired by the Trust, for members
of the Manager's organization to serve as officers or agents of the Trust.
(b) The Manager shall pay directly or reimburse the Trust for: (i) the
compensation (if any) of the Trustees who are affiliated with, or "interested
persons" (as defined in the 0000 Xxx) of, the Manager and all officers of the
Trust as such; and (ii) all expenses not hereinafter specifically assumed by the
Trust where such expenses are incurred by the Manager or by the Trust in
connection with the management of the affairs of, and the investment and
reinvestment of the assets of, the Trust.
(c) The Trust shall assume and shall pay: (i) charges and expenses for
fund accounting, pricing and appraisal services and related overhead, including,
to the extent such services are performed by personnel of the Manager, or its
affiliates, office space and facilities and personnel compensation, training and
benefits; (ii) the charges and expenses of auditors; (iii) the charges and
expenses of any custodian, transfer agent, plan agent, dividend disbursing agent
and registrar appointed by the Trust with respect to the Trust; (iv) issue and
transfer taxes chargeable to the Trust in connection with securities
transactions to which the Trust is a party; (v) insurance premiums, interest
charges, dues and fees for membership in trade associations and
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all taxes and corporate fees payable by the Trust to federal, state or other
governmental agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Trust and/or its shares with the Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of Prospectuses and Statements of Additional Information for filing
with the Commission; (vii) all expenses of shareholders' and Trustees' meetings
and of preparing, printing and distributing prospectuses, notices, proxy
statements and all reports to shareholders and to governmental agencies; (viii)
charges and expenses of legal counsel to the Trust and the Trustees; (ix) any
distribution fees paid by the Trust in accordance with Rule 12b-1 promulgated by
the Commission pursuant to the 1940 Act; (x) compensation of those Trustees of
the Trust who are not affiliated with or interested persons of the Manager, the
Trust (other than as Trustees), The Pioneer Group, Inc. or Pioneer Trusts
Distributor, Inc.; (xi) the cost of preparing and printing share certificates;
and (xii) interest on borrowed money, if any.
(d) In addition to the expenses described in Section 2(c) above, the
Trust shall pay all brokers' and underwriting commissions chargeable to the
Trust in connection with securities transactions to which the Trust is a party.
3. (a) The Trust shall pay to the Manager, as compensation for the
Manager's services and expenses assumed hereunder, a fee as set forth below.
Management fees payable hereunder shall be computed daily and paid monthly in
arrears.
(i) For the period beginning on the date this Contract becomes
effective and ending on June 30, 1996, the fee shall be paid at the annual rate
of 0.50% of the Trust's average daily net assets up to $250 million, 0.48% of
the next $50 million, and 0.45% of the excess over $300 million (the "Carryover
Fee").
(ii) For periods after June 30, 1996, the fee payable hereunder
shall be composed of the Basic Fee (defined below) and a Performance Adjustment
(defined below) to the Basic Fee based upon the investment performance of the
Trust in relation to the Standard & Poors Mid-Cap 400 Index (the "Index").
(iii) The Basic Fee is payable at an annual rate of 0.625% of the
Trust's average daily net assets.
(iv) The Performance Adjustment consists of an adjustment to the
monthly Basic Fee to be made by applying a performance adjustment rate to the
average net assets of the Trust over the performance period. The resulting
dollar figure will be
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added to or subtracted from the Basic Fee depending on whether the Trust
experienced better or worse performance than the Index.
The Performance Adjustment rate is 0.02% per annum for each percentage
point rounded to the nearer point (the higher point if exactly one-half point)
that the Trust's investment performance for the period was better or worse than
the record of the index as then constituted. The maximum performance adjustment
is 0.20% per annum.
The performance period will commence on February 1, 1996. During the
first five months thereafter there will be no Performance Adjustment and the
Carryover Fee will be in effect. Starting with July, 1996 and ending with
December, 1997 (the "Transition Period"), the Performance Adjustment will take
effect only if this would have the effect of lowering the Basic Fee. Starting
with January, 1997, the Performance Fee will take effect for purposes of both
raising and lowering the Basic Fee.
Starting with July, 1996, a new month will be added to the performance
period each month until the performance period equals 36 months. Thereafter, the
performance period will consist of the current month plus the preceding 35
months.
The Trust's investment performance will be measured by comparing the
(i) opening net asset value of one share of the Trust on the first business day
of the performance period with (ii) the closing net asset value of the one share
of the Trust as of the last business day of such period. In computing the
investment performance of the Trust and the investment record of the Index,
distributions of realized capital gains, the value of capital gains taxes per
share paid or payable on undistributed realized long-term capital gains
accumulated to the end of such period and dividends paid out of investment
income on the part of the Trust, and all cash distributions of the companies
whose stock comprise the Index, will be treated as reinvested in accordance with
Rule 205-1 or any other applicable rule under the Investment Advisers Act of
1940, as the same from time to time may be amended.
The computation of the performance adjustment will not be cumulative.
Except during the Transition Period, a positive fee adjustment will apply even
though the performance of the Trust over some period of time shorter than the
performance period has been behind that of the Index, and, conversely, a
negative fee adjustment will apply for the month even though the performance of
the Trust over some period of time shorter than the performance period has been
ahead of that of the Index.
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(v) One-twelth of the annual Performance Adjustment rate shall be
applied to the average of the net assets of the Trust (computed in the manner
set forth in the Declaration of Trust of the Trust adjusted as provided above,
if applicable) determined as of the close of business on each business day
through out the performance period. The resulting dollar amount is added to or
deducted from the Basic Fee.
(vi) In the event of termination of this Agreement, the Carryover
Fee or Basic Fee then in effect shall be computed on the basis of the period
ending on the last business day on which this Agreement is in effect subject to
a pro rata adjustment based on the number of days elapsed in the current month
as a percentage of the total number of days in such month. The amount of any
Performance Adjustment to the Basic Fee will be computed on the basis of and
applied to net assets averaged over the 36 month period ending on the last
business day on which this Agreement is in effect, provided that if this
Agreement has been in effect less than 36 months, the computation will be made
on the basis of the period of time during which it has been in effect.
(b) If the operating expenses of the Trust in any year exceed the
limits set by state securities laws or regulations in states in which shares of
the Trust are sold, the amount payable to the Manager under subsection (a) above
will be reduced (but not below $0), and the Manager shall make other
arrangements concerning expenses but, in each instance, only as and to the
extent required by such laws or regulations. If amounts have already been
advanced to the Manager under this Agreement, the Manager will return such
amounts to the Trust to the extent required by the preceding sentence.
(c) In addition to the foregoing, the Manager may from time to time
agree not to impose all or a portion of its fee otherwise payable hereunder (in
advance of the time such fee or a portion thereof would otherwise accrue) and/or
undertake to pay or reimburse the Trust for all or a portion of its expenses not
otherwise required to be borne or reimbursed by the Manager. Any such fee
reduction or undertaking may be discontinued or modified by the Manager at any
time.
0.Xx is understood that the Manager may employ one or more
sub-investment advisers (each a "Subadviser") to provide investment advisory
services to the Trust by entering into a written agreement with each such
Subadviser; provided, that any such agreement first shall be approved by the
vote of a majority of the Trustees, including a majority of the Trustees who are
not "interested persons" (as defined in the 0000 Xxx) of the Trust, the Manager
or any such Subadviser, at a meeting of Trustees called for the purpose of
voting on such approval and by the
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affirmative vote of a "majority of the outstanding voting securities" (as
defined in the 0000 Xxx) of the Trust. The authority given to the Manager in
Sections 1 through 6 hereof may be delegated by it under any such agreement;
provided, that any Subadviser shall be subject to the same restrictions and
limitations on investments and brokerage discretion as the Manager. The Trust
agrees that the Manager shall not be accountable to the Trust or the Trust's
shareholders for any loss or other liability relating to specific investments
directed by any Subadviser, even though the Manager retains the right to reverse
any such investment, because, in the event a Subadviser is retained, the Trust
and the Manager will rely almost exclusively on the expertise of such Subadviser
for the selection and monitoring of specific investments.
5.The Manager will not be liable for any error of judgment or mistake
of law or for any loss sustained by reason of the adoption of any investment
policy or the purchase, sale, or retention of any security on the recommendation
of the Manager, whether or not such recommendation shall have been based upon
its own investigation and research or upon investigation and research made by
any other individual, firm or corporation, but nothing contained herein will be
construed to protect the Manager against any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
6. (a) Nothing in this Agreement will in any way limit or restrict the
Manager or any of its officers, Trustees, or employees from buying, selling or
trading in any securities for its or their own accounts or other accounts. The
Manager may act as an investment advisor to any other person, firm or
corporation, and may perform management and any other services for any other
person, association, corporation, firm or other entity pursuant to any contract
or otherwise, and take any action or do any thing in connection therewith or
related thereto; and no such performance of management or other services or
taking of any such action or doing of any such thing shall be in any manner
restricted or otherwise affected by any aspect of any relationship of the
Manager to or with the Trust or deemed to violate or give rise to any duty or
obligation of the Manager to the Trust except as otherwise imposed by law. The
Trust recognizes that the Manager, in effecting transactions for its various
accounts, may not always be able to take or liquidate investment positions in
the same security at the same time and at the same price.
(b) In connection with purchases or sales of securities for the account
of the Trust, neither the Manager nor any of its Trustees, officers or employees
will act as a principal or agent
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or receive any commission except as permitted by the 1940 Act. The Manager shall
arrange for the placing of all orders for the purchase and sale of securities
for the Trust's account with brokers or dealers selected by the Manager. In the
selection of such brokers or dealers and the placing of such orders, the Manager
is directed at all times to seek for the Trust the most favorable execution and
net price available except as described herein. It is also understood that it is
desirable for the Trust that the Manager have access to supplemental investment
and market research and security and economic analyses provided by brokers who
may execute brokerage transactions at a higher cost to the Trust than may result
when allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Manager is authorized to
place orders for the purchase and sale of securities for the Trust with such
brokers, subject to review by the Trust's Trustees from time to time with
respect to the extent and continuation of this practice. It is understood that
the services provided by such brokers may be useful to the Manager in connection
with its or its affiliates' services to other clients.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Trust as well as other clients, the
Manager, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Manager in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Trust and to
such clients.
7.This Agreement shall become effective on the date hereof and shall
remain in force until , 1997 and from year to year thereafter, but only so long
as its continuance is approved annually by a vote of the Trustees of the Trust
voting in person, including a majority of its Trustees who are not parties to
this Agreement or "interested persons" (as defined in the 0000 Xxx) of any such
parties, at a meeting of Trustees called for the purpose of voting on such
approval or by a vote of a "majority of the outstanding voting securities" (as
defined in the 0000 Xxx) of the Trust, subject to the right of the Trust and the
Manager to terminate this contract as provided in Section 8 hereof.
8.Either party hereto may, without penalty, terminate this Agreement by
vote of its Board of Trustees or Directors, as the case may be, or by vote of a
"majority of its outstanding voting securities" (as defined in the 0000 Xxx) and
the giving of 60 days' written notice to the other party.
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9.This Agreement shall automatically terminate in the event of its
assignment. For purposes of this Agreement, the term "assignment" shall have the
meaning given it by Section 2(a)(4) of the 1940 Act.
10. The Trust agrees that in the event that neither the Manager nor any
of its affiliates acts as an investment adviser to the Trust, the name of the
Trust will be changed to one that does not contain the name "Pioneer" or
otherwise suggest an affiliation with the Manager.
11.The Manager is an independent contractor and not an employee of the
Trust for any purpose. If any occasion should arise in which the Manager gives
any advice to its clients concerning the shares of the Trust, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Trust or any series thereof.
12.This Agreement states the entire agreement of the parties hereto,
and is intended to be the complete and exclusive statement of the terms hereof.
It may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with the 1940
Act, when applicable.
13.This Agreement and all performance hereunder shall be governed by
and construed in accordance with the laws of The Commonwealth of Massachusetts.
14.Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction.
15.This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER MID-CAP FUND
/s/Xxxxxx X. Xxxxx By: /s/Xxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxx Xxxx X. Xxxxx, Xx.
Secretary Chairman and President
ATTEST: PIONEERING MANAGEMENT CORPORATION
/s/Xxxxxx X. Xxxxx By: /s/Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Secretary President
