AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this 8th day of December, 2006, by and between Pioneer Variable Contracts
Trust, a Delaware statutory trust, on behalf of its series, Pioneer Ibbotson
Moderate Allocation VCT Portfolio (the "Acquiring Portfolio"), with its
principal place of business at 60 State Street, Boston, Massachusetts 02109, and
Pioneer Variable Contracts Trust, on behalf of its series Pioneer Balanced VCT
Portfolio, with its principal place of business at 60 State Street, Boston,
Massachusetts 02109 (the "Acquired Portfolio"). The Acquiring Portfolio and the
Acquired Portfolio are sometimes referred to collectively herein as the
"Portfolios" and individually as a "Portfolio."
This Agreement is not intended to qualify 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 sale of all of the Acquired Portfolio's securities for cash,
the distribution by the Acquired Portfolio to its shareholders of its net income
and gain for its last taxable year and the transfer of all of the assets of the
Acquired Portfolio to the Acquiring Portfolio solely in exchange for (i) the
issuance of shares of beneficial interest of each Class of shares of the
Acquiring Portfolio that corresponds to the Classes of shares of the Acquired
Portfolio equal to the net asset value ("NAV") represented by such shares
(collectively, the "Acquiring Portfolio Shares" and each, an "Acquiring
Portfolio Share") to the Acquired Portfolio, and (ii) the assumption by the
Acquiring Portfolio of all of the liabilities of the Acquired Portfolio (the
"Assumed Liabilities"), on the closing date set forth below (the "Closing
Date"), and (b) the distribution by the Acquired Portfolio, on the Closing Date,
or as soon thereafter as practicable, of the Acquiring Portfolio Shares to the
shareholders of the Acquired Portfolio in liquidation and termination of the
Acquired Portfolio, all upon the terms and conditions hereinafter set forth in
this Agreement.
WHEREAS, each Portfolio is a series of Pioneer Variable Contracts
Trust, a registered investment company classified as a management company of the
open-end type, and the Acquired Portfolio has sold all of its portfolio
securities in exchange for cash to permit the Acquiring Portfolio to invest in
underlying funds and other assets of the character in which the Acquiring
Portfolio is permitted to invest;
WHEREAS, the Acquiring Portfolio is authorized to issue shares of
beneficial interest;
WHEREAS, the Board of Trustees of Pioneer Variable Contracts Trust, on
behalf of each Portfolio, has determined that the exchange of all of the assets
of the Acquired Portfolio for Acquiring Portfolio Shares, and the assumption of
the Assumed Liabilities of the Acquired Portfolio by the Acquiring Portfolio,
are in the best interests of each Portfolio's 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 PORTFOLIO IN EXCHANGE FOR THE
ACQUIRING PORTFOLIO SHARES AND ASSUMPTION OF THE ASSUMED LIABILITIES
AND LIQUIDATION AND TERMINATION OF THE ACQUIRED PORTFOLIO.
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 Portfolio agrees to transfer its assets as set forth in paragraph 1.2
to the Acquiring Portfolio 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 Portfolio agrees in exchange therefore: (a) to issue to the Acquired
Portfolio the number of Acquiring Portfolio Shares of each Class, including
fractional Acquiring Portfolio Shares, determined (to at least two decimal
places) by dividing the value of the Acquired Portfolio's net assets
attributable to a Class of shares and transferred to the Acquiring Portfolio,
computed in the manner and as of the time and date set forth in paragraph 2.1,
by the NAV of one Acquiring Portfolio 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 Portfolio to be acquired by the Acquiring
Portfolio shall consist of all of the Acquired Portfolio's property, which shall
consist solely of cash, goodwill, contractual rights of the Acquired Portfolio,
dividends and interest receivables, all other intangible property owned by the
Acquired Portfolio and originals or copies of all books and records of the
Acquired Portfolio.
(b) The Acquired Portfolio has provided the Acquiring Portfolio with a list
of all of the Acquired Portfolio's assets as of the date of this Agreement.
The Acquired Portfolio will not, without the prior approval of the Acquiring
Portfolio, acquire any securities other than securities of the type in which
the Acquiring Portfolio is permitted to invest and shall not acquire, without
the consent of the Acquiring Portfolio, any securities that are valued at
"fair value" under the valuation procedures of either Portfolio.
1.3 The Acquired Portfolio will endeavor to discharge all its known liabilities
and obligations that are or will become due prior to the Closing Date. The
Acquired Portfolio 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
Portfolio as of the close of business on the Closing Date. The Acquiring
Portfolio shall assume the Assumed Liabilities.
1.4 On the Closing Date, or as soon thereafter as is practicable, the Acquired
Portfolio shall liquidate and distribute pro rata to the Acquired Portfolio's
shareholders of record determined as of the close of business on the Closing
Date (the "Acquired Portfolio Shareholders") the Acquiring Portfolio Shares it
receives pursuant to paragraph 1.1. Such liquidation and distribution will be
accomplished by the Acquired Portfolio instructing the Acquiring Portfolio to
transfer the Acquiring Portfolio Shares then credited to the account of the
Acquired Portfolio on the books of the Acquiring Portfolio to open accounts on
the share records of the Acquiring Portfolio in the names of the Acquired
Portfolio Shareholders (as provided to the Acquiring Portfolio by the Acquired
Portfolio) and representing the respective pro rata number of the Acquiring
Portfolio Shares due such shareholders. The Acquired Portfolio shall promptly
provide the Acquiring Portfolio with evidence of such liquidation and
distribution. All issued and outstanding shares of the Acquired Portfolio will
simultaneously be cancelled on the books of the Acquired Portfolio, although
share certificates representing interests in the Acquired Portfolio will
represent a number of Acquiring Portfolio Shares after the Closing Date as
determined in accordance with paragraph 1.1. The Acquiring Portfolio shall not
issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
1.5 Ownership of Acquiring Portfolio Shares will be shown on the books of the
Acquiring Portfolio's transfer agent. Acquiring Portfolio Shares will be issued
in the manner described in the Acquiring Portfolio'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 Portfolio Shares
in a name other than the registered holder of the Acquired Portfolio Shares on
the books of the Acquired Portfolio as of the time of issuance shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Portfolio Shares are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Portfolio with respect to the
Acquired Portfolio is and shall remain the responsibility of the Acquired
Portfolio up to and including the Closing Date and such later date on which the
Acquired Portfolio is terminated.
1.8 The Acquired Portfolio 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
Pioneer Variable Contracts Trust.
2. VALUATION
2.1 The value of the assets of the Acquired Portfolio to be acquired by the
Acquiring Portfolio 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 Portfolio as in effect on the date hereof.
2.2 The NAV of the Acquiring Portfolio 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 Portfolio.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be December 15, 2006, 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 The Acquired Portfolio shall present its assets to Brown Brothers Harriman &
Co. ("BBH") as custodian for the Acquiring Portfolio for examination no later
than three business days preceding the Valuation Date. The cash, receivables and
due bills shall be delivered by the Acquired Portfolio to BBH as custodian for
the Acquiring Portfolio for the account of the Acquiring Portfolio at the
Closing duly endorsed in proper form for transfer in such condition as to
constitute good delivery thereof. The cash shall be delivered by wire in federal
funds to an account of the Acquiring Portfolio specified by the Acquiring
Portfolio.
3.3 BBH, custodian for the Acquired Portfolio, shall deliver at or as soon as
possible after the Closing a certificate of an authorized officer stating that:
(a) the Acquired Portfolio's assets have been delivered in proper form to the
Acquiring Portfolio 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 the Acquired Portfolio has not sold
all of its portfolio securities for cash, the Closing Date shall be postponed
until the first business day after the day that the Acquired Portfolio has sold
all of its portfolio securities and received payment in cash in exchange for the
sale of all of its portfolio securities, provided that unless the parties
otherwise agree, if the transactions contemplated by this Agreement shall not
have occurred on or prior to March 30, 2007, 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 Portfolio shall deliver to the Acquiring Portfolio 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
Portfolio 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 Portfolio as being an accurate record of the information (i) provided
by Acquired Portfolio Shareholders or (ii) derived from the Acquired Portfolio's
records by such officers or one of the Acquired Portfolio's service providers.
3.6 The Acquiring Portfolio shall issue and deliver a confirmation evidencing
the Acquiring Portfolio Shares to be credited to the Acquired Portfolio's
account on the Closing Date to the Secretary of the Acquired Portfolio, or
provide evidence satisfactory to the Acquired Portfolio that such Acquiring
Portfolio Shares have been credited to the Acquired Portfolio's account on the
books of the Acquiring Portfolio. 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 PORTFOLIO
4.1 As soon as practicable after the Closing, the Acquired Portfolio shall
liquidate the Acquired Portfolio and distribute pro rata to the Acquired
Portfolio Shareholders the Acquiring Portfolio Shares received pursuant to
paragraph 1.1. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares credited to the account of the
Acquired Portfolio to open accounts on the share records in the names of
Acquired Portfolio Shareholders as delivered to the Acquiring Portfolio prior to
the Closing Date in accordance with paragraph 3.5 and representing the
respective pro rata entitlement of each Acquired Portfolio Shareholder in the
Acquiring Portfolio Shares of the corresponding Class held by the Acquired
Portfolio Shareholder at the time of the Closing.
4.2 In connection with such liquidating distributions, (a) the Acquiring
Portfolio shall not deliver certificates representing its shares and (b) the
share transfer books of the Acquired Portfolio shall be permanently closed as of
the Closing Date and arrangements satisfactory to the Acquiring Portfolio,
acting reasonably, shall be made to restrict the further transfer of the
Acquired Portfolio's shares. 4.3 As soon as practicable after the liquidation of
the Acquired Portfolio, the Acquired Portfolio shall terminate its existence as
a series of Pioneer Variable Contracts Trust in accordance with the Declaration
of Trust and By-Laws of Pioneer Variable Contracts Trust.
5. REPRESENTATIONS AND WARRANTIES
5.1 The Acquired Portfolio represents and warrants to the Acquiring Portfolio,
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 Portfolio is a series of 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
Portfolio Shareholders, to perform its obligations under this Agreement. The
Acquired Portfolio 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 Portfolio 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 Portfolio is a series of 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 Portfolio is not, and the execution, delivery and performance
of this Agreement in respect of the Acquired Portfolio will not result, in a
material violation of its Declaration of Trust or By-Laws or of any material
agreement, indenture, instrument, contract, lease or other undertaking with
respect to the Acquired Portfolio to which the Acquired Portfolio is a party or
by which the Acquired Portfolio 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 Portfolio has no material
contracts or other commitments (other than this Agreement) with respect to the
Acquired Portfolio which will be terminated with liability to either the
Acquired Portfolio or to the Acquiring Portfolio 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 Portfolio or any of the Acquired Portfolio's properties or
assets, except as previously disclosed in writing to, and acknowledged in
writing by, the Acquiring Portfolio. The Acquired Portfolio 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
Portfolio's business or the Acquired Portfolio's ability to consummate the
transactions herein contemplated;
(f) The statement of assets and liabilities of the Acquired Portfolio as of
December 31, 2005 has been audited by Ernst & Young LLP, independent registered
public accounting firm, has been prepared in accordance with GAAP consistently
applied and fairly reflects the financial condition of the Acquired Portfolio as
of such date; except for the Assumed Liabilities, the Acquired Portfolio will
not have any known or contingent liabilities on the Closing Date;
(g) Since December 31, 2005, except as disclosed in the Acquired Portfolio's
semi-annual report dated June 30, 2006, on a schedule to this Agreement or
specifically disclosed in the Acquired Portfolio'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 Portfolio's financial
condition, assets, liabilities, business or prospects, or any incurrence by the
Acquired Portfolio 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 Portfolio arising
out of its normal investment operations or a decline in net assets of the
Acquired Portfolio as a result of redemptions shall not constitute a material
adverse change;
(h) (A) For each taxable year of its operation, the Acquired Portfolio 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 Portfolio has not taken any action, or failed to take any action, which
has caused or will cause the Acquired Portfolio to fail to qualify for such
favorable tax treatment as a regulated investment company under the Code. The
Acquired Portfolio has not been notified that any tax return or other filing of
the Acquired Portfolio has been reviewed or audited by any federal, state, local
or foreign taxing authority. To the knowledge of the Acquired Portfolio, (i) the
Acquired Portfolio does not have, and has not ever had, any shareholder that is
not a segregated asset account within the meaning of Treasury Regulation Section
1.817-5(e) or an entity referred to in (and holding its shares in compliance
with the terms of) Treasury Regulation Section 1.817-5(f)(3)(i), (ii), or (iii);
(ii) no public investor is participating or has ever participated in the
Acquired Portfolio through such a segregated account other than through purchase
of a variable contract within the meaning of Treasury Regulation Section
1.817-5(f)(2)(i)(B); and (iii) the Acquired Portfolio satisfies, and at all
times during its existence has satisfied, the diversification requirements
contained in Treasury Regulation Section 1.817-5(b)(1), (2), or (3);
(B) The Acquired Portfolio 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;
(C) The Acquired Portfolio 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;
(D) All tax returns filed or to be filed by the Acquired Portfolio shall
constitute complete and accurate reports of the respective tax liabilities of
the Acquired Portfolio 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;
(E) The Acquired Portfolio 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
(F) The Acquired Portfolio has not been notified that any examinations of
the federal, state, local or foreign tax returns of the Acquired Portfolio are
currently in progress or threatened and no deficiencies have been asserted or
assessed against the Acquired Portfolio 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 Portfolio are, and at the
Closing Date will be, duly and validly issued and outstanding, fully paid and
non-assessable. To the Acquired Portfolio's knowledge, all of the issued and
outstanding shares of the Acquired Portfolio 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 Portfolio does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any shares of the Acquired Portfolio, nor is there outstanding any
security convertible into any shares of the Acquired Portfolio;
(j) At the Closing Date, the Acquired Portfolio will have good and marketable
title to the assets to be transferred to the Acquiring Portfolio 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 Portfolio 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 Portfolio;
(k) The Acquired Portfolio 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 Portfolio's Board of Trustees, and, subject to the approval of the
Acquired Portfolio Shareholders, assuming due authorization, execution and
delivery by the Acquiring Portfolio, this Agreement will constitute a valid and
binding obligation of the Acquired Portfolio, 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 Portfolio for use in registration
statements, proxy materials and any information necessary to compute the total
return of the Acquired Portfolio 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 Portfolio's Registration
Statement on Form N-14 (other than information therein that relates to Pioneer
Investment Management, Inc., the Acquiring Portfolio 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
Portfolio of the transactions contemplated by this Agreement;
(o) To the Acquired Portfolio's knowledge, all of the issued and outstanding
shares of beneficial interest of the Acquired Portfolio have been offered for
sale and sold in conformity with all applicable federal and state securities
laws;
(p) The Acquired Portfolio 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 Portfolio 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 Portfolio with respect to the Acquired
Portfolio. All advertising and sales material used by the Acquired Portfolio
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 Portfolio 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 Portfolio has previously provided to the Acquiring Portfolio
(and will at the Closing provide an update through the Closing Date of such
information) with data which supports a calculation of the Acquired Portfolio's
total return and yield for all periods since the organization of the Acquired
Portfolio. 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 Portfolio dated May 1, 2006, and any
amendments or supplements thereto, previously furnished to the Acquiring
Portfolio, 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.
(s) The Acquired Portfolio Tax Representation Certificate delivered by the
Acquired Portfolio to the Acquiring Portfolio and Wilmer Cutler Pickering Hale
and Dorr LLP pursuant to paragraph 8.4 (the "Acquired Portfolio 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 Portfolio represents and warrants to the Acquired Portfolio,
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 Portfolio is a series of 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 to perform its obligations under
this Agreement. The Acquiring Portfolio 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 Portfolio 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 Portfolio is a series of 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
Portfolio included in the Acquiring Portfolio'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 Portfolio 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
Portfolio 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 Portfolio or any of the Acquiring Portfolio's properties or assets,
except as previously disclosed in writing to, and acknowledged in writing by,
the Acquired Portfolio. The Acquiring Portfolio knows of no facts which might
form the basis for the institution of such proceedings, and the Acquiring
Portfolio 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 Portfolio's business or its ability to consummate the
transactions contemplated herein;
(f) The Acquiring Portfolio 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 Portfolio's Board of Trustees, and,
assuming due authorization, execution and delivery by the Acquired Portfolio,
this Agreement will constitute a valid and binding obligation of the Acquiring
Portfolio, 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 Portfolio Shares to be issued and delivered to the Acquired
Portfolio, for the account of the Acquired Portfolio 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
Portfolio Shares and will be fully paid and non-assessable; the Acquiring
Portfolio does not have outstanding any options, warrants or other rights to
subscribe for or purchase any Acquiring Portfolio Shares, nor is there
outstanding any security convertible into any of the Acquiring Portfolio Shares;
(h) The information to be furnished by the Acquiring Portfolio 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) (A) For each taxable year of its operation, the Acquiring Portfolio 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 Portfolio has not taken
any action which has caused or will cause the Acquiring Portfolio to fail to
qualify as a regulated investment company under the Code. The Acquiring
Portfolio has not been notified that any tax return or other filing of the
Acquiring Portfolio has been reviewed or audited by any federal, state, local or
foreign taxing authority. To the knowledge of the Acquiring Portfolio, (i) the
Acquiring Portfolio does not have, and has not ever had, any shareholder that is
not a segregated asset account within the meaning of Treasury Regulation Section
1.817-5(e) or an entity referred to in (and holding its shares in compliance
with the terms of) Treasury Regulation Section 1.817-5(f)(3)(i), (ii), or (iii);
(ii) no public investor is participating or has ever participated in the
Acquiring Portfolio through such a segregated asset account other than through
the purchase of a variable contract within the meaning of Treasury Regulation
Section 1.817-5(f)(2)(i)(B); and (iii) the Acquiring Portfolio satisfies, and at
all times during its existence has satisfied, the diversification requirements
contained in Treasury Regulation Section 1.817-5(b)(1), (2), or (3);
(B) The Acquiring Portfolio 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;
(C) The Acquiring Portfolio 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;
(D) All tax returns filed or to be filed by the Acquiring Portfolio shall
constitute complete and accurate reports of the respective tax liabilities of
the Acquiring Portfolio 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;
(E) The Acquiring Portfolio 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
(F) The Acquiring Portfolio has not been notified that any examinations of
the federal, state, local or foreign tax returns of the Acquiring Portfolio are
currently in progress or threatened and no deficiencies have been asserted or
assessed against the Acquiring Portfolio 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 Portfolio 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 Portfolio 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 Portfolio's
registration statement;
(k) The Acquiring Portfolio 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 Portfolio then in effect
and qualified for sale under the applicable state securities laws; and
(l) The Acquiring Portfolio 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 Portfolio's Registration Statement on Form
N-14. On the Closing Date, the Acquiring Portfolio 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
Portfolio Shares.
(m) The Acquiring Portfolio Tax Representation Certificate delivered by the
Acquiring Portfolio to the Acquired Portfolio and Wilmer Cutler Pickering Hale
and Dorr LLP pursuant to paragraph 7.3 (the "Acquiring Portfolio 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 Portfolio will operate its business in the ordinary course
between the date hereof and the date of the special meeting of the Acquired
Portfolio Shareholders to consider the approval of this Agreement. It is
understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions payable either in cash or
in additional shares. Upon the approval by the Acquired Portfolio's Shareholders
of this Agreement, the Acquired Portfolio will take all necessary measures to
sell all of its securities in exchange for cash prior to the Valuation Date and
to declare and pay such additional dividends and distributions as shall be
necessary to meet the requirements of Paragraph 9.6.
6.2 The Acquired Portfolio will call a special meeting of the Acquired Portfolio
Shareholders to consider the approval of this Agreement and act upon the matters
set forth in the proxy statement. Each of the Acquired Portfolio and the
Acquiring Portfolio 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 Portfolio covenants that the Acquiring Portfolio 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 Portfolio will assist the Acquiring Portfolio in obtaining such
information as the Acquiring Portfolio reasonably requests concerning the
beneficial ownership of the Acquired Portfolio's shares.
6.5 Subject to the provisions of this Agreement, each of the Acquired Portfolio
and the Acquiring Portfolio 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 Portfolio shall provide the Acquiring Portfolio 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 Portfolio'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 Portfolio Shareholders to consider
approval of this Agreement and the transactions contemplated herein.
6.7 The Acquired Portfolio shall maintain errors and omissions insurance
covering management of the Acquired Portfolio prior to and including the Closing
Date.
6.8 Neither the Acquired Portfolio not the Acquiring Portfolio shall take any
action that is inconsistent with the representations set forth in, with respect
to the Acquired Portfolio, the Acquired Portfolio Tax Representation Certificate
and with respect to the Acquiring Portfolio, the Acquiring Portfolio Tax
Representation Certificate.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED PORTFOLIO
The obligations of the Acquired Portfolio to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquiring Portfolio 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 Portfolio in
writing:
7.1 All representations and warranties made in this Agreement by the Acquiring
Portfolio 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; and
7.2 The Acquiring Portfolio shall have delivered to the Acquired Portfolio 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 Portfolio and dated as of the Closing Date, to the effect that
the representations and warranties made in this Agreement by the Acquiring
Portfolio 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.
7.3 The Acquiring Portfolio shall have delivered to the Acquired Portfolio and
Wilmer Cutler Pickering Hale and Dorr LLP an Acquiring Portfolio Tax
Representation Certificate, satisfactory to the Acquired Portfolio and Wilmer
Cutler Pickering Hale and Dorr LLP concerning certain tax-related maters with
respect to the Acquiring Portfolio.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING PORTFOLIO
The obligations of the Acquiring Portfolio to consummate the
transactions provided for herein shall be subject, at its election, to the
performance by the Acquired Portfolio 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
Portfolio 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 Portfolio shall have delivered to the Acquiring Portfolio a
statement of the Acquired Portfolio's assets and liabilities showing the federal
tax bases and holding periods as of the Closing Date, certified by the Acquired
Portfolio's Treasurer or Assistant Treasurer;
8.3 The Acquired Portfolio shall have delivered to the Acquiring Portfolio 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 Portfolio 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
8.4 The Acquired Portfolio shall have delivered to the Acquiring Portfolio and
Wilmer Cutler Pickering Hale and Dorr LLP an Acquired Portfolio Tax
Representation Certificate, satisfactory to the Acquiring Portfolio and Wilmer
Cutler Pickering Hale and Dorr LLP concerning certain tax-related matters with
respect to the Acquired Portfolio.
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 Portfolio in accordance with the provisions of Pioneer Variable
Contracts Trust's Declaration of Trust and By-Laws, and certified copies of the
votes evidencing such approval shall have been delivered to the Acquiring
Portfolio. 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 Portfolio'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;
and
9.5 The Acquired Portfolio 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 50% of the expenses incurred in connection with the Reorganization
(including, but not limited to, the preparation of the proxy statement and
solicitation expenses, printing costs, legal fees and audit fees). The Acquired
Portfolio and the Acquiring Portfolio each agree to pay equally the remaining
50% of the expenses incurred in connection with the Reorganization (including,
but not limited to, the preparation of the proxy statement and solicitation
expenses, printing costs, legal fees and audit fees).
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.
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 Portfolio and the Acquiring Portfolio;
(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 each shall bear the expenses incurred by it incidental
to the preparation and carrying out of this Agreement in accordance with
paragraph 10.2.
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 Portfolio and the Acquiring Portfolio; provided, however, that
following the meeting of the Acquired Portfolio Shareholders called by the
Acquired Portfolio 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 Portfolio Shares to be issued to the Acquired Portfolio
Shareholders under this Agreement to the detriment of the Acquired Portfolio
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 Pioneer Variable Contracts
Trust, on behalf of the Acquiring Portfolio and the Acquired Portfolio, 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 Portfolio and
the Acquired Portfolio 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 Portfolio or the Acquired Portfolio, as
the case may be, as provided in the Declaration of Trust of the Acquiring
Portfolio and the Acquired Portfolio, respectively. The execution and delivery
of this Agreement have been authorized by the Acquired Trustees of each of the
Acquiring Portfolio and the Acquired Portfolio and this Agreement has been
executed by authorized officers of the Acquiring Portfolio and the Acquired
Portfolio 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 Portfolio and the
Acquired Portfolio, as the case may be, as provided in the Declaration of Trust
of the Acquiring Portfolio and the Acquired Portfolio, respectively.
[Remainder of page left blank intentionally.]
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 VARIABLE CONTRACTS TRUST,
on behalf of its series,
PIONEER IBBOTSON MODERATE ALLOCATION VCT PORTFOLIO
By: /s/Christopher J. Kelley By: /s/Osbert M. Hood
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President
Attest: PIONEER VARIABLE CONTRACTS TRUST,
on behalf of its series,
PIONEER BALANCED VCT PORTFOLIO
By: /s/Christopher J. Kelley By: /s/Osbert M. Hood
Name: Christopher J. Kelley Name: Osbert M. Hood
Title: Assistant Secretary Title: Executive Vice President