MANAGEMENT CONTRACT
THIS AGREEMENT dated as of this 26th day of February 2003 between Pioneer
Protected Principal Trust, a Delaware business trust (the "Trust"), on behalf of
its series, Pioneer Protected Principal Plus Fund II (the "Fund"), and Pioneer
Investment Management, Inc., a Delaware corporation (the "Manager").
W I T N E S S E T H
WHEREAS, the Trust is registered as an open-end 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 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 Fund.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Trust, on behalf of the Fund, and the Manager do hereby agree
as follows:
1. The Manager will regularly provide the Fund with investment research,
advice and supervision and will furnish continuously an investment program for
the Fund, consistent with the investment objectives and policies of the Fund.
The Manager will determine from time to time what securities shall be purchased
for the Fund, what securities shall be held or sold by the Fund and what portion
of the Fund's assets shall be held uninvested as cash, subject always to the
provisions of the Trust's Certificate of Trust, Agreement and Declaration of
Trust, By-Laws, the Financial Guarantee Agreement, dated February 26, 2003 (the
"Financial Guarantee Agreement") among the Trust on behalf of the Fund, the
Manager and Ambac Assurance Corporation, and its registration statements under
the 1940 Act and under the 1933 Act covering the Fund's shares, as filed with
the Commission, and to the investment objectives, policies and restrictions of
the Fund, as each of the same shall be from time to time in effect, 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 Fund in the same manner and with
the same force and effect as the Fund itself might or could do with respect to
purchases, sales or other transactions, as well as with respect to all other
things necessary or incidental to the furtherance or conduct of such purchases,
sales or other transactions.
2. The Manager will, to the extent reasonably required in the conduct of
the business of the Fund and upon the Trust's request, furnish to the Fund
research, statistical and advisory reports upon the industries, businesses,
corporations or securities as to which such requests shall be made, whether or
not the Fund 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 securities.
3. The Manager will maintain all books and records with respect to the
Fund's securities transactions required by subparagraphs (b)(5), (6), (9) and
(10) and paragraph (f) of Rule 31a-1 under the 1940 Act (other than those
records being maintained by the custodian or transfer agent appointed by the
Trust on behalf of the Fund) 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.
4. 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 Fund's affairs and
investments, and shall arrange, if desired by the Trust, for members of the
Manager's organization to serve as officers of the Trust or agents of the Fund.
5. The Manager shall pay directly or reimburse the Fund for: (i) the
compensation (if any) of the Trustees who are "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 Fund where such
expenses are incurred by the Manager or by the Fund in connection with the
management of the affairs of, and the investment and reinvestment of the assets
of, the Fund.
6. The Fund 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 on behalf of the Fund; (iv) issue and
transfer taxes chargeable to the Fund in connection with securities transactions
to which the Trust, on behalf of the Fund, is a party; (v) insurance premiums,
interest charges, dues and fees for membership in trade associations and all
taxes and corporate fees payable by the Fund to federal, state or other
governmental agencies; (vi) fees and expenses involved in registering and
maintaining registrations of the Trust and/or Fund shares with federal
regulatory agencies, state or blue sky securities agencies and foreign
jurisdictions, including the preparation of prospectuses and statements of
additional information for filing with such regulatory authorities; (vii) all
expenses of shareholders' and 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
Fund 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
"interested persons" of the Manager, the Trust (other than as Trustees), or
Pioneer Funds Distributor, Inc.; (xi) the cost of preparing and printing share
certificates; (xii) interest on borrowed money, if any; (xiii) the fee and any
other payment due from the Fund under the Financial Guarantee Agreement; and
(xiii) any other expense that the Trust, the Manager or any other agent of the
Trust may incur (A) as a result of a change in the law or regulations, (B) as a
result of a mandate from the Board of Trustees with associated costs of a
character generally assumed by similarly structured investment companies or (C)
that is similar to the expenses listed above, and that is approved by the Board
of Trustees (including a majority of the Independent Trustees) as being an
appropriate expense of the Trust.
7. In addition to the expenses described in Section 6 above, the Fund shall
pay all brokers' and underwriting commissions chargeable to the Fund in
connection with securities transactions to which the Trust, on behalf of the
Fund, is a party.
8. The Fund shall pay to the Manager, as compensation for the Manager's
services and expenses assumed hereunder, a fee at the rate of 0.25% per annum of
the Fund 's average daily net assets during the Offering Period and a fee at the
rate of 0.70% per annum of the Fund's average daily net assets during the
Protected Period and during the Post-Protected Period. For purposes of this
Section 8, the definition of and the length of time specified for each of
"Offering Period," "Guarantee Period" and "Post-Guarantee Period" are as defined
in the registration statement on Form N-1A for the Trust relating to the Fund on
the date such registration statement is declared effective by the Securities and
Exchange Commission. If the Fund is required by the terms of the Financial
Guarantee Agreement to invest solely in a defeasance portfolio of U.S.
government securities following a Trigger Event (as defined in the Financial
Guarantee Agreement), the Manager's fee will be reduced to 0.20% of the Fund's
average daily net assets.
9. The management fee payable hereunder shall be computed daily and paid
monthly in arrears. In the event of termination of this Agreement, the fee
provided in Section 8 shall be computed on the basis of the period ending on the
last business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
10. 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
Fund 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.
11. It is understood that the Manager may employ one or more sub-investment
advisers (each a "Subadviser") to provide investment advisory services to the
Fund 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,
and otherwise approved in accordance with the requirements of the 1940 Act or an
exemption therefrom. The authority given to the Manager in Sections 1 through 13
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, on behalf of the
Fund, agrees that the Manager shall not be accountable to the Trust, the Fund or
the Fund'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 Fund and the Manager will rely almost exclusively on the expertise
of such Subadviser for the selection and monitoring of specific investments.
12. 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, the Fund or the
Fund's 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.
13. Nothing in this Agreement will in any way limit or restrict the Manager
or any of its officers, directors, or employees from buying, selling or trading
in any securities for its or their own accounts or other accounts. The Manager
may act as an investment adviser 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 Fund or
deemed to violate or give rise to any duty or obligation of the Manager to the
Fund except as otherwise imposed by law. The Fund 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.
14. In connection with purchases or sales of securities for the account of
the Fund, neither the Manager nor any of its directors, officers or employees
will act as a principal or agent or receive any commission except as permitted
by the 1940 Act. The Manager shall arrange for the placing of all orders for the
purchase and sale of securities for the Fund'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
Fund the most favorable execution and net price available except as described
herein. It is also understood that it is desirable for the Fund that the 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 Fund 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 Fund 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. In addition, subject to the Manager's obligation to seek the
most favorable execution and net price available, the Manager may consider the
sale of the Fund's shares in selecting brokers and dealers.
15. On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Fund as well as other clients, the Manager
may, to the extent permitted by applicable laws and regulations, 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 Fund and to such clients.
16. This Agreement shall become effective on the date hereof and shall
remain in force until December 31, 2004 and from year to year thereafter, but
only so long as its continuance is approved in accordance with the requirements
of the 1940 Act or an exemption therefrom, subject to the right of the Trust, on
behalf of the Fund, and the Manager to terminate this contract as provided in
Section 17 hereof.
17. 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 the outstanding voting securities" (as defined in the 0000 Xxx) of
the Fund or the Manager, as the case may be, and the giving of 60 days' written
notice to the other party.
18. 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.
19. The Trust agrees that in the event that neither the Manager nor any of
its affiliates acts as an investment adviser to the Fund, the name of the Fund
will be changed to one that does not contain the name "Pioneer" or otherwise
suggest an affiliation with the Manager.
20. 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 Fund, the Manager will
act solely as investment counsel for such clients and not in any way on behalf
of the Fund.
21. 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.
22. This Agreement and all performance hereunder shall be governed by and
construed in accordance with the laws of The Commonwealth of Massachusetts.
23. 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.
24. 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 as of the day and year first above
written.
PIONEER PROTECTED PRINCIPAL TRUST
on behalf of its series, PIONEER PROTECTED
PRINCIPAL PLUS FUND II
/s/ Xxxxxx X. Xxxxxx
By: Xxxxxx X. Xxxxxx
Its: Executive Vice President
PIONEER INVESTMENT MANAGEMENT,
INC.
/s/ Xxxxxx X. Xxxxxx
By: Xxxxxx X. Xxxxxx
Its: Executive Vice President
